Page 959 – Show-Me Institute

Stokes on the Sales Tax Pool

Posted on March 14, 2007May 5, 2026 by Timothy B. Lee

Over at our main website, David Stokes has a new article on a proposal to abolish the sales tax pool in Saint Louis County. In short: he thinks it’s a bad idea:

The current system acknowledges the fact that most shoppers going to the Galleria don’t live in Richmond Heights. It also benefits the business environment in our area by rewarding non-retail economic development. If Webster Groves attracts a new corporate headquarters, that would clearly generate significant new sales taxes for the area based on the new jobs and employees brought to the region. Why should a neighboring A city with significant shopping, such as Brentwood, keep all of the sales taxes generated within Brentwood by the new employees of that Webster Groves company? Eliminating the pool contributions of A cities would further press all cities to search for ways to increase sales taxes and grow retail development at the expense of other modes of the economy, such as finance and manufacturing, which generate the salaries used to go shopping in the first place.

That pressure to increase the retail economy, as opposed to other types of development, is one of the main reasons behind the eminent domain abuses we have seen in recent years in Saint Louis County. It is not a coincidence that all of the controversial eminent domain actions in Saint Louis County have occurred in A cities such as Sunset Hills, Manchester, Rock Hill and Clayton. Residential areas such as the one at issue in Sunset Hills have more tax value to B cities, where a city’s population is a significant factor in the amount received from the pool.

It’s a great article, so you should click here to read the whole thing.

Its beginning to feel a lot like reassessment…

Posted on March 13, 2007May 5, 2026 by David Stokes

Reassessment season is here. This is good news for government entities, real estate appraisers and bloggers who like to write about local tax issues. It is bad news for everyone else. The traditional start, the first-pitch if you will, of reassessment season is the article by the Post-Dispatch announcing the mailing, accompanied by the school district breakdown, which serves the role of the opening day starting pitcher. This year’s Post article, very well done as always by Clay Barbour, is here. My first reaction to the news of large increases in value was a double-take, as everyone is well aware that the real estate market has been terrible for the past year. Maybe they mostly used 2005 sales, but I think people who appeal will be able to have a great deal of success by finding lower values from very recent sales or, better yet, depending on your point of view, introducing evidence of the many homes throughout our area that have not sold at all. Feel free to e-mail your horror stories of homes that increase in value by 90% when their neighbors all go up 10% to [email protected]. You can rest assured that I will follow this closely and don’t be afraid to appeal your assessment if you think it is warranted!

MOHELA Deal Is Like Girl Scout Cookies for Politicians

Posted on March 13, 2007May 5, 2026 by Steven Bernstetter

The MOHELA deal is back and better than ever…or not. The proposal orginally intended to take $350 million in assets and spend it on capital improvement projects for Missouri’s public universities. A large chunk of this appropriation was intended to fund a number of projects relating to the biotech industry. Political pressure derailed that version of the project, forcing Governor Blunt and his cohorts to rethink the distribution of those funds. Well they’re back with a new list, which can be viewed here, and, not surprisingly, the biotech proposals are gone.

The new list has received somewhat mixed reviews: Republicans are mostly for it, Democrats are mostly against it. I’m a little miffed, as I thought the proposal was originally about creating jobs in a growing industry with great promise. Now, however, that part of the bill has been largely eliminated, and replaced with more mundane projects. I’m also curious about what happened to that assessment by that private firm that found the deal could seriously undermine MOHELA’s financial health and ability to continue providing loans to Missouri students. This assessment drew attention to pending federal changes to the Higher Education Act, due to sunset this summer. It seems a little hasty to push this controversial proposal too hard when we don’t know how the federal law might change or how those changes might impact Missouri and MOHELA.

Without the long term, lucrative jobs the biotech measures would have created, I’m not sure what Missouri has to gain, beyond the obvious brownie points politicians stand to score in districts receiving the funds. Capital improvement projects are great, but only to the extent that students can afford to attend those schools and utilitize those improvements. With the ever-increasing cost of higher education in this state and others, I’m not sure this is the best way to spend our money at this time. Ultimately we need to be careful, and should at least wait until the federal government does its job before moving forward with any proposal.

The Unintended Consequences of Minimum Wage Laws

Posted on March 13, 2007May 5, 2026 by Sarah Brodsky

The minimum wage is hurting colleges and universities in Missouri:

Kelley said she’s happy to follow the mandate of the people; she just wishes it came with some instruction on how departments are supposed to stretch their budgets.

