Susan Pendergrass speaks with former superintendent John C. Carver. John writes about education policy at growthringsjcc.blogspot.com
Produced by Show-Me Opportunity
K-12 without Borders: School Choice in Missouri
On April 26, 2023, the Show-Me Institute, in partnership with EdChoice and Show-Me Opportunity, hosted a virtual event featuring EdChoice’s Marty Lueken, Director of Fiscal Research & Education Center, and Mike McShane, Director of National Research, join Show-Me Institute’s Director of Education Research, Susan Pendergrass. Mike and Marty discussed their recently published report titled K-12 Without Borders: Public School Students, Families, and Teachers Shut in by Education Boundaries, which examines what a K-12 education system with fewer school district borders would mean for students, teachers, and taxpayers.
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Show-Me Institute Policy Briefs on Open Enrollment in Missouri:
School Choice and School Transportation: Exploring Opportunities
Produced by Show-Me Opportunity
Initiative Petition Reform Clears Senate Hurdle. Great! Now Stop Wasting Time
In a move that may open the spigot on legislation in both chambers, on Thursday the Missouri Senate finally passed an amended version of a Missouri House initiative petition (IP) reform proposal. The proposal would raise the threshold for the state constitution to be modified at the ballot box. This development is important for a couple of reasons.
The first reason it’s important is the policy itself. IP reform has been a long-overdue priority because in Missouri, the threshold to amend the state’s constitution is practically the same as the threshold to amend a law—only when the constitution is amended, it’s much harder to change later. Raising the bar for constitutional amendments—requiring a supermajority or some kind of concurrent majority of voters for passage, as this bill would do—is a rational move that should have been done last year, if not three years ago.
Whatever your thoughts on the various contentious constitutional ballot items over the last several years, not reforming initiative petitions has had an irrefutably enormous impact on policymaking in the state. Of course, two things still have to happen for IP reform itself to become law: the House and Senate have to agree to and pass the same legislative language, and voters will have to pass it into law.
But the second reason the Senate’s move on IP reform is important is more practical and political in nature. Reports in recent weeks suggested that the Missouri House would no longer advance Senate bills so long as House priorities, particularly the IP bill, languished in the upper chamber.
Keep in mind that the House finished its work on IP reform at the beginning of February; the Senate heard the bill in committee a week later . . . and then sat on the legislation for two months until literally the last legislative day in April. That approach in the Senate—and response by the House—dimmed prospects for all legislation in Missouri, especially as we approached the end of the session in mid-May.
Whatever the IP reform bill’s ultimate fate, it’s my hope that the Senate will take the present legislative opportunity to get its act together in the two weeks remaining in the session and, rather than (for instance) stop attempts to get woke diversity, equity, and inclusion (DEI) and critical race theory (CRT) programming out of government, instead stop making excuses and start keeping the promises legislators made to their constituents over the last six months. Tax cuts, school choice, transparency . . . the Senate is suffocating all kinds of reforms right now. That can’t continue.
A Better Way to Pay?
A few weeks ago, I wrote about the state’s new gas tax refund program and how its first year was a complete failure (learn more about the gas tax hike and refund scheme here). In short, very few Missourians took advantage of the program, and I think a big reason for that is how difficult the state made the process for claiming a refund. Fortunately, if a bill recently passed by the House can make it across the finish line, Missouri drivers would be in store for a much better experience next year.
If enacted, House Bill (HB) 519 would require the state’s department of revenue to develop a mobile application for claiming gas tax refunds, which is what I suggested the state do back before the program began. The idea of keeping track of gas receipts for a whole year to fill out a form and mail it to Jefferson City always seemed like more work than the refund would likely be worth to most Missourians. That’s why I think having an easy process for registering gas purchases at the point of sale and submitting those receipts through an app for refunds would be a real game changer.
Additionally, the bill would get rid of the arbitrary window for filing rebates. As much as I’d like to think most Missourians enjoy following the state’s budget along with me every year, I don’t think the end of the state’s fiscal year (which is the current deadline for filing gas tax refunds) represents an obvious time for most to be filing tax documents. Expanding the window to allow gas receipt submissions through the app all year, as well as when individuals file their taxes in April, would likely make things much more convenient for those interested in claiming a refund.
Finally, the bill allows taxpayers who don’t want to mess with tracking gas receipts to claim a “standard refund,” which will offer a specified amount as a credit against the individual’s income tax liability. For the 2023 tax year, the standard refund would be $30. But by 2026 and every year after, when the gas tax hike is fully ramped up, the refund would be $75.
