The upcoming release of the movie Supergirl got me thinking about another Superman-related film—one without laser vision or chiseled jawlines.

Waiting for Superman, released in 2010, follows families hoping to use lottery systems to get into a charter school. These families were stuck in failing public schools and desperate for a way out. Parents profiled in the film cried tears of joy when their children “won” the lottery and were so disheartened when they didn’t.

Its message was simple: droves of students are stuck in failing public schools and are waiting desperately for someone to help.

Missouri has been content allowing students to wait for Superman (or Supergirl now). My colleague, Susan Pendergrass, describes the problem well:

For years, the education establishment in Missouri has relied on a predictable playbook. Whenever state test scores drop or national rankings look bleak, we are told that the data don’t capture the whole picture, or that a new bureaucratic report card will soon show things are turning around. We are urged to wait, to invest more taxpayer money, and to trust the system.

But each year, more students move through the system either underprepared or unprepared. Thankfully, there are proven policies that can help.

Charter schools, open enrollment, and education savings accounts (ESAs) give parents choice, which in turn fosters more competition. With increased competition and accountability, schools are incentivized to innovate.

But Missouri parents have significant limits on choice.

Charter schools face a quasi-ban across the entire state, except in the St. Louis City School District, the Kansas City 33 School District, and all school districts in Boone County. (A charter school does operate in Normandy Schools Collaborative due to an accreditation provision). Missouri does not have open enrollment, and the ESA program reaches only a fraction of the state’s more than 900,000 students.

This needs to change.

Also concerning is Missouri’s reluctance to embrace comprehensive early literacy reform.

When Waiting for Superman was released in 2010, Mississippi ranked 48th in fourth-grade reading on the National Assessment of Educational Progress (NAEP). Louisiana ranked 47th, Tennessee ranked 38th, Indiana ranked 27th, and Missouri ranked 31st.

Since then, Mississippi, Louisiana, Tennessee, and Indiana have implemented serious early literacy reform. They all recognized teaching children to read is a serious undertaking that requires serious solutions.

Success has followed. By 2024, Mississippi had risen from 48th to 9th in fourth-grade reading. Louisiana climbed from 47th to 15th. Tennessee improved from 38th to 23rd. Indiana jumped from 27th to 6th. Do those states have more work to do? Of course.

But while they’ve shown improvement, Missouri has fallen from 31st to 38th, as 42% of our fourth graders scored below basic on the reading portion of NAEP.

There was a clear opportunity to pass early literacy reform to mimic the successes of these other states with House Bill 2872. But opponents in the Senate argued that Missouri should allow the state’s 2022 early literacy reforms (Senate Bills 681 and 682) to take full effect. In other words, keep waiting.

Superman does not exist, and neither does Supergirl.

But policymakers do.

Missouri students cannot afford to spend another year waiting. There are proven reforms that can expand educational opportunity and improve outcomes. This year, Missouri chose not to pursue them. For the sake of our students, that needs to change next year.

The post Waiting for Supergirl appeared first on Show-Me Institute.

At the Show-Me Institute, we spend a lot of time analyzing the systemic, high-level benefits of educational freedom—how it spurs competition, how it affects state funding formulas, and how it drives long-term accountability. But sometimes, it is important to look past the research and focus on the immediate, practical reality confronting parents.

Why do families need school choice? The answer is straightforward—a single, zip-code-assigned school cannot possibly be everything to every child. And when a school fails a student, that student needs a lifeline. A recent iteration of EdChoice’s long-running Public Opinion Tracker survey shows that roughly one in four parents indicate that they have had to switch their children’s school at some point.

When you dig into why these families are switching, the reasons are straightforward. Parents pull their children out of schools because of unfortunate, everyday problems that directly impact a child’s well-being and future.

The four most common reasons parents choose to leave a school are:

• Academic needs not being met: The child is either falling behind without support or completely unchallenged by a rigid, one-size-fits-all curriculum.
• Bullying: The learning environment has become unsafe, hostile, or emotionally damaging.
• Difficulty with teachers: Friction or a lack of connection with educators that derails the learning process.
• Excessive stress or anxiety: The school environment actively harms the child’s mental and emotional health.

