Page 919 – Show-Me Institute

MSBA Joins the Blogosphere

Posted on October 23, 2007May 5, 2026 by Sarah Brodsky

I see, by way of Combest, that the Missouri School Boards’ Association has started a blog. One of its stated objectives is to "get the word out about public education success stories in Missouri." In case you’re concerned that a blog like that will be updated only once in a blue moon, another stated goal is to discuss legal issues and federal and state legislation — about which, we can all agree, there is much to say.

I don’t expect this new blog to be a local version of Cato-at-Liberty, but I’m looking forward to the exchange of ideas it’s sure to trigger.

Liberty Should Consider Privatization, Not Tax Increases for Utilities

Posted on October 23, 2007May 5, 2026 by David Stokes

Liberty, Mo. (Clay County), is considering raising utility fees, aka taxes, on its citizens as part of its 2008 budget. The Kansas City Star has the story here (scroll down to the third story). The kicker here is that nowhere in the article, or from what I can find on their website, do they appear to even be considering selling off and privatizing their water services. The op-ed I wrote here about Kirkwood, in St. Louis County, applies even more to Liberty, as Liberty treats its own water, as well as using its own distribution system.

Liberty does not need to do this. Missouri-American is more than capable of purchasing the water system and serving the needs of the citizens. And with the proposed Liberty rate increase, they can almost certainly do it at a lower cost to the city and its residents, even after you remove the one-time profit of the sale from the equation.

To Liberty’s credit, they do seem to have bid out their trash collection services, which are handled by BFI. Plus, the city has one of the better municipal websites I have visited, so let’s give them props for that, too.

CARR Training Returns Home to Missouri

Posted on October 22, 2007May 5, 2026 by Eric D. Dixon

Along with David Stokes, I had the pleasure of attending two all-day sessions training Missouri broadcasters how to use the techniques of Computer-Aided Research and Reporting, first on Friday at UMKC and, the following day, at UMSL. This is a program started about eight years ago by a couple of folks at the Heritage Foundation — Bill Beach, director of Heritage’s Center for Data Analysis, and Mark Tapscott, formerly director of Heritage’s Center for Media and Public Policy, and now editorial page editor of the Washington Examiner. They were joined at our sessions by Greg Elin, chief data architect for the Sunlight Foundation, and Robert Bluey, who now holds Mark Tapscott’s old position at Heritage. In fact, Robert currently has a couple of entries on his blog about their Missouri trip.

The Show-Me Institute sent me to DC in July to take a look at one of Heritage’s CARR seminars, and decide whether the program was worth bringing to Missouri. Not only is the program incredibly valuable — for younger newcomers to journalism and old hands alike — but in a way, bringing this program to Missouri is like bringing it home. The textbook given out during the training sessions was written by none other than Brant Houston of the University of Missouri-Columbia.

One of the primary benefits of a program like this is that it shows essential skills can be taught in a non-ideological environment, even if the teachers have their own political points of view. Folks at the Show-Me Institute, the Heritage Foundation, and the Sunlight Foundation — in addition to all the attending reporters and editors — would all undoubtedly find many things to disagree about (and did, as evidenced by our lunch and dinner conversations). But the material presented in the training sessions was entirely informational — about how to use computers in researching articles, checking claims of fact, analyzing the use and misuse of statistics, and learning about all the new and varied ways Internet technology allows information to be gathered and used in ways unimaginable only a few years earlier.

These events wouldn’t have been possible without the generous support and organizational efforts of Don Hicks of the Missouri Broadcasters Association. We owe him a huge debt of gratitude.

Missouri School Districts Gamble … and Lose

Posted on October 22, 2007May 5, 2026 by Joseph Haslag

On October 17, Judge Richard G. Callahan rendered a decision in the case brought by many of Missouri’s school districts alleging that the State of Missouri does not adequately fund public education. Judge Callahan concluded that the state is meeting its constitutional obligation to spend 25 percent of the state budget on K-12 public education.