“This is an unfunded mandate from the masses,” she said. “No additional funds come with it, just the instructions to do it.

The article describes how colleges must now pay higher wages to the students who work in their department offices for a few hours a week.

Minimum wage laws are supposedly on the books to help poor, working families–not students who are saving their money for spring break. This is the perfect example of how the laws misfire.

In contrast, the Earned Income Tax Credit helps only the poor and doesn’t disproportionately burden any particular businesses or nonprofits.

A Mean-spirited Letter on Parental Choice

Posted on March 13, 2007May 5, 2026 by Timothy B. Lee

A letter to the editor in today’s Post shows the ugly, mean-spirited attitude of some opponents of parental choice:

Regarding “School tax credits die in state House” (March 8): Missouri House Speaker Rod Jetton, R-Marble Hill, never ceases to amaze me. His support of a Missouri House bill to give tax credits to send urban kids to private schools is a slap in the face to the rural school districts he is supposed to represent. The article said that this bill could cost the state up to $40 million in tax credits.

As House speaker, it is a testament to his poor leadership that 35 Republican representatives voted against the bill. Thank goodness the bill was defeated. I live in Mr. Jetton’s district. The only good thing about that is that he is term-limited and cannot serve another term as a state representative. Maybe next time around we can get a representative who cares more about the needs of rural schools than making a career in politics.

There are several problems with this argument. First, the state of Missouri spends about $5 billion per year on K-12 education each year, so the $40 million price tag amounts to less than one percent of the state budget. I wonder if Mr. Page writes letters to the editor every time the legislature spends $40 million in an effort to help inner-city kids.

Second, if the author’s point is that rural taxpayers shouldn’t be forced to subsidize the education of inner-city kids, he’s long since lost that battle. The state already pays significantly more per-pupil to the Saint Louis and Kansas City school districts than they do elsewhere in the state. Saint Louis receives $5500 per pupil from the state, compared with only $4200 per pupil for the author’s hometown of Fredericktown.

Most importantly, the author fails to consider the fact that the cost to the state of his program would be far less than $40 million. It’s true that the HB808 would issue up to $40 million in tax credits. However, many of the scholarships distributed as part of the tax credit program would go to kids who otherwise would have gone to public schools. Some (or depending on the details, potentially all) of the costs of the tax credit program would be offset by savings due to the fact that the state had to educate fewer kids through the public schools. So the true cost of the tax credit program would be substantially less than $40 million.

If the author is truly worried about threats to his pocketbook, he should be writing letters to the editor about the so-called adequacy lawsuit now wending its way through the court system. That could mandate billions of dollars in additional spending. And worst of all, it would require that all of the money be given to the same public schools that have squandered so many millions already. If there’s one thing that’s worse than being forced to pay for the education of other peoples’ kids, it’s being forced to pay for an ineffective effort to educate other peoples’ kids.

We Don’t Need More Clinics in Schools

Posted on March 13, 2007May 5, 2026 by Sarah Brodsky

Do health clinics belong in public schools? The St. Louis Post-Dispatch reports that the idea hasn’t taken hold in Missouri as it has in Illinois:

The Metro East area has two of these high school clinics, the one in East St. Louis and another in Cahokia.

In contrast, the whole state of Missouri has just three, according to the National Assembly on School-Based Health Care, a nonprofit group in Washington.

Providing preventative health care to poor children is imperative, but attaching the service to public schools is the wrong way to go. The existing system of public schools excacerbates disparities in education, because the children with the fewest choices are stuck in the worst schools. If a child’s health care provider also depends on his address, we’ll have greater health care injustice.

My libertarian guilty pleasure is government funding for the arts…

Posted on March 12, 2007May 5, 2026 by David Stokes

My esteemed colleague, Sarah Brodsky, has recently posted on government funding for the arts. The traditional free-market view of this is general opposition, although for reasons of taxes and budgets rather than taste or attitudes. Sarah gently critiques Gov. Blunt for his comments supporting arts funding and, in particular, his statement that arts funding helps lead to economic development. Sarah quotes Tyler Cowen on the issue of economic development studies, but I find Mr. Cowen’s remarks to be a very accurate smackdown of Chamber of Commerce-type economic development studies themselves, not funding for the arts in general. We here in St. Louis are privileged to have the local RCGA, which is a gigantic conflict of interest in its dual role as economic forecaster and cheerleader for the region. Does anyone actually believe anything in these studies?