As a parent of three children who had no publicly funded choice, I have witnessed or experienced all of these. Missouri families who face these issues have very few options. If you have the financial means, you can pay private school tuition out of pocket or pack up and move to a different neighborhood. But if you are a lower-income or working-class family in Missouri, you are trapped unless you live near a charter school in St. Louis, Kansas City, or maybe one day Boone County (charter schools are now authorized to open there, but none have yet). Many families have to watch their children suffer through chronic anxiety, falling grades, or safety concerns because an arbitrary residential boundary says there is no other choice.

This is precisely why educational choice is so vital. It isn’t about dismantling public education. All parents need some form of agency when their children’s current school simply isn’t working. When a child is facing bullying or their academic needs are being completely ignored, a family cannot afford to wait five or ten years for the school to change. They need an option right now.

The national data show that school switching is a normal, healthy mechanism for families trying to optimize their children’s upbringing. It’s time to ensure that every single family in Missouri, regardless of income, has the flexibility to make that switch when their children’s future depends on it.

The post This Is Why Missouri Families Need Choice appeared first on Show-Me Institute.

Susan Pendergrass speaks with Cory Koedel, director of education policy at the Show-Me Institute, about Missouri education policy following the 2026 legislative session. They discuss the governor’s A to F letter grade executive order, why literacy legislation failed to pass, leadership turmoil at DESE, Show-Me’s latest Report on the effects of open enrollment, the case for expanding charter schools in Missouri, and more.

The post Missouri’s Stalled Education Reforms with Cory Koedel appeared first on Show-Me Institute.

Evidence highlighted by Show-Me Institute researchers shows that charter schools are disproportionately represented among “Bright Spot” schools nationwide; that is, schools where students consistently exceed expectations academically. And Missouri charter schools are doing even better—ours are among the most effective in the country in terms of improving academic achievement relative to their traditional public-school alternatives.

The introduction of a charter school does not replace existing public schools; instead, it adds another option for parents and students to address their diverse needs. The move signals broader momentum for school choice across Missouri. It represents an important step toward a much more diverse and adaptable educational system, one designed to give every student access to high-quality instruction and the opportunity to succeed.

The post Columbia’s First Charter School Approved for 2027 Opening appeared first on Show-Me Institute.

The 74’s Bright Spots project identifies public schools across the country that are beating the odds in reading. Specifically, “Bright Spot” schools have literacy rates that are significantly higher than what is predicted based on their student poverty rates. In other words, these schools are outperforming expectations in terms of teaching kids to read.

The project is impressive in both scope and purpose. Using data from 41,883 schools across 10,414 districts in all 50 states and Washington, D.C., it shines a light on excelling schools. Too often, education debates fixate on failure. Highlighting success—and learning from it—is just as important.

While there are surely all kinds of interesting tidbits in the data, in this post I want to focus on the disproportionate representation of charter schools among Bright Spots.

Charter schools make up seven percent of The 74’s national sample, but 11 percent of schools identified as Bright Spots. This means charter schools are overrepresented among Bright Spot schools by more than 50 percent. If performance were unrelated to charter status, we would expect charter schools to comprise seven percent of the Bright Spot list—not 11 percent.

This adds to a large and growing body of evidence showing that charter schools produce stronger academic gains than traditional public schools, on average. This does not mean that every charter school is more effective than every traditional public school, nor does it mean that there aren’t high-performing traditional public schools (indeed, the Bright Spots project highlights many!). But it does mean that, more often than not, a school system with more charter schools will outperform a school system with fewer charter schools.

In Missouri, we’re missing the boat on charter schools. Our outdated charter laws result in them operating in just four jurisdictions in the state (Boone County, Kansas City, Normandy, and the City of St. Louis). This leaves most Missouri families without charter school options.

The fundamental reason is that outside of these four jurisdictions, a charter school can only open with the approval of the local school board. But because the local school board has a vested interest in maintaining resources for its own traditional public schools, this rule effectively serves as a ban on charter schools in most of our state.

If state policymakers are serious about improving student outcomes, they should modernize Missouri’s charter law. A simple solution is to allow the Missouri Charter Public School Commission to authorize charter schools statewide, rather than relying on local school boards to approve them. This would allow the charter sector to expand and result in more students attending high-quality public schools.

The post Charter Schools Are More Likely to Be Bright Spots appeared first on Show-Me Institute.