As I explained previously, if the legislature really wasn’t trying to raise taxes on Missourians without their input, the refund portion of the gas tax hike should be simple enough that most taxpayers feel they can reasonably take advantage of the refund opportunity. Based on the data from the refund’s first full year, I’d say that was not the case. While HB 519 is not perfect, I think it goes a long way toward demonstrating the state’s commitment to the law enacted by the legislature. I, for one, would appreciate a better way to reclaim my tax dollars.
Not the Time for Entertainment
Like Nero fiddling while Rome was burning, our state lawmakers are focusing on entertainment at the most inopportune time. With less than three weeks left of this year’s legislative session, only two bills have thus far made it to Governor Parson’s desk, yet policymakers are devoting time toward creating a new “entertainment” tax credit.
This new credit, called the Entertainment Industry Jobs Tax Credit, is just as bad—or perhaps even worse—as the film tax credit, which is truly horrible (as I explained here). The credit, based on a similar program in Pennsylvania, would reimburse a “qualified rehearsal facility” for rehearsal and touring expenses. If this sounds a bit vague, that might be intentional. As has been discussed previously (both here and here), this program is aimed entirely at one company in Chesterfield that has already received significant state and county subsidies.
Missouri already devotes more than $600 million per year to economic development tax credit programs that mostly don’t work, and this new entertainment tax credit is no better. Right now, despite efforts to bring the program to other states, Pennsylvania is the only place in the country that thinks the program is worthwhile. Unfortunately, even Pennsylvania’s own audit shows that the program is a bad investment.
According to a report from the state’s Independent Fiscal Office, the credit “provides substantial benefit to the only Pennsylvania qualified rehearsal facility.” And “the net return on investment (ROI) is 15 to 35 cents of state tax revenue for each tax credit dollar.” In other words, state taxpayers are losing 65 to 85 cents off each dollar to benefit a single private company.
This program is yet another example of Missouri’s legislature taking the wrong approach to getting the state’s economy back on track. If the legislature wants more concerts or live entertainment in the state, it should start by figuring out why there aren’t more already. And if the answer is the state’s taxes are too high, then lawmakers should consider lowering the tax burden for everyone as opposed to creating a specific carve-out for one private business.
A new tax credit isn’t going to make one Missouri city into the next Nashville. With so few days remaining in this year’s legislative session, and with so much left to do, it’s time for our lawmakers to stop fiddling around.
Widening I-70, Education Bills, and How Much is Your House Worth
James Shuls, Elias Tsapelas, and David Stokes join Zach Lawhorn to discuss the latest on the Missouri budget process, get an update on education legislation, why some Missourians are going to be surprised by the increase in their property tax bills, and more.
Produced by Show-Me Opportunity
Prudent Pundit Ponders Independence Power Privatization Proposal
The Kansas City suburb of Independence—although it is weird to call the fifth-largest city in Missouri a ”suburb”—is considering privatizing its municipal electric utility. Municipal utilities are an archaic system, and privatizing the utility would be an excellent move by city leaders. Independence is open about the long-term outlook for its utility. From the Kansas City Star article on the topic:
Independence has struggled to maintain its own power generation as the environmental and financial costs of coal plants has [sic] pushed many other energy firms into renewables. While many say IPL provides exceptional service and reliability, city officials note that their customers pay higher electricity rates than those served by for-profit companies in other parts of the region.
The utility is also facing financial headwinds: Its cash reserves will drop below the utility’s target of $25 million by 2025, officials said. And those reserves will drop to a negative $97 million by June 2032 as the costs to maintain the utility’s infrastructure mount.
“The problem we have, as we sit here today is that IPL is on a course to a financial train wreck, due to what I believe to be questionable decisions in the past,” said Councilman Jared Fears. “So clearly something has to change.”
It bears repeating that Independence utility customers pay more than those using for-profit utilities in the region. This is despite the advantages in taxation and regulation that municipal utilities have over private utilities. There have been several water utility privatizations in Missouri in recent years, but not many electrical utility privatizations. The case for electrical privatization is probably even stronger, as one does not have to deal with the typical “how do you privatize something that falls from the sky?” argument. Unless you make extensive use of your home lightning rod, someone is artificially generating the electricity you use. Eureka and Arnold are just two of the larger cities that have privatized their water or sewer systems in recent years. From the Post-Dispatch story:
Arnold sold its sewer system to Missouri American in 2015 for $21 million. “The system was not in good shape. It was not well maintained,” said City Administrator Bryan Richison. “And city council members were running on not raising rates, so it put us in a bad position.”
