Pop Quiz

The St. Louis School Board has decided to spend more money on:

a) New textbooks and computers.

b) Hiring better-qualified teachers in hard-to-staff subjects like math and science.

c) Repairing old school buildings.

d) A PR campaign to slander the charter schools.

Answer: d. That’s right, the St. Louis School Board has hired a marketing firm for $25,000 to publicize the "negative impact of charter schools."

The St. Louis Post-Dispatch article notes that the School Board didn’t take bids for this contract. Surprise, surprise. It’s not exactly like they’re enthusiastic about the benefits of competition.

What is the true value of a taxi medallion in St. Louis?

In New York City, the value of a taxi medallion, simply a license to operate a taxi cab, is $477,000. That is an amazing sum, but certainly understandable by the law of supply and demand. The demand for taxis is always high in NYC, and with Mayor Bloomberg’s proposal to dramatically increase the tax/tolls to enter Manhattan via car, it is likely to grow even higher. As for the supply, NYC limits the number of licenses available, so it does not take a genius to see why the prices of medallions are outpacing other investments in New York.

Here in St. Louis we have the Metropolitan Taxicab Commission. While I don’t like all the regulations it has for cabs (the dress code for drivers is particulaly stupid), it is certainly preferable to the system in place before its establishment in 2003. Before then, the county and city each regulated their own cabs and prevented crossover, so a county cab could pick someone up in the county and take them to the city, but then was not allowed to pick up a fare in the city. So the current system is at least a little better. 

Unlike NYC, St. Louis does not, as far as I can tell, set a numerical limit on the number of licensed taxis. This is a good thing from a free-market perspective, but the commission does have broad powers to deny new licenses if it feels the market is currently being met with existing licenses. As the commission is largely composed of people with direct involvement in the taxi industry, the potential for limiting the number of competitors by limiting new licenses is certainly there. 

The cost for a taxi license in St. Louis is $55 per year. Judging by how hard it is to get a cab in St. Louis, I’d say there is not exactly a line forming (pun intended) to drive that value up. In NYC it is $477,000 for a medallion. That is an 867,172-percent greater value. Based on my perceptions of the cab industries in both towns, I’d say that sounds about right.

Bad Use of Incentives

An editorial in the Joplin Globe titled "Good Use of Incentives" praises the proposed Missouri Quality Jobs Act:

Without the additional funding, local leaders say, Missouri can’t run with the big dogs — namely other states that offer more incentives to employers. Meanwhile, folks looking to make a decent wage are looking or moving elsewhere. According to the U.S. Department of Labor, of the 77,760 jobs in the Joplin metropolitan area, more than 50,000 of them paid less than $10 an hour in 2005.

The editorial portrays economic growth as an auction in which states bid for a few companies that pay well. The lucky residents of those states then benefit from higher wages.

The real economy doesn’t work that way. Any company can afford to pay its employees well if they’re productive enough. But first, employees need to invest in their own education and skills, and their employers need to train them.

A tax incentive program requiring companies to pay high wages is at best a temporary fix. The jobs will probably go to the most productive Missouri residents, who already earn high wages. And most businesses that come to Missouri for a special tax break will leave as soon as some other state offers a better deal.

A better idea is a tax cut that treats all businesses equally, which would give existing companies the chance to spend more on job training or to hire new employees. It would also make life a little bit easier for imaginative entrepreneurs who are dreaming of creating some well-paying jobs from scratch.

Broad Coalition Behind the Midwives

There’s a great column in the Post-Dispatch today about the midwife legislation:

Every mother has a particular way in which they want to give birth and their reasons are motivated by their interests and those of their children. Until a week or so ago, Missouri had a knee-jerk rejection of home birthing — it is a felony to practice midwifery without a doctor’s oversight[…]

Opponents say the bill lacks penalties for bad midwives. Why have they not addressed the matter previously? It’s not like they didn’t have the opportunity. Do they think that nothing bad ever happens at a hospital and there is never any negligence, ever? Ever hear of the soaring 30% cesarean rate? Apparently, a medical mistake is only criminal if you aren’t a doctor. There are bad doctors just as there are bad midwives.

And here‘s an interesting article about the legislation’s diverse supporters. It’s remarkable how people with different opinions and lifestyles can join together to lobby for more freedom in health care. This is an advantage of allowing people to make their own decisions: There’s less arguing when people are free to be different.   

School Choice Would Provide Incentives

An editorial in today’s Post-Dispatch says:

Almost half of the 23 school districts in St. Louis County have slammed their doors in the faces of kids who want to transfer out of the beleaguered St. Louis Public Schools after the district loses its accreditation. The rest are undecided.

Sadly, not a single district so far has agreed to take more kids from the city schools. That’s bad news for parents desperately searching for educational options, bad news for kids and bad news for the future of our work force.

We already know that Missouri parents support school choice by huge margins. The Show-Me Institute has been staying on top of this issue with recent op-eds from Steve Bernstetter and Sarah Brodsky.

