Listen to the full show: www.kcmotalkradio.com/

Listen on Spotify

Listen on Apple Podcasts 

Listen on SoundCloud

Interview Transcript

Patrick Tuohey (00:00)
Good morning, Kansas City. This is Patrick Tuohey, Kansas City’s second favorite Patrick, sitting in on the Pete Mundo Show for the whole morning. If you have read anything in the Kansas City papers about either the Royals Stadium or the Chiefs Stadium, the chances are that you are familiar with my next guest. J.C. Bradbury, a professor of economics at Kennesaw State University, has been studying the economic impacts of building stadiums, tearing down stadiums, getting teams, and losing teams. He’s got a book coming out at the end of next month called This One Will Be Different. I’ll get to the book in a second, JC, but my first question is: why do you hate baseball?

J.C. Bradbury (00:43)
Hi Patrick, thanks for having me on. I get that question a lot because I bring a lot of bad news, or uncomfortable truths, let’s say, about baseball. But I study these things because I love baseball. I’m a huge fan. I grew up an Atlanta Braves fan, but I follow baseball generally and all sorts of sports. I was an Atlanta United season ticket holder for many years. That’s why I do this — because I enjoy it.

Patrick Tuohey (01:09)
It’s funny — years ago somebody recommended Moneyball. It’s a fantastic book. The movie is just as good. I rewatched it the other day, and if you haven’t seen it or haven’t seen it in years, it really holds up. I think of that because baseball claims to be so statistics driven that you’d think fans would be more amenable to the kind of economic analysis you’re doing. But maybe it’s just love of the game and fandom that clouds their reason.

J.C. Bradbury (01:44)
There’s some of that. There are many people who are baseball fans, sports fans, who understand what I’m arguing — and I’d argue it’s more than you’d realize. But most of the people vocally speaking out about stadium issues and public finance are largely blinded by their own fandom. I deal with people on social media all the time who respond to things I say about stadiums and tell me I don’t understand the public finance — and they’re just totally incorrect. They don’t even bother to check it. It’s religion to some people. I say most people would give up their religion before they’d give up their subsidies to their sports teams.

Patrick Tuohey (02:27)
If you don’t already follow J.C. Bradbury on Twitter, I recommend it — JC underscore Bradbury. If you’re a fan of baseball, economics, or The Simpsons, you’ll love his account. So JC, tell me about your book, This One Will Be Different, which comes out at the end of July.

J.C. Bradbury (02:44)
I’ve been studying stadium subsidies and publicly funded stadiums for a very long time. I fell into it accidentally because the Atlanta Braves Stadium opened in Cobb County, a few miles from where I live — just outside Atlanta, where my family has been for generations. I had a lot of interest in how the stadium was built and funded, with three hundred million dollars in subsidies. I was familiar with a lot of the economics behind stadiums, and when I tried to share this research with other people, I was heavily rebuffed. So I began to study the issue more, and before I knew it, I had a very long book about the economics of stadiums. My idea was to explain public finance issues in stadiums using simpler methods. I use sound research methods, but I try to explain it through the narrative story of the Braves coming to Cobb County — here’s what happened, here’s what people argued, here’s what actually happened, let’s look at some of the financial numbers, and let’s understand the general intuition of why stadiums get built even though economists say they’re a bad deal. I look at the politics of it too. And one of the things I find is that these stadiums are mostly built by insider coalitions — chamber of commerce types, folks who are going to sit in the owner’s box and enjoy cocktails, or people with season tickets. They’re the large beneficiaries of the subsidy. They push these advocacy campaigns and try to get them passed as quickly as possible without going to voters if they can. That’s why we get these deals.

Patrick Tuohey (04:35)
One of the things that frustrates me about this whole issue — and I’d be curious if you agree, though I hate when TV and radio hosts make a statement and then ask the guest if they agree, and here I am — is that when St. Louis was considering funding a Major League Soccer stadium, or here in Kansas City with the Royals or the Chiefs, what I wish they would do is just say, “Hey everybody, we are a sports town. We think it’s important to have a sports team here, so we’re going to spend hundreds of millions of dollars to build something.” And just leave it at that. It would be a defensible argument. You could argue whether it’s worth the expenditure, but at least everybody would be honest. But they don’t do that. They go the extra step and say, “And we’re going to make money doing it.” That’s where they mess everything up. That’s where they get the numbers wrong. Is it as simple as that, or am I missing something?

J.C. Bradbury (05:31)
Absolutely. I wish there was some honesty in these debates. The reality is that a lot of people who argue these things don’t actually believe the phony economic impact studies they put out. They do it for a couple of reasons. Number one, politically, it’s a winning issue — if you tell someone it’s good for them economically, they’re more likely to support it. But also, if you just argue it’s good for the community and we’re a sports town — okay, how much does it cost? A billion dollars. How much does that increase taxes? Three hundred dollars. Well, hold on, we’re not that much of a sports town. Think about how you make your own decisions. What kind of car do you want to drive? I want a Ferrari. Great. But to drive a Ferrari, you’d need to move into a two-bedroom apartment, never travel again, and eat ramen noodles. You know what — I’ll get the base model sedan. People make those kinds of decisions, and that’s one of the reasons they use false economic benefits — because once you start talking about social benefits, people look at the costs more closely, and it makes a lot less sense.

Patrick Tuohey (06:40)
I had your colleague Victor Matheson on a few weeks ago and we talked about this, specifically with the World Cup. I’ve also asked Neil Damas this question. In your experience, how good are journalists at reaching out to you and your colleagues to vet the numbers they’re being told by chambers of commerce or the city? Where are we now, and are we getting better?

J.C. Bradbury (07:14)
I think the situation is getting worse, and a lot of it is accidental. Newsrooms have gotten smaller and younger, so there’s less institutional knowledge. People don’t remember the last stadium being built, and they’re told to go cover this stadium story. They call a few local sources — who of course are members of the local chamber — and those people say it’s great. At best, they call a local economist who says it’s bad, and it ends up being a tie. But often they don’t even call the economist. That’s part of the nature of the news business, which is one of the reasons I think it’s so important to use social media and other mediums to get the word out. Even journalists trying to do their best often fall short. And journalists deserve some blame here — when I reach out to try to help them, they often get very defensive, and I think that needs to stop. I’m not just angry at journalists. Both my parents were journalists, and my first job was in a newsroom. I understand what’s going on.

Patrick Tuohey (08:19)
The previous segment, I talked about World Cup reporting. Local people put out outrageous economic development claims a year and a half ago, nobody questioned them, and journalists just repeated them — even though past experience hadn’t lived up to those claims. So what can we do to encourage journalists to reach out, or maybe just give them a primer on what economic impact studies look like and where the flaws are? Whether I’m looking in St. Louis, Kansas City, or around the country, they are all flawed in the same way.

J.C. Bradbury (08:56)
It’s important to always speak up. It’s easy to get tired and think you can’t keep doing it. When someone asks me to look through one of these studies, I tell them it’s not a real study — it’s a fake study. I try to spread that message. Part of the problem is that the big number is the story, and that’s what they want out there. The fact that it’s wrong later doesn’t matter. And sometimes people get mad at me because I’ll call out bad reporting. I do it not because I dislike journalists, but every time I’ve tried to be nice about it, I get told I don’t know what I’m talking about or that they don’t want to tell their boss they need a correction. I think it’s important for journalists to know that if they get it wrong, they’re going to get called on it — not to be mean, but to set the standard.

Patrick Tuohey (09:54)
And do a better job because policymakers and business owners are making decisions based on the numbers you’re putting out there. We see this with the World Cup — people were expecting much bigger crowds than they got. It’s not just a matter of being right. It’s a matter of being right so that people make decisions based on real information, not just projections. JC, I’m grateful for your time this morning. Thank you so much. We’ve been talking to J.C. Bradbury of Kennesaw State University. His book, This One Will Be Different, comes out at the end of July. We’ll be right back.

The post Why Stadium Deals Don’t Add Up with J.C. Bradbury appeared first on Show-Me Institute.

Susan Pendergrass speaks with Aaron Renn, author and consultant, and David Stokes, Director of Municipal Policy at the Show-Me Institute, about the recurring debate over whether the city of St. Louis should rejoin St. Louis County. They explore what city county mergers have actually accomplished in places like Indianapolis, Louisville, Nashville, and Lexington, why a full merger in St. Louis would be extraordinarily difficult to pull off, and whether the benefits would even outweigh the costs. They also discuss St. Louis’s demographic challenges, what the Pittsburgh model might offer as a path forward, the cultural barriers that make it hard to attract and retain people from outside the region, and more.

You can find Aaron’s work here.

Listen on Spotify

Listen on Apple Podcasts 

Listen on SoundCloud

Episode Transcript

Susan Pendergrass (00:05): Welcome back, Aaron Renn, to the podcast. So happy to have you and David Stokes, our own expert on cities and counties and all things municipal. I appreciate you coming on, Aaron. There have been murmurings around St. Louis again on a topic that we have revisited for probably a hundred years: should the city of St. Louis be a separate county from St. Louis County?

Before we get to that, I want to ask you something because I was reading the news this morning, and I know that you’ve written about city county mergers before, like cities that are kind of dying and then either pulling in parts of their closest suburbs to sort of make everything look better, broaden their tax base, make their crime numbers look better. I was reading something you wrote a year or two ago about that, and you said that Louisville is a failed example of that. Is that right, basically?

Aaron Renn (01:01): Yeah, I’m a little skeptical of how these things have worked out in practice.

Susan Pendergrass (01:05): Yeah, in terms of losing the flavor and the coolness of the city. Literally this morning I saw an article about how Louisville is having a renaissance and these young professionals are all moving there because they didn’t tear down all their beautiful old Victorian homes, so you can still get one for close to a million dollars. They’ve got a cool art scene and a bourbon scene. So it sounds like maybe Louisville did not lose its personal flavor in the merger. I would be curious to know what you think of that.

Aaron Renn (01:33): Well, I like to put St. Louis in context. I’m glad you mentioned Louisville because many of these river cities have similar characteristics. I like to look at St. Louis as well as three cities in the Ohio Valley: Louisville, Cincinnati, and Pittsburgh. All of them heavily German Catholic in their demographics. All of them are very geopolitically fragmented with many small tiny suburbs throughout. They all have very fragmented neighborhood systems as well, where everybody has a strong sense of neighborhood identity. Where you go to high school is a big social marker. They all have phenomenal collections of urban assets and great historic buildings. They all still have their own unique character in a country where that has sort of bled away.

Aaron Renn (02:31): And they also have curiously underperformed demographically and economically in terms of growth. They’re slow growth places. So one thing I always encourage people is to pan back the lens and don’t just look at St. Louis in isolation. Look at it in comparison or dialogue with some of these other places and see what you can learn from them.

Louisville is actually a quite troubled city in important ways. From a white collar employment perspective it’s doing well, from a blue collar perspective less so. It’s one of the 10 least educated major metros in the country. I don’t want to spend too much time on Louisville, but I want to talk about the city county merger, which is distinct from recombining the city and the county. This has been considered urban planning best practice for 30 or 40 years. There was a book written by David Rusk called Cities Without Suburbs. The idea is that cities that were able to expand their boundaries through either annexation or city county mergers were prospering, whilst cities that did not, like the Clevelands, the Cincinnatis, and the St. Louises, were struggling. So the idea is we need big box government.

Indianapolis, where I live now, had a city county merger in 1970. Louisville did a city county merger, I grew up near Louisville. Jacksonville, Florida, Lexington, Kentucky, and Nashville, Tennessee did as well. What I would say is a few things. Merger is not necessarily bad. For Indianapolis, merger did prevent the city from essentially going down the tubes in important ways. So it really was a win in important ways.

But it did not prevent the historic city from going into the exact same demographic decline as St. Louis. The historic city of Indianapolis has lost almost exactly the same share of its population since 1970 as St. Louis has. Secondly, these are very politically difficult to pull off. They take enormous effort. They often fail multiple times. Louisville had multiple failures.

The most precious resource is always management time and attention. Is this where you want to put all your political chips? And in order to get it passed politically, what happens invariably is that most entities are actually not consolidated. In Louisville, none of the existing incorporated suburban governments were in fact merged. In Indianapolis, the school districts weren’t merged.

This means you don’t necessarily get all of the benefits you think from consolidation, because many things are excluded. And then unlike a corporate merger, where there’s typically a lot of downsizing and cost rationalization, in city county mergers nobody ever loses their job and salaries and benefits might even be harmonized upward to the high watermark. So don’t expect it to save any money. Personally, city county merger might have some benefits for St. Louis. I’m not saying it would have no benefits, but in my opinion it’s not going to be a needle mover and most likely it would be extraordinarily politically difficult and uncertain to pull off.

Susan Pendergrass (06:00): Yeah, no question. It’s been very politically difficult. People don’t want to do it. However, we do have these little tiny school districts and police districts. We have, I don’t know, 28 911 systems. We have a lot of what looks like bureaucratic waste and red tape. To the extent that doesn’t get resolved in a merger, then what’s the point? But I do think, you know, we’ve been talking about the demographics of St. Louis. There were over 800,000 people in the city once. Now there are maybe 280,000 and declining, and we’re in the death spiral of more people dying than being born. We’ve been in that for a while. And I guess it brings up the question of what is St. Louis to do if we are in this death spiral? We’re not having the babies. We’re having fewer babies than we did 15 years ago. So school enrollment is only declining. What is the prescription in that situation?

I’ve been to Cincinnati quite a bit. They’re trying to get people downtown with sports stadiums. It doesn’t really work. Louisville has sports stadiums downtown. I don’t know if people really want to move down there. I don’t see it working in St. Louis. So what is a city in that situation to do?

Aaron Renn (07:18): It’s going to be challenging in a sense because your problems are a little over determined. St. Louis was once a regional capital city, much like a Dallas or an Atlanta or a Denver or a Minneapolis. And it lost a lot of those functions. Many of its headquarters have left. It used to have a lot of professional services firms like ad agencies that did business all over the country, not just for the local market. Now St. Louis, although it’s still bigger than Indianapolis, looks a lot more like an Indianapolis or a Columbus, Ohio, where you have fewer corporate headquarters and most of the service firms are just there to serve the local market. St. Louis has essentially shrunk a little bit in relative importance, and it’s hard to get that back.

The demographics are also quite difficult and create a situation where it’s hard to attract business when you have a shrinking labor force, weak demographic growth, and a weak ability to bring people in from the outside. So it’s a very complicated situation and I don’t think there’s any silver bullet for St. Louis.

Susan Pendergrass (08:39): That’s what I’m asking you for. You have the answers. What’s the silver bullet?

Aaron Renn (08:43): So here are the things I would look at if I were in St. Louis. One of the clear issues that affects all of these river cities is that their wonderful, unique local cultures come with a downside, which is an extreme parochialism that has two negative effects. One, it makes it difficult for the communities to cohesively work together, which I’m not telling you anything you don’t already know. City-suburb divides tend to be bigger. In Indianapolis, regional leadership is mostly all on the same page about the big issues. Same with Columbus, Ohio. Secondly, it makes it very difficult to attract people from out of town because they come there and they can’t make friends, they can’t penetrate the social networks.

