If Cerner fails to live up to the promises that made it Missouri’s top recipient of taxpayer subsidies according to Good Jobs First, what are the consequences? Did the issuing agencies insist on clawbacks? Were subsidies issued on a performance basis? Or did taxpayers’ representatives just believe what they were told and not insist that Cerner actually deliver on its promises? If experience is any indication, it’s likely the latter.

Now we have an answer. According to a story in the Kansas City Business Journal, the Kansas City Council requested a report from the Tax Increment Financing Commission on the status of the Cerner development, now owned by Oracle. According to the author:

Cerner pledged 15,000 new jobs ahead of its TIF plan’s 2013 approval, and 16,000 with revisions through 2018. A Bloomberg report in April found Oracle Health had 40% of that count, or 6,400 employees, designated in Missouri, where the Innovations Campus is its lone metro location. However, the commission’s report did not discuss the campus’ job creation or retention, as its redevelopment terms do not have binding job thresholds.

The job creation promises were not binding. Our representatives, including members of the city council and the mayor, just took the company at its word. And what’s more, they didn’t even ask for any guaranty. We apparently just handed Cerner the money. Kansas City leaders should have set up measurable markers and demanded Cerner meet them lest it lose the subsidies and potentially face additional penalties.

As my colleagues here can attest, researching public policy will make you a skeptic. Often, one needs to resist becoming a cynic. But rarely—though maybe not as rare as we’d hope—you find out the truth is as bad or worse than you feared. This is one such occasion.

The post Apparently, Failing to Meet Promises Is Not a Violation of K.C. Subsidies Regime appeared first on Show-Me Institute.

In 2014, Cerner received the largest economic development project subsidy in the state’s history. The company pledged to add 16,000 *new* jobs in Kansas City in exchange for substantial taxpayer subsidies to construct its new headquarters. However, by 2019, Cerner had only managed to expand its workforce to 14,000 total, and not all the jobs were in Kansas City proper. Cerner fell short of its promise. Now, under Oracle’s ownership, the local employee headcount has been nearly halved to a mere 6,400. This is far from the 26,000 jobs—the 16,000 new plus the 10,000 Cerner had at the time—that were supposed to be in place by this year.

The issue runs deeper than just the numbers; it’s more about the impact on the local economy and the trust that was placed in these corporations. The Kansas City region was promised significant economic growth and job creation. Taxpayers delivered, but Cerner, and now Oracle, have failed to keep their promises.

Just like the Power & Light District, and the proposed downtown stadium, the Cerner project reveals the misplaced faith in economic development incentives. Time and again, we see that these incentives often fail to deliver. Instead, they serve as generous gifts to corporations, paid for by taxpayers, with little to no accountability.

The Cerner deal has been an abject failure. All city and state leaders who cheered this project should be held to account.

Current and future Kansas City leaders must learn from these missteps. They must scrutinize these large-scale economic development projects more rigorously and demand transparency and accountability. Tax incentives and subsidies, if issued at all, should include meaningful and measurable outcomes, strict legal standards for what constitutes a new job, and oversight from a clearly defined agency that will monitor the subsidy recipient over time. Holding corporations accountable for their promises will not only protect taxpayers; it may reduce the demand for subsidies in the first place.

The April 2 stadium outcome showed that voters demand more details and accountability from those who seek public funds. Leaders must provide them.

The post Kansas City Must Learn Lessons from Cerner Failure appeared first on Show-Me Institute.

Unsurprisingly, this document found its way onto my desk with a request that I—a Policy Intern of two months—was basically bred for: fact checking. And fact check I did.

My first challenge was that the governor’s office didn’t “show its work” by citing sources for its claims. A Google search allowed me to infer where some of the rankings came from, but others were harder to verify.

Indeed, I found several online sources that issued rankings that were similar but not identical to the governor’s claims.  Here, for example, Missouri is listed as sixth in cost of living, not third. Some were further off the mark; here not only is Missouri not number two for “low cost of doing business,” we’re not even on the list. And with some claims, I was completely lost. What does it even mean to be “third for apprenticeships?” Is it referring to the number of current apprenticeships? Completed apprenticeships? Apprenticeship applicants? What organization even collects that data?

After consulting longtime staff members here at the Institute, I learned a Sunshine request was probably my best way forward. Sunshine requests legally require Missouri government employees and officials to provide the requested information, provided that they actually have it. Send a request to the correct official—requests tend to bounce around like a customer service call—and if all goes well they will send back the correct records. In some cases, however, you’ll be told that the information does not exist or that there will be a charge for the collection of the information you requested.