Continue reading “School Choice Would Provide Incentives”

50 Ways to Get Around the Earnings Tax…

The Post has a great article today in the business section on recent successes in luring businesses to locate in downtown St. Louis.  Although I type this from Clayton, I love downtown and hope it thrives.  I lived there for three years in a loft at 11th and Pine in the late ’90s. Then the whole place started to get trendy and I had to flee, ’cause that’s just how I roll. But anyway, there are two main parts to the article on why businesses are moving downtown. The first is that the convergence of highways, architecturally significant buildings, and being part of a larger business community all give downtown a lift over your suburban office-park. To this I say, hell yes! The buildings are gorgeous, it is easy to get there from anywhere, parking is affordable (except for the meter maids), and downtown is great fun — now moreso than ever (or at least the last forty years). Clayton has many of the same qualities, except the architecture, but you don’t find any of those qualities, other than parking, in your standard office park.

The second major thrust of the story states:

"However, low-interest loans, tax abatements and tax credit programs are helping owners mitigate the impact of the income tax."

I felt like Homer Simpson screaming at the TV while reading this, but instead of yelling "It means he gets results you stupid chief!" I was yelling about just getting rid of the damned earnings tax, and you don’t need all the other things to mitigate it! SMI has done a great study on a way to do just that. This is the insanity of modern government. We keep taxes high and then implement hundreds of programs, credits, deductions, earmarks, etc., to allow people and projects to get around the taxes. How can it not be economically more successful to keep tax rates broad and wide, but as low as possible for everyone?      
 

Students Would Benefit From Diverse Virtual Schools

What kind of student enrolls in a course online? It could be someone who needs to do remedial work, or a student who wants to study more challenging material at a higher grade level. Students who are home schooled, whose high schools don’t offer advanced placement courses, who want to take an additional foreign language, or who just want to work at their own pace might all benefit from virtual school. These students are each looking for different things when they sign up for online courses. But under Missouri’s current Virtual Instruction Program, they have to settle for one-size-fits-all online instruction.

Other states allow students to choose between competing virtual public schools. Some virtual schools have developed their own curricula, while others use online instructional programs sold by private companies. If Missouri followed the lead of other states and offered more virtual school options, Missouri’s virtual school could give students the individualized education they want.

Washington is a good example of a state with a variety of online public schools. Washington students can choose from 26 different virtual public schools. Students don’t have to enroll in one program set up by the state; instead, they can enroll in online academies that public school districts have set up in addition to their brick-and-mortar buildings. Families can borrow the required computers and other materials from the districts. The equivalent of this in Missouri would be if students in Saint Louis City could enroll in, say, a Ladue Virtual Academy and receive the same education as students in the suburbs—without having to spend hours on a bus every day.

A state doesn’t need dozens of virtual schools to create competition. When even a few virtual schools compete, they’re responsive to parents’ requests. Missouri parents were upset when they found out Missouri’s new virtual school doesn’t yet include courses at the middle school level. (Meanwhile, it offers some courses, like technology for kindergarteners, for which there is relatively little demand.) In Florida, middle school students can enroll in the Florida Virtual School, the Florida Connections Academy, or the Florida Virtual Academy. Besides the standard middle school courses, they can study electives like Spanish, French, home economics, the arts, and world cultures. If a virtual school in Florida didn’t offer enough middle school courses, students would switch to one of the other two.

Missouri’s Virtual Instruction Program didn’t have enough resources to build middle school courses from scratch in time for its first year of operations. Had it faced competition, the Department of Elementary and Secondary Education might have realized it couldn’t reinvent the wheel. Some states partner with private organizations that have already produced courses at all grade levels. For example, many states allow virtual school students to take courses from William Bennett’s k12, which sells courses to home schooling families. Students in twenty states can choose this option.

Besides giving states a way to meet demand for new courses, partnering with private organizations and offering competing online programs could prevent public virtual schools from replicating the mediocrity found in so many brick-and-mortar public schools. If the state creates a monopoly virtual school on its own, it will suffer from the same problems that plague local school districts. But if virtual schools compete with each other and take advantage of successful curricula from the private sector, they’re more likely to come up with models that improve upon the traditional public schools.

Online schools have the potential to give students across Missouri access to individualized education. The new Virtual Instruction Program is most likely to succeed if it offers students the choices they want.

Sarah Brodsky is a policy analyst at the Show-Me Institute.

 

I Love University City, But I Hate This Proposal…

I have weighed in on my absolute hatred of red light cameras before.  Now my own hometown, University City, in which I am extremely proud to live, is considering installing them right by my house.  University City, which was the only (I think) municipality in the area to pass one of those ‘don’t-cooperate-with-the-Feds’ anti-Patriot Act ordinances, is now getting into the very same act itself, or at least considering it.  As I said previously, red-light cameras are not about safety, they are about new revenue collected under the guise of safety, and the last thing in the world that should be contracted out to private companies is law enforcement.  And I say that as someone who thinks government should contract out lots of things to private industry.

I may have to take the radical-yet-strangely-whimsical act of speaking before my city council about this at the next meeting.  By the way, the cameras at Big Bend don’t even make any sense to me as it is a T-intersection, not a 4-way, and my experience with it is that traffic goes very slowly around the intersection.  I admit there can be a problem at Hanley, but U. City should have its police enforce the intersection more closely, not hire a company to snap photos of me as I walk my dog.  I shall keep you all informed as this issue progresses…      

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