Cut the Budget or Raise Taxes? Kansas City, Make Your Choice …

Posted on by David Stokes

Today’s Kansas City Star has a very good and detailed look at Kansas City’s projected budget problems. I believe it was Harry Truman, fittingly enough, who said something along the lines of how he never saw a budget that could not be cut. With that in mind, I will give credit to the mayor for his quote at the end of the article:

Funkhouser said the city can’t duck the budget problem or it will only get worse next year.

“You can’t wait for a better time,” he said. “The consequences of not acting will be worse than the consequences of acting.”

So now that I see the mayor at least intends to address the issue head-on, let’s discuss the suggestions as laid out by the article (all bullet points below are direct quotes from the article, and all emphasis is added):

  • Cutting the $2 million city contribution to the Truman Sports Complex or subsidies to other regional assets such as Liberty Memorial, Starlight Theater and the zoo. Funkhouser says he’s not advocating a stadium cut in the next budget, but he does think regional assets should be funded regionally.

Why doesn’t Kansas City consider a zoo-museum taxing district, along the lines of what Saint Louis has, to fund these things regionally? That is one thing that works well here.

  • Closing the city jail, saving about $4.8 million, or privatizing the service to save part of that amount.

This deserves careful consideration. In Saint Louis County, the privatization of the jail’s pharmacy services has worked well, but the use of entirely privatized prisons for Missouri has not fared as well. I am referring here to the infamous video of Missouri convicts getting the crap beaten out of them by guards in a Texas private prison, for no reason except to torment the prisoners. And trust me, I am not one to normally side with the prisoners, but those scenes were terrible.

  • Cutting part of the $2 million that Kansas City spends on bulky-item pickup.

Bulk pickup is highly overrated. It’s easy enough to borrow a friend’s truck or just hire a hauler. This sounds like a good cut to me.

  • Reducing spending on city planning services and things like dangerous-building demolition.

Amen to the first part. Government central planning is a waste of time and money on anything beyond the basic levels of zoning, and similar areas. If anyone in Kansas City government is working feverishly at "transforming Kansas City into (insert hyperbole here)," which they are, that can be cut out. Markets and investors should be making these decisions — not government planners who can’t even be trusted to know what it is that they don’t know. The dangerous-building demolition should be kept in full, though. Those abandoned places that nobody except the curious ever go can be dangerous.

  • Reducing spending on youth initiatives or neighborhood mediation efforts, which could save about $1 million.

I have to guess there are both things that need to be maintained in full and some options for cuts in this list, but I can’t say which are which without seeing more information.

  • Reducing spending in the City Council and mayor’s offices.

I am sure there is plenty of opportunity for cuts here, but in the end it would probably add up to a small portion of the projected deficit. It should still be done, though. The mayor stated in the article that the Council needed more legislative analysts, rather than fewer. If the Council can’t trust the information from its own city manager, who is supposed to be non-partisan and unbiased, and needs more legislative analysts, that is a problem with the city manager — not a legitimate call to grow staff. (Please note, I said "If"; I am not making a judgment in the dispute between the mayor and the city manager.)

  • Laying off up to 100 people, which could save about $5 million. Some council members recoiled at that idea. Funkhouser and Ford said they want to streamline city departments and reduce the number of middle managers, but focus more on empty positions than actual people.

We finally get to the real solution. Way too many people in government think there is some sort of right to a government job. This question should really be asked before even talking about money and budgets. First of all, do the government workers you have all work solid 40-hour weeks of actual work? If they don’t — and there probably isn’t one government in the world where they do — then many of them should be let go. I am very familiar with the history and role of political machines in government, and I would be stunned if a city such as Kansas City did not have far more city employees on the payroll than are actually needed. Some councilmembers want to protect their own employees first, whether or not they are needed or can be afforded. That is not surprising, but it is exactly the type of governance that gets a city into a budget problem in the first place.

Who Should Decide on Tax Increment Financing?

Posted on by David Stokes

Anytime you can put "Municipal League" and "TIF Commissions" in the same headline, you know you have an exciting story! (To me, at least, which may say a lot about me.) Today’s Post-Dispatch has the story of a recently filed lawsuit challenging the new state law that puts more authority for the use of TIFs in the hands of a countywide commission, rather than municipal commissions. I can see you are getting more interested with each passing word. …

As they are currently established, TIF commissions are dominated by representatives of the municipality the TIF is proposed for, people who generally only care about that particular municipality. However, the tax decisions they make affect entities beyond municipal borders. I strongly feel that having a county commission make these decisions, while taking into consideration the effects the TIF will have on the county as a whole, is a much better way to debate and consider tax-increment financing.

