Adequacy Lawsuits Reinforce Poor Educational Policy

Posted on by Kathleen Navin

As part of a growing trend seen across the United States, several school districts in Missouri continue to perform poorly, failing to prepare students for higher education. Following the Saint Louis Public Schools’ recent loss of accreditation, Missourians want to see change and improvement more than ever. Concern for Missouri’s public school system, however, is not a new development. The past 50 years have seen the rise of several theories on how to promote educational quality — among them, a competitive parental choice environment, which fosters incentives for educators to improve school quality. Unfortunately, the recent adequacy lawsuit trend mistakenly focuses on money, rather than encouraging changes that are needed to improve Missouri schools. To help the public schools succeed, Missouri should focus on incentive-based reforms like parental choice, rather than adequacy litigation.

Adequacy lawsuits have quickly gained popularity among school administrators and educators. The suits claim that current state funding cannot provide an “adequate” education for students, and prescribe a solution: give school districts more money. Although a current adequacy case in Missouri is still pending, several cases in other states — and an older equity case in Missouri — have favored the plaintiffs, granting more money to school districts. This type of substantial increase in financial resources is understandably appealing to many education supporters, but does not lead to the type of restructuring needed to truly change the education system. The amount of funding is not nearly as critical as the way that funding is spent. Until reforms are enacted that change the latter, current conditions will persist.

A statistically significant relationship between expenditure and student performance has yet to be consistently demonstrated. This should not be surprising; when schools receive additional funding despite disappointing educational outcomes and little promise of positive future developments, school officials lack the incentive to develop programs that will improve student performance. When schools are rewarded in spite of failure, they will only continue to misallocate resources to programs that are not in their students’ best interests.

Adequacy litigation not only fails to improve student performance but also costs the state and its taxpayers. A study released in July 2007 by the Tax Foundation discusses the fiscal impact of school finance litigation in the U.S. According to the study, nine out of 27 states ordered to increase educational funding did so by increasing taxes by $13 billion annually. Missouri is among these nine states. The study also points out that “even a hefty, short-term increase in education spending to comply with a court order does not always translate into permanently higher levels of spending.”

Rather than tolerating an approach that rewards poor performance, officials need to push for reforms that increase parental involvement, teacher quality, and students’ motivation to learn. An education system that allows parents to choose the schools their children attend will lead not only to a higher level of parental involvement, but also to better schools. As several school choice studies discuss, increased competition encourages all schools to provide higher educational quality in their efforts to attract students. When faced with competition from other schools, educators will allocate funds to programs with the most successful outcomes, because failure to do this will give parents an incentive to send their children to better-performing schools. Schools with a poor performance record will lose funding. This type of market-based reform motivates officials to improve educational standards while efficiently using resources.

While school choice reforms would take more time and effort than a simple increase in funding, they are necessary to turn underperforming schools into an educational system that will successfully prepare Missouri students for higher education and a competitive labor market.

Kathleen Navin is an intern with the Show-Me Institute, a Missouri think tank, and a graduate student in economics at the University of Missouri-Columbia.

 

Quick Updates All Around …

Posted on by David Stokes

The last few days of the Post-Dispatch have brought a number of updates to things I have been writing about, so how about some quick links and thoughts? Sounds fun, huh? You think you hate this idea now, but wait until you read it!

In a response to fiscal problems caused by a decline in sales at Northwest Plaza, St. Ann has decided to put a large utility tax increase on the ballot. Prediction: It will lose badly, just like the tax increases on the ballot yesterday in our area all did. My thoughts: Utility tax increases are a particularly terrible idea — balancing a budget on the backs of people trying to pay for the basic necessities of life. A general property tax increase would be better than this. At least that would be tax deductible for state and federal income taxes, practically speaking.

University City will be installing red light cameras at Big Bend and Hanley on Delmar. Regular readers (both of you) will recall my hatred of these things. I was going to speak against them at the city council meeting on Monday, but my hatred of red light cameras ran up against my love of going to Cardinals games. As my family has long known, the Cardinals always win those battles. So we have red light cameras now, but at least I saw a 10-run inning and took my son, Nate, to his first game. In the interest of full disclosure, I was heading to play tennis last night, driving northbound on Hanley at Delmar, when I stopped in the right lane for the yellow and the driver next to me completely blew the red. He certainly deserved something for that move.