Susan Pendergrass (09:15): 100%, yes.

Aaron Renn (09:40): You hear it over and over again in places like St. Louis, Cleveland, even Minneapolis, Minnesota. There are some sayings there. If you want to make friends in Minnesota, go to kindergarten, because that’s when everybody makes their friends. Or Minnesotans will give you directions anywhere but their house. They’re never going to invite you over. St. Louis has that reputation. I don’t think it’s just a reputation. And I know you just had Ness Sandoval on.

Susan Pendergrass (09:53): Yeah.

Aaron Renn (10:08): He’s talking about you need to get better on migration. Migration isn’t going to improve if migrants are not going to be able to join the social networks here. And that’s not even just international migration, that’s domestic migrants. So I think that’s a huge issue for the city. Cultural issues are hard to solve, but maybe less intractable than infrastructure.

The other thing is looking at Pittsburgh as a sort of model. Pittsburgh hasn’t solved really most of its problems by any means, but it has been able to regenerate in the city a sort of high value economy around Carnegie Mellon and the University of Pittsburgh Medical Center. It’s done quite well. Many Silicon Valley firms have set up shop there. What’s happened in Pittsburgh, although it’s still a demographic decline story, is there’s been a demographic transition in the city. Pittsburgh went from one of the least educated cities in America to now one of the youngest and most educated. Part of it is old people moved and died off and young educated people replaced them. So the total number of people in the city was declining, but there was a churn happening underneath. And the same thing is already happening in St. Louis.

Susan Pendergrass (11:13): How did they do that?

Aaron Renn (11:33): College degree attainment in the city is now well north of 40%. So the people who live in the city of St. Louis are very educated. That demographic churn has raised educational attainment and thus incomes in the city a lot. Now Pittsburgh was different because it was an almost entirely white city. There’s a racial divide in St. Louis and gentrification concerns become more salient. But St. Louis is now an educated city. This is not an old post-industrial blue collar city. The city of St. Louis itself is very educated. And also being very small, it doesn’t necessarily need a massive change to move the needle. In Indianapolis we have a population of over 900,000. Moving that behemoth takes a lot. St. Louis now being smaller has a situation where there could be a big impact from lower numbers of things. So I think a knowledge economy built around Washington University and your medical centers has some possibilities, somewhat similar to Pittsburgh.

Susan Pendergrass (12:45): So much medical.

Aaron Renn (12:58): Carnegie Mellon’s engineering and computer science areas will be a little different. I might also look at Vanderbilt, what’s going on there? What are some peer schools you could watch to see what’s going on? But I think there are actually some reasons to think that the city of St. Louis, believe it or not, could be sort of turning a corner. It has now demographically renewed itself to a higher educational attainment state. Being small, it probably doesn’t have that much further to fall, and you can start building from there. Obviously there are governance challenges, but looking at the Pittsburgh model, studying similar complexes around peer schools, and addressing the culture issues is where I’d look.

David Stokes (13:33): Hopeful.

Susan Pendergrass (13:47): So as a spokesperson for St. Louis, what do you see for the future?

David Stokes (13:52): Well, I would be curious to get Aaron’s thoughts on that size question, about how the city of St. Louis has in fact gotten so small. It’s about 10% of the metro area. How does that affect the pros or cons of any type of a merger? These would not be a merger of equals. St. Louis County would almost subsume St. Louis City into it. How do you think that would affect things for better or worse?

Aaron Renn (14:28): Well, that was the critique of the Louisville merger by two academics at the University of Louisville. I mentioned the book Cities Without Suburbs. They wrote an academic paper called Suburbs Without a City, which basically said if the merger passed in Louisville, it would essentially mean the suburbs take over the city, not the city taking over the suburbs, because the old city of Louisville only had about 260,000 people and the suburbs would numerically dominate. The same thing would certainly happen in St. Louis. If there were a merger, suburban St. Louis County would control the city in essence.

Another consideration, and this is a Cincinnati issue, I interviewed about 15 years ago the mayor of Cincinnati, John Cranley. Here’s what he said, and I think this is an important point. He said, 30 years ago, city county merger was the thing because cities were in decline and you wanted to tap that suburban tax base to fund the city. But now it’s reversed. Now the cities are coming back and it’s the inner suburbs that are actually going down the tubes. And so in Cincinnati today, we have all the corporate headquarters, we have the universities and the medical centers, and we don’t have to share our tax revenue with anybody. If we were merged with the county government, we’d have to prop up all these failing suburbs. And so I think you’re in a similar situation in St. Louis, where the high value activity, not all of it is in the city of St. Louis because of Clayton and so on, but the St. Louis County suburbs are mostly places that are themselves on negative trajectories. Merging the city, which may be on the cusp of being able to bottom out and turn around, with all of these still declining inner suburban areas, might actually be an albatross around the city’s neck.

Susan Pendergrass (15:16): What would that mean?

David Stokes (16:37): I just think one of the differences between St. Louis and Cincinnati, and I don’t know the property tax base of Cincinnati, is that so much of the city of St. Louis is tax exempt right now. Between Washington University, Saint Louis University, and all the government entities, there’s just so much of it. I say that as somebody who supports property tax changes to make them pay something towards it. But I just don’t think the Cincinnati argument applies to the city of St. Louis right now. That property tax exemption part is a huge factor because the most growing, thriving part of it is the entire giant Barnes-WashU-Cortex complex, and the amount of property taxes they pay is miniscule.

Susan Pendergrass (16:38): Hmm.

Aaron Renn (17:26): Well, some of that is a planning issue. And I think the reality is, when you have a complex like that, are all these people going to move to St. Charles? Maybe not. I’ll tell you, I live in the suburb of Indianapolis named Carmel, and a lot of the hospitals and things have been opening facilities here. When these nonprofit hospitals come up here, we will not approve zoning changes for those hospitals unless they agree to make payments in lieu of taxes. You want to come up here and you want a zoning change, you’re going to have to pay. We were actually quite prescient in that one of the local hospital chains opened a for-profit hospital. As part of the approval deal, we said, if you ever convert to nonprofit status, you will continue paying property taxes. And we did that.

So I think there probably is leverage from the city over some of these entities. You don’t have a lot of leverage over a corporation deciding where to put their office, but that’s not a tax exempt situation. The stuff at Cortex is probably not going to leave if you make them pay a little money the next time they come to you for a zoning approval. I think you need to start looking at how to get more money out of these entities that are nonprofits in name only. These universities and hospitals are effectively gigantic hedge funds. Their executives are extremely well compensated and billions of dollars are flowing through there. Undoubtedly the better solution there is to figure out how to tax them rather than figure out how to tax the soon-to-be-dead mall in the suburb over the border.

David Stokes (19:24): Well, yeah, and that’s sort of the trade off, unfortunately, is that they do pay earnings tax. The employees, many of them very highly compensated, pay the earnings tax. And that’s what makes the city more dependent on local income taxes, not less, because they’re either tax exempt or in the case of Cortex, have tax abatements that make them essentially tax exempt.

Susan Pendergrass (19:25): We do have earnings taxes, right? So the folks who work there have to pay an earnings tax.

Aaron Renn (19:53): Yeah. Again, I don’t know exactly the fiscal architecture there. But I would say you don’t want to do a merger simply to do a tax dollar grab. The lesson of Indianapolis is we did that. We grabbed suburban tax dollars and we used it to rebuild our downtown successfully. But here we are 50 years later, and now we have enormous tracts of decayed suburbia that are an enormous problem. Our entire core county is now in a sense the inner city. We have big challenges because we were not able to invest in ways that allow those suburban areas to retain their allure over the long term.

And I’m not saying that’s impossible, but any short term juice you get, cities always rise and fall. Core cities have proven more resilient and more able to regenerate themselves than suburbs. Part of it is because state governments cannot afford to let their state’s largest city or major urban center go down the tubes.

Susan Pendergrass (21:06): Yeah.

Aaron Renn (21:16): Missouri cannot let St. Louis and Kansas City implode. Michigan cannot just write off Detroit and say who cares. But these suburban areas have proven a lot tougher to save. We don’t have a good model. We’ve spent decades thinking about how to rebuild cities and build districts. There are certain things you can pull off in a city around conventions, civic events, gathering spaces, museums, and government that are very hard to translate to suburban settings. So there’s not a great playbook, especially in declining markets, for renewing suburbs. The playbook for suburban renewal, if you want to call it that, is places like Carmel, Indiana, which are growing and affluent, and therefore can build large mixed use centers, new urbanist developments, trails, and parks. The suburbs of St. Louis County are probably tremendously deficient in infrastructure as we would understand it today.

So again, there may actually be some benefits in having St. Louis City rejoin the county in a sense, because then the county functions are spread and amortized across a larger population.

Susan Pendergrass (22:45): It would immediately improve our murder rate because we would be mixing it in.

Aaron Renn (22:48): Yeah, there is some of that. The murder rate is an artifact of the size of the city more than anything. There are places in Chicago with higher murder rates. A former colleague of mine at the Manhattan Institute, Rafael Mangual, did an analysis of Chicago. He said there are areas on the South Side of Chicago that are larger and have more people than St. Louis with far higher murder rates than St. Louis.

Susan Pendergrass (22:56): We get called out because of the small denominator.

Aaron Renn (23:17): And so there is that. The other thing is Chicago is a good example. New York City was essentially a city county merger. In 1898, the five counties that are the five boroughs of New York were consolidated into one city. Philadelphia was also a city county consolidation from the 19th century. But what happens when you create a very large city of say a million people or more is you really have to scale up your government. You have to have a government that operates at that scale.

What happened with Indianapolis was we merged city and county government, but we didn’t really have a government that could effectively manage this new larger territory. It never built out the infrastructure in the suburbs. In New York, the Bronx has subways, great parks, everything built out with proper infrastructure, because it was part of New York and New York had to expand governance to become a city of eight million. Chicago got big in the 19th century and built a city government that could run a city of three million people. And some of the stuff that gets critiqued there, for example, is a lot of city services were organized by ward or city council district. There are 50 city council districts and every city councilor is sort of a little mini mayor of their district. The alderman essentially has veto power over any zoning changes. It’s called aldermanic privilege. So there are a lot of constraints there.

But if it’s just one mayor and one city council trying to think about a huge city of 77 neighborhoods and three million people, they can’t keep that much in their head. All they can think about is downtown. And that’s what happened in Indianapolis. The mayor and city council can really only think about downtown. We should have built out structures in townships throughout the city so that you had leadership focused on that area and money focused on that area. That’s what made the suburbs work really well. A suburb like Carmel is basically township sized. We have 100,000 people, big enough to do things, but not so big that our mayor and council can’t keep the whole city in their head and plan and manage the whole city.

So if you merge with the county government, you’re going to have to create an entirely new government structure that allows you to essentially manage every sub area of the whole thing and bring it all up to a standard of services. That’s the other thing they often did in Louisville and Nashville. They merge, but they have a two tier service system where there’s an urban services district for the old city which gets more services, and then the others get less. They didn’t do that in New York. There’s one standard of service in New York, one in Philadelphia, one in Chicago. So if you can’t commit to a single standard of service, you’re basically creating a bogus merger in my opinion. If you’re going to do a merger, you need to obliterate every government and entity in St. Louis County and city, merge them all into one with one standard. That’s not going to happen.

Susan Pendergrass (26:35): That’s not going to happen. What do you think, David?

David Stokes (26:37): Yeah, that’s not going to happen.

Aaron Renn (26:43): So you end up with a lot of problems. Louisville didn’t merge any fire departments. Imagine a city that doesn’t have a consolidated fire department. Imagine a city without a single police department. That was actually Indianapolis. When we merged, the Indianapolis Police Department still patrolled the old city, but the new parts of the city that were consolidated in from the county were still controlled by the sheriff.

Susan Pendergrass (27:13): That is 100% what would happen in St. Louis. Everyone would retain their school system and their police department and their fire department. I lived for a long time in Fairfax County, Virginia, which is a single county government. It’s massive, 150,000 students in their school system. It seems to function with a single police department and fire department. But I don’t think you can backwards engineer that into a place that for hundreds of years has been operating as it has been operating.

Aaron Renn (27:43): Lexington, Kentucky worked pretty well because one, the schools were already consolidated, as in the South it’s typically county school districts. Secondly, there were no other government entities, no township governments, no other incorporated municipalities. So it merged everything. And they were sort of able to solve the urban services district issue because the outer areas of Fayette County were horse farms. They actually put in a kind of green belt rule, you can’t develop out there, because they wanted to protect these scenic landscapes. So there was actually a good reason to treat that differently, because it was a very unique American landscape. Lexington, I think, was pretty successful.

Susan Pendergrass (28:15): They are. I appreciate it when I drive across Route 64.

Aaron Renn (28:39): Lexington was pretty successful and wasn’t especially controversial when they did it, in part because there weren’t all these entrenched interests like there are in other places. If you look at places that did the mergers, they weren’t the Cincinnatis and Pittsburghs. They’ve been talking about consolidation in Pittsburgh forever. It was very hard. And Louisville did it, but it was one of the least consolidated so-called consolidated governments. What the Louisville merger functionally did was dissolve the city of Louisville and reorganize county government. The county government now has a mayor and a council instead of the old fiscal court with the judge executive and all that.

Susan Pendergrass (29:21): That’s kind of what would happen in St. Louis, right?

Aaron Renn (29:36): That’s essentially what they did. They basically dissolved the city and the county government was reorganized, but nothing was merged.

Susan Pendergrass (29:43): Did you have a question?

David Stokes (29:45): I want to get back to the fire district point. We’re talking about why this would be so hard. There’s actually a law in St. Louis that only applies in St. Louis County that makes it impossible to consolidate fire districts. Even if a modest mid-sized suburb annexes an unincorporated part of town, they’re not allowed to provide fire services to that new annexed area, or they can, but they have to pay so much to the old unincorporated fire district that it makes it impossible to do so. That’s just one example of how even if you wanted a full scale merger, it would just be impossible to actually carry through.

Susan Pendergrass (30:34): Why do you think people float this idea, David? Why does it come back every couple of years?

David Stokes (30:38): You know, it’s the old line. I remember a study I read about Pittsburgh and St. Louis many years ago. The question was, are the St. Louis and Pittsburgh areas really inefficient with all the fragmented government? And the conclusion was, well, you would never design a metro area like this, but they’ve both made it work over the last century better than you would think. The conclusion was that St. Louis and Pittsburgh aren’t actually as inefficient as you might assume when you run the numbers.

I think people have trouble accepting that. People look at so many small municipalities, many of them dysfunctional, many of them until recent times funded themselves primarily with traffic tickets, which is a terrible way to fund local government, and that’s not even an exaggeration. And there’s just this fundamental belief that if you can just plan it better you’ll create a better place. I just think it fails.

One of the reasons it would fail, going back to what Aaron led this conversation off with, is that if St. Louis County and St. Louis City joined together, they’re not actually going to lay any government employees off to save any money. St. Louis City government is not going to fire city employees. It’s never going to happen. So you’re not going to save any money and it’s all just going to collapse.

Aaron Renn (32:12): Yeah, New York City and large governments are not more efficient.