One thing I noticed about all the cities that I listed is that they contain lots of “U’s” and “L’s,” so I guess we know who the patron saint of this blog post is.

A use tax is simply a sales tax imposed on goods you purchase online or via catalogue and have delivered to your home. Municipal use taxes in Missouri actually predate the internet, but not surprisingly, most cities didn’t pass them until online shopping took off over the past fifteen years or so.

I am generally unsympathetic to the idea that these cities need a tax increase. If Creve Coeur needs more tax revenue, why did it just pass an enormous tax abatement in a very prosperous area that absolutely does not need tax subsidies to encourage development? If Festus needs more tax revenue, why did it put the fix in to sell its water system to another public entity without going out for bids as good government principles require? I don’t have any specific criticisms of Ladue, but I highly doubt the city is in financial trouble. This famous doggerel about Boston Brahmins could easily have been written about Ladue:

And this is good old Boston,
The home of the bean and the cod,
Where the Lowells speak only to Cabots,
And the Cabots speak only to God.

My view is that use taxes are a good way to expand the tax base, level the playing field for businesses, and raise local revenues. However, this last point is key. They should not be used simply as a way for cities to get more revenue. Cutting other taxes after the use tax is imposed (should voters pass it)—especially if you have a particularly harmful tax — is a great way to achieve the above benefits without a tax windfall for the city. Cities can lower their property tax rates, reduce their utility tax rates, or adjust other sales taxes (altering sales tax rates is much trickier than other types of taxes).

I don’t know if any of these cities have pledged to reduce other taxes if the use tax passes. Without such a pledge, the use tax would likely be a significant revenue gain for the city. If you think your city, town, or village actually needs that revenue, then so be it. But I’d be hard-pressed to buy that for the cities listed above, especially Ladue, Creve Coeur, and Festus.

The post Use Taxes on the Ballot in Missouri This November appeared first on Show-Me Institute.

Columbia is currently considering raising its municipal water rates. The proposed increase would be set at four percent, with higher increases for some water services during the summer. I have no criticism of the proposed increase if it is truly necessary and the revenue is properly used, but there is an even better option that Columbia citizens and leaders should consider: privatization.

There is no standard method for providing utility services in Missouri cities. Springfield, for instance, has a city-owned public utility that provides every utility service. Alternatively, almost all of the 1 million residents of Saint Louis County are customers of private utilities for water, gas, and electricity. The private sector also provides utility services in Jefferson City.

Despite the structural differences between public and private provision, there is little difference between what customers pay in Columbia and Jefferson City. Both cities are below the national averages for utility costs. According to data from payscale.com, a residential customer of Columbia’s municipal electric utility has an average monthly charge for usage of $169.75, which is four percent below the national average. In Jefferson City, that average monthly electrical bill is $162.50, or five percent below the average. That’s obviously a small difference in favor of customers of Jefferson City’s private utility compared to Columbia’s city-owned utility.

Studies have demonstrated that private utilities are generally more efficient than municipal utilities. In 2000, economist B. Delworth Gardner of Brigham Young University determined that private water utilities in Utah charged lower rates for water than comparable public utilities, even after accounting for the large advantages in taxation and regulation that public companies have. Economists Daniel Hollas and Stanley Stansell found in a 1994 study that private gas utilities were more economically efficient than public gas utilities.

It is reasonable to suppose that private utilities would be more efficient in their costs and operations than Columbia’s current municipal utilities. Privatizing the utilities could benefit the city in a number of ways. Most importantly, the city would experience an immediate cash infusion from the sale. Eureka, in Saint Louis County, sold its municipal water and sewer utility to Missouri-American Water for $28 million in 2020.

Columbia would also see other fiscal benefits from privatizing the city utilities. The assets of the newly private utilities would become taxable, expanding the Columbia and Boone County tax bases. Finally, reducing the number of municipal employees entails scaling back the long-run taxpayer costs associated with government pensions and health care.

