James Shuls, Aaron Hedlund and David Stokes join Zach Lawhorn to discuss teacher pay in Missouri, the case for and against reforming child care policies, and a new report on modernizing the state’s unemployment insurance system.
Produced by Show-Me Opportunity
Dr. James V. Shuls will serve as Director of Research and a Senior Fellow and Elias Tsapelas as Director of State Budget and Fiscal Policy
St. Louis, MO – Dr. James V. Shuls has been named the new director of research and senior fellow and Elias Tsapelas the director of state budget and fiscal policy at the Show-Me Institute. Previously, Dr. Shuls held the title of distinguished fellow of education policy at the Institute and Tsapelas was a senior analyst.
“I am honored to serve the Institute in this new role,” Shuls said. “While the opportunity to focus on policy areas beyond education is new to me, the goal remains the same—to provide high-quality research that helps promote free markets and individual liberty for all Missourians.”
“Research is at the center of everything we do at the institute,” Show-Me Institute CEO Brenda Talent said. “James and Elias bring knowledge and experience to their respective roles that will be invaluable as we continue to address the challenges facing our state.”
James V. Shuls is an assistant professor of educational leadership and policy studies at the University of Missouri–St. Louis. He earned his Ph.D. in education policy from the University of Arkansas. He holds a bachelor’s degree from Missouri Southern State University and a master’s degree from Missouri State University, both in elementary education. Prior to pursuing his doctorate, James taught first grade and fifth grade in southwest Missouri.
Elias Tsapelas earned his master of arts degree in economics from the University of Missouri in 2016. Before joining the Institute he worked for the State of Missouri’s Department of Economic Development and Office of Administration, Division of Budget & Planning.
Dr. Susan Pendergrass, who previously served as director of research, has returned to the role of director of education policy in order to focus on education research.
Tsapelas is the institute’s first director of state budget and fiscal policy.
Media Contact: Zach Lawhorn
Late last year, Congress approved a bill that will have major implications for Missouri in 2023. After nearly three years of being barred from removing ineligible Medicaid enrollees from the program, Missouri will be allowed to resume eligibility checks starting April 1st.
Though this change may not seem like a big deal, the prohibition on checking whether participants are eligible to continue receiving services has been the primary driver of unsustainable Medicaid growth in Missouri since 2020. When the pandemic began, and the federal government started doling out relief funds, Missouri’s enrollment was well below 900,000. But as a result of the federal government conditioning relief funding for Medicaid on states no longer removing enrollees that were found to be ineligible, Missouri’s rolls have since grown by more than 575,000. Today, there are more than 1.4 million Missourians enrolled in the program; more than 720,000 are children.
Initially, the prohibition on disenrollment was supposed to continue until the federal public health emergency for COVID-19 expired. It was not necessarily surprising that once enrollment checks were stopped that program enrollment would skyrocket. Welfare programs typically experience a lot of what is called “enrollment churn,” as participant circumstances move people in and out of eligibility. What was surprising to many (myself included) was the continued extensions of the federal public health emergency.
Missouri’s emergency declaration for COVID-19 response ended more than a year ago. While it’s certainly true that COVID-19 remains present in our society, it’s also true that emergencies aren’t meant to last forever. Policymakers seem to understand this, as there was bipartisan congressional support for allowing states to resume eligibility checks, regardless of the status of the federal public health emergency.
The coming year will likely be a consequential one for Missouri’s government, as billions in federal covid relief funds that have been propping up the state’s budget begin to dry up. There is perhaps no issue with bigger financial implications than reinstating eligibility checks for Missouri’s Medicaid program. As long as the state’s Medicaid agency is equipped to quickly and accurately process the long-awaited enrollment checks without issue, the program should begin to right-size quickly. And if the agency isn’t prepared, Missouri’s elected officials should be prepared to step in and provide the necessary support, because there are far too many state tax dollars on the line.
David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to discuss the future of MIssouri’s Medicaid rolls, who should pay for mandated electric car charging stations, should anyone be able to turn their property into a short-term rental, and more.