I look at it and say, look, I think merger is a solution for failed states, if you want to call them that, in the St. Louis suburbs. Take some micro-suburb that’s a complete scam or is bankrupt and merge it in with its neighbor. Do some consolidation like that, that probably needs to be led by state government, almost like a receivership sort of thing. That’s just kind of good government as you work through it. But I just don’t think the benefits you would gain from trying to do a complete governmental merger of St. Louis City with St. Louis County would outweigh the opportunity cost of how much time and effort you spend on it, when you could be spending that on other things that I think will actually move the needle more.

The downsides are arguably as high as the upsides. There’s no guarantee it’s even net positive in this environment. The time to have merged was when Indianapolis did it in 1970, not in 2026. Nashville did it in the 60s. Jacksonville did it a long time ago.

And then I think it doesn’t fix the fundamental issues around the culture. You’ve got to take a hard look at that and say, it’s maybe very difficult to change. The idea that people who aren’t from here have to be able to move here and get connected and feel like they belong in the city. There’s a couple we know who lived in St. Louis. The wife taught in St. Louis public schools. They’re big urban people. The husband was from St. Louis, and they moved here to Carmel, Indiana.

Susan Pendergrass (33:47): Tell me more about that.

Aaron Renn (34:10): Basically they said, man, people are just so much friendlier here. They make better eye contact, they engage more. It’s just so much more welcoming than it was in St. Louis, even though they were actually in a sense connected because the husband was from there.

So when even people who lived in St. Louis and liked it notice a difference when they leave, that is a killer when you’re already struggling demographically. I had a guy who owned a business in Cleveland who said to me one time, I learned the hard way never to recruit anyone from out of town to work for my company unless that person or their spouse is from Cleveland, because otherwise they will never stay. When that’s where you are as a place, that is just rough. I think that is one of the killers for these river cities.

Susan Pendergrass (35:16): Yeah, what’s the fix for that? I don’t know what the fix is.

Aaron Renn (35:38): I think the optimistic case for St. Louis, and I actually tweeted this a year or two ago, is that St. Louis City educational attainment is really high now. In a sense, it’s a small, highly educated city that is probably going to continue growing more educated. So I think the Pittsburgh option looks viable in St. Louis.

Susan Pendergrass (36:00): And certainly great medical care. I know that the average age is getting older in St. Louis. I think within 10 years, one in four people will be over the age of 65. But we also have an Alzheimer’s research center and access to medical care, which as you get older gets more important. I do think there’s an opportunity to lean in to the medical services that are available, as the country as a whole gets older. I think St. Louis looks more attractive for that reason. So I think you’re right that with universities and medical centers, there’s an opportunity.

Aaron Renn (36:35): Yeah, I think if America’s demographics keep on this trend, a lot of other places are going to get to where St. Louis is. And the thing to be careful of is that when you’re in a declining market, that often prompts centralization of activity and population. What happened with Japan is that once Japan’s population started falling, everybody started moving to Tokyo. It’s Tokyo and a handful of other cities where everything is concentrated, and they literally have ghost towns there.

I don’t think it’s any accident that Indianapolis’ growth really took off once the Rust Belt era and deindustrialization hit the state. Indianapolis and Columbus, Ohio have grown in large measure through drawing people out of the rest of the state as those states declined. Huge numbers of people move from Cleveland to Columbus every year.

Missouri is a little different than that. One of your challenges is that St. Louis does not draw people from rural Missouri. When I looked at the data, it’s not like there’s a massive flow into St. Louis from the rest of the state. So you don’t have that siphon bringing people in.

Susan Pendergrass (37:55): There are public safety issues around that, but yes.

Aaron Renn (38:00): And the issue we have is that we’ve now eaten our seed corn. There’s not going to be next generations of children in the towns I grew up in in rural Indiana to move to Indianapolis anymore. The cohort sizes are going to be smaller. So that pump, even Tokyo is declining now in population. That siphon is draining the water table. We can only rely on that so long.

But I think this is the risk for St. Louis in that kind of environment. People with opportunity might avoid or flee St. Louis and go to Austin, Texas or Nashville. They go to the handful of places in America that are really still growing. That’s a threat even for Indianapolis and Columbus, Ohio. In a declining market, it’s very hard to get people to want to come to a shrinking city because the opportunity space is shrinking. St. Louis’s opportunity space has been shrinking because you’re losing corporate headquarters and your working age population is declining. That dynamic is really going to be a challenge. But within that, the city of St. Louis might end up doing okay. Again, being small actually helps it here.

Susan Pendergrass (39:25): Any closing thoughts on that, David?

David Stokes (39:27): Just that the part of Missouri that is definitely still growing, and that probably is attracting those young rural people who are moving to a city, is going into southwest Missouri, the Springfield-Branson area. That’s absolutely the growing part of the state. And even Kansas City is growing certainly more than St. Louis is.

Aaron Renn (39:48): Yeah, it’s not a culturally cohesive state. Springfield and that area are definitely growing, and growing despite the fact that they have nowhere close to the urban assets of a St. Louis. It’s interesting to watch, and we’ll just have to see what happens.

Susan Pendergrass (40:05): It is. I think about it a lot. I’ve been talking about this in terms of school enrollment for years and years, where you could see the biggest kindergarten cohort was after the Great Recession of 2009. You know that that’s the biggest kindergarten cohort for the last 15, 16, 17 years. We do nothing but build schools and hire teachers. We are slow to catch on to these things happening. But I think your perspective is certainly very interesting. On the question of the merger, it’s not worth the cost for whatever benefits there might be. But it still gets talked about, so I appreciate you coming and giving us your thoughts on it. Maybe we’ll have to have you back to talk about it again.

David Stokes (41:02): And Aaron, I want you to come back. I want to find out how we get more roundabouts in Missouri. I love roundabouts. I go to Carmel it seems like once a year for these gigantic youth sports tournaments up at Westfield, just a little bit north of you. My kids’ sports take me there. And I love the roundabouts. You cannot get enough of them.

Aaron Renn (41:09): I’d love to talk about that. My favorite topic.

Aaron Renn (41:24): Yeah, it’s great. We hardly ever have to stop. There are barely any stoplights or stop signs left in our city. It’s amazing. We’re one of the few growing places in America where traffic is better today than it was 20 years ago.

Susan Pendergrass (41:32): They’re awesome.

David Stokes (41:45): People don’t realize how good that is for air quality and everything. You just keep moving along, not stop and start. We need 100 times more roundabouts in this area.

Susan Pendergrass (41:55): Are you pretending that people stop at stop signs in St. Louis? Because let’s be honest, people don’t stop at stop signs.

David Stokes (42:00): Well, they roll them, but it’s still wrong when they roll them. Maybe all the people blowing red lights on Kings Highway at 50 miles an hour are just being environmentally conscious. I need to give them more of the benefit of the doubt, I guess.

Susan Pendergrass (42:12): That’s exactly right. All right, thanks so much. I really appreciate it.

Aaron Renn (42:19): Thank you.

Produced by Show-Me Opportunity

The post The St. Louis City-County Merger with Aaron Renn and David Stokes appeared first on Show-Me Institute.

Susan Pendergrass speaks with J.S. Onésimo “Ness” Sandoval, demographer and professor in the Department of Sociology and Anthropology at Saint Louis University, about what the data says about the future of the St. Louis region. They discuss record low birth rates and what they mean for school enrollment, why St. Louis is among the top regions in the country for deaths outnumbering births, how the region compares to Pittsburgh and Cleveland, and why suburbs like Chesterfield and St. Charles are aging faster than most people realize. They also discuss the role of housing supply, school choice, crime, and domestic migration in whether St. Louis can attract and retain young families, and more.

Listen on Spotify

Listen on Apple Podcasts 

Listen on SoundCloud

Episode Transcript

Susan Pendergrass (00:00): Well, certainly not the first time we’ve spoken, Dr. Sandoval. At St. Louis University, you are such a fascinating demographer of the region, and I’ve been following your work as new census data has been released. You’ve been writing about it and creating what I think are really cool mapping tools that folks can look at to see how the St. Louis region is impacted. Thanks for coming on to talk about that. But first I want to sort of expand our view, because pretty sure that I read within the last week that the number of babies born in the United States was at an all-time low. Is that right?

Ness Sandoval (00:35): Yeah, so every year the United States will probably be breaking records. The data coming out for 2025 is a record low, and the data coming out for 2026 is even lower. The first few months of 2026, the provisional data that’s out shows even fewer. And this is what we expected. We call this a demographic shock, because in 2026, whenever you create an atmosphere of uncertainty and fear, rational people do not have children until they understand that their job is safe, there’s not a recession coming, and we’re not at war. When you create this sense of fear, young people do the rational thing and don’t have children. We saw this in 2020 with COVID. We saw this in 2008 with the Great Recession. Anytime there is uncertainty, young people will postpone births. And that’s what we’re seeing. This started in November. We started to see the decline in births, and it’s continued from November, December, January, February. And so this is what we’re going to see.

Susan Pendergrass (01:51): So next year is going to be lower. And when you look at the state of Missouri, I’ve been saying this ad nauseum for years that our K-12 school enrollment is declining and will decline because of that sort of peak in 2008, just before the Great Recession. So our biggest kindergarten class was around 2012, and our kindergarten classes have by and large declined ever since. And so those kids are moving through the system. You can project that we will just have fewer and fewer kids enrolled in our K-12 system in the state of Missouri.

Ness Sandoval (02:06): No, we peaked in 2008.

Susan Pendergrass (02:11): By and large declined ever since 2012. And so those kids are moving through the system. So you can project that we will just have fewer and fewer kids enrolled in our K-12 system in the state of Missouri.

Ness Sandoval (02:24): Yeah, this is true, and we have a pretty good chart. We make these for every city. We’re replacing very large cohorts of children who were born. I have a son who was born in 2007, just before the recession. That cohort that graduated in St. Louis was 40,000 students. The baby birth cohort is now 27,000 students. So that’s just in that one year a 13,000 decline. And it’s going to decline every year for the next 15 to 18 years, because we don’t know what the bottom is yet. It has not reached the bottom.

Susan Pendergrass (03:01): Right. People say where are the kids going? I’m like, they’re not going anywhere. They weren’t born. The St. Louis region, like Clayton is declining, Ladue was, I mean, all of these school districts, I think almost everyone in the county has fewer kids today than they had 10 years ago.

Ness Sandoval (03:07): They weren’t born. Yes, and it’s not just St. Louis County. St. Charles County is experiencing this. There are some parts that are growing, in the Wentzville area, O’Fallon, but if you look at the old St. Charles areas, they’re experiencing decline. Families with children are declining in those areas. We had made an interactive map that I think shocked a lot of people, of seniors outnumbering youth. People could not comprehend this. Like, my gosh, this is not 2000 where youth were dominating these neighborhoods. I live out here in Chesterfield. The entire Route 64 corridor is senior citizens dominating the youth in Chesterfield. People are shocked. More seniors lived in Chesterfield than youth in 2010, and that’s only grown since. This is happening throughout West County.

Susan Pendergrass (04:14): Wow. And your maps actually go down to the zip code, right? You have very granular data.

Ness Sandoval (04:27): Across into Illinois, yes. The only way you can turn this around is young people from across the United States deciding that they want to make St. Louis their home, have a family there, create a business there. This is what I promote. We have to get younger. We really should have a preferential option for families with children. And that’s a hard message for a lot of people because they’re like, wait a minute, we grew from 1970 to 2020. And I’m like, but all of that growth was driven by babies born. Over 1.8 million babies were born. And I tell people, just do the math. 27,000 babies per year times 50. That’s the back of the envelope for what’s coming over the next 50 years. Unfortunately, that’s not what’s going to come. It’s going to be a lot lower than that. People are starting to get it. We’re not going to have 1.8 million babies born over the next 50 years.

Susan Pendergrass (05:33): Yeah, and I think about things like individual school systems building new elementary schools when there have got to be a lot of buildings that are empty. And also, won’t there be more competition for public resources between children and older people?

Ness Sandoval (05:49): Yeah. At my previous job at Northwestern, we did a project on this in one of the suburbs because we were studying seniors. There was a debate about how to spend public money. Was it for transit for seniors or transit for children? This was 2006, and this was the debate happening in Chicago. How do you provide paratransit for senior citizens when that number is increasing? We’re just having this discussion because St. Louis is leading. We’re in the top three of regions. Pittsburgh leads the country, Cleveland is second, and St. Louis is third, tied with Tampa. More people dying than babies born. We simply don’t have the number of babies born for the size of our population. And it’s because we’re a very old region. We’re the ninth oldest region in the country.

Susan Pendergrass (06:58): Yeah, I mean, we used to have 800,000 people in the city of St. Louis, right? And now we’re 280,000 or something.

Ness Sandoval (07:05): Yeah, and I was just looking at the numbers. It is very possible within two years that Kansas City will have more babies born in absolute numbers than the St. Louis metro region. That’s how few babies. I’m talking about the region. Indianapolis is about 700 babies behind St. Louis. Nashville is about 800 babies behind. All of these smaller regions are having lots of babies, and young people are moving there. Your future depends on the number of children born. And when you look at population projections, I kind of know what this looks like. When you fall below Kansas City in number of births, at some point Kansas City will be larger than St. Louis. We can project this out. We’re talking absolute births, not birth rates. We had lots of babies born 10 years ago. We were fine 10 years ago.

Susan Pendergrass (08:09): Yeah, wow.

Ness Sandoval (08:29): We can go back and talk about what happened since 2010.

Susan Pendergrass (08:35): Yeah, please. I’m curious what did happen. I know you call it the death spiral when there’s more deaths than births, but how did we get into this?

Ness Sandoval (08:41): So I moved here for the Great Recession. I moved in 2008 to start my job at SLU. And there was hope when I got here. There was some positive momentum happening. I think the region took it for granted that it didn’t have to do anything. We just have to be St. Louis. We don’t have to do anything. Unfortunately, Nashville came on the scene. Then you started to see regions change. Regions thinking we need to get young. And St. Louis absolutely did nothing. Since I’ve lived here, there’s been a lot of resistance to economic development in the region. Nashville, I think it was the popularity of being young, being pro-development. I went to Nashville to actually look at it, like why are young people there? And I went to Vanderbilt. And I saw this really interesting integration between the city and Vanderbilt University. That does not exist here in St. Louis. Making it a vibrant, cohesive, urban experience.

Susan Pendergrass (09:47): Yeah. Right. Now you step off campus at SLU and you’re in an area you don’t want to walk at night.

Ness Sandoval (10:00): Yeah, and even if it was WashU, right. And then you can talk about the Loop. It never recovered from COVID, traffic is down. I think the region has really struggled to attract young people to stay here and live here.

Susan Pendergrass (10:13): Well, we’ve been looking into the issue of crime in St. Louis quite a bit, and I know it’s down and everyone’s celebrating that fact, but I’m not sure when you survey people and ask how they feel walking alone at night, that it’s changed all that much. Even if the number of murders are down, I don’t know that people feel safer walking alone at night, and that’s got to have an impact on whether you want to stay in St. Louis after you have kids.

