2006 Annual Report: Better Late Than Never

Posted on by Eric D. Dixon

"How did it get so late so soon?" This query from Dr. Seuss was echoed by the equally whimsical St. Louis native Yogi Berra: "It gets late early out there." Although 2007 is quickly winding down, we’ve finally released our 2006 Annual Report.

Most non-profit organizations release their annual reports much earlier in the year than this. Ours would have been out sooner, too, but we decided to commission a thorough independent audit — to make sure everything was fully on track and accounted for during our first full year of operations. We had most of the report ready to go several weeks ago, but we didn’t want to issue an incomplete profile. Some things are worth the wait.

The report details our 2006 accomplishments and finances, profiles our research areas, board of directors, staff, and scholars from that year, and provides a brief overview of what we’ve been up to in 2007 and where we’re headed next. We have an ambitious publishing schedule this fall, so be sure to keep checking our web site!

I wasn’t a Missourian in 2006 (although my best friend did take me to see Spamalot at the Fox when I visited St. Louis for my birthday last November), much less a Show-Me Institute staffer, so I don’t make an appearance in the annual report. It almost seems odd not to be included, since I’ve been here for several months now, and I spent so much time working on the annual report itself, but as Yogi Berra also (supposedly) said, "The future ain’t what it used to be."

More Choice on the Horizon? Glimpsing the Future of St. Louis Public Schools

Posted on by Dave Roland

Last night I participated in a panel discussion (hosted by Metropolis St. Louis, FOCUS St. Louis, and the League of Women Voters) about the future of St. Louis Public Schools — my first official event as the Show-Me Institute’s new education policy analyst. The panel included Dr. John Martin (deputy superintendent of SLPS), Melanie Adams (member of the appointed Special Administrative Board overseeing SLPS), Evan Lewis (vice-president of Urban Prep Academy, an all-boys’ charter school in inner-city Chicago), State Senator Jeff Smith, and myself. Each of the panelists had a few minutes to make a statement about their vision for the future of public education in St. Louis before the floor was opened up to questions from the 40 people in attendance.

I would encapsulate the essential views of the participants as follows*:

Dr. Martin: SLPS has fallen on hard times because of rapid leadership turnover, and because it has to assume the responsibility of parenting kids who live in poverty and transience. The state government isn’t treating the system respectfully in this whole process. The best way to improve education in St. Louis is to seek our input before the administrative board takes any unusual action because there is a wealth of institutional wisdom within SLPS that can help right the ship if people will just keep administrators involved in the decision-making process. By the way, charter schools are dangerously unaccountable, and allowing financially disadvantaged families the opportunity to leave the public schools would be deadly for public education. Long live traditional public schools!

Ms. Adams: The system is broken, but we can fix it by introducing accountability and flexibility for the administrators. The administrative board hasn’t yet charted the path out of this mess, but we will work to move beyond the petty squabbling that has defined and degraded SLPS. Our focus will be doing what is best for the kids.

Mr. Lewis: Urban Prep Charter Academy demonstrates that educational success is attainable in impoverished urban areas. We have the flexibility to hire a staff and shape a curriculum that connects with young black men in unique ways. We set high expectations for our students and we take pride in knowing that, despite the fact that many of these students were not performing well in their traditional public schools, they almost always rise to the occasion with the proper support and encouragement. Even children in difficult circumstances are capable of academic achievement when schools are freed from bureaucratic constraints and allowed to pursue the best educational practices for each school’s particular setting and student body.

Sen. Smith: As an educator, I have seen both the good and bad aspects of SLPS, and I know that the system must be reformed in some way if it is to meet the needs of this city’s children. As a charter school administrator, I’ve seen the advantages that have resulted from the relative lack of constraints in seeking out the best educational practices. As a legislator, I’ve met almost absurd resistance from the teachers’ union when my education proposals would offer financial incentives to increase the number of quality teachers in Missouri classrooms. It’s time to set aside the interests in institutional turf and fiefdoms, and pursue any policy that will improve education for our children. Getting those children educated is a matter far more important than the sort of political, institutional, or personal concerns that have derailed reform in the past.

Mr. Roland: The key to resolving educational woes in St. Louis and elsewhere is to empower parents to seek out the best available education for their children. Almost without exception, parents are more invested in the success of their children than any bureaucrat will ever be, and therefore are more inclined to hold schools accountable for giving their children quality educations. A good school choice program will open the doors of opportunity for families who would otherwise never be able to send their children to schools that have the academic and disciplinary flexibility that is not available in traditional public schools.

