Eminent Domain Abuse in Arnold

Posted on by Timothy B. Lee

Fox 2 in Saint Louis has a great story on the eminent domain controversy in Arnold. I did a story about Dr. Tourkakis and his fight against eminent domain abuse last year. So I can tell you from personal experience that Dr. Tourkakis’s land is not “blighted” by any reasonable standard. It’s tidy, well-maintained, and provides dentistry services to hundreds of area residents. When I visited the area last year, his neighbors included an auto repair shop, a day-care center, a VFW, and a stove and fireplace store, none of which showed any noticeable signs of blight. The picture on the right there is one of the “blighted” homes that will be taken (or may already have been taken).

Mayor Mark Powell tries to hide behind the excuse that state law made him do it, but that’s nonsense. The standards for “blight” are so loose that almost any piece of property can be taken if the city wants to do so. All they have to do is to pay a consulting firm such as PGAV to study the area and declare it blighted. Not surprisingly, when a city asks a firm to determine if an area is blighted, the firm almost always finds in the affirmative. So state law effectively gives him the power to take peoples’ property using eminent domain, but it’s up to the municipality to decide whether to do so. You’ll notice that even the mayor isn’t willing to say with a straight face that Dr. Tourkakis’s land is blighted, because it obviously isn’t.

Some problems can’t be solved by throwing money at them

Posted on by Steven Bernstetter

An ongoing court case pits the state of Missouri against a coalition of Missouri school districts who are seeking court-ordered funding increases. The districts allege that their inability to perform is directly linked to the state’s inability to adequately fund them. This approach is typical of public school systems incapable of providing their students with the necessary education to succeed: complain about money while carrying on with the same failed methods of instruction and administration. This leads one to ask: whose well-being is this lawsuit really about, education professionals or the students?

According to expert testimony, Missouri’s education funding procedure was rewritten in 2005 to reflect changing students needs across the state’s districts. This should be what matters most to these districts. Their solution for fulfilling those needs: more money, same programs, same teachers, same administrators. If more money always meant better results, their request wouldn’t seem so egregious, but further expert testimony asserts that money isn’t always the solution. Here’s one possible solution: Instead of tying the money to the districts and their ineffectual administrators, lets give the money to the student and their parent’s (it’s their money anyway, right?), and let them decide for themselves where they want to get their education. Educators often work to preserve the status quo, except when it involves their paychecks. True education reform will change this unfortunate arrangement.

Tracking Down the Graduates

Posted on by Sarah Brodsky

Private firms have a place in public education after all. From PubDef:

Dr. Martin said that SLPS has evidence that the district has met the sixth standard, a measure of the percentage of high school graduates that go on to college.

Martin said the district contracted with a private firm, for a fee of just $450 per high school, which tracked down recent graduates and confirmed their enrollment in institutes of higher learning.

It is now up to the state board to accept this new data, or instead ignore it and move on with stripping the district of its provisional accreditation.

Notice how efficiently the private firm was able to provide this service. There are 17 high schools in the district. So the firm must have been paid $7,650–just $39.03 per administrator employed by the Saint Louis Public Schools.

The question we should be asking is: How many of those kids in college have to take remedial courses?

The Oil Weapon Myth

Posted on by Timothy B. Lee

One of the most popular canards in politics today is the notion that we need to reduce our dependence on “foreign oil.” Governor Blunt repeated this chestnut at an address to (who else?) the Missouri Corngrowers Association.

I don’t blame Blunt for pandering to a powerful constituency. Lots of politicians?Democrat and Republican?have used the alleged problem of foreign oil as part of their justification for providing more welfare to corn farmers. But just because everyone says we need to end our “dependence” on foreign oil doesn’t mean it’s true.

The most fundamental thing to understand about oil economics is that oil is that it’s an interchangible global commodity. (It is, in economics jargon, fungible) if we stopped buying oil from Iran or Saudi Arabia, they would just turn around and sell their oil to China, France, or Japan instead. Oil-exporting countries, by and large, don’t care who they sell their oil to, and the laws of supply and demand ensure that they’ll be able to sell their oil to somebody, albeit perhaps at a somewhat lower price.