Ness Sandoval (10:47): Yeah. I think in the city you move out to the suburbs. The challenge is they work and you live for affordability. So many suburbs are against new development, even though they can develop. We see these debates in Chesterfield, that debate in Creve Coeur, several debates out in St. Charles. They don’t even talk about Jefferson County, because they’re celebrating voting down housing. My point is if you don’t want to build housing, Indianapolis is going to build it. Columbus is going to build it. Nashville is building it. We are no longer in the top 50 in new housing permits in the country. We’re 58th.

Susan Pendergrass (11:34): Why though? Is it because there’s not demand, or is supply being constrained?

Ness Sandoval (11:42): Supply is being constrained. Part of it is, when I speak to people, they say it’s going to hurt my home values. People want supply down. But you understand there’s a consequence to this. And home values are always good in St. Louis. But again, we always say there’s a city that we can look to that’s our future, and that’s Pittsburgh. If you really study Pittsburgh and look at it, you’re like, wow, there’s a lot of things we can learn as a city, and say this is not what we want to be. Pittsburgh leads the country in discounted rates on home sales. When people offer their price, most people do not get the price that they want. It’s a significant discount because the demand’s not there. We are about 20 years behind Pittsburgh.

Susan Pendergrass (12:25): Wow. I think a lot, in what I do, about the educational offerings in the region. Before we were recording we were talking about Texas. Texas, number one, doesn’t have an income tax, and also you can pick your child’s school from the get-go. They have hundreds, if not thousands of charter schools. And now they have a private school choice program that I think 250,000 families apply to. And Missouri has an extremely limited private school choice program, maybe 6,000 or 7,000 kids in the state, and not even the ability within St. Louis County to go outside of these tiny little districts. You can’t even go from Clayton to Brentwood. People really feel strongly about this and fight the idea of opening up the county and letting kids go within the county to any school district, and then the legislature fights it every year. And I’m like, we are just becoming less and less competitive.

Ness Sandoval (13:36): I don’t think people understand. I do a lot of work with schools now. We’re going to lose at a minimum 100,000 children under 15 by 2045. This loss is built into the system based on 27,000 births right now. The numbers are starting to show up in kindergarten. We have a smaller kindergarten class, a smaller first grade class coming in. And so a lot of schools are like, wait a minute, what’s going on? This is just starting. You have another 20 years, because we have these large cohorts that were still born after the Great Recession that are going to be replaced by smaller cohorts coming in. And there is no significant migration of children coming into the region.

Susan Pendergrass (14:28): So there are going to be difficult staffing decisions, and people don’t want to hear it. Like, we cannot continue to hire more teachers.

Ness Sandoval (14:32): You have to close schools. You have to close schools, have to merge schools. I’m doing some work in Parkway. People should not be surprised. Parkway is having meetings this month about what Parkway looks like going forward, and people are discussing consolidation. Rockwood is talking about a 15% decline in 10 years. Go out another 10 years, Rockwood will be talking about school consolidation. St. Charles will be talking about school consolidation in the old St. Charles area, the city of St. Charles. This is coming. Everybody focuses on the city and says the city needs to close schools. But you will see a discussion, I think, between Clayton and Brentwood.

Susan Pendergrass (15:06): For sure. Clayton had 2,500 kids. Now they’ve got closer to 2,000. I mean, that’s teachers, that’s buildings. And I know in Indianapolis, I’ve talked to a superintendent in that area. All parents can pick a public school. And he was like, I had some under-enrolled elementary schools and it was great for me because I put a language immersion program in one to bring parents in. I think the resistance to this idea is all about not wanting kids who aren’t paying property taxes, but I think it’s going to flip. Then you’ll be like, we’ve got to fill these seats. We’re paying the same teacher for 18 seats that we could pay for 22 kids. At some point they’re going to have to start laying off teachers. So I think there are some very difficult decisions ahead that you can see now, and there are things that could be done now, like at least not filling open positions.

Ness Sandoval (16:16): I think universities are seeing this, because many of them are relying on tuition and those dollars are not coming in. A smart university has to make cuts because it doesn’t get any better next year or the following year. There will be fewer students coming in. So universities that want to survive are making necessary cuts to survive.

Ness Sandoval (16:45): Again, we don’t know what the bottom of the birth decline looks like. We just happen to live in a state and a region that has seen a significant decline in children. I keep saying we’re modeling the future for people, either as a good or bad thing. They’re like, we want to be like St. Louis, or we don’t want to do what they did.

Ness Sandoval (17:13): I think a lot of people are starting to understand this. It’s like, we’re letting our children go, and we’re not doing a very good job of trying to keep them here. When you had 1.8 million births, you had enough to let children leave your region, leave the state. You don’t have that luxury anymore. Our models show the region should have anywhere between 1.3 million to a million births coming in over the next 50 years. We hope it’s not a million births, because that means you have an 800,000 decline in your population under 50. Or it’s 1.3 million births, which is only a 500,000 decline. But that’s coming.

Susan Pendergrass (17:43): How does immigration factor into it? Because I remember the last time we talked, you said that St. Louis is not very immigration friendly. And of course, the current national environment is not very immigration friendly.

Ness Sandoval (18:03): Missouri and St. Louis cannot rely on immigration to save it. It’s not a state that immigrants are going to come to in large numbers. They’re going to go to Florida. Miami leads the country. Even though domestic migration has people leaving, international migrants are going there as their top destination. They’re going to Philadelphia, they’re going to New York. We get immigrants who come here, but it’s a very small number, like 6,000 a year. We’re not even in the top tier as a top 25 metropolitan region. And Missouri is not either. So Missouri has to rely on domestic migration.

The data will show that probably for the decade, there will be more people dying than babies born in Missouri. Missouri will start to have from a natural perspective more people dying than babies born. And 91 counties across the whole state will have more people dying than babies born. So Missouri will become dependent for growth on domestic migration.

Susan Pendergrass (19:29): Or do we just accept that we’re not going to grow anymore? What’s the impact of that?

Ness Sandoval (19:33): Again, it’s going to be specific. I do think the Springfield area is going to grow, the Branson area, there’s growth. Part of this is retirement, I think. Kansas City is growing.

Susan Pendergrass (19:42): Why Kansas City more than St. Louis? What’s attracting younger people to Kansas City that is not happening here?

Ness Sandoval (19:49): Kansas City is a younger region. St. Louis is a fairly old region. Kansas City is a lot younger and it has a large Latino population, and that’s the largest growing population in the country, birth-rate wise. Latinos are now the second largest population in Kansas City. They surpassed the Black population, which I think even shocked me, because we thought we knew this was coming, but we thought this was going to be post-2030. The fact that it already happened shows just how many Latinos are moving there. And then you have an exodus of Black residents leaving Kansas City as well as St. Louis. I always tell people, when you have young Black families leave or young Black adults leave, those children ultimately leave too. And so that’s part of the story.

Ness Sandoval (20:48): When young people leave, the children that traditionally were born to those young people are now being born in Charlotte, Atlanta, Houston. The number one challenge for St. Louis and the state is the decline in births. If that doesn’t change, then you’re going to see that decline start to show up in five to ten years in our schools.

Ness Sandoval (21:17): And the private schools will simply go out of business because that’s dictated by the private market. Or they’ll do what many of the Catholic schools are doing. They think, we’re going to have middle school now, or we’re going to be K through 12. But then what about the parochial schools? There’s no growth. They’re just taking children out of other schools and putting them in their school system.

Ness Sandoval (21:45): And so again, I go back to Pittsburgh. Pittsburgh is about how do we manage population decline? The city is growing a little bit, but 100% of the growth in terms of the losses is in the suburbs. And that’s going to happen in St. Louis. When this loss starts to show up in the demographic accounting, most of the loss is going to be outside of the city of St. Louis. It’s going to be in the Chesterfield areas. It’s going to be in St. Charles.

Susan Pendergrass (22:18): So what could be done from a policy perspective? Chesterfield is trying to have this arts and entertainment district. They put in Topgolf and the concert venues. They’re trying to attract younger people there. Is it working?

Ness Sandoval (22:34): It’s not working. I mean, they have the same slight increase. I just posted this yesterday. People are shocked. The growth is in non-family households in Chesterfield. If you look at the new development, I call it downtown West Chesterfield. These are million-dollar homes, very expensive. Very few families with kids are there. These are empty nesters or dual-income, no-kids households. It’s very expensive for young families to get into Chesterfield today, when your entry-level home that was $170,000 in 1980 is $600,000 today. These are the challenges.

Susan Pendergrass (23:23): So build more starter homes?

Ness Sandoval (23:32): You need more entry-level homes. I’m not even going to use the word affordable. You need attainable homes for two incomes. And they can be built. But what I’ve heard is that a lot of cities do not want these homes. They want the $600,000 to $700,000 homes because of taxes. And so there is this tension there.

Ness Sandoval (23:56): Parkway and Rockwood are going to look very different in 30 years. They were very attractive amenities for young families with children. But I look at the data, and my kids are in Parkway. These schools are under-enrolled. You go and objectively look at the classrooms, you’re like, there should be 30 kids in these rooms and there’s 15. It’s great for me as a parent. I’m glad there’s only 15 kids for my fourth grader. One of the classes in Parkway Central, in the middle school, in his math class, there are eight students. I love it as a parent, but as someone who looks at the data, this is not sustainable.

Susan Pendergrass (24:45): Yeah, lots of one-on-one. Yeah. I’m just trying to figure out what would cause a renaissance in St. Louis. It doesn’t feel super safe. It has some great amenities and a great food scene and now MLS soccer. What would it take? Well, number one, you do have the school system problem where the St. Louis public school system is kind of a dumpster fire. So people want to move out if they have small children.

Ness Sandoval (25:32): Yeah, the decision to move out is made within the first three years once the baby’s born. We can see that in the data. When we moved from Chicago, because we lived in the city of Chicago, we wanted to live in the city of St. Louis. I think most people who move from Philadelphia or Boston are living in the city. We thought the city of St. Louis would be offering the same amenities. Because of the Great Recession, I came a year before my family, and we soon realized the city of St. Louis was not the city of Chicago in terms of amenities. And so we ended up in St. Charles. And I think most people make that same decision.

Susan Pendergrass (26:25): Yeah, my husband and I moved right into the city.

Ness Sandoval (26:27): We see it in the data. People are moving into the city from Philadelphia, from Boston, from Houston. But then, like me, if you have children and you’re not going to pay for private school, because that’s a tax in many ways, they’re going to exit out. And then with the Catholic schools closing in the city, there are going to be fewer options.

Susan Pendergrass (26:50): Yeah. But the public transportation is no good. I mean, there are things.

Ness Sandoval (26:57): And it’s interesting. We did see a kind of experiment during COVID. When COVID happened, the Catholic schools in the county opened up. A lot of families wanted their children in face-to-face instruction. So they left the city. They did not stay. So we had kind of a quasi-experimental design there. Education was very important.

Ness Sandoval (27:26): A lot of people left the city because of that and never came back. And that started before COVID. But I think this idea of school choice is something where parents want it. We have enough anecdotal evidence. When Normandy closed, the school system closed, families moved to Normandy to get their kids into Francis Howell. There’s enough evidence to show that families want to make these decisions. The question would be, would Parkway accept all of the students that would want to be in Parkway?

Susan Pendergrass (27:56): Yeah, the law would have to say that they would have to. You couldn’t let them pick and choose.

Ness Sandoval (28:15): Yeah. And so the question is, you have a lot of people who would love to be in Parkway. I gave a talk at Marquette and I was shocked because a good percentage of the students there were saying those public school students, but the parents had left to get out to West County for their children. So the question is, do you just let the private market dictate this? Those who can leave the city will ultimately leave the city and get out to West County.

Susan Pendergrass (28:50): There’s movement out. And I think in terms of domestic migration, to get parents to move in, you can go to our northern border, Iowa. The state pays for private school tuition. Oklahoma to the south, the state pays for private school tuition. Kansas, you can go to any public school in the state. It’s 100% open enrollment. Arkansas is one of the strongest for school choice, both public and private. I think we’re going to be surrounded by it and just have our arms folded across our chest. Because Parkway doesn’t want all those kids coming, or Rockwood doesn’t want all those kids coming. Parents are simply going to move across the border to a state where they can pick any public or private school. I’ve talked to some parents who have reached out to say, I’m thinking about moving to the region, is it true I can’t pick a school? And I’m like, it is true. You cannot pick a school. And I think they’re like, forget it. I’m not going to make this big decision on where to buy a house. I think if we don’t do things that are family friendly, and if we don’t get crime under control in some way, or have a 911 system where when you call somebody responds, I think it’s interesting that St. Louis will become this example for the nation of what a dying city looks like.

Ness Sandoval (30:08): We have three examples today: Pittsburgh, Cleveland, and St. Louis. Tampa is kind of unique because it is a destination for retirees. The Wall Street Journal has an article today on Cleveland, the renaissance of downtown Cleveland. And Detroit too, it’s a renaissance.

Susan Pendergrass (30:29): Wow. What about Detroit now? So St. Louis hasn’t figured out our renaissance yet.

Ness Sandoval (30:49): And to be honest with you, I think it will be hard. I’m not pro anything, but I find this whole debate about the city and county interesting. I’m not from here, so I don’t have this history of growing up here. But I think objectively, when I look at the budget of the city of St. Louis and compare it to Pittsburgh, Pittsburgh is a little bit bigger. It’s got 25,000 more people. But their budget is significantly smaller than St. Louis City’s budget. Part of me wonders, because the city is both a city and a county, it doesn’t have enough people or revenue to operate as both. And this is what’s helping Pittsburgh out. This is what’s helping Cleveland out, because that county revenue is spread among more taxpayers. In St. Louis City, the county functions are spread among a dwindling number of taxpayers. The city probably cannot be a county anymore. There’s just too few taxpayers to provide both city services and county services.

Ness Sandoval (32:08): I looked at these budgets and I’m like, my gosh, why is St. Louis’s budget so much more? I’m talking not a little bit more, a lot more than Pittsburgh’s budget. Pittsburgh is having trouble. And I don’t see the long-term fiscal situation turning around for the city because it’s got to provide all of these services. The tax base is going to decline. The next three years are probably going to see population loss in the city. The numbers just came out in March, but we’ll get the numbers in May. It’ll probably lead the country again in population decline for large cities.

Susan Pendergrass (32:58): Are we still a top 20 city? We’re number one in population decline, but what about in population size?

Ness Sandoval (33:01): We’re number one in decline. Last year, St. Louis City was number one. We’re declining. We’re not in the top 20 yet, but we’re very close. If we go back to 2020, we’re smaller than we were in 2020. The only reason we’re not number one in decline is because we had so many immigrants that offset our domestic migration loss. But this will be an interesting 2030 census, because it’ll be the first time the region will go into a census with more people dying than babies born. In the last census, we had about 75,000 natural growth. We’re looking at about 25,000 to 30,000 natural decline going into this census without any domestic migration. I tell people that this story is just starting. We have 74 years of the century left.

Ness Sandoval (34:18): I’m just trying to get people to move from the mindset that this is 2010 St. Louis. You don’t have 36,000 births anymore. You have 27,000 and it’s declining, one of the fastest declines in the country. Because of it, we’re aging very fast, and so we have to shift. The region has to make a choice that we start to organize our economy around senior citizens. There’s lots of money to be made from senior citizens, but we will never be viewed as Nashville or Austin as a place for young people.