Taken as a whole, I believe the evening resulted in a basic consensus that the reclamation of public education in St. Louis hinges on three central concepts: school accountability, educational flexibility, and the availability of some form of parental choice among schools. I won’t pretend that, despite my efforts, everyone was persuaded that we need full-blown school choice immediately. But my sense of the discussion was that most people recognize allowing even a restricted form of choice (open enrollment in traditional public schools, expansion of charter school options, etc.) would be an improvement over the status quo.

* Please note that these statements reflect my own impressions from listening to the other speakers, and should not be taken as direct quotes. The impressions of others present at the event may differ from my own.

Welcome, Dave Roland and Justin Hauke!

Posted on by Eric D. Dixon

The Show-Me Institute is expanding, bringing aboard new policy analysts and a research assistant to help us conduct the best in Missouri public policy research.

Dave Roland joins us as an education policy analyst, bringing with him three years of experience as an attorney with the Institute for Justice, litigating school choice, economic liberty, and property rights cases in state and federal courts. He has undergraduate degrees in political science and Biblical studies from Abilene Christian University, and both a law degree and a master’s in theology from Vanderbilt University. Dave’s wife, Jennifer, will also be joining us as a policy analyst in a couple of weeks. She’s the former legislative affairs attorney for IJ’s Castle Coalition — but more about her later.

Also joining us as a research assistant is Justin Hauke, a graduate student at Washington University’s Olin Business School who until recently worked as a senior research associate for the St. Louis Federal Reserve. He has an undergraduate degree in economics and math from the University of Texas at Austin. Justin has been blogging here for a few days now, and we’ve already released his first op-ed. (Actually, he co-wrote an op-ed for us almost a year ago, so technically that would be his first.)

We hope to hear much more from our new staff members as they get settled in!

Hannah Montana Teaches Teens Valuable Lesson About Law of Supply and Demand

Posted on by David Stokes

Today’s Post-Dispatch has an article about the continuing education pre-teen girls are receiving about the basic laws of economics. If large numbers of people want an item (a concert ticket) that has a limited supply (number of seats), that price will go up. Sometimes substantially. Add into the mix the strange rules of modern parenting and our entertainment-obsessed culture, and you have the perfect recipe for an extremely weird situation:

She gave in and bought six tickets from an online broker for a total of $900 for a Dec. 11 concert in Columbus, Ohio. Edelstein paid $150 for each $56 ticket. She bought two extra to sell, to help finance the family’s road trip.

Traveling to Ohio for a concert by a teenage girl. At $100 more than face value per ticket. Buying extra tickets to sell at even higher prices to finance the trip (nothing wrong with that; it’s just peculiar). It’s like a modern suburban version of Easy Rider, with two extra pop concert tickets substituted for the cocaine. If Phil Spector gets out of jail to buy this woman’s tickets in Columbus, that is really gonna freak me out.

For the record, there should be rules limiting the number of tickets one person can by, and there is nothing wrong with efforts to enforce those rules on scalpers. That would be a case of a private entity (the venue) choosing to offer its product to as many people as possible. Efforts should continue to block scalpers from buying huge numbers of tickets via computer programs, or however else they do it. But that does not mean it should be a crime for people to sell commodities they purchase for whatever price they choose. Changes to the law that legalize scalping for sporting events should be extended to concerts.

Hannah Montana tickets are not clean water after a flood, or Red Cross blood after an earthquake. Hell, they’re not even Cake tickets or something people will remember six months from now. They are just items to be bought and sold on the open market. If Hannah Montana teaches this principle to young girls, it will be an excellent lesson in basic economics, as explained decades ago by a band worth paying top dollar for.

(Note: Phil Spector played the man who bought the drugs in Easy Rider. I HATE explaining references, but considering most people won’t get it, and he is currently being tried for murder, I probably needed to do so.)

Tour of Missouri’s Value Yet to Be Determined

Posted on by Joseph Haslag

World-class cycling came to Missouri. For one week in mid-September, Missourians were offered an intimate look at the sport. Judging by the crowds and the enthusiastic press, the state embraced the Tour of Missouri and consumed the product of watching cyclists whizz by at 30 miles per hour.