Currently, there is a question about how Columbia has been calculating the payments-in-lieu-of-taxes (PILOTs) from the water department (and likely the electric department, too). The Columbia city charter states that the public utilities shall pay to the city the amount that would be due in taxes to the city if the utilities were private. However, the city has long been transferring into the city’s general fund the total taxes that would have been due to all of the local governments, such as the county and school district, which is a much higher amount. While it may seem like a harmless transfer from one city fund to another, it also looks like a questionable use of water department revenues to increase Columbia city revenues while going around the requirements of the Hancock Amendment. Heavy users of water, such as swimming-pool owners, should pay high water bills to account for their greater use of water. They should not have to pay more for water because Columbia wants to transfer more money from the water division to the general fund as a subsidy to other city services. Privatizing the water and electric utilities would stop that appearance of impropriety for good.

Private utilities are just as capable of providing quality services at a low price to the residents of Columbia, and likely more efficient, than city departments. Privatization of the Columbia Water and Light Division would bring a needed cash infusion to the city, add substantial assets to the tax rolls, and reduce long-term public employee costs. Cities around Missouri have seen positive results from such privatization efforts, and there is good reason to believe that Columbia taxpayers and residents would also benefit.

The post Columbia Should Privatize Its Water and Electric Utilities appeared first on Show-Me Institute.

Charter schools could be coming to Boone County. If a group of teachers, parents, or citizens wants to open a charter school and has a solid application, it can now apply to a university or the state charter school board for sponsorship. The group does not need the approval of a local school board.

Eligibility for the MOScholars scholarship program for low-income students and students with disabilities has been greatly expanded. There are no longer geographic restrictions for who is eligible. The income limits for eligibility have been raised. The total amount of tax credits that can be dedicated to the program was increased from $50 million to $75 million. And the dollar amount of the scholarship was raised to bring the number in line with the Foundation Formula amounts for similar types of students.

Districts in the state’s largest communities must now put a potential switch to a four-day school week to a vote. There is also a financial incentive that will be remitted to any district that remains open five days per week.

There is also an important change to the state’s foundation formula. Previously, students were counted purely based on attendance. Now, the formula will be 50 percent based on attendance and 50 percent based on enrollment.

The minimum teacher salary was raised from $25,000 to $40,000 for all teachers and from $33,000 to $46,000 for teachers with master’s degrees.

Districts will be able to attempt to fill teaching positions in “hard-to-staff” schools by placing teachers higher on the salary schedule than they normally would be.

There are many more provisions to SB 727. It represents a defensible trade-off between increasing options for Missouri students who need them and investing in the system. I look forward to the governor signing it.

The post A Win for Education in Missouri appeared first on Show-Me Institute.

Several years ago, my colleagues and I were debating what the worst possible tax policy change could be. (I work at a think tank, so conversations like this are normal.) We settled on “exempting lottery winnings from income taxes.” While it may not be quite as bad, the ongoing proposals before Missouri counties to freeze the property taxes for senior citizens are similarly misguided attempts at tax reform. Boone County is the first county to put this question before voters, who will vote on Proposition One on April 2. Hopefully, Boone County voters will see through the sympathetic arguments for the plan and realize that this is very poor public policy.

Last year, state legislation authorized any county to freeze the real property taxes of the primary homes for senior citizens who qualify. Their property taxes will stay at the same amount they are when they become eligible for the plan, which for most people would be when they turn 62. The purpose of the proposal is to help senior citizens stay in their homes as they age, but there are several major problems with this idea.

This proposal is harmful simply because it reduces the property tax base. Unless local governments in Boone County cut services in response to the enactment of this tax freeze for seniors, it will almost certainly lead to higher tax rates on those property owners not eligible for the freeze. Proposition One will be every bit as much of a tax increase on non–senior citizens as it is tax relief for some senior citizens. People who live in homes of similar value with similar public services should pay similar property taxes. The recent college graduates in Columbia who have lived in their home for a year should not pay higher property taxes than their neighbor just because the neighbor has lived there for two decades.

Concerns over reducing the tax base are especially applicable in Boone County, with its substantial amount of university-owned property that is already off the tax rolls.

Passage of this proposal would also lead to the problematic situation in which people vote on property tax increases that they themselves do not pay. The single best aspect of property taxation is that it imposes the costs of local services on the people who use those services, unlike sales or hotel taxes that are exported in part to visitors, shoppers, and others. Instituting a system in which people vote on property taxes they won’t pay breaks that beneficial connection.