The next point Sarah references in her post is about the difficulties of remaining as a small-business in a newly popular area. I have two solutions for the issue of independent businesses being forced out by higher rents and taxes in fashionable area. Solution # 1: Lower the tax rate. Really, most downtown areas have special taxing districts (both downtown St. Louis and Clayton have them). If the rents and property values rise quickly (we should be so lucky in downtown St. Louis) it is easy enough to lower the special taxing district rate to make it easier for the smaller or merely less-hip businesses to remain. Solution # 2: If that is the way it is, than so be it.

I don’t mean to sound cruel, but I LOVE GENTRIFICATION! If a business can no longer make it because a new cultural center moves into the area and brings with it all the hipness (and expensiveness) you can handle, well, those are the breaks, independent bookstore-dude. I should be very clear here that I am not encouraging eminent domain to forcibly remove Mr. independent bookstore and Ms. clothing resale shop. In fact, I like both of them very much, but change and progress are not meant to be easy, and if an art center comes to your neighborhood and the free market decides other businesses compliment it more, than so be it.

But back to government funding of arts. I like it local, low level and without strings. I don’t think it should be a large amount of money and certainly not a gravy-train for artists, but oftentimes the results are well worth the investment. “Man on a Horse” right here in Clayton, for example.

Whose road is being traveled?

Posted on March 12, 2007May 5, 2026 by David Stokes

St. Louis County has used a carrot and stick approach to dealing with local municipalities regarding the necessary traffic changes during the upcoming Highway 40 reconstruction projest. Apparently, the carrot has been successful. Agreements have been reached with Ladue, Frontenac and Town and Country for the County to take over Clayton and Ladue Roads during the project for the purpose of speeding up traffis so they may be better used by commuters. Of course, the fact that St. Louis County has the legal right to take over all the roads at any point, and was willing to do just that, made the carrot much more appealing to the cities. Basically, we are now going to have traffic lights at some well-known intersections which before had "Stop" signs intentionally placed to prevent heavy commuter traffic. These intersections, off the top of my head, will include Price and Clayton, Price and Ladue, McKnight and Litzsinger, Clayton and Lay, and Warson and Ladue. I don’t mind that the "Stop" signs are there to prevent heavy traffic before, and I have no problem with their return after construction, but I commend St. Louis County for making certain these imperative changes will go ahead quickly.

Kids Don’t Have a Few More Years

Posted on March 12, 2007May 5, 2026 by Timothy B. Lee

Brian Lewis’s column on HB808 illustrates just how much work advocates of parental choice still have to do in educating Missourians about how choice works and why it’s important. Lewis says that “Taking kids out of bad schools and putting them in ones that aren’t high-performing systems doesn’t solve any problems” and that “You’ve got to fix the system first.”

There are a couple of problems with this. In the first place, taking kid a out of a bad school and putting her into a better schools does solve a problem: it gives that child a better education. It’s downright bizarre that Lewis doesn’t even acknowledge this. Even if all parental choice did was help a few kids get into better schools, that would seem like a major argument in favor. Helping some kids is better than helping no kids.

But in fact, the argument for choice is a lot stronger than that. Because choice is a way to “fix the system.” The fundamental problem with “the system” is that public schools are monopolies, with no accountability to the vast majority of parents who aren’t wealthy enough to take their children elsewhere. As anyone who has studied economics will tell you, monopolies routinely deliver an inferior product at high prices.

Lewis says that “to really turn things around would take a few years.” What he doesn’t point out is that pundits have been saying this for decades. Over and over again, the public school bureaucracy has insisted that if we just give them more money and “a few years,” they’ll turn things around. Over and over again, we’ve poured more money into urban schools, only to see things continue to get worse. “We just need more money and more time” might have been believable in the 1980s or the 1990s, but in 2007, it doesn’t pass the straight face test.

Most importantly, the kids who are in failing schools today don’t have “a few years” to spare. Every year we wait for the public schools to fix themselves is a year that tens of thousands of kids miss out on the opportunity to get a great education. Poor kids need help now, in 2007. Parental choice is one of the few reforms that promise to bring them help immediately, not at the end of yet another 5-year plan.

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