The Osage Beach TIF Commission will meet on April 17, 2023 regarding the Oasis at Lakeport project. More information here.
Does Tax-Increment Financing Pass the But-For Test in Missouri? Read the full Policy Study: https://bit.ly/3mkuFw8
Nuclear Energy in Modern Missouri
Is nuclear power on the rise in Missouri? House Bill (HB) 225, which just passed through the House, would allow state utility companies to raise consumer rates to pay for the construction of small module nuclear reactors (SMRs). The goal of the bill appears to be spurring nuclear power in Missouri, which has largely been non-existent for decades.
So, what would the bill change?
HB 225 would modify a law passed in 1976 that prevents government-supported utility companies from raising rates to pay for construction of new projects. Specifically, HB 225 would allow only a “clean baseload plant rated under 600,000 megawatts” to be exempt from the current law. The current ban on raising consumer rates to help pay for construction projects would still apply to traditional nuclear plants (which are rated at over 700,000 megawatts), non-baseload energy sources (such as windmills and solar panels), and fossil fuel plants (which are deemed unclean). A utility company would only be able to raise consumer rates to pay for the construction of (SMRs).
So, what are small modular reactors (SMRs)? How are they different?
SMRs are essentially a smaller, more compact version of a traditional nuclear plant. They are brand new, cutting-edge nuclear technology, and are beginning to be rolled out across the United States—including a new SMR project a stone’s throw away from my hometown in East Tennessee. Although they are less powerful, they improve upon some of the shortcomings of traditional nuclear power plants. First, they take up far less space—the SMR being constructed near my hometown will be the size of a football field. They are less expensive and can be assembled more quickly, as the major components of each SMR are prefabricated (constructed beforehand), meaning they can be manufactured in a factory offsite and shipped to the location. This differs from traditional plants which are much larger and have to be custom designed to fit certain landscapes. SMRs are very versatile—they can increase or decrease output to match energy demand and shore up weaknesses in the power grid. For example, if a huge concert comes to a town in Missouri, an SMR can ramp up energy output to assist the grid. Additionally, SMRs can be grouped together so that if energy demand exceeds the capability of one reactor, another can be paired with the current reactor.
Are these small modular reactors safe? Could they explode and create radioactive waste?
When thinking of nuclear energy, many conjure up images of Chernobyl—the Soviet Union nuclear plant and subject of a recent HBO series—or of nuclear bombs that loomed ominously during the Cold War. However, modern nuclear energy is clean, safe, and efficient. Nuclear fission does not produce greenhouse gas and misconceptions surround nuclear waste. Nuclear waste is reusable and there is only a small amount of it that has to be stored securely. If you took all the nuclear waste ever produced by the United States nuclear industry since the late 1950s, you could dig a ditch 10 yards deep under the dimensions of one football field and store it there. Additionally, a nuclear plant cannot blow up like a nuclear bomb; it is impossible. While a disaster like Fukushima is already unlikely, the design of an SMR (which does not require power to cool a reactor down) makes an accident even less likely.
HB 225 could expand nuclear energy in our state, providing Missourians with additional clean, safe, efficient, and reliable energy, and deserves serious consideration.
Learning From Wisconsin with Will Flanders
Susan Pendergrass speaks with Will Flanders about what Missouri can learn from Wisconsin’s educational choice programs.
Will Flanders is the Research Director at the Wisconsin Institute for Law & Liberty. Together with the education policy team, Dr. Flanders conducts econometric research on the application of WILL’s principles of freedom and liberty to the educational system in Wisconsin. Since joining WILL, he has authored or co-authored reports on the return on investment from charter schools, the effects of Act 10 on the teaching workforce, and the economic benefits of the Milwaukee Parental Choice Program.
Produced By Show-Me Opportunity
Missouri Charter Schools Top the Academic Growth Charts
The first report from the Missouri School Improvement Program 6 (MSIP 6) was released recently, providing data on how each school and district in Missouri performed. Evaluation systems, such as MSIP, typically measure performance and growth. Most of the public conversation is about performance, as we regularly see discussions about the percentage of students who are “proficient” or “advanced.” While performance is a really useful metric, growth is also important. And in the MSIP 6 results, the extremely high growth rates in both math and English/language arts (ELA) for charter school students were notable.
Before delving into the growth results, it is important to understand the applicable terminology. There are two different subgroups for comparing math and ELA scores: “all students” and “selected groups.” All students is self-explanatory, but selected groups are comprised of students that have been historically lower performing—low-income students, Black students, Hispanic students, students with disabilities, and English-language learners.