So, I typed up a Sunshine request and went to the Governor’s website in search of a contact email to send my letter to. Instead of an email, I saw only this at the bottom of the page:

It’s 2023. Where is the email address? After browsing the website to some length, I concluded that if an email contact point existed for Sunshine law purposes, it was very well hidden. And without an email address, I had to fax it.

Dear reader: if you’re under the age of 35 there’s a good chance you have never had to send a fax before and may not even know what a fax machine is. In short, think of text messaging, but with printers.

While awaiting a response, I pondered the situation. If the Sunshine law didn’t exist, I would have been hunting snipes in my quest for the truth. Yet I felt disheartened by the need to use a Sunshine request. Not every Missourian knows how to do a Sunshine request, or even that they exist—I certainly didn’t before my time at the Institute. It is good practice in any field to cite your sources. Are governments exempt from that expectation? Citizens of Missouri value government transparency and accountability and our governor should respect that value: Show-Me your work.

Several days after I sent the fax, I received a reply. Part two of this blog discusses the response I received from the governor’s office.

The post Just the Fax, Ma’am: Dubious “Rankings” Press Release Emphasizes Importance of Transparency (part 1) appeared first on Show-Me Institute.

To name just a few:

I’ll add another criticism here. The structure of DESE is such that the buck never seems to stop anywhere. The commissioner serves at the pleasure of the state board of education. The state board of education members serve staggered terms, so that a single governor may hold little sway over the board. As such, the governor, the board, and the commissioner escape being held accountable in any meaningful way.

Yet, it is one thing to criticize DESE for failing to perform the duties it should be performing. It is another thing entirely to suggest DESE should not exist at all.

There seems to be a growing chorus of voices on social media calling for the abolition of DESE. It is hard to tell if there is really a movement here or simply the continuous ramblings of a few active Twitter users. Nevertheless, it is a question that deserves consideration—should DESE exist?

Conservatives have long argued that the federal department of education should be abolished. The argument for this is easy to follow—there is no provision for education in the constitution. Thus, it is a state issue.

What is the argument at the state level? It must be that education is a local issue and not a state issue. Here is where the DESE destroyers are wrong. The Missouri Constitution makes it clear that the responsibility to provide an education lies with the state:

A general diffusion of knowledge and intelligence being essential to the preservation of the rights and liberties of the people, the general assembly shall establish and maintain free public schools for the gratuitous instruction of all persons in this state within ages not in excess of twenty-one years as prescribed by law. (IX Section 1(a))

Moreover, the constitution requires the state to spend 25 percent of general revenue on public education.

With clear constitutional authority and a sizeable budget dedicated to education, the state has need of an agency whose purpose is to distribute funds and assess the diffusion of knowledge. The state has need of an agency such as DESE.

While DESE could do so many things better than it does, there clearly is a role for DESE. Therefore, we should (1) do a better job of defining the proper role and responsibilities of DESE, (2) do a better job of holding DESE accountable for meeting those obligations, and (3) find ways to improve the overall structure of DESE so we can actually tell where the buck stops.

I welcome conversations that focus on these things.

The post Does Missouri Need DESE? appeared first on Show-Me Institute.

There is high, and deep, support for student testing in K-12 public education. As a result, elected officials across the country should ignore the noise and instead focus on what the lion’s share of voters are saying – test students each year to assess progress in reading, writing, and math, and look for opportunities to improve the way states can measure student progress in the future. Voters want testing to be fixed, not ended.

Overall, things are not looking good. Almost half (44 percent) of all voters in this survey say that the public schools in their state are on the wrong track and more than two thirds (68 percent) of parents believe that their children started the school year behind. But people don’t want to gloss over what is happening. In fact, nine in ten respondents said that testing students every year in reading, writing, and math is important.

Even when presented with arguments against testing, respondents overwhelmingly believe it is necessary:

DESE is preparing to launch the sixth version of the Missouri School Improvement Program (MSIP), which is used to hold schools and districts accountable for their performance. MSIP 6 is likely to be even less grounded in assessments than MSIP 5, given that just one half on one page in the accompanying 22-page document deals with academics.

Legislators would be wise to remember that parents and voters want real accountability. We can handle the truth, even in times of dismal performance. In fact, we welcome it.

The post Think We Can’t Handle the Truth? Think Again appeared first on Show-Me Institute.