Missouri and Illinois are slowly getting closer to an agreement on a new Mississippi River Bridge. This is good news, and I look forward to the final agreement — which I understand, for better or worse, will not be using tolls. 

I appreciated the feedback and critiques from the gentlemen at Missouri Political News Service on my post about 911 systems and expansion. I am always happy to defend my posts and discuss my ideas, and am open to hearing new thoughts and opinions on what I write about.

Finally, I am just gonna give a general credit to Combest, as I linked to a lot of articles here and I almost certainly got some most every one of them from his great website.

What to Do With the Budget Surplus

Posted on by Sarah Brodsky

An op-ed in the Springfield News-Leader argues that Missouri shouldn’t spend its budget surplus:

To fairly address this excess, the government should either refund the $320 million to taxpayers or pass comprehensive tax cuts for all Missourians.

I think the second option is much better policy. If you give people a one-time rebate, they’ll spend the money or put in in the bank, then go back to business as usual. But if you cut taxes, people will change their plans, investing more in education and capital because they expect to reap higher after-tax returns. That can have effects far into the future.

“Hot Fuel” Regulations Would Harm Consumers

Posted on by Eric D. Dixon

According to a piece in yesterday’s Kansas City Star, Sen. Claire McCaskill filed legislation on Friday to regulate gas pump measurements "to adjust volumes to account for the effects of temperature." McCaskill said in a statement that the bill was inspired by last year’s series of hot fuel articles in the Kansas City Star.

Heat expands fuel and cold contracts it, so that if you were to buy a single gallon of gas in Florida, you’d actually be buying a somewhat lower amount of energy output than if you were to buy a gallon of gas in Alaska. This temperature dichotomy is particularly relevant for a state like Missouri, with both infamously hot summers and cold winters.

From yesterday’s article:

The stories, which began last August, found that consumers are being overcharged about $2.3 billion per year because of the effects of temperature on fuel.

“We have the technology to change that, and there’s no good reason not to utilize it,” McCaskill said.

As the article also notes, the "physics of hot fuel are fairly straightforward" — but it’s not at all clear that this undeniable variation in purchased energy output actually results in consumers being overcharged. Price is a function of both demand and supply. So, in a competitive market, when temperatures rise and the contents of fuel storage tanks simultaneously expand, gas stations have an increased supply of fuel to sell.

The competitive drive to outsell the station down the street gives each gas station an incentive to lower its prices slightly — precisely because it has that temperature-increased supply of fuel. "Overcharging" is only taking place if we assume gas stations aren’t competitive, which is an absurd assumption. Individual gas stations wouldn’t stay in business long if they didn’t ever lower prices to compete with other nearby stations. This sort of fierce competition is one of the reasons we’re not still at $3.00-plus-per-gallon pump prices — when overall market price drops, so do individual station prices.

The article continues:

The bill would give the Federal Trade Commission, working with the National Institute of Technology and Standards, the authority to implement its provisions. If the legislation is approved, its provisions would go into effect within a year of enactment.

The legislation calls for all retail dispensers in the United States to be equipped to adjust for fuel temperature fluctuations within six years. State inspectors would determine whether the necessary equipment had been installed.

A trust fund also would be established to help pay as much as $1,000 to upgrade each retail pump. To be eligible for the subsidy, however, the retail fuel stations could not be owned by a major oil company. Details on financing the trust are to be disclosed later.

If equipment like this is installed, and gas stations are required to dispense slightly more gas per "gallon" when temperatures are hotter, the price charged for each one of those larger gallons will also naturally rise. Just as prices would fall slightly when hot temperatures bump up the gas supply available in storage-tank reserves, the prices would increase accordingly if that extra supply were, instead, parceled out to motorists a little at a time with each gallon purchased. There would be no consumer savings as a result of this regulation.