The latest MSIP 6 results display growth statistics for 1,672 different traditional and charter schools, with charters comprising 57 (or 3.4%) of the total. Despite being such a small percentage of the overall sample, charter schools held at least 20 percent of the top ten, twenty-five, and forty spots in each category.
*KIPP Wisdom Academy STL was #1 in ELA Growth for All and Selected Groups
**Four of the top six were charter schools
***The top three, and four of the top five, were charter schools
While charter schools are greatly overrepresented in the top scorers for all students, they are even more so in selected groups. In areas with historically lower-performing students, charter schools have narrowed some of the traditional gaps. Growth may also be a better measure than absolute performance in some of these areas that have struggled historically. It would be unreasonable to expect schools with many underperforming students to compete with high-performing districts overnight. But growth indicates that things are moving in the right direction and that the gap may eventually disappear.
Opponents of charter schools often point to their performance compared to state averages. Since Missouri’s charter schools predominantly serve higher percentages of disadvantaged students living in St. Louis and Kansas City, these comparisons are not very accurate indicators of charter school quality. In certain circumstances, growth can be a better measure. And, as we can see, charter schools seem to be getting something right on growth that traditional public schools can’t yet match. Charter schools have shown they certainly deserve a place (and an expanded one) in Missouri’s education sphere.
Myth vs. Fact with Ben DeGrow
Susan Pendergrass speaks with Ben DeGrow about some common myths about school choice, the state of education reform in several states, and more.
Ben DeGrow is the Policy Director of Education Choice for ExcelinEd.
Ben worked nearly two decades in state-based public policy, providing expert analysis in school choice, school finance and more. In his time at Colorado’s Independence Institute and Michigan’s Mackinac Center for Public Policy, he led dozens of studies and research project initiatives while also managing or supporting various coalitions to advance student opportunity through greater parental choice. Ben’s classroom experiences include service as a university graduate assistant, high school history teacher and a substitute in Michigan public schools. He earned a Bachelor of Arts degree in history from Hillsdale College, a Master of Arts degree from Penn State University and a Certificate in Education Finance from Georgetown University.
Produced by Show-Me Opportunity
The “Bruno Principle” of School Finance—Don’t Talk About Total Expenditures
What do the Missouri Department of Elementary and Secondary Education (DESE) and most newspaper reporters have in common? They follow the “Bruno Principle” when it comes to spending on debt and facilities for public education—they don’t talk about total expenditures.
Total expenditures include everything it costs to run a school district, from books and salaries to buildings and debt. It is exactly what it sounds like—total expenditures. Try to find this figure for the state on DESE’s website; I doubt you’ll have much luck.
DESE and the newspaper reporters regularly cite Missouri’s or an individual school district’s current expenditures per pupil. Current expenditures are operating expenses that do not include costs for facilities or debt. DESE readily displays these figures on its website and they are the figures you will see repeated in the media. (While you won’t find the total expenditure per pupil figure on DESE’s website, you can calculate it yourself using DESE data—for 2022 it was $18,683.)
There are good reasons to report current expenditures. For starters, they tell you how much it costs to run the day-to-day business of educating kids in a school district. Moreover, they are more or less consistent over time. Total expenditures may fluctuate when a school district makes a big debt payment or decides to build a new building. Nevertheless, this does not make the total expenditure figure pointless.
Current and total expenditures are each relevant, but they answer different questions. Think of it like this. Can you tell the difference between these two questions:
-How much are your housing costs?
-How much does it cost to run your house?
The first question asks how much you are paying for your mortgage or rent and all of your utilities and incidental costs. The second drops the cost of the housing payment. If I want to know how efficient your home is, I might ask that second question. If you are on a budget and I’m trying to help you make sound financial decisions, I’m going to ask the first question.
In the public discussion about school spending, we are only told by DESE, public school officials, and the media about operating expenditures. Taxpayers care about this, but they want to know where all their dollars are going.
It is time to drop the Bruno Principle. It is time to tell Missourians exactly how much their school districts spend (in total) per pupil.
In the interest of promoting transparency, the Show-Me Institute has created a useful data tool: moschoolrankings.org. The site allows you to compare school districts academically. You can also toggle to look at school district finances. Here, you can see how each school district spends your taxpayer dollars.