Produced by Show-Me Opportunity
Turning primary or secondary homes into assets by renting them out via AirBNB or VRBO has become very popular. It also often conflicts with local zoning regulations banning or limiting such practices. When a similar debate—technological changes versus old laws—emerged with Uber and Lyft a decade ago, I unambiguously took the side of Uber and Lyft because the existing regulations were rank protectionism for the taxi companies. The short-term rental question is trickier.
The debate over municipal limits on renting out your own property is happening all over Missouri, but most immediately in Lake Ozark and the City of St. Louis. In Lake Ozark, which currently bans short-term rentals in much of the city, the city council is voting Tuesday night on amending the zoning laws and allowing short-term rentals in certain parts of the city. I am opposed to municipalities having a comprehensive ban on short-term rentals. In a tourism-driven area like the Lake, it makes even less sense to have an outright ban.
The arguments for allowing short-term rentals are that: (a) you have right to rent out your own property if you wish to (b) allowing more rental options is good for the tourism industry and local economy; and (c) complaints about the rentals are often overblown, and police or regulators can handle such problems as they arise.
I agree with all of that—but even if you believe with all your heart that zoning violates property rights, the courts have decided that zoning is legal. So, if zoning regulations where you live say you can’t rent out your property, you may need a better argument. Point (b) is hard to dispute, and while point (c) is also true in my opinion, I understand why homeowners next door to the property that is the exception—with lots of parties, noise, crime, etc.—may want their city to take more proactive action.
The legitimate arguments against allowing short-term rentals are also straightforward. Too many of them do involve large parties and general mayhem. More importantly, one has to have sympathy for the property rights of the people who bought a home or condo under existing zoning laws that limited or prohibited such rentals, and are now seeing people trying to change (or governments ignoring) those laws. I support allowing short-term rentals, but I won’t be cavalier about the property investments people made with the understanding such things are not allowed.
It’s a tough issue. I think short-term rentals should be allowed in a tourist area like Lake Ozark (and the entire Lake region), but I understand that limits and rules may be necessary. In more residential locations, tighter limits may be appropriate. However you look at it, this issue isn’t going away in Missouri anytime soon.
I’ll be writing more soon on the role homeowners associations can play in this issue and how short-term rentals should be taxed.
The St. Louis Post-Dispatch, and other major media outlets in Missouri, continually claim that Missouri teachers are, on average, the lowest-paid in America. That claim is false. As the data clearly show in the National Education Association’s report, which the Post-Dispatch cites for its claim, Missouri ranks 50th. That’s 50 out of 51 because Washington, D.C. is included. Montana ranks lower than Missouri.
You may ask, “So what? Isn’t this just splitting hairs?”
Undoubtedly, being second to last is hardly better than being dead last. But this correction is not simply about making Missouri teacher salaries look marginally better. It is about calling for clarity when it comes to this important policy discussion.
Right now, the Missouri Legislature is debating measures that could cost taxpayers hundreds of millions of dollars to increase teacher pay. To date, no lawmaker has been provided accurate information regarding Missouri teacher pay. That’s the problem.
Take, for example, this NEA report in which Missouri ranks 50th. The figures from this report are being described as the average starting “teacher” salary. But the numbers are actually the average starting “district” salary.
“So what?”
But this distinction matters! Each year, Missouri hires thousands of new teachers. An actual calculation of the average starting teacher salary would use the data from each of these teachers. A district that pays well and hires a bunch of teachers would pull the average up.
The NEA report calculates the average starting salary of Missouri’s more than 500 districts. It counts small, low-paying school districts the same as it counts large, higher-paying school districts.
If the Middle Grove School District, which according to the Missouri State Teachers Association is the only district to start teachers at the state minimum of $25,000 and has just 35 students, were to hire one teacher, and the Parkway School District, with more than 17,000 students, were to hire 20 teachers at the starting salary of $44,250, the NEA report would count each district once and say the average starting salary was just $34,625. In reality, the average of those 21 new teachers would be $43,333. This is a difference of more than $8,700.