Too often, local officials have resisted oversight of Missouri public schools and districts. School bureaucrats from across the state have pushed back against Sunshine requests filed by the public, including many from the Show-Me Curricula Project, and now lawsuits are flying. I’ve heard stories from concerned parents and teachers about their treatment by school officials and their fears of persecution for speaking up about controversial issues.

This is not how parents and taxpayers should be treated by our public education system. Enough is enough.

In an effort to put the power of schooling back in the hands of the public that funds it, today I am introducing the Missouri Parents’ Bill of Rights (MPBR).

The MPBR emphasizes two objectives—transparency and accountability—and sets out reforms that would allow taxpayers and parents to see exactly how their schools and districts are operating and what they are teaching. Titularly highlighting parents’ role in the education of Missouri kids, the MPBR is geared toward promoting good, responsive governance in taxpayer-supported schools and school districts. Certainly, many of these reforms could be just as easily applied to other local governments like cities and counties—and eventually should.

But the taxpaying public should have an unambiguous right to see what’s being taught to their kids, how schools are performing, and how money is being spent. Taxpayers and parents should be able to use every tool available to them to ensure Missouri kids can have a productive educational career and life. For that to happen, taxpayers and parents must have oversight of the educational bodies in our state.

As I’ve written before, the privilege of taxing comes with a duty of forthrightness and responsibility. Denying that forthrightness and responsibility is to entertain the idea that government rules the people and not the other way around. The MPBR seeks to proclaim unequivocally where power in our system resides—with the people—and to emphasize that transparency and accountability are non-negotiable preconditions to accessing tax dollars.

Stay tuned in the days, weeks, and months ahead as we go into greater depth on this initiative.

We’ve only just begun.

Missouri Parents’ Bill of Rights

The parents of Missouri’s children have a fundamental right to participate in and direct the education of their children. In order to effectuate and protect those rights, the state hereby adopts an approach that affirms “sunlight is the best disinfectant” to ensure parents can see, understand and trust representations made by state and local education officials about their children’s education and equips parents with the tools to make informed choices to educate their children especially if, in their judgment, the unique needs of their children are not being met.

Those rights include but are not limited to:

• the right to transparent access to school and school district curricula and lesson plans, made available in an electronically searchable format and available at all times online on the homepage of the website hosted by the district (an expansion of RSMo §162.208) and submitted to the state to affirm compliance.
  • Curricula shall be available to the public at least 30 days before the beginning of a semester’s classes.
  • Because they are often formulated up to the date of instruction, lesson plans shall be available to the public no later than 30 days after the date such course materials were taught. Parents nonetheless have the right to request such materials directly from teachers prior to that time.
  • The right to instructional material includes the right to transparent access to school and school district faculty and staff training materials, also made available in an electronically searchable format and available at all times online on a website hosted by the state.
• the right to transparent access to school and school district academic performance information in an easy to understand and electronically searchable format, available at all times online on the homepage of the website hosted by the district (an expansion of RSMo §162.208) and based on data from the Department of Elementary and Secondary Education. That information shall be regularly updated and shall include:
  • the percentage of all students scoring at the Proficient level or higher on all assessments administered under the Missouri Assessment Program (MAP)
  • the percentage of students in each reportable subgroup, including race/ethnicity, economically disadvantaged, students with disabilities, and English language learners, scoring at the Proficient level or higher on all assessments administered under the Missouri Assessment Program (MAP)
  • the Growth score in English/language arts (ELA), measured in National Curve Equivalents (NCE) for grades 3 through 8
  • the Growth score in math, measured in National Curve Equivalents (NCE) for grades 3 thru 8
• the right to transparent access to school and school district financial information in an easy to understand and electronically searchable format, available at all times online on the homepage of the website hosted by the district (a new section under RSMo Chapter 162) and submitted to the state to affirm compliance. That information shall be regularly updated and shall include:
  • transactional data similar to that produced from an accounts payable report, and if practicable rendered in a manner similar to the existing Show-Me Checkbook website maintained by the Treasurer’s Office.
  • the district’s latest financial statements filed with the state.
• the right to transparent access to contract negotiations between the district and labor groups with whom the district is considering entering into labor agreement (a new section under RSMo Chapter 162) including access to all materials used in negotiation and all finalized documents that describe the legal obligations of parties pursuant to an agreement. Such documents shall be available in an electronically searchable format and available at all times online on the homepage of the website hosted by the district (an expansion of RSMo §162.208) and submitted to the state to affirm compliance.
• the right to choose existing educational choice options provided by law that best suit the learning needs of their children.
• the right to request to opt their children out of the classroom for any presentation of content listed in the syllabus with which they disagree.
• the right to control their children’s likeness in district materials, subject to exceptions like court orders.
• the right to control their children’s health and identifying markers, including but not limited to the right to opt out of health measures not required by state order or statute.