For a cautionary tale about the dangers of property tax subsidies, consider California’s famous Proposition 13, which was passed in 1978. Prop. 13 limited the increases in property assessments and taxes for homeowners. The measure has certainly had its intended effect of keeping property taxes low for longtime California homeowners. However, it has also reduced mobility, dramatically increased alternative taxes, limited homeownership opportunities, and caused substantial tax disparities between similar properties. This is not what Boone County needs.

According to data from the Federal Reserve, people ages 65 to 74 have the highest net worth of any age group. So why, if we were to pick any age group for tax exemption, would we pick the wealthiest among us? (People over 75 have less wealth than those 65–74 or 55–64, but they have a higher net worth than any age grouping under 55.) We shouldn’t be handing out property-tax exemptions to anyone, whether those exemptions take the form of corporate subsidies, developer abatements, or senior-citizen tax freezes.

Passage of Proposition One would certainly benefit some of Boone County’s senior citizens, but it would alter the county’s property tax and assessment system in a myriad of harmful and biased ways. Property taxes work best when the assessments are accurate, the base is wide, and the rates are low. Proposition One does not move Boone County in that direction.

The post The Upcoming Senior Property Tax Freeze Vote in Boone County appeared first on Show-Me Institute.

Senate Bill 727, which passed out of the Senate last week by a vote of 19 to 10, dramatically increases the number of children eligible to receive a scholarship under MO Scholars, an education savings account program established two years ago. Gone are the restrictions that scholarships can only go to students in Missouri’s 10 largest communities. And the low-income restriction line has been raised from 200 percent of the free or reduced-price lunch boundary to 300 percent (a yearly income of roughly $166,000 for a family of four).

The reason I can only describe the expansion as “somewhat” is because, unlike the raft of states that have passed similar school choice legislation in the last few years, the bill doesn’t provide any public funding for the scholarships. The six approved scholarship-granting organizations (SGOs) must still raise the funds for the scholarships through donations from individuals or corporations.

The bill also—finally—allows charter schools to open outside of St. Louis and Kansas City, a policy goal that Show-Me Institute analysts have been talking about for years. Granted,  only Boone County was added to the list, bringing in Columbia, but it’s a start. It may take years for a charter school to actually materialize in Boone County, but at least it may soon be possible.

As I anticipated, getting this bill through the Senate required some sweeteners for school choice opponents. These included raising minimum teacher salaries and changing how we count students for the foundation formula (more on that in a coming post). Too bad the negotiators didn’t get public funding for the scholarships with this trade-off. For now, we’ll wait to see what happens to the bill as it moves through the House.

The post The Missouri Senate Moves on Education Choice appeared first on Show-Me Institute.

The post Charter Schools in St. Louis, St. Charles, and Boone Counties appeared first on Show-Me Institute.

Earlier this year, Missouri homeowners received their reassessment notices on the value of their property. For many homeowners, the new values were quite a shock. In Jackson County, for example, the average assessment increase was 30 percent.

Missouri’s Hancock Amendment is supposed to require tax rate rollbacks as assessed values increase. Reassessment is not supposed to be a tax increase. However, the high inflation of last year allows local governments to roll back rates far less than usual, if at all. Columbia announced it was keeping its city tax rate exactly the same, despite an eight-percent average valuation increase in Boone County. Don’t let your county or other local government do the same.

In September, counties throughout Missouri are setting their tax rates for 2023. Many of them are seeing large increases in the assessed valuations within their boundaries. Missouri taxpayers need to demand that their counties—and other taxing districts within certain charter counties—roll back rates to offset the otherwise large property tax hikes people will see later this year. Yes, this means local governments should roll back rates even more than is required by Hancock.

Large increases in assessed valuations don’t have to translate to large tax increases, but they will if local officials keep their tax rates the same or lower them by the bare minimum required. High inflation shouldn’t be an excuse to hammer taxpayers with large tax hikes. Taxpayers deserve—and should demand—better treatment from their county officials and other local governments.

The post Taxpayers should demand larger rollbacks than Hancock Amendment requires appeared first on Show-Me Institute.

Relying heavily on sales and use taxes may not be the best way to ensure reliable, stable revenue streams. Property taxes tend to provide a more stable revenue stream.