Legal proceedings are not cheap. According to an Associated Press article written by David Lieb, two organizing bodies of Missouri’s school districts — The Committee for Educational Equality and the Coalition to Fund Excellent Schools — have spent $1.9 million and $700,000 respectively. In addition, the St. Louis School District spent $600,000. Overall, plaintiffs have spent $3.2 million in trying this case.

At the time the case started, the school districts would have thought of this as an investment. In this context, the return is abysmal. After spending $3.2 million, the additional funding — after enforcing Judge Callahan’s ruling — will be zero. So, from the school district’s perspective, the return is negative-100 percent, so far. Perhaps it is too early to measure the returns. Often, it takes time to realize the gains from such an investment. I cannot accurately forecast how this trial will affect Missouri’s legislature. Hence, it is possible that the school districts will realize significant gains in the future.

What is the likelihood that Missouri’s General Assembly will feel compelled to increase their contribution to K-12 education? In my view, the answer is that they will not. For the sake of disclosure, I should mention that I computed the Legislature’s obligation for this trial, presenting evidence that the state was more-than-meeting its constitutional minimum. Indeed, my independent calculations indicated that the state spent more than 35 percent of its discretionary budget on K-12 education in each of the last three years. Based on my calculations, it is difficult to imagine that the Legislature will feel compelled to increase its contribution to elementary and secondary education, given that it is spending more than one-third of its discretionary budget on this activity. By this reasoning, the most likely event is that K-12 education will receive the same funding, as a percentage of the state’s general revenue, as it did last year.

Thus, unless Missourians want to specify an even larger fraction of state resources to funding elementary and secondary education, the return to this trial investment will not improve much from this year’s utter failure during the next few years. In economics, the question starts with the opportunity cost of the resources spent on this trial. Even if the per-district expenditures are a small fraction, the relevant question is whether the school districts would have had a higher return by spending those resources on producing education. It is hard to imagine that the return would be negative-100 percent if spent on books, teachers, science equipment, etc. Elementary economics tells us that resources should flow to their highest valued use. It is time for school districts to apply this logic.

Missouri in High Immortal Verse

Posted on October 22, 2007May 5, 2026 by Sarah Brodsky

Regular readers of this blog know that I like to include references to literature in the titles of my posts. So, of course, I was intrigued to learn that Gov. Blunt is now seeking a poet laureate:

Blunt is working with the Missouri Center for the Book to determine length of term and a basic job description. The center is a nonprofit group that promotes the importance of books and reading.

"This is a public acknowledgment of the value of literary arts," said Mark Tiedemann, board president for the center. "It puts a face on what is all too often overlooked."

We have official state invertebrates; now we’ll have an official poet.

The problem with this phenomenon is not that it burdens taxpayers — the poet laureate won’t receive a salary, just like the crayfish aren’t compensated — but that it gives the impression that everything worthwhile needs government sanction or approval. Why don’t we just appreciate our state’s wildlife and writers without official designations? And no matter how diplomatically the poet is chosen, any choice is sure to annoy somebody out there because of subject matter or poetic style.

In some ways, this might be a better move than giving crayfish a special title. Most states do have poet laureates, and many people like the idea. If a laureate is chosen once every few years, that doesn’t waste elected officials’ time the way hundreds schoolchildren lobbying for official bugs could.

On the other hand, a choice of a partisan poet could lead to unnecessary public discord. At least crayfish don’t write anything controversial.

Cell Phone Subsidies and 911 Service

Posted on October 22, 2007May 5, 2026 by David Stokes

I have written before about the proposed new 911 tax on cellular phone bills. There is a great article in the Sikeston Standard-Democrat (link via Combest) about the latest meeting of the legislative task force considering how to improve 911 service in Missouri. In prior posts, I had worried that a statewide 911 fee/tax would not be used just to improve the location ability of 911 cell calls, but to add 911 service to the parts of Missouri that had never bothered to institute it in the first place at their own cost. Needless to say, I appear to have been justified in the concern (emphasis added):

As it is also proposed that 40 percent be diverted to help rural counties without 911 establish their service, that means his center would only get about 30 cents per cell phone ?minus 3 cents that would be deducted for processing, Wells said. He said that means it would take five cell phones to make up for a single land line.