It’s sometimes argued that all the oil in the Middle East requires us to get involved in foreign conflicts like the war in Iraq. But this doesn’t make a whole lot of sense either. Obviously, there are lots of good reasons to prefer a peaceful, democratic Middle East to one ruled by erratic despots. But despots seem just as willing as anyone else to sell us oil. Foreign countries don’t sell us their oil as a personal favor. They sell us oil because we have the money to pay for it. No matter who’s in charge in Iran or Saudi Arabia, they’ll most likely be interested in the revenues that come with oil exports. And as the richest country on Earth, we’ll have little trouble outbidding other nations for the oil we need.

But doesn’t our dependence on foreign oil make us subject to blackmail from those countries? Jerry Taylor and Peter Van Doren, two economists at the Cato Institute, explain why this is silly:

Even if you think that OPEC has the means and motive to use this alleged oil weapon, there’s not a thing we can do about it. First, even if every drop of oil we consumed came from Oklahoma, Texas, and Alaska, a cutback in OPEC production would raise domestic oil prices as high as if all our oil came from Saudi Arabia. That’s because there are no regional markets for oil — only global markets — and because prices always reflect opportunity costs in free markets, regional prices invariably rise to the world price. In 1979, for instance, Great Britain was “energy independent” — virtually all the crude oil it consumed came from the North Sea. But the oil price spike of 1979 hit Great Britain as hard as it hit Japan, a country dependent upon imports for its oil. No country can wall itself off from the world market.

Earnings Taxes and Wal-Mart

Posted on by David Stokes

Today’s announcement by Wal-Mart got me thinking about this study by the Show-Me Institute.  Wal-Mart is opening 9 new stores in economically depressed areas around the country.  Did local earning’s taxes have an effect on where Wal-Mart chose to locate?  Here is am important nugget from the report:

East Hills, Pennsylvania, is a community just outside of Pittsburgh.

So Wal-Mart is locating just outside of Pittsburgh.  What does Pittsburgh have that East Hills almost certainly does not?  Besides the Steelers and Pirates…An Earnings Tax of 1%.  On the other hand, Wal-Mart is locating within the city limits of Indianapolis which has an earnings tax, although at 0.7% it is the lowest such tax in the country.  Wal-Mart appears to have located new stores in suburbs just outside of major cities, such as Atlanta, San Francisco and Washington, DC.  While those last three cities do not have earnings taxes, they very likely do have higher taxes in general than the chosen suburbs outside them.

Wal-Mart is also opening a store that appears to be within the city limits of Cleveland, which has a high earnings tax of 2%.  However, the new Cleveland store appears to be a part of a major revitalisation project, Steelyard Commons, which likely has substantial tax incentives that would offset the earnings tax.  Chicago, the other major site for a new Wal-Mart within municipal limits, does not have any earnings tax.

The final store count is two out of nine in cities with earnings taxes. One in a large city without an earnings tax.  Three in suburbs without earnings taxes located just outside major cities, and three in more distant suburban areas without earnings taxes.  I must conclude that earnings and other local taxes were a significant, but not the decisive, factor in where Wal-Mart has chosen to open these new stores.

Virtual Classrooms: Good for students, good for Missouri

Posted on by Steven Bernstetter

The Missouri Department of Elementary and Secondary Education is working on a plan to create virtual classes for Missouri students. This program would serve three basic purposes: first, it would give students, particularly rural ones, access to classes they might not otherwise have access to; second, it would enable students to retake courses at any time, rather than having to wait for that course to become available the following school year; third, it would grant further access to Advanced Placement courses, as only about a third of Missouri’s districts currently offer such classes.

Some educators are understandably wary about such a program: it could threaten their jobs significantly. If students find their needs are better served through an online program, as opposed to a traditional public school classroom, they may decide against attending public schools at all, and instead switch to homeschooling supplemented with online classes. While this prospect bodes ill for those schools and districts that do not meet student needs, it gives those schools a positive incentive to improve their services to compete with the new program. This can only lead to better schools and educational options for Missouri’s students.

Some logistical concerns do apply as well. The new program presents challenges in conforming with current No Child Left Behind laws, and the requisite testing for that program. Presumably all Missouri students would still be required to take the Missouri Assessment Program test, and those taking online classes could conceivably lower the states overall score on that test if the online classes do not include the relevant material for the test. There are also concerns about enrollment; demand has already grown beyond supply, and some kind of lottery system will likely be implemented to deal with the overruns. These concerns aside, any program that creates choice for Missouri’s students and puts pressure on schools and teacher to perform can only prove beneficial to public education in Missouri.