As electric vehicles ramp up the electrical power needs of our communities, it is time for Independence, Columbia, Kirkwood, and (most of all) Springfield to get out of the utility business. Private, regulated utilities are much better positioned to provide the necessary services to these communities. These cities should privatize their assets via an open, transparent process and use both the sale price and the future tax revenues to provide better overall public services for their communities.
WATCH: Jason L. Riley on the Life of Thomas Sowell
On April 19, 2023 the Show-Me Institute hosted Jason L. Riley, senior fellow at the Manhattan Institute and columnist for the Wall Street Journal, at the Saint Louis University Richard A. Chaifetz School of Business to discuss his book Maverick: A Biography of Thomas Sowell.
Jason L. Riley is an opinion columnist at The Wall Street Journal, where his column, Upward Mobility, has run since 2016. He is also a senior fellow at the Manhattan Institute and provides television commentary for various news outlets. Mr. Riley, a 2018 Bradley Prize recipient, is the author of four books: “Let Them In: The Case for Open Borders” (2008); “Please Stop Helping Us: How Liberals Make It Harder for Blacks to Succeed” (2014); “False Black Power?” (2017); and “Maverick: A Biography of Thomas Sowell” (2021). Mr. Riley joined the paper in 1994 as a copy reader on the national news desk in New York. He moved to the editorial page in 1995, was named a senior editorial page writer in 2000, and became a member of the Editorial Board in 2005. He joined the Manhattan Institute in 2015. Born in Buffalo, New York, Mr. Riley earned a bachelor’s degree in English from the State University of New York at Buffalo.
About the Book:
Maverick: A biography of Thomas Sowell, one of America’s most influential conservative thinkers. Thomas Sowell is one of the great social theorists of our age. In a career spanning more than a half century, he has written over thirty books, covering topics from economic history and social inequality to political theory, race, and culture. His bold and unsentimental assaults on liberal orthodoxy have endeared him to many readers but have also enraged fellow intellectuals, the civil-rights establishment, and much of the mainstream media. The result has been a lack of acknowledgment of his scholarship among critics who prioritize political correctness. In the first-ever biography of Sowell, Jason L. Riley gives this iconic thinker his due and responds to the detractors. Maverick showcases Sowell’s most significant writings and traces the life events that shaped his ideas and resulted in a Black orphan from the Jim Crow South becoming one of our foremost public intellectuals.
Event sponsored by: Show-Me Institute, the Sinquefield Center for Applied Economic Research, the Sinquefield charitable trust, and Show-Me Opportunity
Optimism and Concern on the Future of Parents’ Bill of Rights Legislation
For those unfamiliar with it, a “Parents’ Bill of Rights” is a law that helps to ensure parents have transparent access to their children’s instruction, spending, and performance materials, and ultimately helps to secure the rights of parents to have the primary say in how their children are educated. Paired with enhanced school choice, a Parents’ Bill of Rights gives parents the ammunition to judge how the government is educating their kids—and the ability to adjust their educational plans and options accordingly.
The good news in Missouri is that we’ve seen legislative progress toward both goals this year, especially with the Parents’ Bill of Rights. On Wednesday, news came from the Missouri Legislature that Senate Bill (SB) 4 had passed out of committee. As our readers may know, SB 4 represents the most likely vehicle for a Parents’ Bill of Rights to pass into law, so its (relatively) expeditious approval in the Senate and in a House committee is heartening.
What’s less heartening is that the House added a Committee Substitute to the bill, which changes its contents and, thus, would require another vote from the Senate if it passes on the House floor, which it seems likely to do. Why is the substitute a problem? Because if the bill survived unamended, the Senate would not have to see the bill again; given the dysfunction in the upper chamber this year, there’s no telling whether the Senate would take up SB 4 a second time with the House’s amended language. Factor in threats from the House that it may stop considering Senate bills altogether, and yeah, the circumstances here aren’t great.
Unless the House knows the Senate can and will pass its revised SB 4 late in the session, I hope the House will consider removing the Committee Substitute, as it did with its special session bill last year, and pass it as drafted by the Senate. I appreciate the inside-baseball reason for rejecting Senate bills in an environment when the Senate is an AWOL partner in policymaking, but that doesn’t change that SB 4 achieves one of the core objectives the House had set out at the beginning of the session: putting parents back in charge of their kids’ education. Four weeks remain between now and the end of this year’s legislative work; we’ll keep you posted if SB 4 makes it across the finish line.
