A Terrible Idea for Electrical Licensing ? Or Is It?

Posted on by David Stokes

As regular readers of this blog may recall, I loathe occupational licensing. In the vast majority of cases, it is nothing more than using the government to block competition, usually under the catch-all guise of "safety." I was pleased that I had not seen any legislation creating new licensing systems before our current legislative session, but that changed today when I came across Senate Bill 1093. So I am supposed to hate this bill, right? Well, yes, but a careful reading of it at least made me realize there are two sides to this story.

A couple of key points jumped out at me. First of all, it is sponsored by Senator Loudon, who is a true free-market guy, so I had to wonder why he was proposing this. Second, as you read it, you see that the suggested state licensing board will include reps from the Independent Electrical Contractors, or IEC, who are the non-union guys and whom I would not normally expect to be pushing licensing. Further reading and research, by moi, makes it clear that this is an attempt to normalize electrical licensing rules across the state by the IEC, and trump the current union-favoring local systems established in some of our larger counties. The bill is clear that the statewide license would have to be allowed in any county, or city, in Missouri. Local governments could still continue their own local licensing, but they would have to allow someone with a state license to work even if they don’t have the local license. It is also important to note that non-licensed electrical contractors could still work in counties that do not require a local license. So if you are an electrician who lives and works in a rural county with no licensing, this would really not affect you.

I fully understand that the licensing systems in many of our larger counties are set up to favor union members and union contractors. This bill is really about politics and fairness, not about the economics of licensing systems. I would prefer that its supporters change the local, unfair rules before they take licensing statewide, but I am sure they would respond that they have tried that and failed. I recognize that the current political situation in many of those larger counties is not going to change, as the irrigation contractors found out in 2006 when they attempted a very minor, and perfectly reasonable, change to the St. Louis County plumbing code as it related to backflow prevention devices.

I am not going to sit here and write that I support this proposed law, or believe it to be a good idea.  However, I know the frustration many non-union contractors have with the biased systems in place in many of the larger counties. To that end, I understand why they are attempting this change and I sympathize with their goals. If I may mix my metaphors, it’s like they want two bites at the apple, and to eat it too. With this bill, we would have more statewide licensing for electrical contractors, but the licensing would be more level and fair. Since this is one profession where I understand some manner of licensing may be needed, perhaps wide and level is better than limited and biased? But probably not …

It Must Be a “Mc” Thing

Posted on by Justin Hauke

The U.S. Senate rejected today a proposal which would have placed new restrictions on congressional “earmark” bills.

Earmarks are line-item requirements in the federal budget that direct federal agencies to provide funding to specifically targeted organizations. This year, the average U.S. senator brought home more than $180 million in earmarked projects to their constituents ($28 million for representatives).

Earmarks are a huge problem at the federal level, because the benefits from such projects flow to small groups of interested individuals while the taxes used to pay for them are spread across the entire population as a whole. This diffusion of cost encourages the earmark practice, because it allows politicians to bring money to their constituents without putting the cost on them directly. The result is an ever-expanding federal budget, which this year passed the $3 trillion mark — or more than $10,000 per U.S. citizen.

Sadly, the U.S. Senate overwhelmingly rejected the bill’s earmark restriction. From Bloomberg’s coverage of the vote:

The proposal ran into opposition from senators in both parties as lawmakers said it would merely shift authority to make spending decisions to anonymous bureaucrats in the executive branch.

Fortunately, six Democrats and a handful of Republicans did vote for the bill’s adoption, including Missouri’s own Claire McCaskill, who has been a strong opponent of congressional earmark proposals. And to the best of my knowledge, only McCaskill and Sen. John McCain (the bill’s sponsor) were true to their vote, refusing to direct federal dollars into earmarked projects in any of the legislative bills they sponsored last year. That’s much better than the (transparent) electioneering support by Sens. Clinton and Obama, who voted for the bill, yet oversaw $342 and $98 million in earmarked projects last year, respectively.

The 29 senators who voted to approve the legislation should be commended for their commitment to reducing governmental spending on pet projects. It’s a shame that more elected officials don’t share their commitment to fiscal discipline.