The City of Ashland in Boone County has a sales tax proposal on the April ballot. Typically, new sales tax proposals tend to be something like a quarter-cent for parks or a half-cent for transportation. But the Ashland sales tax proposal is for an additional one percent general sales tax on top of the existing one percent general sales tax. Ashland is proposing to use the new revenues for roads and police. This new tax, if approved by voters, would put the new Ashland sales tax rate at 3.5 %, which, as far as I can tell, would be the highest municipal sales tax rate in Missouri. It would be higher than Joplin’s sales tax rate, which at 3.125% is the highest rate for any large Missouri city. (We need to leave the City of St. Louis out of this because it is an independent city so there are no county sales taxes to consider.)

Ashland’s own promotional materials for the sales tax (which are clearly not just informational but actively promoting it) directly state:

Data show that an estimated 60 to 70% of sales tax revenue generated within the City of Ashland is paid by those that do not reside in Ashland. This sales tax increase will have the largest impact on those that do not live in Ashland. (emphasis added)

This continues the trend of many cities thinking they are smart by taxing “the other person,” even though plenty of other cities and counties are trying to do the same thing. You think your residents are getting a good deal by taxing those outsiders, but your residents are getting jobbed in the same way by the other cities and counties around them. This practice is at its most extreme with traffic ticket revenues. (The adoption of use taxes is the opposite of this—use taxes imposes sales taxes on residents of the community.)

Ashland has a relatively low property tax rate, which will be decreased further if the sales tax passes. This just further increases Ashland’s reliance on taxing shoppers and outsiders instead of people directly paying for the municipal services they use. Residents make smarter decisions about what municipal services they want when they are the ones paying for them, not when they can outsource the cost of running their municipality to non-voters. This is true with the earnings tax in St. Louis and Kansas City, and it is true with outlandishly high sales taxes in Joplin, Hazelwood, and Ashland.

I recognize that people in Ashland are not trapped. Residents and visitors may choose to shop in Columbia or Jefferson City if local sales taxes are too high. But that doesn’t mean it is good public policy to increase the sales tax rate as much as you can. The purpose of government is not to maximize revenue just for the sake of it.

I don’t claim to know for certain what “too high” is for sales taxes, but watching Ashland try to pass another general sales tax on top of the state, county, and local sales taxes the residents already pay makes me think that Ashland is almost certainly above it. Sales taxes have an important role in funding state and local governments, but Ashland city officials are taking things too far with their latest proposal.

The post Ashland Wants to Make Its Sales Tax How High? appeared first on Show-Me Institute.

We have been debating the issue of school choice in Missouri for more than 20 years now and it doesn’t look like our lawmakers are any closer to reaching a consensus. Meanwhile, a revolution has taken place in Florida. Ron Matus has documented this change in his terrific piece, “Miami’s Choice Tsunami,” appearing in the winter edition of Education Next.

Matus explains:

Today, 45 percent of Florida students in K-12 attend something other than their assigned schools. Charter schools are part of the mix. So are private schools that can be accessed with choice scholarships. So is an ever-growing array of district options.

This wave didn’t just happen.

In 1996, the Florida Legislature passed a law allowing creation of charter schools. The first opened that fall in Miami’s Liberty City community. Two decades later, Florida had 295,814 students in 655 charter schools—and one of the largest charter sectors in America.

In 1997, the Legislature created the Florida Virtual School to ramp up online learning. It started with 77 students and five courses. Today, it serves more than 200,000 students a year.

In 1999, the Legislature created the McKay Scholarship, a state-funded private school voucher for students with disabilities. In 2018-19, it served 30,695 students in 1,525 private schools.

In 2001, the Legislature created the Florida Tax Credit Scholarship for low-income students. As of June 2019, it was serving 104,091 students in 1,825 private schools. In students and funding, it is the largest private school choice program in the U.S.

The results in Florida speak for themselves. The state is seeing incredible gains in student achievement on the National Assessment of Educational Progress, known as “The Nation’s Report Card.” As the Orlando Sentinel reported, “Something very good is happening in Florida.” Indeed, it is.

In Miami, the focus of Education Next article, the beloved superintendent, Alberto Carvalho, embraced school choice. Matus writes, “Instead of resisting the inevitable forces of choice and customization that are re-shaping public education, Carvalho and Miami-Dade chose to harness them . . . They realized it was too powerful to avoid—and too brimming with opportunity not to embrace.”