Susan Pendergrass (34:52): Absolutely. That Route 64 corridor is just going to be all retirement homes.

Ness Sandoval (35:04): We won’t be talking about single family homes anymore. We’ll be talking about senior housing. We’ll be talking about a workforce that’s going to work with seniors instead of a workforce for children. And there is money to be made in that economy. I’m not saying that this is a bad thing. But again, we can look at other parts of the country where this transition has happened. Local government spending is being consumed by senior citizens, the healthcare of senior citizens, the paratransit of seniors. Seniors will lose their ability to drive. That cost typically gets covered by local governments. And so you will not be providing buses for children. You’ll be providing paratransit to get seniors to their doctors. Churches will have to think about being accessible to seniors. I go to Church of the Ascension and they are not prepared. At Easter, one of the Masses, one-third of this section was senior citizens in wheelchairs. The churches are simply not prepared for a parish that’s going to be 50% of the population at 70 years old and older. Restaurants have to think about this.

Susan Pendergrass (36:30): Wow, that’s crazy. Well, interesting stuff. I hope you’ll come back and talk about this more. And certainly I’m very interested in reading everything that you write about what St. Louis can do. We need to figure out a renaissance.

Ness Sandoval (36:51): We’ve got to get younger. The kids are giving us a try. They’re coming to school, they’re coming here because they have hopes. We just have not responded the way we need to. A lot of companies are starting to recognize this. I talked to the mayor and said, you need to be a more proactive voice on this. But the region, this is not a city of St. Louis issue. This is a St. Charles issue, a Jefferson County issue, a Chesterfield issue. Most of the people live outside of St. Louis city. The loss we’re projecting is going to come from the suburbs. And that’s what’s happening in Pittsburgh, that’s what’s happening in Cleveland. 100% of the demographic loss is in the suburbs.

Susan Pendergrass (37:21): Yeah. Wow, that’s crazy. Well, fascinating. Thank you so much for explaining it. I don’t want to be depressed about it, but it’s not super optimistic. We’ll find a silver lining. Thanks, Dr. Sandoval.

Ness Sandoval (37:59): All right, thank you very much.

Produced by Show-Me Opportunity

The post St. Louis Demographics and the Future of the Region with Ness Sandoval appeared first on Show-Me Institute.

Susan Pendergrass and Patrick Tuohey join Zach Lawhorn to discuss their new report, The Public Safety Climate in the City of St. Louis. They explore what the data actually show about crime trends over the past two decades, how St. Louis compares to similar cities like Cincinnati and Memphis, why crime perception lags so far behind the data, the challenges facing the 911 system and police staffing, why public disorder in high-traffic neighborhoods may be doing as much damage to the city’s reputation as violent crime itself, what it would take to make residents actually feel safer, and more.

Download a copy of the report.

Listen on Spotify

Listen on Apple Podcasts 

Listen on SoundCloud

Episode Transcript

Zach Lawhorn (00:00) Welcome to the Show Me Institute podcast. I’m Zach Lawhorn from Show Me Opportunity, and today I’m joined by Susan Pendergrass and Patrick Tuohey from the Show Me Institute. Today we’re going to be talking about some work that the two of you have done on public safety and crime, specifically in the city of St. Louis. But before we get into the project, I want to talk to you both about your perception of crime as people who have both lived in and frequently visit the city of St. Louis. So Susan, I want to start with you. Before you started this project, before you started looking at the data, when someone said “Is the city of St. Louis dangerous?” what was your perception before you started this project?

Susan Pendergrass (00:38) I only moved to the city of St. Louis in 2015, so there’s a long period of time before I lived there. I was in D.C. for part of that, and my perception before I moved there was that it was dangerous. The Ferguson incident had just happened and I knew that there was a lot of crime. But then when I moved to St. Louis, my husband and I decided to live in the city itself and we loved our neighborhood. It was the coolest with this super cool house built around the time of the World’s Fair. It was amazing. But I never felt really safe. We started leaving our car doors unlocked because our cars would get rifled through. We had a smash-and-grab right within two weeks. I called to report the smash-and-grab and was told that they don’t take reports on them. That was new for me. We had to keep a lot of lights on outside. We didn’t really walk our dogs after dark. I felt like lots of times I would go by police cars sitting on corners idling, but it didn’t necessarily make me feel safer because I wasn’t sure how much they were doing. I also realized people run stoplights, run stop signs, use the right parking lane to pass, and that was all new for me. So I got this feeling that the rule of law wasn’t enforced very well in the city, and that just doesn’t feel good as somebody who has bought a house there and lives there.

Zach Lawhorn (02:06) Patrick, as someone who lives in Kansas City across the state, two questions. What do you think the perception is over there on the western half of the state? And then as someone who comes into St. Louis regularly, what was your perception of the safety situation in the city?

Patrick Tuohey (02:22) A lot of the issues that Susan and I explored in this paper bore out here in Kansas City. I’ve lived in cities my whole life. I understand that every city is going to have the parts you don’t want to go to, the parts that are rougher than others. Kansas City certainly has that. I’ve had my car broken into here in my driveway a number of times, no real damage, and it’s not something I reported to the police. As far as traveling to St. Louis, I’ve been going to St. Louis since the late nineties. Before I lived in Kansas City, I was in Washington, D.C. And I loved St. Louis. I still do. I would visit Creve Coeur, the Central West End, sometimes stay at the Westin downtown. But living in D.C. and growing up in D.C., I understood that every city is going to have the places that you don’t want to go. I understood that St. Louis often gets ranked higher than it should because the city’s footprint is so small. But it never felt to me that what was going on in St. Louis was way outside the normal limits of what we see in U.S. cities. There are those dangerous parts and you generally know not to go there. There is kind of an urban decline, which can be seen in a lack of services, graffiti, uncut grass. But I didn’t navigate St. Louis or think of St. Louis any differently than I thought of Kansas City, Washington D.C., Boston, or any other place I had been.

Zach Lawhorn (04:03) Yeah, and I’m glad you brought up the population of the city, the MSA. It seems like when there are national or even local news stories written on crime statistics in St. Louis, people will point out that if you’re not talking about the larger metropolitan area, you get down to actually a pretty small population number for U.S. cities. So for this work that we’re going to be talking about, can you define what area you guys looked at? When we say murders are a certain number, what area are we specifically talking about?

Patrick Tuohey (04:38) We looked at the city of St. Louis specifically, just those few square miles. We did not look at the metropolitan area and we did not look at the county. It is fair to want to combine all that data into one region, but oftentimes I think people want to do that to mask the seriousness of homicide and violent crime and property crime in the city. And that’s what we wanted to talk about. What is true in St. Louis is not unique to St. Louis. Kansas City has a crime problem that is not reflected in our metropolitan area. That’s true in Washington D.C., Atlanta, Los Angeles, everywhere. So I understand why people who live in St. Louis feel that you can cook the numbers by just looking at the city, but that’s true in every urban environment.

Susan Pendergrass (05:30) We also compared St. Louis to four other cities, and one of them in particular, Cincinnati, ended up being very similar. We wrote a paper and at the back of the paper there’s a table with variables on which we compared them. Similar size, similar poverty, similar median income, very similar. So to say that St. Louis is this very unique outlier and is the only city in the United States that has this situation where, essentially 100-plus years ago, St. Louis was so much better and more metropolitan and forward-thinking than the rest of the state of Missouri, and safer and wealthier, that they drew a line around the city of St. Louis and said we are going to be our own thing and we’re going to have our own police. It was called the Great Divorce. Now that line, the arrows are sort of pointing different ways, where St. Louis County isn’t necessarily excited to absorb the city of St. Louis and its services, systems, police departments, and 911 systems, because it is a uniquely crime-ridden area in parts. So while it would be nice to, as Patrick mentioned, just water down all the numbers by mixing them into a safer pot, it would really mask what’s going on.

Zach Lawhorn (06:47) Susan, you used the word “unique” there to describe the setup. Patrick, does that genuinely make it harder to talk about this topic? In the last few months you’ve had some public events, and we’re going to talk about those in a minute. But as you’ve gone through this process, do you think the unique setup has made it harder? Is there more throat-clearing and definitional work that goes into it?

Patrick Tuohey (07:12) I don’t know that what St. Louis is dealing with is unique. Yes, the city has a particularly small footprint. It is as if you drew a line around just the bad neighborhood in your community and tried to use that small footprint to describe the whole area. I get that argument. But if it’s true by a matter of degree, it’s not uniquely true of St. Louis. And it’s something that the city needs to deal with and understand rather than try to paper over. As Susan said, there are real problems in the city. Their population decline is only exacerbating those problems because there’s less revenue. And frankly, the history of the city going back decades has been that the image of the city is dysfunctional, and not just on public safety, on lots of issues. So although I understand that people say they don’t just want to talk about the city when it comes to crime, St. Louis, while it’s got lots of opportunities and strengths, doesn’t do itself any favors by combining all this stuff and whistling past the graveyard. People in this country know that St. Louis has a crime problem. You don’t solve it by redirecting people.

Zach Lawhorn (08:30) Okay, and let’s talk about that crime problem. Susan, when we use the word “crime” in this context, what are we talking about? Murders? Car break-ins? Lay it out for us.

Susan Pendergrass (08:42) We have violent crime and property crime. Violent crime is murders, aggravated assault, and robbery. Property crimes are larceny and motor vehicle thefts. In our report, we break them all out separately. Murders are the one crime area that the media likes to focus on: how many murders, which city is the murder capital, did we have 150, did we have 200, are they down? They are certainly down in the last two years, to be clear. Murder rates are down. Aggravated assault rates are not down by as much. And sometimes the difference between aggravated assault and murder is how fast the ambulance drives. We still have a lot of violent crimes against people happening. We certainly have a lot of motor vehicle thefts. That’s an area of crime that spiked during COVID, particularly for Kias and Hyundais, and it’s come down, but it’s still a very high number. While it is wonderful that crime has come down across these areas in many cases, the numbers are still pretty high, particularly on a per capita basis, which is how we translate all the crime rates so we can compare them with other cities.

Zach Lawhorn (10:00) So you said crime is down. Is it fair to classify it as it was really bad and now it’s just bad? It was terrible, now it’s just bad. How would you summarize what you found with the drop in crime?

Susan Pendergrass (10:13) Crime’s been dropping since the 80s, so we had much worse crime decades ago. It’s been dropping, it spiked during the pandemic, and it is continuing basically down. Now, when you look at the murder rate per capita in the city of St. Louis, it is still on a slightly upward trend, the number of murders per people, and that could be driven by the fact that Missouri is losing population at a pretty good clip. We have more deaths than births. So on a per capita basis maybe not quite the same, but in terms of actual numbers, crime has been coming down for some time. Crime overall peaked in the late 80s and 90s.

Zach Lawhorn (10:58) Patrick, we talked about your perception and the relevance of many other cities. Did that surprise you, the finding that crime is down? Or was that kind of what you expected?

Patrick Tuohey (11:09) No, the data showing that crime in St. Louis was down wasn’t a surprise. It’s certainly been nice to see that it’s been down year after year. This doesn’t appear to be just a one-off good year. And I’ve known that the mayor and the police chief have been talking about these positive numbers for a while. What I was really interested in with this paper was perception of crime. That’s what I’ve really wrestled with, both at events in the city and in the county. It is a difficult problem to overcome because you can have good numbers like St. Louis has and yet people still rely on that decades-old impression. That’s not something you can address just by waving away the numbers downtown. You have to wrestle with it. You have to admit it, and you have to figure out how do you get people to accept good news, and then how do you make them confident that that good news is going to continue? It’s so easy these days, especially with cities, to just be a pessimist and to say that things are down and won’t ever continue to go down. It is a problem that St. Louis has, but St. Louis isn’t alone in having it. The news on crime is good all over the country, yet perceptions about crime all over the country are still very much with us.

Susan Pendergrass (12:43) There’s a survey question that’s often asked: do you feel safe walking outside alone at night? And those numbers aren’t down. As Patrick mentioned, you have graffiti and trash not being picked up and panhandling and homelessness. Those numbers aren’t necessarily down. But we did look at St. Louis on a neighborhood-by-neighborhood basis, and it is true that out of 16 neighborhoods, four or five have basically no crime, they’re crime-free. But then there are some other pockets that have most of the murders concentrated in one neighborhood. So it isn’t equal across all the neighborhoods. There are some that have very little crime, but it’s hard to convince folks of that when they drive through the ones that have public disorder and still don’t feel safe.

Zach Lawhorn (13:29) Susan, as a researcher trying to ultimately figure out why things happen, you mentioned that crime is down across the country. Would it be easier if it was just a few select cities, so you could actually go and say what is Boston doing different, what is Memphis doing? Does it make it harder to find the “why” since it seems like it’s kind of across the board?

Susan Pendergrass (13:45) Yeah. There have been other periods of time when crime has gone down and then gone back up again. I personally believe, and this is not based on any research I’ve done, that cameras being absolutely everywhere makes it harder to commit crimes. You cannot basically travel through the world anymore without being on a camera somewhere. Police body cams probably make it harder to commit crimes too. I feel like we’re getting into more of a surveillance state, and maybe that’s what’s bringing crime down. I’ve heard that Detroit has brought crime down faster than other cities, that Pittsburgh is feeling safer, Chattanooga is feeling safer, Memphis feeling less safe. So it would be worthwhile to look into some of these differences. But I don’t think our research has yet pointed to a clear reason why it’s happening.

Patrick Tuohey (14:41) Let me follow up on that because Susan’s exactly right, and I think your question gets to that point. Crime is down nationwide, down in all cities if I remember correctly, and we don’t really know why. And it’s not just Susan and I that don’t know why. Susan has spoken with public safety and crime experts from all over the country, and that’s really frustrating from a public policy research point of view, because you would love to have that outlier, that one city, maybe Boston or Omaha, that tried something novel and got results unlike everybody else. But crime is so difficult because there are so many contributors. Some people want to point to the availability of guns. Some people want to talk about root causes. Some people want to talk about the number of police, the severity of crime, the clearance rate, population growth, new development, basic services like picking up the trash and making sure the streetlights work. And all of those things are right, all those things contribute. So it’s really difficult to figure out which one is driving the change. And sometimes, as Susan pointed out, you may just get a dip and there’s no explaining it. In 2014, in Kansas City, our mayor and police chief at the time came out and had a press conference because they were so proud of the homicide drop the previous year. There was a lot of back-slapping and self-congratulation. Then when the homicide rate went back up the next year, you couldn’t get those guys to answer a basic question. Policymakers are, and maybe rightly so, really shy about claiming credit, because they don’t want to be called to task a year later when the numbers reverse. The good news is that the numbers are trending down, and that’s always good. The frustration is it’s very difficult to figure out why and then make recommendations. We’re all kind of scratching our heads. Although again, this is a good problem to have. The numbers are heading in the right direction and we ought to be happy about that.

Zach Lawhorn (16:58) Patrick, to get a better idea of the perception side, you did the hard work of going to the people. In January and February you moderated events. We had one in the city of St. Louis and one in St. Louis County. There are full recordings of the events available at showmeinstitute.org. You had a panel of experts and spent a lot of time getting feedback from attendees who lived in the city and the county. What were your takeaways? Are they buying that crime is getting better?