Failure by a school or school district to abide by these rights and expectations could subject the school or school district to financial penalties by the state and administrative penalties affecting the privileges afforded districts under state law.

Download a Copy of the Missouri Parents’ Bill of Rights

The post Missouri Parents’ Bill of Rights appeared first on Show-Me Institute.

The omnibus bill touches on other local government issues of interest to us, notably the manner and circumstances under which local governments can take away rights of association and commerce via pandemic “health orders” and lockdowns. Living in Chiefs Kingdom doesn’t make you Kansas City’s peasant, and the bill’s eminently reasonable restrictions on local governments’ ability to take draconian actions against Missouri residents were overdue. As with local checkbook transparency, the state has an obligation to ensure that local governments, which exist as a managerial convenience, are accountable for acts done in the state’s name. On health orders in particular, local governments far exceeded in the last year what the state should ever tolerate. Congratulations to Sen. Bob Onder for successfully attaching this limiting language to the bill and to Sen. Andrew Koenig, Rep. Jim Murphy, and others for adding fuel to the fire throughout the process.

House Bill 271 now moves on to the governor, who is expected to sign it. Congratulations to the legislators and advocates who achieved these objectives.

The post Excellent: Legislature Passes Bill Holding Local Governments Accountable appeared first on Show-Me Institute.

As some readers will be aware of by now, the 8^th wonder of the world, the Delmar Loop Trolley, is in a financial pickle. The head of the company said that it needs $200,000 by next month to continue operations through the year, and $500,000 more to operate in 2020. One could call this a shocking policy failure, but I think many of us saw this coming. Whether it’s putting together or working within a reasonable budget, finishing a project on time or with appropriate permitting, or coming even remotely close to meeting ridership projections, the trolley leadership has proven time and time again that it cannot be trusted by policymakers or taxpayers.

(You should know that when your plan to boost ridership is to have stand-up comedians ride the rails, your project is absurd.)

But what I do find shocking this time around is the total lack of accountability exhibited by trolley leadership. They claim the trolley’s failure should be chalked up to delays in getting additional trolley cars on the tracks. So, the firm renovating the trolley cars is responsible for the delays, and thus responsible for the trolley’s laughable performance.

But this finger-pointing is all too easy to see through. First, the firm renovating the cars is accountable to the trolley company, its customer, and so, the trolley company should be compensated for the delayed product delivery. If the trolley company cannot be compensated by a contracted vendor for its failure to deliver, then the trolley company simply entered a bad agreement.

Second, it seems there are a number of other and far more reasonable explanations for the trolley’s failure. For one, the project was delayed for years and developed a sort of toxicity, and so would-be riders just gave up on ever riding. When you fail to deliver half a dozen times, people tend to just give up on you. Another explanation is that the trolley just doesn’t provide a valuable service, and so people just don’t ride it. Who wants to pay to sit on a glorified bus that takes you down the loop slower than the pace of an average pedestrian? And how many people do you honestly think are going to drive to the loop just to pay to take the trolley to the history museum? I’ll let you in on a little secret: not very many! (I am in the loop every day, and the most common number of riders I see is zero.)    

But what about the $200–300 million in development the trolley has apparently spurred? Doesn’t that make the project worthwhile? Well, no. For one, most if not all of the recent development around the trolley has been subsidized. Who can tell if it was the trolley or the subsidies that spurred the development? Two, the loop is hot real estate, and so I think the strong market, rather than the presence of a needless novelty, is what spurred development. Three, the only reason for thinking the trolley spurred this development is that it occurred after the trolley was in place. But temporal succession is not identical to causation. Moreover, there is little evidence in general to suggest that vintage streetcars or streetcars in general spur investment.

So what should policymakers do at this point? Well, they needn’t rip up the tracks and say goodbye to the trolley forever. Here is a modest proposal: Don’t bail out the trolley company again. Force its leadership to find the funding on its own. In the meantime, shut the trolley down if need be. The more the trolley company is responsible for itself, the better it will be. And, let’s be honest; it won’t be leaving many riders stranded. 

The post If You Love it, Let it Go appeared first on Show-Me Institute.

One argument we have heard from skeptics of checkbook transparency is that small cities like Battlefield (population 5,590) cannot afford to provide spending records at a low cost. Certainly, different cities have various staffing levels and challenges, but responses like Battlefield’s should raise concerns. And while we do not expect small cites to have the same resources as the City of Saint Louis, several cities provided us their expenditure records free or at very little cost, and some of those cities are smaller than Battlefield.