It is time for Missourians to stop debating the merits of school choice. Choice is good. Options are good. Competition is good. While we fail to act, innovation is happening elsewhere. Now is the time to act. Now is the time to expand educational opportunities in Missouri.

The post Stop Debating School Choice. Give Us Options Now! appeared first on Show-Me Institute.

We do that by making smart financial and fiscal decisions . . . and being open and transparent in our spending and where the citizens’ tax dollars are going.

This commitment to good government is admirable. So why would the Columbia City Council vote 5-3 in favor of approving the Broadway TIF after the Columbia TIF Commission overwhelmingly voted 8-3 against the proposal?

For several months, a developer who owns The Broadway Columbia Hotel, has been trying to convince the TIF Commission to declare 1104 E. Walnut St. a redevelopment area so that he can qualify to receive $2 million in taxpayer subsidies to expand. To support this effort, the developer claimed in his development plan (pp. 4–5) that the building meets the “Conservation Area” criteria for TIF eligibility because it is 56 years old and “displays obsolescence due to age, ongoing vacancy, and deferred maintenance of external items like the roof and gutters.”

Furthermore, the developer claimed in testimony provided to the TIF council on October 30 that while not blighted yet, the redevelopment area may qualify due to excessive vacancies, litter, and alcohol containers on the grounds. Should taxpayers be asked to pick up the tab for cleaning the area up, or should it be the responsibility of the property owner?

The developer also noted that without TIF assistance, potential investors and lenders said they would not be willing to join the project because the financial risk would be too great. And yet, in a letter sent to the commission, the Boone County Auditor pointed out that “just a few blocks west of the parcel in question . . . a multi-story office building is currently under construction [and] is proceeding without TIF financing on a smaller lot than the subject lot, and at a significant investment … of several million dollars.” If similar projects can proceed without subsidy, then can’t this one as well?

Finally, the Boone County Assessor has warned that over its 23-year life, the TIF arrangement would divert $4.3 million away from schools, libraries, and municipal services—but the hotel expansion is projected to produce only $695,000 in tax revenue. Proponents say this diversion of money will lead to job growth. However, this argument is at odds with multiple studies that have concluded that TIF has no demonstrable effect on job creation. Is this the sort of smart fiscal decision-making that is supposed to regain the trust of the voters?

Last year, the Missouri Legislature passed a law stating that if a city passes a TIF over the objection of a TIF commission, then the money raised from it can only be used towards the demolition and clearing of the site. Unfortunately, the law only applies to Saint Louis County, Saint Charles County, and Jefferson County. Maybe it’s time to include Boone County—or the rest of Missouri—under the law. 

The post Is This How Trust Is Regained? appeared first on Show-Me Institute.

Those decisions are newsworthy on their own, but there was an interesting quote from a Columbia council member regarding the failed proposals. Councilman Matt Pitzer said voters have a natural tendency to reject use-tax measures because voters don’t trust government to spend their tax dollars responsibly. How might trust be restored? According to Pitzer,

We do that by making smart financial and fiscal decisions . . . and being open and transparent in our spending and where the citizens’ tax dollars are going.

I could not agree more, which is why we started the Checkbook Project, which is intended to track the expenditures of each Missouri municipality over the past five years. Notably, when we requested data for the project from Columbia, the city was more than accommodating in providing the data we requested. At no cost to us, we got the information in an easily searchable Excel file. Also notable is that when we made the request of Ashland, the city was going to charge $20.00 for their records—still a pretty reasonable figure, in stark contrast to some of the responses from other municipalities we’ve received to date. (More on those interactions in a later blog post.)

When government asks for more money out of our pockets, we have every right to know what that money will be spent on. Even when policymakers are conscientious in their management of tax dollars, we should remember (per H.L. Mencken) that conscience is merely “the inner voice that warns us that someone might be looking.” When municipalities commit to transparency, they introduce that very possibility, and the expectation of public scrutiny should result in better policy. 

The post Restoring Trust through Transparency appeared first on Show-Me Institute.

The researchers partnered with The New York Times to create a searchable data visualization of every county in America and its neighborhood effect on lifetime earnings. Missouri is shown below  (on the map, blue is good and red is bad.) 