Official ________ of the State of Missouri

Posted on by Sarah Brodsky

I’ve suggested that encouraging students to nominate state symbols is a bad idea because it’s a slippery slope. I felt that my concern was validated when a legislator proposed that the state declare Budweiser its official beer. But the News-Tribune has a different take on it:

As far as we know, the idea was not initiated by a group of students. Thank goodness for that.

The origin of the idea gives evidence that young people sometimes think more clearly than the adults who govern them.

So the students are actually coming up with better ideas for symbols than the adults are. Maybe we should turn over the rest of state business to them, too.

Why Did the Sales Tax Cross the Road?

Posted on by Sarah Brodsky

To try to stimulate the economy, Missouri may get another sales tax holiday:

For three days in June, the GOP is proposing to exempt any product costing up to $600 from state or local sales taxes.

"The hope is the state can give a little boost to get people out spending," said the plan’s sponsor, Rep. Mike Sutherland, R-Warrenton.

I’ve already argued against sales tax holidays and failed to convince. But I’ll try again. If a sales tax holiday is a good thing, then why limit it to school supplies? Why not include anything under $600? Why not get rid of the limit? If a three-day holiday is a good idea, wouldn’t three weeks or three months be better? How about all year?

Would people go crazy buying stuff all year round if we got rid of the sales tax entirely? Probably not. They might buy a bit more because things are cheaper. They might be a little more likely to buy something in a store than to order it online. But we would also see a drop in tax revenue, and there wouldn’t be a 365-day shopping spree to make up for it.

So why do people run out to the store for a three-day holiday if they wouldn’t do that for a longer one? If, for example, people are going to buy school supplies sometime in August anyway, they might as well do that during the sales tax holiday. So everyone postpones their trip to the store until those three days and buys all the stuff they would have bought during the week before. To legislators, that looks like a magical economy booster. To me, that looks like switching around people’s shopping days for no good reason.

I guess this year we’ll see whether it works any better in June than in August.

Jefferson City Friday Round-Up

Posted on by David Stokes

There is a great deal going on in Jefferson City these days, which might normally be a bad thing, as I take P.J. O’Rourke’s attitude toward government gridlock, where, "Preventing the government from governing is like preventing a pit bull from eating your child." That being said, there are some excellent ideas moving forward. Let’s succinctly take them one at a time:

Reassessment in Missouri might be undergoing some much-needed changes with Senate Bill 711, sponsored by Senator Gibbons. It appears to be sailing through, and it will address one of the primary problems with assessment and taxation — when taxing entities already below their legal cap don’t roll back rates after a reassessment. This change, which will mandate a 100-percent rollback during reassessments, will be a great improvement for the taxpayers of Missouri.

The state is also considering additional sales tax holidays. Instead of debating this one again around SMI, I’ll just point you to last year’s debate on the subject. And before Sarah tears into me, I just want to note that I completely agree with her earlier post today. I will say that if they propose too many of these tax holidays, I might have to start agreeing with Sarah and Tim on the issue.

Justin and Eric have been arguing about the proposals to toughen the rules for initiative petitions. I agree with many of Eric’s points, but on the whole Justin is right. Too many people, particularly on the left side of the political spectrum, are going around our democratic system with idiotic proposals on things that should be made by legislators who have studied an issue and put it through the legislative process, rather than the masses who will have no idea what they are voting on, or will just vote for what make them feels good. I am specifically referring here to the stupid proposal to expand Medicaid in the state through an initiative petition. If you want to expand Medicaid and the welfare state, then elect people to office who agree with you. That is how our country is supposed to work, Eric’s history lesson notwithstanding. To be clear, I merely support making the signature requirements higher and banning collectors from being paid by the signature, which is an open invitation to fraud. I don’t want to get rid of the system entirely.

Finally, the bills regarding repealing the controversial village ordinance from last session are also moving forward. There is no need to make it easier to form a municipality in Missouri. Private property rights are separate from the ability to declare your own property as a political entity all on its own. It would be a good idea to repeal last year’s law and go back to the way it was in Missouri.

How Not to Take Away Scholarship Money

Posted on by Sarah Brodsky

Thanks, Combest, for linking to the Springfield News-Leader story about this proposed bill:

A proposed Missouri Senate bill would strip community college students of tuition money if they violate underage drinking laws, which educators call shortsighted.