There has been some criticism of state officials, including in this blog, arguing that the state’s return on its investment is negative. I have not seen the final tally, but suppose that Missouri State Government paid $1 million to sponsor the Tour. On average, between 3 and 4 cents of every dollar of Gross State Product (GSP) is received by Missouri’s General Revenue Fund. Thus, the break-even point is somewhere between $25 million and $33 million in additional GSP that would have to be generated by the Tour of Missouri. I have seen the estimated economic impact from the Tour de Georgia and am skeptical. The bottom line is that it is unlikely that the Tour of Missouri created enough new jobs or new physical capital to generate an additional $25 million of GSP. Nor were there enough idle resources — such as empty hotel rooms — used by out-of-state fans and participants to add that much to the Missouri economy. Rather, what we saw was people substituting the goods and services associated with the Tour of Missouri, displacing other forms of entertainment. As such, I would agree with the narrow economic calculation of the rate of return; it was probably negative.

Does this mean that the State of Missouri should not have sponsored the event with any funding? That answer is yet to be determined. Economic theory indicates that governments do improve welfare when they use resources to overcome coordination failures in the market. In this case, can one imagine that the Tour of Missouri would have been an entertainment offering without the state government’s sponsorship? No. It is difficult to coordinate the numerous activities necessary to put on such a cycling festival; profit-motivated entrepreneurs are probably incapable of solving the coordination problem. Hence, there is a role for government to solve these issues and provide its citizens with this form of entertainment.

The rate-of-return argument notwithstanding, stewards of the state resources must be vigilant. Over time, the justifiable size of state sponsorship will decline as the coordinating problems decline. There will always be issues with state roads and protection that require some state intervention. However, the initial mobilizing services will disappear in several years. If the Tour of Missouri is valuable enough to Missouri citizens, it will survive declining state sponsorship. Ultimately, market forces will determine the value to this enterprise just as it vets all goods and services that consumers choose from. It will take several years to assess the outcome, though there are hints from the revealed preferences of the thousands of people lining the Tour route.

Parents as Customers

Posted on by Sarah Brodsky

A parent writes to the St. Louis Post-Dispatch that he’s upset the schools’ CEO isn’t attending the Parent Assembly:

As a parent of two children in the district, I have received dozens of automated phone calls and mailings over the past months informing me that parental involvement is the key to successful schools. The governor’s machinations with Mr. Sullivan’s appointment and Mr. Sullivan’s repeated failure to meet with district parents make a mockery of the idea.

The St. Louis Public Schools are right that parents need to be involved in education. But parents are most involved when they choose their kids’ schools themselves. If they have no option but a failing public school district, all the automated phone calls in the world aren’t going to make them more enthusiastic. This is especially the case when the district’s CEO doesn’t even appear at meetings he promised to attend.

If parents were customers with choices, schools would be more responsive to them. Back in June, Sullivan declined his salary to make a statement: The St. Louis Public Schools aren’t a for-profit business. Maybe he should reconsider that position. After all, what CEO earning a salary would skip shareholder meetings?

 

What, For Free? Gimme $78 Million Dollars

Posted on by David Stokes

Can’t you just imagine seeing this scene playing out …

Cordish to Centene: "Excuse me, sir? What it is, Mr. CEO; we’re from out of town."

Centene To Cordish: "No s%!t."

Cordish: "We’d really appreciate it if you would move your corporate headquarters down to our brand-new downtown development instead of Clayton."

Centene: "What, for free? Gimme $78 million dollars in tax credits and incentives."

Cordish: "We’re not gonna give you $78 million on top of everything else the taxpayers have already paid for."

City of St. Louis (from passenger seat and reaching for checkbook / aldermanic approval): "I think that’s fair, Cordish."

Cordish: "Here’s $78 million, plus a brand new sales tax for your own sales tax district." (Pauses while Centene pockets it all.) "Keep the change."

Needless to say, I could go on and on. I would really have liked to work "a Torino with no wheels on it" into this, but I think I have made my point. The fact that the above scene actually takes place in St. Louis is all the better, in case you forgot that.

The move of Centene is just another insane example of businesses playing various cities against each other in order to get taxpayer money they don’t deserve. I may sound naive here (and I am not at all naive when it comes to government and politics), but if cities such as St. Louis would just improve their overall business climates, they would not have to give away the store to favored targets. These incentives and tax credits are necessary precisely because of the earnings tax and other disincentives for business in the city. Getting rid of those disincentives first makes giving away new incentives far less necessary.

Support Us

The work of the Show-Me Institute would not be possible without the generous support of people who are inspired by the vision of liberty and free enterprise. We hope you will join our efforts and become a Show-Me Institute sponsor.

Donate
Man on Horse Charging