But there might at least be more accurate information at the pump. So, aside from the illusory specter of hot fuel "overcharging," it might seem at first glance like a good idea to make sure that consumers know exactly what they’re getting when they buy a gallon of gas, in terms of energy output per gallon. As useful as this information might be, though, it’s necessary to weigh its value against the cost of obtaining it. Temperature-managed pumps would require a huge investment, and would be reflected in still higher gas prices — or higher taxes, depending on how the upgrades are financed. The fact that this investment would be required by law means that economic valuation becomes irrelevant. It wouldn’t matter whether consumers actually think the information is worth the cost — they’d be getting the information, and paying the cost, regardless.

What really matters when buying a gallon of gas isn’t knowing its energy output in relation to other temperatures, but in relation to other nearby stations. If you can be sure that the gallon of gas you’re buying at one station is the same size as the gallon of gas you might buy down the street, you can make an informed decision about which relative price is worth your patronage.

In short, this legislation would increase costs across the board, all in the service of providing consumers information that’s not relevant to comparative fuel shopping.

Civics 101

Posted on by Sarah Brodsky

If the legislature writes the laws, who enforces them? The executive branch? No — according to state senators Tim Green and Chris Koster, it should be you and me:

Last session, bills were put forth to require law enforcement agencies to ask the citizenship status of anyone they arrest. Another bill would have placed a number regulations into the books, including a ban on renting to illegal immigrations. Neither bill passed this session.

That’s from the Columbia Daily Tribune Politics Blog, which also reprints an essay by Rod Jetton about illegal immigration.

I see two problems with these laws. First, they would waste the time of law enforcement officers, who should use their discretion about when these inquiries would be appropriate. Second, they waste the time of the rest of us, who would have to put every transaction or business decision on hold while we determine the immigration status of all people involved.

I’m all for enforcing laws — if the executive branch can do the job.

You Can Tax My Cell Phone When You Pry It From My Cold, Dead Landline …

Posted on by David Stokes

Actually, I really don’t mind the idea of a tax to improve 911 service throughout Missouri, but I do mind that people from areas that have 911 service are going to be taxed to give it to people who don’t. From the article in today’s Post and another on Missourinet (both of which I cribbed from Mr. Combest):

The other problem, according to Bruns, is the disparity of 9-1-1 access in metropolitan and rural areas of the state. He notes that 21 rural counties don’t have 9-1-1 systems.

Call me crazy (get it, call me???), but why don’t the residents of those 21 counties tax themselves to pay for 911 service? We’re not just talking cell phone locators in those 21 counties, we’re talking having no 911 service at all. But please, feel free to tax those of us in the other 93 counties (plus one independent city not within a county) to pay for their service. I realize, of course, that people travel, and when traveling around Missouri you would want responsive 911 service wherever you are at the time, not just back where you are from.

Half of Missouri’s counties lack the ability to track cell phone callers’ locations at all. Only 20 statewide can pinpoint a caller’s location, while some can find a general area.

Now that is something people throughout the state could, and perhaps should, pay for. Everyone would benefit from having better tracking of their cell phones for emergency purposes. (Except when the black helicopter UN troops use it to track us while riding up the North American Union Superhighway to enslave us all, but that is a different issue entirely.)

There is a very important part at the close of the Post-Dispatch article:

James also said 911 centers need to ensure wise use of new money they get, noting that in some areas, there’s a city and a county center within a few blocks of each other that could consolidate efforts.

Amen to that. There is no need for small cities or counties to have their own 911 service. Before the Legislature proposes any new taxes to fund improved 911 service, I hope they mandate a minimum population size for having your own center, or else you have to pay for it all yourself. Here in St. Louis County, some smaller cities have done some good things in consolidated 911 serice, which I wrote about here and here. This is from the Richmond Heights Police Department website:

In 2003 our dispatchers joined a dispatching consortium, housed in the Richmond Heights Public Safety building. The consortium, now called ECDC (East Central Dispatch Center), dispatches calls for Richmond Heights, Webster Groves, Maplewood, Clayton and Shrewsbury. Through this relationship with surrounding agencies, we believe that this will increase the level of service the we provide to our communities. The ECDC is supervised by director Paul Anderson.