If you haven’t noticed, Missouri has a lot of school districts Our state has more than 550 school districts, which ranks 11th in terms of total number of districts. Meanwhile, Missouri is 21st in the number of students. Florida, which has about two million more students, has just 75 school districts. All of these figures come directly from NEA reports. Taken together, these facts mean the NEA calculation of district averages leads to lower averages and lower rankings for Missouri teacher pay.
The NEA reports Missouri’s starting salary as $33,234. But what is Missouri’s actual average starting teacher salary?
According to data I have obtained from DESE, the average regular term salary for a first-year teacher in Missouri was $38,367.33 in 2022. This figure was provided directly by DESE after my request. The increase of more than $5,000 would move Missouri up to 37th on the NEA report.
While we’re at it, I’d like to note some other relevant data. Missouri ranks 43rd in average salaries for instructional staff. Meanwhile, Missouri ranks 48th in student-to-teacher ratio, with 11.3 students per teacher. In comparison, Illinois’s ratio is 14.3 to 1, ranking the state 28th. In 2021, revenues for Missouri’s public schools were $15,809 per student, which is 31st overall nationwide. These data suggest that part of the reason Missouri’s teacher salaries are relatively low is due to staffing choices made by school districts themselves.
Missourians deserve an honest discussion about Missouri’s teacher salaries. For that, we must have all the facts.
For the second year in a row, the U.S. economy enters January under a considerable cloud of uncertainty. In January 2022 inflation was 7 percent, and the “transitory” narrative pushed by defenders of the current administration was itself proving quite transitory in the face of stubborn reality. Although the demand for workers remained strong as the economy continued to ride the wave of a V-shaped recovery that began in summer 2020, businesses were struggling with a labor supply shortage that was driven at least in part by the massive wave of deficit-financed government transfers from the American Rescue Plan Act in spring 2021 that actively pushed workers to stay on the sidelines (most predominantly by extending excessively generous unemployment benefits despite a robust job market and stripping the Child Tax Credit of work requirements).
A year later, in January 2023, a lot has changed, but some things remain the same—especially the amount of economic uncertainty on the horizon. The economy began the year with rock-bottom interest rates, but after the Federal Reserve finally came to terms with the persistence of inflation, it wisely abandoned its lax stance and proceeded to tighten the screws by raising interest rates at an extremely rapid pace—taking its benchmark Fed Funds rate from 0 percent at the beginning of the year to over 4 percent by the end. During this same period, mortgage rates jumped from historically low levels of under 3 percent to over 7 percent. As a result, existing home sales fell by 35 percent over the year, and residential investment plummeted. Meanwhile, gross domestic product shrank during the first two quarters of the year but managed to register a respectable number in the third quarter (fourth quarter data is not available yet).
The primary questions on everybody’s minds entering 2023 are these: Can the economy achieve a soft landing? And can inflation come down without the U.S. economy entering recession? Unfortunately, it is still far too early to tell. Today’s jobs report revealed that the labor market continues to hold up, with payrolls growing by 223,000 in December 2022 and the unemployment rate falling to 3.5 percent. While these data are good news, they don’t tell us much about the future, because the labor market tends to lag the rest of the economy. In other words, if the U.S. economy hits turbulence in 2023 and enters recession territory, the labor market response will likely be delayed, as has been the case historically. In the meantime, the main takeaway from the most recent jobs report is that the prospects for the Federal Reserve reversing its rate hikes are basically nil—at least until inflation drops back down to 2 percent and remains there for a while. The recent release of the Federal Reserve’s minutes from its most recent policy meetings confirms that there is no sentiment at the Fed to begin rate cuts anytime soon.
It is still possible to gather some other tea leaves from some of the recent economic data, however, to get a sense for where the economy may be headed. The downside of the latest jobs data is that there is little to no evidence that workers are being enticed from the sidelines. As shown in the chart here, the labor force participation rate—which counts people who are working and those actively looking for work—remains below 2019 levels by a full percentage point. Some of the drop is due to early retirements during COVID-19, but if one looks at the data just for prime-age workers (those between the age of 25 and 54—see the chart here), their labor force participation rate hasn’t fully recovered either. With 1.75 job openings per unemployed worker, the labor shortage has no imminent end in sight, which also complicates the inflation picture by making it more difficult for businesses to accommodate demand without raising prices.