Consider the example of Winfield (population 1,404), which stands out not only because it shared its expenditure records free of charge, but also because of its commitment to transparency. When I spoke with the mayor, he said that while he loved our Municipal Checkbook database, his city could not afford to host its checkbook on its own website.

But after I told him we planned to put the city’s records in our database, he said that he would provide a link to our website so citizens could see how Winfield is spending its money. And if you check out Winfield’s website today, you’ll see that link. He also said the city was in the process of updating its transparency portal on the city website—not bad for a city of fewer than 1,500 people.

Cities, no matter their size, should provide easy access to information about how they’re spending our money, and modern accounting software used by most cities allows for quick generation of accurate reports. In Winfield’s case, the city saw in the Checkbook Project a tool to increase its own transparency. I applaud its commitment to promoting a culture of municipal accountability and good governance.

The post Why Can’t They All Be Like Winfield? appeared first on Show-Me Institute.

A recent study commissioned by the St. Louis Development Corporation (SLDC) found that the lack of aggregate information available from developers has made analysis of projects difficult. The study was intended to measure the impact subsidies have had on job creation, but the researchers found that no data was available regarding payroll information. The SLDC subsequently recommended additional reporting from incentive recipients.

Currently, municipalities must submit project details to the Missouri Department of Revenue every year or face losing TIF privileges, but municipalities get their information directly from developers (who self-report), and often reports are incomplete or inaccurate.  In a few cases, such as the construction of a seven-story multi-use building on Tucker Blvd., developers have even listed their anticipated project costs at $0! (see “Nadira’s Place”).

Inaccurate reporting is also an obstacle to accountability, allowing developers to receive taxpayer dollars without being held to the promises they made regarding job creation. When projects fail, there are no consequences. Worse yet, without information about what (or how badly) things went wrong, we can’t learn from the failure and be more selective about future subsidies.

Increased accountability would not limit the use of subsidies where they may be appropriate, but it could help us make better decisions about how they should be used. The SLDC report contains several policy proposals, including the use of “claw back” provisions that would require developers to pay back money they received as incentive for developments that failed to produce their promised job-creation or revitalization outcomes. Given that the story of development subsidies in Saint Louis has hardly been a tale of rousing success, area leaders would do well to take note of the SLDC report and consider its recommendations.

The post Subsidies in St. Louis, Part 4: Accountability and Clawbacks appeared first on Show-Me Institute.

Holding elections for government unions is one of the most exciting labor reforms discussed in Missouri right now. Currently, if you work for the government and you’re represented by a union, you’re pretty much stuck with that union. If you can organize, gather signatures, and then win a “decertification” election, you may force the union out. But barring this, government employees, like teachers, social workers, and firefighters, are pretty much “married for life.”

Holding regular union elections addresses this issue. When employees of public institutions get the option to vote for their representatives every few years, union representatives are forced to be accountable to their members. When workers get a vote, a union executive’s job depends on representing workers well.

You can read more about government union elections in Missouri here, here, here, and here.

The post Union President Agrees That Union Elections Lead to Greater Accountability appeared first on Show-Me Institute.

My own experience with Nixon’s office corroborates the reputation. Several months ago I submitted two public records requests for a contract held by an agency under the governor’s authority. I submitted one of these requests directly to the governor’s office; the other I sent to the agency bound to this contract. The agency responded promptly. In less than two weeks, a full copy of the contract appeared online, and the agency sent me a copy. The governor’s office was not so prompt. After the full contract had been publicly available for at least a month, I received a copy of the contract with blanks in place of key information, including dates and signatures.

These problems occur at the local level as well. A couple years ago, former Grundy County assessor Don Stotts refused to comply with a simple records request from David Stokes of the Show-Me Institute. While Stotts demanded over $9,000 to complete the request, dozens of other county assessors provided the same information at little or no charge. The dispute was finally resolved when the attorney general weighed in and Grundy County complied with the request.

I’ve handled plenty of open records requests, and I see two attitudes toward the Sunshine Law: one of compliance with the letter of the law and one of observance of the spirit of the law. When I send a sunshine request to some public agencies, the request is viewed as a burden. The people handling these requests seek to provide the bare minimum to avoid violating the law. They resent the scrutiny that can come from open government, and hence they follow the letter of the Sunshine Law while trying to avoid disclosing anything useful.