Patrick Tuohey (17:33) No, in a word, they don’t. We gave them a short survey before the event. A lot of them believed that crime was important, certainly, but they didn’t necessarily believe that crime was getting better. They weren’t necessarily optimistic that crime was going to be better in St. Louis City in the next five years, and that was certainly true in the county. I wanted to press these audience members: what would it take for you to believe this good news? And I think sometimes they just didn’t want to believe anything. We got the frustrating line: “there are lies, damn lies, and statistics.” That’s a cute thing to say, but it really doesn’t help you explain your own view. If you’re just going to say you believe it’s bad and always going to be bad, that doesn’t get us anywhere. We were happy to have representatives from the Circuit Attorney’s office at both events, and they struggle with this too. They can do a better job. They can prosecute more and different cases, they can do it faster. The police can certainly improve their clearance rate. But public policymakers in those cities, in every city, are going to have to realize that they may have to continue that grind, doing the hard work of lowering crime, and they’re not going to get the attaboys from the people in their city or the communities around them. That’s just a reality. One of the panelists talked about how perception of crime is often a lagging indicator. When crime goes up, people feel it immediately. But when crime goes down, it may take a few years. The tough news for the people who lead St. Louis City is you may have to keep doing this for another 10 years before you get any credit for being successful. And that’s really tough in politics because people want that immediate payoff, that immediate

Susan Pendergrass (19:15) You

Patrick Tuohey (19:31) applause, that immediate press conference and support.

Susan Pendergrass (19:34) Patrick and I have been thinking about the things that could happen that could make a difference, that could maybe make people feel safer. Number one: when you see a crime happening, you need to be able to have faith that you can report it and somebody will respond. And that is not happening right now in the city of St. Louis. We’ve called several times about crimes and nobody showed up. You need to have faith in the 911 system, and the 911 system needs to function. We have about 28 different systems in the county. They’re building a new 911 center in the city that’s going to consolidate services, but it’s not finished. It’s going to be some time before it’s fully functioning. We also need to know that the police will be able to solve these crimes. They need resources. They need to be able to do DNA testing and rape kits and DNA. They need money to do those things. They need detectives. We need to know that these crimes can get solved, and then we need to know that the crimes are prosecuted. I think if these pieces on the front end, not just the “lock them up” approach, but on the front end, people would feel safer if they felt like they could call somebody and somebody would respond and something would happen. I’m not sure that’s happening right now. And until it does, people, especially when they start having small children, are probably going to move out.

Patrick Tuohey (20:59) What we’ve known since at least 1961, when Jane Jacobs wrote The Death and Life of Great American Cities, is that you sometimes just need eyes on the street. Shop owners, pedestrians, people walking around. Cameras can reduce crime, but they’re kind of abstract and tucked in corners. When a street is vibrant, when it’s got people living there, when you’ve got kids playing in the street and families on the porch, there’s that sense of being watched, being seen. But because St. Louis has been in this population spiral, how do you bring people back into the city? The city talks about economic development subsidies all the time, but that’s about bringing in amenities and employers. Maybe what the city needs to do is figure out how to bring in people. And oftentimes it’s the non-crime-related policies, the housing policies, the regulations, the tax structure, that keep people out. Crime is one of those, but the city could open itself up to urban homesteaders who want to come in and rehab these old houses. What has struck me about St. Louis for the decades I’ve been going there is just the absolutely beautiful old neighborhoods, the incredible housing stock. Susan talked about living in a house that was built for the World’s Fair. There are gorgeous neighborhoods in St. Louis, and it’s the barriers to entry, red tape and government regulation, that are keeping people out, I have to believe. Crime is one of them, to be sure. But I am confident there are people who would love to move into those old houses and revitalize those old neighborhoods, because they’re just so gorgeous and so walkable. And it’s been done in other cities. DuPont Circle in Washington D.C. was a slow process of rehabbing neighborhoods block by block, and now 30 years later it is a vibrant community.

Zach Lawhorn (23:03) Susan, you mentioned the 911 system. I know in the report you don’t get into specific solutions, and I know we’re still kind of in the measuring-the-problem stage and trying to figure out next steps, but beyond the 911 system, are there any areas you’d consider low-hanging fruit worth considering moving forward?

Susan Pendergrass (23:25) The legislature passed and the governor signed a violent crime clearance grant program last year that cities like St. Louis could apply for, funding to hire detectives, do DNA testing, collect data, and other activities directly focused on solving crimes. The legislature has not appropriated any money for that program. If they did, St. Louis could apply for those funds. We also have, and I don’t know the exact number as I say this, but at least 100 open police positions in the department. Those are hard to fill. The policies that have been tried, like no longer requiring officers to live within the city and across-the-board raises, none of those have really made a difference. So we need recruitment and retention policies that could actually work. And as I mentioned with the 911 system, triaging calls and making sure the correct agency responds when a crime has been committed. There are community violence intervention programs that have been tried in some places, and using neighborhood-by-neighborhood data to focus in on where crimes are really happening. Those are all things we’d like to explore further: what is the cost of these programs, what is the likelihood that they’ll improve things, and what are some feasible ways to get them done.

Zach Lawhorn (24:54) So there’s the PR part of it. The city’s got a PR problem. There’s the need for more cops. We need people to be able to call 911. We need people to actually be prosecuted for crimes. That all seems doable.

Susan Pendergrass (24:58) Yeah.

Zach Lawhorn (25:06) Where do you think the city of St. Louis is at right now? Are we in a good place? Are we in just an improved place where it could still be a few years? How are you feeling about public safety in the city of St. Louis right now?

Susan Pendergrass (25:21) I don’t want to be a wet blanket. I love the city of St. Louis and I want it to succeed wildly. But I’m concerned that they’re going to say murders are down and these other crimes are down, but people are still running stop signs and stoplights, there are still panhandlers, and trash still isn’t being picked up. They’re not really fixing the small things that make people feel safe. They’re sort of focused on these big numbers. It could be like a school improving ACT scores. You have to be really careful if you’re just focusing on one aspect, because these big crime numbers being down could be hiding a lot of other stuff that really needs to be done and focused on. So I’m cautiously optimistic, I guess.

Patrick Tuohey (26:05) I’m optimistic because crime is going down everywhere, and I think it will probably continue to go down at least for the next few years, for reasons that may have nothing to do with the management of St. Louis. Part of it is because Susan and I have been reviewing the research for the last few months, and there is so much out there, primary research on crime and secondary, that talks about exactly the things Susan hit upon: the environment, picking up trash, cleaning up graffiti, fixing sidewalks, making sure the streetlights are lit. We know so much more about what drives crime, or at least what can ameliorate it, that even if we don’t know the specifics of what’s going on now, city leaders and state leaders are much more aware of what they can do to make communities not just safer but feel safe. And again, it is frustrating because you can say the numbers are down, but until people feel safe and want to go downtown and take advantage of what the city has to offer, we’re not going to see that public perception change. So yes, I think the public perception is accurate in as much as that is what people feel, but I don’t think it reflects what’s actually going on in St. Louis or in the county.

Zach Lawhorn (27:20) And we will leave it there. The report, The Public Safety Climate in the City of St. Louis, is available at showmeinstitute.org. If you want to watch the full recordings of the events that Patrick moderated, those are available right now at showmeinstitute.org. Susan, Patrick, thank you very much.

Susan Pendergrass (27:36) Thank you.

Patrick Tuohey (27:36) Thank you.

Produced by Show-Me Opportunity

The post The Public Safety Climate in the City of St. Louis with Susan Pendergrass and Patrick Tuohey appeared first on Show-Me Institute.

TO THE HONORABLE MEMBERS OF THE COMMITTEE

Thank you for the opportunity to testify. My name is Elias Tsapelas, and I’m the Director of State Budget and Fiscal Policy at the Show-Me Institute, a nonprofit, nonpartisan, Missouri-based think tank that advances sensible, well-researched, free-market solutions to state and local policy issues. The ideas presented here are my own and are offered in consideration of proposals that will affect tax credits in Missouri.

Senate Bill 1079 consolidates Missouri’s existing film and series production tax credit sub-caps into a single $16 million pool for both, leaving the state’s total commitment the same. The only substantive effect of the bill would be to give the Film Office more flexibility in how the same dollars are allocated. That flexibility does not address the fundamental problem with this program.

Current and Past Tax Credit Failures

Despite the Missouri film tax credit’s recent revival, our state has a long history with this troubling incentive. Until its sunset in 2013, Missouri’s previous iteration made promises similar to what supporters are touting today. Missouri’s own Tax Credit Review Commission recommended the credit be eliminated because it served too narrow an industry and failed to provide a positive return on investment.¹

Research confirms that pattern holds nationally. Film tax credits have not resulted in job growth, have not affected market share or industry output, and have produced only short-term wage gains for those already in the industry.² Credits in many states generated just cents on the dollar. As one Tax Foundation analyst notes, “non-favored activities and businesses remain on the hook to bear the full impact of the state’s tax code.”³

The Missouri Film Office has pointed to the number of projects approved and production spending in the state as evidence the program is working, but that is not the right measure for determining whether the program is a good investment for state taxpayers.⁴ The relevant question is how much the state receives back in tax revenue and broader economic activity—and by that measure, the research is consistent: film tax credits do not generate a positive return.

The Competitiveness Argument Doesn’t Hold

Supporters of SB 1079 argue that pooling the sub-caps will make Missouri more competitive for productions. Even setting aside the ROI question, that argument doesn’t hold.

Steven Conrad, the showrunner who created a new HBO series set in St. Louis and filmed it entirely in Atlanta, recently suggested that governments may not be well-served by chasing the film industry at all.⁵ His observation reflects a structural reality: Georgia has spent two decades building the studios, crews, soundstages, and production infrastructure that make large productions possible. Missouri has not. No reallocation of $16 million changes that.

Georgia’s own state auditor found that even Georgia’s fully developed, deeply established program returned just 10 cents to the state for every dollar of credit granted, producing a net revenue loss of $602 million in a single year.⁶ If one of the most mature film-incentive programs in the country cannot generate a positive return on investment, a program at a fraction of its scale operating in a state without comparable infrastructure has no prospect of doing so.

Targeted Credits Are Poor Economic Policy

Targeted economic development tax credits are just another way for lawmakers to pick winners and losers, a job that is better left to consumers in the market. When tax breaks are given to some, other taxpayers have to make up for the lost revenue. The impulse to do something to support an industry is understandable, but tax credits are a poor substitute for the conditions that make industries thrive organically. A dollar of film tax credits reduces state revenue by exactly the same amount as a dollar of direct appropriations—the difference is that credits bypass the appropriations process and receive less scrutiny.

Prioritize Tax Relief That Benefits All Missourians

Missouri is already a national leader in state spending in the name of economic development. Over the past few decades, Missouri has forgone billions in state tax revenue in favor of a host of narrow incentives that have consistently shown poor results. In FY2025 alone, Missouri redeemed more than $961 million in tax credits—nearly double the $521 million redeemed in 2010.⁷ The General Assembly is simultaneously weighing whether to eliminate the state income tax, a reform that would deliver broad economic benefits to every Missourian. The legislature should consider whether a growing tax credit portfolio is consistent with that goal. Expanding targeted credits that erode the income-tax base works against broad-based tax relief, and Missouri would be better served by pursuing the latter.

The film tax credit is a small program, but it exemplifies the approach to tax policy that makes comprehensive reform harder to achieve. Tax credit programs have not been successful in Missouri in the past, there is little evidence to suggest the film tax credit is succeeding now, and there is no reason to believe this program will perform differently under a restructured allocation. If increasing economic opportunity is the goal, the research is clear: Instead trying to manufacture more opportunities at the expense of taxpayers, lawmakers should provide broad-based tax relief to every Missourian.

NOTES

1. “Report of the Missouri Tax Credit Review Commission.” Missouri Tax Credit Review Commission. 2010; https://www.semissourian.com/files/tcrcfinalreport113010.pdf.
2. “Lights, camera and no action: How state film subsidies fail.” USC Press Release. August 18, 2016; https://pressroom.usc.edu/lights-camera-and-no-action-how-state-film-subsidies-fail.
3. Loughead, Katherine. “Illuminating the Hidden Costs of State Tax Incentives.” Tax Foundation. 2021; https://taxfoundation.org/state-tax-incentives-costs.
4. “Made-in-Missouri Film and TV Productions Spent $40.7 Million in 2025.” Missouri Department of Economic Development. February 2026; https://ded.mo.gov/press-room/made-missouri-film-and-tv-productions-spent-407-million-2025.
5. Neman, Daniel. “HBO’s DTF St. Louis has a dream cast, but it wasn’t shot here.” St. Louis Post-Dispatch. February 26, 2026; https://www.stltoday.com/life-entertainment/local/movies-tv/article_cfa2d34c-435a-40fd-9fa5-75933d716915.html.
6. “Impact of the Georgia Film Tax Credit.” Georgia Department of Audits and Accounts, Performance Audit Division. Report No. 18-03B. January 2020; https://www.audits.ga.gov/ReportSearch/download/23536.
7. “Fourth Quarter Tax Credit Report, Fiscal Year 2025.” Missouri Department of Revenue. 2025; https://dor.mo.gov/public-reports/documents/Fourth-Quarter-FY25-Tax-Credit-Report.pdf.

The post Senate Bill 1079: Film Tax Credits appeared first on Show-Me Institute.

TO THE HONORABLE MEMBERS OF THE COMMITTEE

Thank you for the opportunity to testify. My name is Elias Tsapelas, and I’m the Director of State Budget and Fiscal Policy at the Show-Me Institute, a nonprofit, nonpartisan, Missouri-based think tank that advances sensible, well-researched, free-market solutions to state and local policy issues. The ideas presented here are my own and are offered in consideration of proposals that will affect tax credits in Missouri.

House Bill 2142 consolidates Missouri’s existing film and series production tax credit sub-caps into a single $16 million pool for both, leaving the state’s total commitment the same. The only substantive effect of the bill would be to give the Film Office more flexibility in how the same dollars are allocated. That flexibility does not address the fundamental problem with this program.

Current and Past Tax Credit Failures

Despite the Missouri film tax credit’s recent revival, our state has a long history with this troubling incentive. Until its sunset in 2013, Missouri’s previous iteration made promises similar to what supporters are touting today. Missouri’s own Tax Credit Review Commission recommended the credit be eliminated because it served too narrow an industry and failed to provide a positive return on investment.¹

Research confirms that pattern holds nationally. Film tax credits have not resulted in job growth, have not affected market share or industry output, and have produced only short-term wage gains for those already in the industry.² Credits in many states generated just cents on the dollar. As one Tax Foundation analyst notes, “non-favored activities and businesses remain on the hook to bear the full impact of the state’s tax code.”³

The Missouri Film Office has pointed to the number of projects approved and production spending in the state as evidence the program is working, but that is not the right measure for determining whether the program is a good investment for state taxpayers.⁴ The relevant question is how much the state receives back in tax revenue and broader economic activity—and by that measure, the research is consistent: film tax credits do not generate a positive return.