Not the Worst Idea, just not the Right One…

Posted on by David Stokes

Sen. Bill Stouffer (R – Northwest Missouri) his introduced a bill to increase the state sales tax by a penny to fund expansions of Interstates 70 and 44.  The act will sunset after 10 years, and while I am sure Sen. Stouffer genuinely wants it to sunset, he will be term-limited by then and can easily foresee an attempt to keep the tax going after ten years, something along the line of, "Its not a tax increase, it is just continuing a current tax, the children are the future, etc" 

This is not a terrible idea.  Our highways are indeed in poor shape, just ask the Governor of Kansas. She’ll tell you.  Expanding 70 and 44 and limiting trucks to certain lanes would no doubt improve transportation in Missouri, but there is an alternative to spending hundreds of millions of public dollars to expand these roads.  We can amend the Missouri Constitution to allow toll roads in our state and let the market and private business address the needs instead of taxpayers.  We would then have the choice between the free (sort of) current highways or the new toll roads.  More choice and better roads without taxpayer investment.  Seems like a good idea to me.

Between a Rock and a Hard Place

Posted on by Sarah Brodsky

Everybody loses from minimum wage increases like the one just passed in Missouri. David Nicklaus comments on the effects of Arizona’s law:

The Arizona Republic reports that some employers “say payroll budgets have risen so much that they’re cutting hours, instituting hiring freezes and laying off employees.”

Teen-agers often are the ones who feel the effects.

Arizona’s minimum wage went from $5.15 an hour to $6.75 last month. Missouri’s went from $5.15 to $6.50. I wonder how many teen-agers here are getting the same kind of bad news?

Nicklaus is right that minimum wages hurt teenagers, but the bad effects don’t stop there. First, an employer who has to layoff someone is probably going to let go of a poor single mother with few skills, rather than a better-educated teenager from a middle-income family (as many minimum wage earners are).

Second, minimum wages hurt the people who get to keep their jobs, too. Minimum wages keep people from getting the training they need to move up on the career ladder. And minimum wage increases can lead workers to expect larger and larger raises. When these workers start earning more than the minimum wage, they’ll be poor bargainers because their expectations are unrealistic.

Getting Serious about Educating Our Kids

Posted on by Timothy B. Lee

The Columbia Daily Tribune has a story on a new proposal for tax credits to direct more money toward failing public schools:
 

The bill would allow Missouri’s 13 unaccredited or partially accredited school districts to apply for grants to implement proven intervention programs such as early childhood education or tutoring programs. Corporations would receive tax credits on 50 percent of their contributions to that fund, with a cap of $20 million in state tax credits offered annually.

Baker, D-Columbia, said her proposal is an alternative to tuition tax credit bills that would use tax credits to set up scholarship funds for students transferring out of struggling school districts.

“I say, let’s put our money toward those types of interventions that really work,” Baker told members of the Missouri Parent Teachers Association Thursday night at Smithton Middle School. “We all acknowledge we have a problem, and we all want to address the problem, but I want to address the problem within public schools.”

What’s revealing about this program is who the money would go to. The tuition tax credit bill puts money in the hands of parents, and gives them the freedom to use the money to send their kids to the school of their choice. That puts parents in the drivers’ seat: if a public school isn’t meeting the needs of a particular family, parents have the power to send their kids to a new school that will do a better job.

In contrast, notice how Rep. Baker’s legislation leaves the public school bureaucracy in charge. Those “proven intervention programs” will be implemented by the same bureaucrats who have repeatedly failed to educate the children entrusted to their care. Why we should have any confidence that another $40 million will be more successful than the billions of dollars already spent is not explained.

But maybe Baker is right that these “proven intervention programs” are effective at helping low income kids. What’s really weird about her proposal is that she considers it an “alternative” to tuition tax credits. Given the serious problems in our schools, why should we limit ourselves to one reform at a time? If Baker were sincerely interested in helping kids, rather than scoring cheap political points, she would support trying both strategies. That’s what Democratic Senator Dianne Feinstein did in 2003 when she brokered a compromise that provided more money for private school vouchers, charter schools, and traditional public schools in the District of Columbia. Maybe you think school choice won’t work, but given the high stakes, shouldn’t we at least give it a try?

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