It should absolutely be required that if this cellular tax passes, rural counties that have never established 911 service be forced to institute a local phone tax as well to pay for a portion of their new emergency service. They should not be allowed to make taxpayers statewide pay for something they should have paid for themselves decades ago. If the state does not make that a requirement, I’m going back to a beeper.

Kirkwood, Tax Rates, and a Well-Timed Op-Ed

Posted on October 22, 2007May 5, 2026 by David Stokes

There is a debate in Kirkwood about the proposed library district tax rate increase on the ballot next month. This is a good thing — debate about issues is always healthy. In the interest of full disclosure, I am chock full of conflicting biases on this one, what with my general desire for streamlined government, my work as president of the University City Library Board, and my appreciation of historic areas like Kirkwood Junction. Mr. Larry Allin is a leading opponent of the measure, and he makes a number of good points in the Post-Dispatch article, except for the part about better service which would strictly be his opinion:

The county library has its headquarters and a branch near Kirkwood. They provide better service and parking, Allin said. The county library benefits from economies of scale — and its 14-cent tax rate is lower than the Kirkwood library’s, he said.

Liz Walker, my counterpart in Kirkwood, offers a number of retorts:

Liz Walker, chairwoman of the library’s trustees, on Thursday said the tax increase would preserve "a huge asset for all citizens of Kirkwood. It’s convenient, and it brings in people from all parts of the community."

I think that a having a public library in the heart of a downtown area really adds something to the area, such as in the University City Loop, Downtown St. Louis and Downtown Clayton. I also think that the property tax increase proposal is going to be a victim of bad timing, coming a few months after voters approved another tax increase and a few days after voters will have received their property tax bills in the mail. But speaking of timing, the voters and citizens of Kirkwood could always consider selling off their municipal utilitites, which would give the city and its taxing districts a number of options moving forward. (Thank you to the Missouri Political News Service for hosting my latest op-ed.)

The citizens of Kirkwood get to decide between some obvious choices: higher taxes and a quality library right in the heart of their downtown area, or lower taxes and a reduction in local libarary services, which may or may not be offset by the presence of two county libraries nearby. I am not going to presume to tell the voters of Kirkwood what they should do, but I look forward to following the debate and decision.

Reading is Expensive

Posted on October 22, 2007May 5, 2026 by Justin Hauke

On November 6th, Kirkwood residents will vote whether or not to approve an additional 12 cents in taxes per $100 of assessed property value in order to (primarily) finance improvements to its municipal library.

Dave wrote a great entry on the St. Louis Country Library system a few weeks ago, but I have to disagree with him on the benefits of Kirkwood maintaining its own library, rather than consolidating with the county. Kirkwood residents already pay 16.7 cents in taxes per $100 of assessed value in order to maintain their city library (compared to 15 cents for St. Louis County residents). The proposed tax increase would push this to nearly 30 cents.

Does such an expensive library system make economic sense? The building may be impressive and have an extensive collection, but is it really worth an extra $45.60 per year (for an owner of a $200,000 house) to maintain such a facility, when it could be consolidated with a country branch right down the street? By consolidating, you’d have the benefit of economies of scale, which would allow the two libraries to combine their collections and charge less in taxes.

Dave disagrees with me (and he should know, he serves as president of the University City Library Board of Directors) since he argues that Kirkwood residents like their own library and feel that it’s worth the cost. But residents have previously rejected municipal bond proposals to renovate their library. And I guess I just don’t see the point of paying twice as much in taxes to maintain a library on my block, as opposed to paying half as much for one the next block over, especially if it would have twice the books (and yes, that’s a little bit of hyperbole, but the point is there).

Should Kirkwood Sell Its Municipal Utilities?