On the other hand, there are some public agencies that value feedback from the people they serve. When I send a request to an agency that shares this “spirit of the law” attitude to the Sunshine Law, I get a prompt and full response to my request from people who really try to be helpful. Agencies like this see open government as a public service and are happy to honor the public’s right to know how their public institutions operate.

Public officials, from the governor to employees of cities and counties, should keep in mind both the letter and the spirit of the Sunshine Law when interacting with the citizens they serve. Government provides a set of services on behalf of the community, and in a democracy, part of that service is transparency.

John Wright is a policy researcher at the Show-Me Institute.

The post Two Approaches to Open Government appeared first on Show-Me Institute.

The Missouri School Boards Association on Monday announced that many districts and organizations are pitching an idea that unaccredited districts would be willing to enter into a performance agreement with the state school board. While the districts are under that agreement, the state would classify them as provisionally accredited, freeing the districts and their neighboring districts from the transfer law.

As my colleague James Shuls has noted, this idea is just a shell game. What’s more, it ignores the fact that schools are already in a performance agreement and they have failed to perform. That’s the whole point of accreditation. Missouri Rep. Jay Barnes (R-Dist. 60) equates this proposal to a magic wand and issued a statement reading in part:

This plan doesn’t require any evidence of actual improvement, and it makes a joke of the accreditation process. It changes the school accreditation process from one which requires accountability to one which perpetuates failure without consequence. It’s geared toward protecting existing power structures rather than ensuring substantive changes to improve the lives of Missouri families with students trapped in struggling schools.

Change is difficult, but after decades of failure from the St. Louis and Kansas City school districts, who can seriously argue that they deserve one more chance? It is more likely that school boards are more interested in protecting their own interests than meeting the needs of Missouri families. Barnes ends his piece with this:

In recent years, the State Board has shown it has the political courage to make difficult decisions regarding struggling districts, and it’s my hope that the Board will continue that tradition.

The Show-Me Institute shares that hope.

The post Education’s Magic Wand appeared first on Show-Me Institute.

This is how Saint Louis City’s demolition specialist described the process of identifying vacant buildings for demolition during a meeting with Saint Louis housing and demolition employees.

Problem properties have long been an issue in Saint Louis, and preservationists question whether some buildings that get demolished are in that bad of condition.

Preservationists fear that knocking down existing houses that could be rehabbed speeds up the process of out-migration and neglect. Michael Allen, of the Preservation Research Office, says, “As many as half the buildings demolished in St. Louis were actually sound under the city’s building code.”

Is Allen’s assessment accurate? It’s hard to know. While the city’s demolition process involves ranking buildings on a scale to determine which are priorities for demolition, there is no specific criteria for each ranking. The demo specialist just drives by and conducts a quick assessment.

Let me be clear: I’m not accusing the demo specialist of doing a poor job. He could be an expert at determining a building’s condition, and only need a quick glance to make a decision.

But this method does leave the process open to influence. Without documenting criteria that determines the need for demolition, what prevents an alderman, developer, or other interested party from getting the buildings in his/her area to the top of the list? Or conversely, out-of-favor aldermen and developers could have high-priority buildings moved to the bottom of the list.

The City of Saint Louis could improve transparency and accountability to its citizens by implementing standards that determine demolition priorities. Or, better yet, make the process easier for private citizens to buy demo-ready properties and tear the building down themselves.

The post The Figure Skating Method For Building Demolitions appeared first on Show-Me Institute.

Rep. Kevin McManus, a Kansas City Democrat, pointed out that Health and Human Services Secretary Kathleen Sebelius has repeatedly said states couldn’t get full federal funding unless they fully complied with the national law. That’s why he was one of two lawmakers to vote against the bill in committee.

Joining him in opposition was Rep. Mark Parkinson, a St. Charles Republican who said he could not support the bill because of an ideological opposition to the federal health care law. Three times, he said, voters in his district have rejected Obamacare. The first was a ballot measure in 2010 on the individual mandate. The second was last fall’s ballot measure on health insurance exchanges. The third was a vote against President Barack Obama’s re-election.

The committee had previously voted down an attempt to amend HB 700 to actually implement a full Medicaid expansion. That was not altogether unexpected, either; the House has been stalwartly opposed to an ACA Medicaid expansion as both standalone bills and amendments. Suffice to say, I share their skepticism and concerns about the program.