The Competitiveness Argument Doesn’t Hold

Supporters of HB 2142 argue that pooling the sub-caps will make Missouri more competitive for productions. Even setting aside the ROI question, that argument doesn’t hold.

Steven Conrad, the showrunner who created a new HBO series set in St. Louis and filmed it entirely in Atlanta, recently suggested that governments may not be well-served by chasing the film industry at all.⁵ His observation reflects a structural reality: Georgia has spent two decades building the studios, crews, soundstages, and production infrastructure that make large productions possible. Missouri has not. No reallocation of $16 million changes that.

Georgia’s own state auditor found that even Georgia’s fully developed, deeply established program returned just 10 cents to the state for every dollar of credit granted, producing a net revenue loss of $602 million in a single year.⁶ If one of the most mature film-incentive programs in the country cannot generate a positive return on investment, a program at a fraction of its scale operating in a state without comparable infrastructure has no prospect of doing so.

Targeted Credits Are Poor Economic Policy

Targeted economic development tax credits are just another way for lawmakers to pick winners and losers, a job that is better left to consumers in the market. When tax breaks are given to some, other taxpayers have to make up for the lost revenue. The impulse to do something to support an industry is understandable, but tax credits are a poor substitute for the conditions that make industries thrive organically. A dollar of film tax credits reduces state revenue by exactly the same amount as a dollar of direct appropriations—the difference is that credits bypass the appropriations process and receive less scrutiny.

Prioritize Tax Relief That Benefits All Missourians

Missouri is already a national leader in state spending in the name of economic development. Over the past few decades, Missouri has forgone billions in state tax revenue in favor of a host of narrow incentives that have consistently shown poor results. In FY2025 alone, Missouri redeemed more than $961 million in tax credits—nearly double the $521 million redeemed in 2010.⁷ The General Assembly is simultaneously weighing whether to eliminate the state income tax, a reform that would deliver broad economic benefits to every Missourian. The legislature should consider whether a growing tax credit portfolio is consistent with that goal. Expanding targeted credits that erode the income-tax base works against broad-based tax relief, and Missouri would be better served by pursuing the latter.

The film tax credit is a small program, but it exemplifies the approach to tax policy that makes comprehensive reform harder to achieve. Tax credit programs have not been successful in Missouri in the past, there is little evidence to suggest the film tax credit is succeeding now, and there is no reason to believe this program will perform differently under a restructured allocation. If increasing economic opportunity is the goal, the research is clear: Instead trying to manufacture more opportunities at the expense of taxpayers, lawmakers should provide broad-based tax relief to every Missourian.

NOTES

1. “Report of the Missouri Tax Credit Review Commission.” Missouri Tax Credit Review Commission. 2010; https://www.semissourian.com/files/tcrcfinalreport113010.pdf.
2. “Lights, camera and no action: How state film subsidies fail.” USC Press Release. August 18, 2016; https://pressroom.usc.edu/lights-camera-and-no-action-how-state-film-subsidies-fail.
3. Loughead, Katherine. “Illuminating the Hidden Costs of State Tax Incentives.” Tax Foundation. 2021; https://taxfoundation.org/state-tax-incentives-costs.
4. “Made-in-Missouri Film and TV Productions Spent $40.7 Million in 2025.” Missouri Department of Economic Development. February 2026; https://ded.mo.gov/press-room/made-missouri-film-and-tv-productions-spent-407-million-2025.
5. Neman, Daniel. “HBO’s DTF St. Louis has a dream cast, but it wasn’t shot here.” St. Louis Post-Dispatch. February 26, 2026; https://www.stltoday.com/life-entertainment/local/movies-tv/article_cfa2d34c-435a-40fd-9fa5-75933d716915.html.
6. “Impact of the Georgia Film Tax Credit.” Georgia Department of Audits and Accounts, Performance Audit Division. Report No. 18-03B. January 2020; https://www.audits.ga.gov/ReportSearch/download/23536.
7. “Fourth Quarter Tax Credit Report, Fiscal Year 2025.” Missouri Department of Revenue. 2025; https://dor.mo.gov/public-reports/documents/Fourth-Quarter-FY25-Tax-Credit-Report.pdf.

The post House Bill 2142: Film Tax Credits appeared first on Show-Me Institute.

TO THE HONORABLE MEMBERS OF THE COMMITTEE

Thank you for the opportunity to testify. My name is Elias Tsapelas, and I’m the Director of State Budget and Fiscal Policy at the Show-Me Institute, a nonprofit, nonpartisan, Missouri-based think tank that advances sensible, well-researched, free-market solutions to state and local policy issues. The ideas presented here are my own and are offered in consideration of proposals that will affect tax credits in Missouri.

House Bill 2058 consolidates Missouri’s existing film and series production tax credit sub-caps into a single $16 million pool for both, leaving the state’s total commitment the same. The only substantive effect of the bill would be to give the Film Office more flexibility in how the same dollars are allocated. That flexibility does not address the fundamental problem with this program.

Current and Past Tax Credit Failures

Despite the Missouri film tax credit’s recent revival, our state has a long history with this troubling incentive. Until its sunset in 2013, Missouri’s previous iteration made promises similar to what supporters are touting today. Missouri’s own Tax Credit Review Commission recommended the credit be eliminated because it served too narrow an industry and failed to provide a positive return on investment.¹

Research confirms that pattern holds nationally. Film tax credits have not resulted in job growth, have not affected market share or industry output, and have produced only short-term wage gains for those already in the industry.² Credits in many states generated just cents on the dollar. As one Tax Foundation analyst notes, “non-favored activities and businesses remain on the hook to bear the full impact of the state’s tax code.”³

The Missouri Film Office has pointed to the number of projects approved and production spending in the state as evidence the program is working, but that is not the right measure for determining whether the program is a good investment for state taxpayers.⁴ The relevant question is how much the state receives back in tax revenue and broader economic activity—and by that measure, the research is consistent: film tax credits do not generate a positive return.

The Competitiveness Argument Doesn’t Hold

Supporters of HB 2058 argue that pooling the sub-caps will make Missouri more competitive for productions. Even setting aside the ROI question, that argument doesn’t hold.

Steven Conrad, the showrunner who created a new HBO series set in St. Louis and filmed it entirely in Atlanta, recently suggested that governments may not be well-served by chasing the film industry at all.⁵ His observation reflects a structural reality: Georgia has spent two decades building the studios, crews, soundstages, and production infrastructure that make large productions possible. Missouri has not. No reallocation of $16 million changes that.

Georgia’s own state auditor found that even Georgia’s fully developed, deeply established program returned just 10 cents to the state for every dollar of credit granted, producing a net revenue loss of $602 million in a single year.⁶ If one of the most mature film-incentive programs in the country cannot generate a positive return on investment, a program at a fraction of its scale operating in a state without comparable infrastructure has no prospect of doing so.

Targeted Credits Are Poor Economic Policy

Targeted economic development tax credits are just another way for lawmakers to pick winners and losers, a job that is better left to consumers in the market. When tax breaks are given to some, other taxpayers have to make up for the lost revenue. The impulse to do something to support an industry is understandable, but tax credits are a poor substitute for the conditions that make industries thrive organically. A dollar of film tax credits reduces state revenue by exactly the same amount as a dollar of direct appropriations—the difference is that credits bypass the appropriations process and receive less scrutiny.

Prioritize Tax Relief That Benefits All Missourians

Missouri is already a national leader in state spending in the name of economic development. Over the past few decades, Missouri has forgone billions in state tax revenue in favor of a host of narrow incentives that have consistently shown poor results. In FY2025 alone, Missouri redeemed more than $961 million in tax credits—nearly double the $521 million redeemed in 2010.⁷ The General Assembly is simultaneously weighing whether to eliminate the state income tax, a reform that would deliver broad economic benefits to every Missourian. The legislature should consider whether a growing tax credit portfolio is consistent with that goal. Expanding targeted credits that erode the income-tax base works against broad-based tax relief, and Missouri would be better served by pursuing the latter.

The film tax credit is a small program, but it exemplifies the approach to tax policy that makes comprehensive reform harder to achieve. Tax credit programs have not been successful in Missouri in the past, there is little evidence to suggest the film tax credit is succeeding now, and there is no reason to believe this program will perform differently under a restructured allocation. If increasing economic opportunity is the goal, the research is clear: Instead trying to manufacture more opportunities at the expense of taxpayers, lawmakers should provide broad-based tax relief to every Missourian.

NOTES

1. “Report of the Missouri Tax Credit Review Commission.” Missouri Tax Credit Review Commission. 2010; https://www.semissourian.com/files/tcrcfinalreport113010.pdf.
2. “Lights, camera and no action: How state film subsidies fail.” USC Press Release. August 18, 2016; https://pressroom.usc.edu/lights-camera-and-no-action-how-state-film-subsidies-fail.
3. Loughead, Katherine. “Illuminating the Hidden Costs of State Tax Incentives.” Tax Foundation. 2021; https://taxfoundation.org/state-tax-incentives-costs.
4. “Made-in-Missouri Film and TV Productions Spent $40.7 Million in 2025.” Missouri Department of Economic Development. February 2026; https://ded.mo.gov/press-room/made-missouri-film-and-tv-productions-spent-407-million-2025.
5. Neman, Daniel. “HBO’s DTF St. Louis has a dream cast, but it wasn’t shot here.” St. Louis Post-Dispatch. February 26, 2026; https://www.stltoday.com/life-entertainment/local/movies-tv/article_cfa2d34c-435a-40fd-9fa5-75933d716915.html.
6. “Impact of the Georgia Film Tax Credit.” Georgia Department of Audits and Accounts, Performance Audit Division. Report No. 18-03B. January 2020; https://www.audits.ga.gov/ReportSearch/download/23536.
7. “Fourth Quarter Tax Credit Report, Fiscal Year 2025.” Missouri Department of Revenue. 2025; https://dor.mo.gov/public-reports/documents/Fourth-Quarter-FY25-Tax-Credit-Report.pdf.

The post House Bill 2058: Film Tax Credits appeared first on Show-Me Institute.

MOScholars is Missouri’s education savings account (ESA) program. It provides scholarships to eligible families to use on a variety of educational expenses: tuition, tutoring, lessons, and more. The decision by Hallsville and Atlanta to join the program is noteworthy because MOScholars is viewed primarily as a vehicle for private school tuition. Their participation is a reminder that these scholarships can also enable nonresident students to attend public schools outside of their assigned districts.

The move is significant for two reasons. First, it signals a willingness among public schools to compete for students within a choice-driven landscape. Contrary to the notion that public schools wilt under competition, districts like Hallsville and Atlanta are demonstrating initiative. As Patrick Wolf, Distinguished Professor of Education Policy at the University of Arkansas, explains, “this idea that public schools are a fragile ecosystem, and they can only serve students if they have no competition . . . that claim has been completely debunked.”

Second, the move effectively serves as a workaround to Missouri’s lack of statewide interdistrict open enrollment. Students in Missouri typically cannot attend a public school outside their residential district. By participating in MOScholars, Hallsville and Atlanta are using the program to facilitate student transfers across district lines, with the scholarship serving as the funding mechanism rather than state formula dollars.

Given the limited size and scope of the MOScholars program as currently funded, it is unlikely that there will be significant enrollment shifts in these districts due to their participation. Still, their decision points to underlying demand for more school choice and is another step toward a more flexible and responsive public education system in Missouri.

The post Two Missouri Public School Districts Opt into MOScholars appeared first on Show-Me Institute.

The post Why America Can’t Build Enough Housing with Edward L. Glaeser appeared first on Show-Me Institute.

The post The National Hybrid Schools Project with Eric Wearne appeared first on Show-Me Institute.

The proposed office building, called Strata, has spurred controversy for months. The combined tower and parking garage would cost $132 million; of that, roughly $63 million would come from public subsidies, including a direct $27 million public investment in the offices.

The editorial board is correct on their call, and while their analysis of market demand and public risk is correct, there are even more reasons to be skeptical of the developers’ claims. Part of the argument for Strata is that Kansas City needs more high-end office space that Strata would provide, but it’s hard to find evidence to support that claim.

In testimony before the Kansas City Finance and Governance Committee on June 26, 2019, a Strata developer asserted that Starbucks recently considered Kansas City for an office location [starts at 9:05]:

Jobs are being lost in Kansas City, opportunities are passing us by because we don’t physically have the space created. So I think that, uh, Starbucks is the example that gets used a lot toward the end of last year where there just was not Class A space on the shelf.

This same argument appeared in a number of outlets. FOX4 in Kansas City reported on June 26 that:

In recent months, a big employer, Starbucks, cited a lack of quality office space downtown as one factor in its decision to take about 1,500 jobs to Atlanta instead of Kansas City.

CitySceneKC, a blog funded by the pro-development subsidies Downtown Council, claimed in December 2018:

But Starbucks needed 100,000 square feet of Class A space relatively quickly, and it would take 18- to 24 months to build it in downtown KC. They went to Atlanta instead where there’s already “four- to five cranes in the air.”

Starbucks did choose Atlanta, Georgia for its new office location. But its operation looked nothing like what advocates for development subsidies claimed the company was seeking in Kansas City. They sought only 85,000 square feet and planned on only 500 new jobs, not the 100,000 square feet and 1,500 jobs alleged by Kansas City developers and their acolytes.

Note: the Atlanta job numbers were reported in August 2018, but developer sources in Kansas City kept using the inflated numbers in their blogs and comments to the media months later.

Furthermore, Kansas City and Atlanta are not in the same league. Atlanta’s metropolitan population is the country’s ninth-largest with just shy of 6 million people—2.5 times the size of Kansas City—and has grown 12.5 percent since 2010. (Kansas City’s metropolitan area is ranked the 31^st largest, and has only grown 7 percent since 2010.) Atlanta is growing rapidly and is the headquarters city for 18 of the Fortune 500. (Kansas City has only one.) Atlanta is also home to the busiest airport in the United States, providing executives with direct routes to most places they might want to travel. (Incidentally, the Atlanta Journal Constitution article that detailed Starbucks investment also offered a caveat about the incentives offered to Starbucks.)

It’s also noteworthy that the “most compelling reason” for their decision, according to a July 2018 email from a senior executive at the Kansas City Area Development Council, is Starbucks already had an operation center in Atlanta and the company had a “comfort level in their ability to scale that workforce based on experience.” Also, Starbucks’ Chief Financial Officer had “strong ties” to The Big Peach. Could any of this have been overcome by more readily available office space?

Developers will always seek public handouts to build what they cannot fund through private investment. While it is understandable that Kansas City leaders look toward Denver and Atlanta and New York City, we have a long way to go before we can compete with those places. We won’t get there through subsidies—but through the long arduous work of supporting infrastructure, public safety, and education while being business friendly and an efficient steward of public funds.

The post The Strata Deal Is Built on Misinformation appeared first on Show-Me Institute.

William Frey of the Brookings Institution just published a report entitled “How migration of millennials and seniors has shifted since the Great Recession,” and it has some promising numbers for Kansas City. In the report, Frey writes:

Another feature of young adult migration magnets is their location in the South and West “Sun Belt” region where all except three of the top 20 magnets are located. (Those three—Minneapolis-St. Paul, Columbus, and Kansas City—are among the most highly educated Midwest areas for millennials.)