The municipalities are screaming that this is an infringement on their rights, as though the residents of a certain city are not also residents of the county, too. They claim (emphasis added):

The suit noted the law adds the county commissions to municipal panels, opening the door to legal challenges to projects with tax increment financing. Investors would not put money into such projects because the of the risk of suits, the plaintiffs say.

So investors might not finance projects that get to kick people out of their homes and are guaranteed to succeed by the government because they don’t have to pay the taxes other businesses pay?  That would really be terrible. …

Almost all abuses of TIFs and eminent domain (which are related, but not the same thing) have occurred at the municipal level — particularly in St. Louis County. The record of municipalities making responsible decisions about the use of TIFs does not generate confidence. I believe that the lawsuit has at heart the interests of municipal government and developers — not the interests of residents of St. Louis County. As such, I hope it is thrown out of court and County Executive Dooley gets to appoint a countywide TIF commission that has final say on ALL TIF proposals within the county.

It’s good to be back blogging after some time focusing on other things here at Show-Me!

I Drink Your Milkshake

Posted on by Nicholas Loyal

After last night’s Academy Awards, it feels appropriate to reiterate a story closely related to the eventual Best Picture Winner With an Incomprehensible Ending That I Understood But Obviously Didn’t Appreciate.

According to an article printed earlier this month in the Riverfront Times, the Missouri Department of Conservation unanimously approved a proposal that would allow hunters to use high-caliber air-powered rifles (not unlike the weapon used by a certain antagonist) at the start of regular-weapon deer season on November 15.

These weapons (which must be powered by compressed air or a hand pump with a minimum of a .40 caliber) came at the request of a small group of enthusiastic hunters whose logic led one member of the regulatory committee to comment on the nature of the weapons:

"These firearms are not Daisy air rifles. They are high-powered,
large-caliber, generally very expensive firearms that carry the
foot-pounds of energy necessary to take down large game."

Although I realize that any extension of firearm legalization is likely to lead to an outcry from someone, I feel that anyone who wants to use an expensive (retail prices for the rifles start at around $500), short-range (about a quarter of that of a traditional rifle) and slow-loading weapon to make their hunting experience more difficult can go right ahead. After all, who are we to stop the Missouri Outdoorsman from making his hunt as difficult as that faced by Lewis & Clark?

Just as long as we keep them away from certain people.

Standards vs. Market Reform

Posted on by Sarah Brodsky

Over at Cato-at-Liberty, Andrew J. Coulson tells it like it is:

Trying to “fix” the education being provided by a monopoly school system is like trying to “fix” a command economy. While occasional improvements will certainly be possible, ultimately, the effort is doomed. Even when excellent, proven methods or curricula are adopted in state schools, the incentive structure of the system provides no support for retaining  them.

Coulson mentions old vs. new math debates and tells the story of Jaime Escalante, who developed a highly effective math curriculum and was kicked out of his school. There are good curricula out there, but public schools have little incentive to find and use the best ones.

Read the whole thing!

Margaret Spellings on the Teacher Shortage

Posted on by Sarah Brodsky

Margaret Spellings spoke about alternative teacher certification in Jefferson City yesterday:

She pointed to federal programs such as Teach for America to recruit more college students and alternative certifications for people with other careers who want become teachers.

"We’re going to have to figure out how to recruit mid-career professionals into our classrooms," Spellings said.

Both Teach for America and alternative certification are good ideas, but I think alternative certification has the potential to be more effective. Teach for America is popular, but graduates generally teach for just a year or two and then go on to something else. Whereas, if you help people switch careers — say, from working as a scientist in a lab to teaching high school science — they may stay in their new career for 15 or 20 years. This could be a particularly attractive option for older people who want to cut down on their work hours but don’t want to retire completely.

However, alternative teacher certification is much more controversial than Teach for America. I’m not sure why; neither program requires extensive education coursework. But many people seem to think that older people need more theoretical training than recent graduates. The NEA criticized Spellings’ alternative teacher certification idea, not her mention of Teach for America:

Chris Guinther, Missouri president for the National Education Association, said the American Board for Certification of Teacher Excellence checks whether people know a subject, not whether they can teach it.

"As we hold our students to higher standards, it seems incongruous that we’re willing to lower teacher standards," said Guinther.

New Charters Threatened

Posted on by Sarah Brodsky

Here’s a video clip about a plan to prevent new charter schools from opening in St. Louis. The proposal would allow only charter schools sponsored by the city or state boards of education. That would mean no KIPP schools and no new versions of Lift for Life. The clip includes a quote from Eric Hanushek, who recently spoke at a seminar cosponsored by the Show-Me Institute. Hanushek suggests that the district stop worrying about charters and focus on spending its money more efficiently.

SLPS’s response to Hanushek’s criticism is that they’re working on making the traditional public schools "more attractive." That’s a positive step — and one that I’m sure was prompted by the large numbers of students leaving the district every year. Limiting new charter schools would remove this incentive for SLPS to try to appeal to parents.