As to HB 700 itself, my views about the proposal have been documented; the legislation has some good points, including reforming some aspects of how Medicaid is delivered. But it seems in some respects to bow to a perceived political reality that more has to be spent on the program for reform to be passed. I do not agree with that view. Medicaid reform is a good unto itself that policymakers of all stripes should be able to get behind. Moreover, I worry that in the process of HB 700’s continued legislative sausage-making that we ultimately will find the state passing a law that, inadvertently or purposefully, actually expands and implements the Medicaid program under Obamacare. The governor is still pushing for that, and by keeping the increased spending aspect a live wire, I am still concerned about this possibility. Indeed, if this compromise legislation moves any further in the expansion direction, it will be right and truly compromised.

The perfect need not be the enemy of the good, but I am not yet convinced the pavestones of this legislation are leading us someplace Missouri voters want to be. Stay tuned.

The post On The Medicaid Proposal Coursing Through The House appeared first on Show-Me Institute.

Governments often grant public subsidies, tax breaks, and other incentives to powerful corporate interests and other groups at the expense of taxpayers. In Missouri cities, this type of information is not always easily available to the public. But our governments should readily share spending information. Otherwise, taxpayers may not even know when special interests gain unfair advantages through government spending. It is impossible to ensure that government decisions are efficient and reasonable unless information is publicly available.

A few weeks ago, I blogged about Saint Louis’ failing grade in the  U.S. Public Interest Research Group (PIRG) report on the largest cities’ spending transparency online.

Saint Louis has major improvements to make, with the 28th lowest ranking out of 30 cities. Kansas City ranked much higher, at 14th, but still only received a letter grade of “C.”

Kansas City has made a more visible effort to show residents how the city spends funds. The city allows residents to view checkbook level spending, which Saint Louis should allow, but does not. This transparency helps keep Kansas City accountable to taxpayers.

But Kansas City does have room to improve. Some other cities have created centralized transparency websites and provide comprehensive information on tax subsidies. New York City’s “Open Book” website is the perfect example of what Kansas City and Saint Louis should strive to implement.

The post Missouri Cities Should Open The Books appeared first on Show-Me Institute.

This is exactly why I listen to the Freakonomics podcast, which highlights the ways that economics can provide insight to seemingly inexplicable situations. Recently, Freakonomics discussed efforts in Romania to fine witches if their predictions fail to come true. The jail-time punishment being proposed for multiple false predictions could result in six months to up to three years in jail.

I suppose that if you acted on a false prediction, you would want to punish the person who led you astray. But think of all of the people and organizations who make predictions that affect the way our economy runs. We don’t penalize, say, politicians, economic development officials, or coalition groups when the promises they make fail to materialize.

As Steven Dubner, host of the Freakonomics podcast put it, “I don’t care if you’re anti-witch or pro-witch or witch-agnostic. Why should witches be the only people held accountable for bad predictions?”

In Missouri, it isn’t very hard to find evidence of bad economic development predictions. The recent Mamtek scandal is one. The 2006 prediction that the Ballpark Village development in downtown Saint Louis would result in more than $700 million in economic impact looks unlikely, to put it kindly. And, for a recent example, we have the ever-changing job estimates associated with a proposal to dedicate $300 million in state tax credits to construct warehouses and facilities.

Consider also a state audit report that found, among many other problems, that Missouri’s Low Income Housing Tax Credit is much more costly than initially predicted. How about the overly rosy economic growth assumptions used to sell Tax Increment Financing (TIF) projects? An East-West Gateway Council of Government study found that “broad measures of regional economic outcomes strongly suggest that massive tax expenditures to promote development have not resulted in real growth” (emphasis mine).

Of course, I’m not advocating that we throw politicians and economic development officials in jail for making the wrong promises. But I would suggest, for the health of Missouri’s economy, that we start holding these people responsible for their predictions.

As Freakonomics co-host Steve Levitt points out in the podcast, people have every incentive to make absurd predictions:

So, most predictions we remember are ones which were fabulously, wildly, unexpected and then came true. Now, the person who makes that prediction has a strong incentive to remind everyone that they made that crazy prediction which came true. …But if you’re wrong, there’s no person on the other side of the transaction who draws any real benefit from embarrassing you by bringing up the bad prediction over and over.

Levitt’s point reminds me of the St. Louis Regional Chamber and Growth Association’s outlandish predictions. The RCGA frequently issues press releases touting incredible job and investment numbers. Sometimes, the message of one RCGA study (say, that the region needs to build millions more in warehouse space) conflicts with another RCGA press release (that the region has an abundance of cheap warehouse space). The agency clearly isn’t worried about making an unlikely prediction, either.