One provision of the bill sponsored by Sen. Luann Ridgeway calls for students to lose A+ program money — which pays for community college tuition — if they receive three "minor in possession by consumption" alcohol violations.

This proposal is arbitrary and unfair. It would punish community college students by taking away their scholarship money, while students who receive government loans and scholarships to attend four-year colleges are off the hook. And as a student quoted in the article pointed out, it doesn’t make sense to pass a law specifically targeting alcohol possession above other illegal activities. It’s reasonable to take away publicly-funded scholarships if students break the law, but legislators should target a class of offenses at once, not one infraction at a time. Otherwise, we’ll see a proliferation of scholarship retraction bills to compete with all of the potential state symbols that are bombarding the General Assembly.

Certificates of Need Not Needed

Posted on by Eric D. Dixon

Today, the St. Joseph News-Press reported about the efforts of an area doctor (also, incidentally, a Missouri representative) who is sponsoring legislation to get rid of Missouri’s Certificate of Need (CON) requirement for most health-care facilities — except for those providing long-term care:

Anyone in the hospital business wanting to set up shop in Missouri must endure a stringent application process with the state under a Certificate of Need program.

The same goes for long-term care facilities, such as nursing homes, and certain medical equipment, such as MRIs.

Rep. Dr. Rob Schaaf, R-St. Joseph, wants to take hospitals and medical equipment out of the equation.

“I’m just a believer in the free market and I don’t believe in central control,” Dr. Schaaf said.

Dr. Schaaf is in good company. Last year, we published an op-ed by Steve Bernstetter, "Taking the CON Out of Certificate of Need Laws," that argued in favor of largely the same perspective. Steve pointed out the drawbacks of CON laws here:

Proponents of maintaining current CON laws make two key arguments. First, they assert that CON laws keep prices down and assure both quality and availability of service. Evidence for these claims is spotty at best. Success with and without the program varies greatly from state to state, and it is extremely difficult to separate the differences in care created by CON laws from differences created by other variations in healthcare systems between states. Additional study is required before any solid conclusions can be drawn as to the affect of CON laws on price, quality, and availability. However, conventional economic wisdom holds that when multiple firms compete, quality rises and prices drop. There’s no reason to assume that the health care industry would be exempt from this effect.

He went on to propose an alternative model:

The ideal system provides a variety of options, in both price and quality, for all. Such a system is best achieved in a market where firms are free to specialize to meet consumer demand. Such a market depends on consumers with a variety of options making informed decisions. As such, CON law reforms should focus on increasing the transparency of the market while simultaneously fostering competitive growth within it. A balanced approach to competition, in which artificial barriers to entry, such as CON laws, are eliminated and the healthcare needs of all are well represented, offers the best chance for guaranteeing all Missourians access to affordable, quality health care.

The Joplin Globe Discusses Our Transportation Study

Posted on by David Stokes

The Joplin Globe published this editorial today about the potential for truck-only lanes and public-private partnerships for Missouri. (Thanks to Combest for the link.) I, along with intern Nick, aka the Nintern, visited the Globe last week and had a great dicussion with them about our study. We appreciate the thoughful editorial and recommend it highly.

Two Must-Read National Articles: One Hysterical, One Insightful

Posted on by David Stokes

In light of our recent study on transportation, this article in the Onion has some outstanding additional recommendations for addressing Missouri’s serious transportation needs. (A hat tip to devoted reader James "Jim" Cronin, aka "Cronin", of Fairfield, CT for alerting me to this. Because of his much- appreciated tip on the story, he and I are now officially even for the time he brutally cubed me with a hackey-sack. Or was it a tennis ball? To be honest, I only remember the agonizing pain.)

I also must recommend this amazing article about the changing political worldview of playwright David Mamet, written by Mr. Mamet as an essay in one act. While Mamet has never thrown anything at me for no reason whatsoever, I still loved the article, which briefly gets into the economics of Thomas Sowell and Milton Friedman. Link via Drudge. (Hey, Drudge, I have now linked to you, so I believe it’s your turn to link to me.)

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