Posted on October 22, 2007May 5, 2026 by David Stokes

Kirkwood is the only municipality in Saint Louis County that continues to provide utility services to its residents. Would citizens benefit if Kirkwood abandoned this service model, instead allowing private, regulated utilities to provide all utility services to residents?

In January 2002, Florissant sold its water distribution system to Missouri-American Water Company for $14.5 million. That works out to $268.78 per person. Going by that ratio, Kirkwood could sell its water distribution system for $7,344,072 (in 2002 dollars), which matches the estimates Kirkwood received in 2004 when it investigated the possibility of selling its water system.

Florissant used the profit from its sale to finance additional street repairs, public works improvements, and police department projects. It then put most of the money, $10 million, into a reserve fund that earned interest for the city. Kirkwood had to consider a similar decision in 2004 because of the major capital needs of its aging water treatment plant. Officials opted to close the treatment plant and purchase water wholesale from Missouri-American Water, but maintain city operation of the distribution system. Kirkwood Electric operates in the same manner, purchasing electricity wholesale from AmerenUE and reselling it to residents.

A 1970 study by University of Missouri economists Paul Junk and Richard Wallace demonstrated that private, investor-owned electric utilities had significantly lower operating costs per kilowatt hour than municipal utilities. While that study compared power-generating municipal utilities to private utilities, it is still relevant to the current situation. The study concluded it would be better for municipal utilities to purchase and redistribute power from outside sources, as Kirkwood now does for both electricity and water, rather than produce or treat it themselves, as Kirkwood used to do. Is it now time to move further?

There are good arguments for maintaining the existing municipal electrical and water distribution systems. Both systems continue to generate excess revenues that can be reinvested into other Kirkwood services and help keep the city’s tax rates lower. The current tax-exempt status of the municipal distribution system decreases pressure on costs and allows more revenue to be returned to other city services. In fiscal year 2005, the electric department returned $1,380,000. Although it is hard to measure, a sense of civic pride can result from having your own city provide this service, much like community pride in a high school football team.

Kirkwood’s own website states that residents pay the same rates for electricity as AmerenUE customers. From a review of the publicly listed rates for water, it seems that Kirkwood residents pay a slightly higher rate for water ($1.8353 per 100 cubic feet compared to $1.5253 for Missouri-American) than other county residents, but with Missouri-American’s recent rate hike request, the Kirkwood rate may soon be lower. The benefits to Kirkwood residents do not lie in cheaper electricity or water, but in reinvesting resale profits in the city rather than seeing them go to shareholders.

There are also strong arguments for selling off municipal utilities. The one-time profit from a sale of the water distribution system could finance immediate needs, an emergency fund, a long-term, interest-earning reserve fund, and a property tax cut for Kirkwood’s residents — all at the same time. While there might be no short-term salary savings from employee layoffs, because the utilities still generate a profit, savings from long-term employee pension costs could be significant. On top of the immediate profits Kirkwood would receive from any sale, AmerenUE and Missouri-American Water are two of the 10 largest property taxpayers in Saint Louis County. Replacing tax-exempt facilities with systems they own would increase Kirkwood’s tax base and provide a long-term revenue benefit on top of immediate profits from the sale and budget savings.

While Kirkwood utilities do make “payments in lieu of taxes” back to the city, those payments really just move government money around without generating new revenue or long-term savings. And not every year going forward will result in an operating profit to be transferred to the general fund. According to Kirkwood’s 2007 budget report, “The high average age of our (electric) system dictates more replacement and maintenance and drives our operations and maintenance costs up.” This situation will not become less expensive for Kirkwood over time.

In my opinion, Kirkwood should follow the example of the other municipalities in our area that have ceased providing utility services, and sell its facilities to investor-owned, regulated utilities. This would allow Kirkwood to focus on services that are not privately provided, such as police and fire protection. Aside from the one-time profit, however, the immediate, quantifiable savings to residents from the sale would be minimal. If the residents and leaders of Kirkwood wish to continue the current system, there are legitimate reasons to do so.

David Stokes is a policy analyst at the Show-Me Institute, a Missouri-based think tank.

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