It’d Be One Thing if They Offered Four Times the Quality

Posted on by Justin Hauke

“Public, four-year colleges (possibly because of the restraints of taxpayer financing or larger student bodies) have not made the same effort to reduce the financial burden of higher education for low- to middle-income families.”

I don’t know what planet my colleague is from, but if he honestly thinks that public university tuition isn’t heavily subsidized by taxpayers already then he has spent way too many years in the ivory halls of Washington University.

A college education is just about the safest investment one can make. It essentially guarantees that you’ll recoup your initial costs through higher lifetime earnings.

Nick’s argument would be equivalent to claiming that Fannie Mae hasn’t done enough for middle-class home owners because it hasn’t "given away homes for free."

A Freer Free Ride

Posted on by Nicholas Loyal

Maybe it’s because a wintry mix has shut down every major St. Louis roadway, or maybe it’s because I’m still disappointed by a scholarship offer from a legal institution I’m going to elect not to identify, but yesterday seemed like the single biggest day of collegiate financial news in years, and it would be remiss of me not to comment.

We start, as all things should, with the alma mater: Washington University announced yesterday that it would be eliminating loan programs for students whose families annually earn less than $60,000. Financial aid for these students will instead come in the form of University-sponsored grants that will not have to be repaid.

However, this news was upstaged later in the day as the little junior college that could, Stanford University, announced that it would eliminate tuition entirely for all students whose families earned less than $100,000 a year (students would, however, still have to contribute on their own behalf through work-study programs).

Both of these programs are designed to ease the financial burden of a top-tier education so that such an education is accessible for all those who desire it and have proved themselves worthy. While tuition breaks and loan forgiveness may not reach the benefit of Yale’s financial aid extension to undergraduates whose families make up to $200,000 annually, they do make college considerably more affordable to the middle and lower classes of American society. However, one glaring truth comes to light when I look at these programs from an objective standpoint: All of these universities are private and exorbitantly wealthy (Wash U’s endowment is $4.4 billion, Stanford’s is $12.4 billion, and Yale’s hovers around $15 billion).

So why can’t public universities compete?

Public, four-year colleges (possibly because of the restraints of taxpayer financing or larger student bodies) have not made the same effort to reduce the financial burden of higher education for low- to middle-income families. Granted, resident tuition at the University of Missouri is a quarter of that at Wash U, but that doesn’t mean that Mizzou isn’t competing to attract the same bright students in every round of the admissions process. Why can’t state educational institutions, which don’t exactly have measly endowments themselves (MU’s stands at $511 million), offer breaks on loans?

The immediate answer seems to be that the money just isn’t there when taxpayers are involved, but I’m not entirely sure I believe that. Even if public universities simply replaced loans with grants, as Wash U did, there is significant research to suggest that such an investment in human capital eventually yields higher returns for the state economy itself. After all, both loans and grants eventually have to get paid back somehow, and students with "scholarships" have been shown to be more likely to complete degrees and contribute to boosting the economy of the states where their universities were located.

If nothing else, there is a hope that the competition of the free market could help advance this claim. The sooner that state institutions realize they are losing elite middle- and lower-class students to private universities, the sooner they will adapt their financial aid packages to extend offers that turn out better for all those involved.

Competitive Begging

Posted on by Nicholas Loyal

Every major city that has any problem with homelessness (which, I think, is all of them) realizes that steps must be taken to curb the burden of panhandlers. However, as reported through the Post-Dispatch this morning, St. Louis government officials are taking an unusual approach to correcting the problem in the city’s Central West End.

The St. Louis Treasurer and "parking czar" has donated a decommissioned and refurbished parking meter to the area in an effort to reduce begging. The idea is that rather than give change to the homeless, visitors to one of the fine establishments surrounding the intersection of Maryland and Euclid will drop their change into a meter (if for no other reason to remind themselves that they just waited 35 minutes to find a meter they were required to throw change into).

The funds are intended to help aid homeless service agencies, but more importantly, the presence of the meter will "discourage panhandling by providing some competition for change, while
at the same time giving folks on [sic] alternative route for their altruism."

Really? Competition is going to make beggars go away? I’m aware of the fact that the meter will be an alternative target for quarters, but I really hope no one at city hall thinks that its presence will reduce panhandling. As a matter of fact, if I were a beggar, I’d be even more obnoxious because I’d know if I didn’t annoy you enough, you’d give those coins to an inanimate object. Better yet, I’d do it while standing right next to the meter, so that any joy you get from giving is canceled out by the guilt of not giving to me.

I can see it now: an anti-panhandling meter surrounded by 15 panhandlers. Great idea.

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