DEI Statements, Biggest Budget Yet, and Pot Tax Vote Tuesday
Patrick Ishmael, David Stokes, and Elias Tsapelas join Zach Lawhorn to discuss recent changes to language used in University of Missouri System job listings, the progress of the state budget process, a preview of the upcoming election, and more.
DEI-blocking Bills and Amendments Rain Down in “Loyalty Oath” Aftermath
I’ve talked a lot in the last month about how the state shouldn’t allow institutions of higher learning to impose woke loyalty oaths on job applicants and how the University of Missouri System responded to the controversy in a largely positive way last week. Now it appears that legislation on the subject is finally on the move, with bills in both the House and Senate restricting such university practices moving efficiently through their respective committees.
But perhaps the most interesting recent development on this subject happened Tuesday night. As part of the House’s annual budget debate, amendments were repeatedly added to spending bills that would explicitly stop state funding from going to DEI programs—not only in higher education, but in other state departments as well.
Now that the budget bills go to the Senate, this language will likely change or even be removed by the upper chamber. We’ll keep you posted on the progress of the budget bills and on the other anti-loyalty oath initiatives. The legislation remains a long way from crossing the finish line.
St. Louis County Municipal Use Taxes Should Expand the Tax Base, Not the Size of Government
A version of this commentary appeared in the St. Louis Business Journal.
Use taxes in Missouri are simply sales taxes on goods delivered to your home from out-of-state sellers. Local governments have been authorized to collect use taxes for a long time—predating the internet, even—but they have not been widely adopted. Collecting sales taxes on a family’s Sears catalog purchases in St. Louis was a lot of work for little revenue. The internet has changed that. The Supreme Court decision in the “Wayfair” case, changes to state legislation in 2021, and, most obviously, the tremendous increase in e-commerce during the pandemic, have all combined to greatly increase the need or desire (depending on your point of view) for governments to tax online sales.
For purposes of comparison, e-commerce now makes up over 14% of total sales in the United States according to the U.S. Department of Commerce. For cities in St. Louis County, 14% is a lot of sales not to tax. To address that, several St. Louis County municipalities (Chesterfield, Town and County, Fenton, Maryland Heights, Velda City, Flordell Hills, and Northwoods) have placed a use tax on the April 4, 2023, ballot. In many of these municipalities, use taxes have been proposed and failed previously. However, a lot has changed in e-commerce in recent years, and it may be time for voters to revisit the issue. (Although for cities like Chesterfield and Fenton, where voters rejected the use tax less than a year ago, asking again in the manner of a spurned yet persistent suiter is unseemly.)
Expanding the tax base with a use tax, if done in conjunction with a reduction of other, more harmful taxes, could be a beneficial change for cities in St. Louis County. But let’s be clear: if there is no corresponding reduction in other taxes, this is a tax increase on residents.
Flordell Hills is a particularly intriguing decision. I’m curious to see if voters will trust city government with more tax money after two city officials were recently convicted of stealing over $600,000 in city funds—a substantial portion of the annual budget. Fool me once . . .
It is a central tenet of tax policy that a tax base should be as broad as possible. The more expansive the tax base, the lower the rate that must be imposed to fund the functions of government. Exact use-tax revenue amounts are hard to predict, but Maryland Heights, to give one example, previously estimated it would receive about $2 million per year if a use tax is enacted. The use tax could be approved by voters to responsibly expand the tax base and equalize the competition between online and physical stores, but it should not be approved simply to grow municipal government revenues. Imposing a use tax in a revenue-neutral manner is not new idea. It is exactly how the Missouri legislature addressed this issue with the state’s new use tax law in 2021.
For the cities in St. Louis County proposing to impose their own use taxes, the simplest way for them to offset the revenue increases from the use tax would be to lower their property taxes in a revenue-neutral manner. That would lead to a wider tax base, fairer competition between businesses, and lower rates for taxpayers. Other options for various cities if the use tax is approved include eliminating more harmful taxes or fees. Reducing the local utility tax rate would be another good exchange for cities that do not levy property taxes, such as Chesterfield.
The imposition of a use tax in these St. Louis County cities could be a positive policy change. It could also be an easy way for politicians to just raise taxes one more time. By having various city officials pledge to enact offsetting revenue reductions that embrace the positive aspects of the use tax, these municipalities can amplify the public benefits while curtailing the tax impact on residents and businesses. That is a plan I think most taxpayers and voters could support. Without such a commitment, though, the use tax is just another tax increase.