Thankfully, the end of 2022 offered some promising signs for inflation. Most directly, the inflation data itself showed some moderation, although it continues to run hot at over 7 percent year-over-year. Also, the most recent jobs report showed that wage pressures also may be subsiding to some extent. Of course, faster wage growth in principle is a good thing for workers, but only when driven by sustainable forces. Over the past nearly two years, wage growth has run hotter than in prior years, but the increase took place amidst a backdrop of declining productivity. The result has been even faster price growth, resulting in a steep drop in purchasing power, leaving families poorer in terms of their living standards. Going forward, 2023 offers a lot of uncertainty, and data over the next few months regarding inflation and productivity will be quite revealing. One thing working in the economy’s favor is a divided Congress, which should mean a stop to the glut of inflationary government spending. The question is whether it will be too little, too late to avoid a hard landing.
As the 2023 legislative session opens this month, it’s heartening to hear the keynote speeches of our elected officials and the extent to which their priorities seem to be hewing toward good government. Tax cuts, education transparency and reform, Hancock Amendment reform . . . that’s a much-shortened list of the good stuff I’ve heard from policymakers on the first day of the session.
Yet while most elected officials have been sworn in and are settling into their offices this week, one important elected office remains between occupants—the office of the auditor, which gets a new officeholder on Monday, January 9. I’ve long been a fan of the state’s auditors because the office plays a critical role in promoting good, transparent, and accountable government, and I’m hopeful that over time, the legislature will vest more oversight power (and funding) in this important office.
That doesn’t mean the next auditor is without powerful tools at his disposal; he’s made clear his intention to focus some of his firepower on educational transparency in curricula, spending, and performance. That’s stupendous stuff. But the auditor ought to include revised reporting expectations for all local governments, as well. More local government transparency would also advance the treasurer’s Show-Me Checkbook.
As I reiterated on January 4, 2021, “the Auditor’s Office could make the Show-Me State a leader on the issue [of spending transparency] by leveraging the office’s existing rule-making power.” How? By using Section 105.145 of Missouri’s Revised Statutes:
The governing body of each political subdivision in the state shall cause to be prepared an annual report of the financial transactions of the political subdivision in such summary form as the state auditor shall prescribe by rule, except that the annual report of political subdivisions whose cash receipts for the reporting period are ten thousand dollars or less shall only be required to contain the cash balance at the beginning of the reporting period, a summary of cash receipts, a summary of cash disbursements and the cash balance at the end of the reporting period. [Emphasis mine]
There are many avenues for the auditor to pursue greater transparency in local spending, but importantly, it seems to me that 105.145 allows the auditor to require political subdivisions to include supporting documentation for their annual transaction reports. 105.145 clearly states that the auditor gets to prescribe the form of these summary reports, and the auditor could easily declare that these financial summaries must include all supporting transaction documents. In addition, those transactions should be made public by the auditor’s office and posted to the treasurer’s Show-Me Checkbook website.
This is, of course, only one idea in a month that is chock full of them in the legislature, but as the auditor considers projects to undertake outside the realm of education, I hope he considers reforming the way all local spending is reported to him, and to the public. The legislature could explicitly require such reporting by passing a new law, of course, and it might in 2023 or beyond. But I don’t think the auditor needs to wait for additional authority from legislators to advance the public interest in spending transparency.
In this episode, Susan Pendergrass speaks with Ness Sandoval about the changing demographics of St. Louis, crime in the city, immigration as a possible solution to some of the challenges facing the region, and the cost of a bad national reputation.
Ness Sandoval, Ph.D, is associate director of SLU’s Geospatial Institute (GeoSLU) and an associate professor of sociology. Dr. Sandoval’s research tells stories using maps and works with students to use data and maps to look into the future.
Produced by Show-Me Opportunity