This is absolutely what we need more of in Missouri and St. Louis County. These five cities deserve great credit for starting this, and other nearby municipalities, like Brentwood and Rock Hill, need to jump in.  Then we can talk about raising taxes if it’s still necessary.

Familiar Story of Financial Woes for St. Ann

Posted on by David Stokes

Northwest Plaza is struggling, and it is taking St. Ann down with it. The Post-Dispatch has an all-too-familiar story of a municipality struggling because the local mall is having problems. Similiar stories have taken place in Crestwood and Jennings. To its credit, St. Ann appears to have made the necessary cuts in services and staff, along with passing a sales tax increase last year, but now the mall wants to increase sales taxes again to help pay for renovations there:

St. Ann’s Board of Aldermen is expected to vote in September on Somera’s request for $96 million in redevelopment assistance — including a 1 percent tax on sales at the shopping center.

After the renovations are made, the city is predicting an increase in sales tax collections. First comment — there is no guarantee of that. Second comment — even if it does happen, it will just take tax money from some other city (Hazelwood and St. Louis Mills, perhaps), leading to the same problem, different location. As Charlie Brennan often says on KMOX, we are all just eating the same pie, and the retail pie in St. Louis is not growing. All that changes is where we bite.

So, what should St. Ann do? As I said, they have done some good things in regards to making tough choices, so I want to give them credit where it’s due. One thing I highly recommend, although this is not financial, is to stop electing the Chief of Police. That is just silly. Next, the county matrix shows that St. Ann does contract with St. Louis County Public Works to perform a number of functions, but they can certainly contract for more. Finally, follow the lead of Clayton, Maplewood, and Richmond Heights, and give serious consideration to sharing municipal services with Overland, Woodson Terrace, Edmundson, and other neighboring cities. Perhaps this is already being done, but it does not appear to be. Finally, give serious consideration to leaving “A” sales tax status, joining the pool, and rejecting Northwest Plaza’s insistence on public money. I know that would lead to dramatic cuts in city services at the start, but the long-run stabilization might be well worth it. If more cities did this, we could stop the cannibalization of sales tax money within our area.

Parents Need More Choices Than Charters Alone

Posted on by Sarah Brodsky

St. Louis Post-Dispatch readers are debating parental choice in education in a series of interesting letters to the editor. Here’s an excerpt from one:

The desegregation program offers city public school students choices that will continue for a few more years. Charter schools are another way to increase options within the public sector that are open to all students.

This letter criticizes voucher programs because, the authors claim, private schools limit their enrollments to a select few. Evidence to the contrary appears in this L.A. Times article. Even in places like Los Angeles, with many charter and magnet schools, parents have to fight bureaucracy and long wait lists to find schools for their kids.

If, in addition, parents were given vouchers (or tax-credit-funded scholarships) that they could take to private schools, new schools would open to meet the demand. Parents who can afford to pay tuition have no trouble enrolling their kids in private schools. Vouchers would give everyone that opportunity.

A Failed Effort to Redirect Medications

Posted on by Sarah Brodsky

The Southeast Missourian reports on another government health care program that doesn’t work:

A few years ago, as prescription drug costs continued to soar and lawmakers heard concerns from voters, the Missouri Legislature created a new program to help redirect extra, unused prescription drugs to the needy. […]

Pharmaceutical companies, hospitals and nursing homes — the very groups the law was aimed at, who were thought to have a supply of drugs they hate to just throw out — say it’s not working as intended, and hardly anyone is participating.

It turns out that all these private businesses and organizations don’t just have prescription drugs sitting around unused. They don’t need help from the state to avoid stockpiling unneeded medications or to allocate supplies efficiently. When people have trouble paying for medicine, that’s a problem caused by their poverty rather than by broken health care markets.

Some people quoted in the article think that Missouri should allow medicines that were under a patient’s control — such as a bottle of antibiotics someone took home from the pharmacy — to be donated. To me, that sounds prohibitively risky. A better idea would be to issue vouchers that people can spend on new, unopened medicine.

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