…Today’s young adults, now encompassing those in the prime millennial ages, show a penchant for “educated places”—including Denver and Seattle—as well as more affordable areas like Minneapolis and Kansas City with pre-recession hot spots like Riverside, Phoenix, and Atlanta showing reduced appeal. 

Frey, as do most researchers, uses the term Kansas City broadly, to encompass an entire metropolitan statistical area (MSA). The Kansas City MSA stretches from Independence to Lawrence and includes 14 counties. Its population is 2.1 million, compared to the under 500,000 within the political boundaries of Kansas City, Missouri itself. Knowing whether a statistic describes a city or a metropolitan area is important, lest you conclude, as some would have you believe, that Kansas City gets 25 million visitors a year. It doesn’t.

It’s important to remember the Brookings Institution numbers on millennial migration speak to the broader MSA. Frey doesn’t report how much of the growth is taking place in downtown Kansas City, or how much is taking place in Olathe and Overland Park, two places recently listed as top destinations for millennials. Frey doesn’t report it because he doesn’t know it; I asked him.

As has happened before, it is possible that reports like this will be set upon by groups like the Downtown Council and the City of Kansas City as proof that the billions of dollars spent subsidizing wealthy developers in downtown Kansas City are bearing fruit. But until we know migration numbers within the MSAs, all that optimism is premature and skepticism is warranted.

Below: a map containg data from Frey’s analysis.

The post Some Promising Numbers About Millennials in Kansas City. Maybe. appeared first on Show-Me Institute.

As you may know, a few months ago the Show-Me Institute launched its own municipal checkbook project in an effort to increase government transparency and accountability. Our database tracks the spending of local cities. Missouri taxpayers ought to be able to see how their cities spend their money, and we hope more of our municipalities follow Atlanta’s lead by making a municipal checkbook a top priority.

The post Sunshine in Atlanta appeared first on Show-Me Institute.

A number of initial deficiencies were closed prior to the issuance of the final report, often because the city addressed the concerns after receiving a draft of the report. The city has until October 19 to address the remaining items. Of the seven initial deficiencies, one that remains concerns maintenance, including vehicle preventative maintenance, facility/equipment maintenance, and oversight of contracted maintenance.

It is a shame to learn that the city isn’t properly maintaining its streetcars—or at least is not complying with federal grant guidelines for reporting maintenance procedures. These are complicated machines, and cities such as Seattle, Atlanta, Charlotte, and Toronto have had maintenance and safety issues with their streetcars.

Cincinnati’s streetcars—which were manufactured by the same company as Kansas City’s—have had myriad maintenance problems. At one point late last year, several streetcars were offline at once.

[Southwest Ohio Regional Transit Authority spokeswoman Sallie] Hilvers cited “manufacturing defects” that caused the service issues that resulted, at one point Thursday night, in all but one of the city’s five streetcar vehicles being removed from city streets.

It is possible that Kansas City has had no significant streetcar maintenance problems—despite an embarrassing shut down on at least one occasion. And it is possible that the deficiencies cited by the FTA are easily addressed. We’ll know more when the city responds to the outstanding issues. 

Click below to see the entire FTA report

The post Feds Find KC Streetcar Deficient appeared first on Show-Me Institute.

But this blog post isn’t a review. (If only!) Alas, it is instead a continuation of our sometimes-Sisyphean task of criticizing the corporate welfare doled out by government, albeit this time with a twist. This time Missouri, where “Ozark” is set, didn’t subsidize the show’s production. Georgia did.

While the show won’t film at its namesake location, it is expected to drive film tourism to the Lake of the Ozarks. The expansive Missouri reservoir will be recreated at Lake Allatoona. The decision to film elsewhere is likely to do with Missouri’s lack of film tax incentives, after their 35% tax credit programme expired in November 2013.

The state of Georgia on the other hand has one of the most lucrative film incentives in the country. Productions filming on location need to incur a minimum spend of USD500,000 to access 20% in transferable tax credits. An uplift of 10% is available if productions embed an official Georgia logo somewhere in the finished product.

There are no per-project caps on the amount that can be claimed through the programme, which has made Georgia an incredibly popular filming location for productions of all sizes. AMC’s The Walking Dead has been filmed in multiple areas throughout Georgia including Atlanta and Senoia.

References to real places in and around the Lake of the Ozarks are everywhere in the show, and at one point about two episodes into the series I turned to my wife and said I thought Ozark was good enough, and its geographical depiction true enough, to drive some serious tourism to the Lake of the Ozarks—that a lot of people were going to be introduced to this uniquely Missouri asset and want a closer look. Certainly residents at the Lake have a right to gripe about the less-than-positive portrayals of the Ozarkian villains in the show, but on the whole, you couldn’t really craft a more subversive promotional vehicle for the mid-Missouri region.

Suspense! Excitement! Drugs! Violence! Light comedy! More drugs! And all the while, Georgia is paying for that entertainment—at no charge to Missouri taxpayers or Lake residents. 

In fact, contrary to what tax credit supporters may suggest, letting Missouri’s film tax credit expire in 2013 was a benefit to the state and ultimately got the Peach State to pay for about 10 hours of promotional material free of charge for the Show-Me State, with potentially hours and hours more to come should the show be renewed. And renewal is looking likely.

If I were Georgia, I’d cut bait on the credit. But if I were Missouri? I’d laugh all the way to the Lake.

The post Georgia Paying to Promote Missouri with “Ozark” Series appeared first on Show-Me Institute.

But is MetroLink underdeveloped? One way to answer that question is to ask whether the existing supply of light rail meets demand. Based on ridership trends, the existing supply of light rail may actually exceed demand. Ridership plummeted during and shortly after the recession in 2008 and has failed to pick back up even while economic conditions have improved in Saint Louis.

Another way of determining if MetroLink is underdeveloped is to compare it to other light rail systems. The table below lists light rail systems from across the country, and looks specifically at the length of each system, as well as the population and geographic size of the urbanized area (UZA) where the system is located.

Note: Track miles are compared to UZA and not ‘Service Area’ (SA) because SA includes modes besides light rail (e.g., buses) and is a direct correlate of track miles. Thus, SA is simply a function of track miles, and not a measure of the metropolitan area a system serves.  See National Transit Database Glossary for more.  
Source: Track miles from agency websites, and UZA data from National Transit Database.

Given this perspective, we can see that in terms of track miles, Saint Louis has a rather robust light rail system compared to other cities. While there is variation across systems, Saint Louis has more miles of track than the average and the median system. In fact, of these 18 systems, Saint Louis is the 7th-largest (and if we excluded systems with heavy rail, the 5th-largest). MetroLink is even larger than some heavy rail systems, such as Metrorail in Miami-Dade County (24.4 miles), and is just about as large as Atlanta’s system (47.6 miles).

However, what matters is not just the length of a system but also the length of a system relative to the size of the area it serves. To measure this, we divide the size of an area by the miles of track its system has—the figures in the fourth column. (For a more complete picture, I’ve also included population as the last column.) In short, the lower the number in the fourth column, the more miles of track per square mile of land, and so, the more developed a system is. By this measure, Saint Louis has one of the more developed systems in the country and compares well to many cities, with a system that is far more developed than the average. Saint Louis even compares favorably to Los Angeles!

Based on this analysis, Saint Louis’s light rail system does not appear underdeveloped. It may even be overdeveloped (or, perhaps, it developed too quickly or along poorly chosen routes). Before pushing for another expensive MetroLink extension, shouldn’t officials ask if we already have more than we need (and can afford)?

The post MetroLink Underperforms, but It Is Not Underdeveloped appeared first on Show-Me Institute.

Why is ridership so high? The Star has at least twice ascribed it to the “novelty” of the new system, both in the story linked above and here. The Star is likely correct, considering the experiences in two other new streetcar markets. Atlanta, for example, was crowing about its better-than-expected ridership numbers last year, and proponents were urging the city to consider expansion,

With this early success and ridership exceeding expectations by more than 20 percent, it’s never too soon to look ahead to Atlanta’s future.

Yet a year later, the system is being threatened with closure due to a list of problems, not the least of which being a decline in ridership,

After offering free fares for a year, the streetcar started charging $1 in January. Ridership plummeted. About 91,000 people rode the street in the first three months of this year—48 percent less than the same period in 2015.

The same plight has befallen the streetcar system in Tucson, Arizona. Last March, the system was said to be carrying more riders than forecast 7 months after its launch. Yet last week, the Tucson streetcar announced it was curtailing its late night service in the name of “passenger efficiency.” The Tucson system is not free to ride either, charging $1.50 for a one-way fare.

The streetcar in Kansas City is free to ride, and for now it's a novelty. It may be months before ridership levels settle into their long-term levels as they have with older systems. Only once those numbers are known, and the impact of a fare is included, should policymakers decide if this is something worth extending to UMKC or beyond. Otherwise, the city risks wasting millions of dollars that could be better spent elsewhere.

The post The Streetcar’s Future Ridership appeared first on Show-Me Institute.

In fairness, my colleague Joe Miller recently wrote that there are some reasons why a city might rightfully consider building a new terminal. The cost of current maintenance may be more expensive than a modern replacement, or a new terminal may be needed to accommodate increased traffic. Neither of those apply to MCI. While our traffic is up moderately, no one is arguing that we need to build for increased capacity. In fact, the new terminal proposal from the Aviation Department would reduce the number of gates we have now.

No one is arguing that the costs of maintaining the current MCI are prohibitive, either. Supporters of a new terminal seem to have strictly cosmetic concerns.

As for doing what we want airports to do, MCI is serving admirably. Consider the recent developments.

• In 2014, MCI picked up service from Spirit Airlines, and Seaport Airlines added service. Southwest announced that service to Ronald Reagan National Airport in Washington, D.C. has been approved.
• In 2015, Spirit started offering direct nonstop flights to Los Angeles. Allegiant Airlines will be flying nonstop to Florida from MCI, and Southwest offers new direct service New York LaGuardia, and Orange County, California. American Airlines added nonstop flights from Kansas City to Miami.
• And in 2016, Frontier Airlines will add flights to Atlanta, Chicago, and Philadelphia. Southwest recently expanded service in the form of direct flights to San Antonio.

In January, the Star catalogued some of MCI’s gains, including that annual traffic has grown each year since 2012 with the terminal we have now. Supporters of a rebuild point to possible (but by no means certain) increases in traffic as a result of a new terminal. But as Miller concluded in 2014:

To sum it up, the airlines (and common sense) say that building an expensive new terminal will not increase demand for air travel. Quite the contrary, the higher costs to airlines and passengers may mean fewer flights. Even if we agree with business leaders that MCI requires more amenities, certainly there is a cheaper way of providing these than a $1.2 billion new terminal plan. The cost is so much greater than the supposed benefits that the plan looks more like a vanity project than a sound investment.

In short, Kansas City’s airport is doing well. It has won high marks for its convenience; we’re unlikely to suffer the long waits seen at other airports because MCI does not use the TSA for security. Importantly, airlines seem eager to come and expand their service (despite their claims to the contrary). It is unlikely that Kansas City could improve on this. In fact, in taking on mountains of debt we risk losing the competitive advantage that many of us now take for granted. 

The post MCI Is the Envy of its Peers appeared first on Show-Me Institute.

Far from it. Of the 77 U.S. cities that KPMG ranked (which was not exhaustive of all major metros), Saint Louis ranked 45th and Kansas City ranked 46th. Among the cities cheaper than Saint Louis (and Kansas City) are regional competitors like Nashville, Omaha, Cincinnati, Memphis, Indianapolis, Cleveland, and Oklahoma City, to name a few. Worse yet, Saint Louis was more expensive than all 18 Southeastern cities KPMG looked at, from Atlanta to New Orleans.

So where did the Post-Dispatch get a top ten ranking for Saint Louis? If we only consider regions with populations greater than two million (of which KPMG ranked 31), Saint Louis is the 9th cheapest. I will leave it to the readers of this blog to decide if Saint Louis should pat itself on back for being cheaper than New York, Los Angeles, and Chicago, when it has higher costs for businesses than Nashville, Memphis, and just about every other regional competitor. But if we do decide to use population as criteria, it seems more justified to look at metros with populations similar to those of Saint Louis and Kansas City (between two and three million residents). When we do that, Saint Louis is 7th and Kansas City is 8th out of 14 such cities. That seems awfully middling.

That’s probably why, if one reads the study that the Post-Dispatch reports on, they’ll find that it does not claim that Saint Louis is among the most competitive cities in the country. KPMG didn’t even break down cities by population in the study, choosing instead to do so by region.  The Post-Dispatch story (while citing the study) is actually based on an ancillary KPMG press release, which lauds Cincinnati, and is careful to note context.

Titling an article “St. Louis among most cost-competitive cities for business, report says” when the report in question says no such thing is a questionable decision for a newspaper of record. But this is not just a problem with the headline. The article itself is equally misleading, and it was not a headline writer who placed this story front and center on the Post-Dispatch’s website less than a week before a vote on multiple tax issues (where the city’s business climate is an issue). 

The post Report: Saint Louis, Kansas City *Not* Among Most Cost-Friendly Cities for Business appeared first on Show-Me Institute.

“In 2014, congestion caused urban Americans to travel an extra 6.9 billion hours and purchase an extra 3.1 billion gallons of fuel for a congestion cost of $160 billion.”

Direct costs aside, traffic congestion make cities more difficult places in which to live and do business. The good news for Missouri is that both Kansas City and Saint Louis actually have relatively little traffic.

                Of the 46 metropolitan areas in the United States with more than one million residents, Kansas City and Saint Louis ranked as the third and fourth least congested (by traffic indexes), respectively. In both cities, a trip that takes 30 minutes in off-peak periods only takes between 34 and 35 minutes during peak periods. In other words, rush hour isn’t really that bad in either city. Compare that to San Francisco or Los Angeles, where a 30 minute trip outside of rush hour will take about 43 minutes during rush hour.

And not all rush hours are created equal. In fact, Saint Louis might want to ditch the term altogether, because the city’s highways only experience 1.3 hours of congestion per day, meaning it’s more like “rush 40 minutes” in the morning and evening. That’s the shortest period of congestion for any large city in the United States. Compare that to Los Angeles, where the city experiences nearly 8 hours of congestion per day. It’s not your imagination, Angelenos—rush hour really does last all day.

Traffic congestion is correlated with a metropolitan area’s size, so Kansas City and Saint Louis benefit from not being among the nation’s largest metropolises. However, some very large cities (Atlanta, Philadelphia) have reasonably low congestion, while some cities with smaller populations (Portland, Austin) are among the top 10 most congested cities. A continuing commitment to expanding highways and eliminating bottlenecks (when necessary/possible) likely makes the biggest difference. As for Missouri’s major cities, very low levels of congestion are evidence of an adequate supply (or possible oversupply) of highway capacity. If accelerated population growth takes hold in either city, needs could quickly change, and it will be up to cities and the Missouri Department of Transportation to maintain the congestion advantages. But for now, Saint Louis residents should enjoy their “rush 40 minutes” with the knowledge that others have it much, much worse. 

The post Saint Louis and Kansas City Enjoy Low Congestion, Commute Times appeared first on Show-Me Institute.