I also wonder about the Missouri Department of Economic Development, and the state legislature’s propensity to create tax credit programs in the hopes of attracting jobs to the state. Audit reports have shown that these tax credits are more expensive than anticipated, and that the state gets little in return. And yet, in the face of  bad earlier predictions (and even blatant overstatements), state legislators continue to fail to pass substantive tax credit reform.

A solution that Freakonomics proposes is a little unexpected, but elegant. We all are familiar with baseball players’ batting averages. Let’s apply those to people who make economic development predictions.

Consulting organizations should report their track record of success (and failure). What if every estimate of job and investment creation the RCGA publishes had to be accompanied with a percentage showing the accuracy of previous estimates the agency predicted? What if, when contemplating creating new tax credit programs, we considered whether existing programs delivered on the promises used to create them?

If we are considering whether hundreds of millions of taxpayer dollars should be allocated to a particular project, it is not enough to take proponents’ claims for fact, especially if those organizations have a track record of poor prediction. We need to know how frequently those predictions actually become reality.

We wouldn’t throw anyone in jail. We might find that some organizations are really good at making predictions. And, like Romanians burned by a bad prediction from a witch, we could stop relying on organizations and individuals that provide wildly unreliable predictions.

The post Witches, Economic Development Promises, and Baseball appeared first on Show-Me Institute.

Missouri students will soon be returning to school, and although most school employees are still enjoying their summer breaks, superintendents are already hard at work preparing their districts for the annual back-to-school onslaught. Superintendents are the most highly compensated employees in education, earning an average salary of $106,368 in Missouri during 2009, according to the Department of Elementary and Secondary Education (DESE).

However, salary statistics considerably understate total superintendent compensation, leaving out benefits such as insurance, car allowances, and annuities. Furthermore, according to a new study by Audrey Spalding, public information specialist at the Show-Me Institute, although superintendent pay is correlated with many school district characteristics — total student enrollment, whether a district is urban or rural, percentage of residents with a college degree, etc. — compensation does not appear to depend on measures of either superintendent performance or student achievement. Given the amount of money paid to superintendents, it behooves Missourians to take a closer look at how superintendent compensation is determined and the benefits that the public receives for that cost.

Using superintendent contracts collected from nearly 90 percent of Missouri’s 521 public school districts (all the collected contracts are available at the Show-Me Institute’s website), Spalding shows that a quarter of all superintendents receive automatic raises built into their contracts. Other school districts look to surrounding districts to determine superintendent pay. For instance, the Lindbergh School District simply averages salary figures from 11 specific school districts and adds 11 percent to determine its superintendent’s pay.

Districts are required to report superintendent salary numbers to DESE, but the value of their contractual benefits are far less transparent. All superintendents receive some form of insurance through their districts, but contracts rarely specify the monetary value of the coverage. More hidden still are the annuities received by 6.9 percent of all Missouri superintendents. The majority of annuity payments are awarded to superintendents already making more than the median salary, which indicates that annuities are a supplement to regular salary, not a replacement for it. Sometimes this additional money can be quite substantial. The Parkway School District’s superintendent, for instance, earns both $200,000 in salary and a $30,000 annuity. Some superintendents say that annuities are used to offset the difference between their salary and what they could earn managing a private firm of similar size. However, the fact that annuity payments are not reported to DESE suggests that they can also serve as a means for districts to mask the full costs of superintendent compensation from the general public.

The simplistic methods used for determining superintendent salary and lack of transparency in compensation are both cause for concern, but more troubling is the fact that superintendent pay does not seem to correlate with student academic achievement. Spalding tested whether higher scores on the mathematics portion of the Missouri Assessment Program (MAP) test led to increased pay for the superintendents and found no statistically significant relationship between the two variables. Moreover, most school districts do not have any specific method of evaluation spelled out in the contract, and less than 13 percent of districts tied superintendent raises to school board evaluations.

The point is not that school districts are overpaying superintendents. In fact, many — particularly in rural areas — may be underpaid. However, because nearly all superintendents are paid without regard to any kind of performance metric, it is extremely difficult to determine what benefits they bring to the district. If school boards tied at least some portion of superintendent salary to district goals and academic outcomes, and reported total compensation in a more transparent manner, the public would be in a better position to determine whether those resources are being employed wisely. As any good educator will tell you, knowledge is power.

John Payne is a research assistant at the Show-Me Institute, a Missouri-based think tank.

Related Links

Actual Pay: A Survey of Missouri Public School Superintendent Salary and Benefit Packages

The post Compensation for School Superintendents Needs Greater Transparency, Accountability appeared first on Show-Me Institute.