The three best counties to grow up in, paired with the extra money a child from a poor family will expect to make by age 26 for having grown up there, are:

• Osage County +$5,260
• Chariton County +$4,660
• Perry County $4,460

The three worst counties, paired with the negative financial repercussion of growing up there, are:

• St. Louis City –$3,780
• Boone County –$1,470
• Mississippi County –$1,320

The authors point to five factors driving better rates of upward mobility: less segregation by income and race, lower levels of economic inequality, better schools, lower rates of violent crime, and a larger share of two-parent households. 

Each of those factors is important, but here I’d like to focus on the role that educational attainment plays in increasing economic mobility.  Take a look at this graph from the Pew Research Center:

The gap between the wages of high school graduates and college graduates is widening. Helping more students successfully complete high school and then get a meaningful postsecondary credential (it doesn’t have to be a four-year degree, but it’s critical to choose one’s field of study wisely) can be a huge boost to upward mobility. Consider the following graph from the Brookings Institution’s Hamilton Project:

Visually, what jumps out are the dark bars, which show how difficult it is to progress to a better economic situation without a college degree. But the light bars tell a much more hopeful (and frankly amazing) story. At the far right edge of the graph we see that with a college degree, even someone born into a poor family has a 19% chance of making it into the top quintile of income distribution. By definition, only 20% of the entire population is in that top quintile at any given time, so this finding suggests that those who earn a college degree in spite of the formidable challenges of poverty really do achieve economic mobility.

The problem is that so few among the economically disadvantaged are able to earn that college degree. Several factors—broken families, lackluster schools, and unsafe streets, to name a few—contribute to opportunity inequality that is too often overlooked by those who consider income inequality to be the primary (or even the only) concern. But rather than hold out for a single solution to all of these interconnected problems, why not see if serious educational reform (as Show-Me Institute writers have suggested here and here and here, for example) can help give students the opportunities they need to improve their lives?

The post Opportunity and Mobility in Missouri appeared first on Show-Me Institute.

Boone County could cut its property tax rate. This not only would help Kraft, but all the other property owners in the county as well.

Even better, Boone County could shift away from property taxes and toward a land value tax. Land value taxes are taxes levied against the unimproved value of land and not the buildings, personal property, or other improvements on that land. A broad spectrum of economists support the land value tax versus other types of taxes because it is non-distortionary (i.e., it doesn’t alter behavior, unlike income and sales taxes).

If Boone County imposed a land value tax instead of a property tax, companies like Kraft would not face increased taxes after improving their plant. Unfortunately, only Kansas City is allowed to levy land value tax. There would need to be a change to the State Constitution in order for Boone County to levy a land tax.

Boone County (like other counties and cities) faces a difficult dilemma. It either can erode its property tax base with abatements to select businesses or risk having those companies being lured away to locations that offer subsidies. A land value tax won’t completely eliminate that problem (a jurisdiction could offer to not tax the land at all or provide that business some type of tax rebate), but it will make it more financially viable for businesses to expand facilities already present. If the State Constitution were changed, counties would have another policy option available to retain businesses other than having to resort to tax abatement.

The post Land Taxes and Columbia appeared first on Show-Me Institute.

You read that right. There will be fewer people at this plant when all is said and done. Companies are free to employ as many people as they deem necessary. However, giving out a subsidy to a company so that it can employ fewer residents just doesn’t make sense. Even if the tax abatement led to higher employment at the plant, Boone County would be hard pressed to justify the subsidy since it does not lead to the kind of economic growth that would justify it being awarded.

If Boone County really wants to become a place where it makes sense to locate a business or expand a current one, it should rethink how it taxes property (more on this in another post). There are potential tax improvements that could help not only Kraft Heinz, but all the other businesses in Boone County as well.

Boone County is following the example of many other counties and municipalities by granting subsidies to a local business. That doesn’t mean it’s a good idea. These types of subsidies don’t, in the long run, provide a boost to the local economy. They just make it more likely that the county will hand out more subsidies in the future. 

The post Krafting a Bad Subsidy Package in Columbia appeared first on Show-Me Institute.

If you follow the work of the Show-Me Institute, you are aware (assuming you agree with us) how badly our state needs Tax Increment Financing (TIF) reform. TIF is severely damaging our state. It weakens the tax base, empowers government planners, encourages crony capitalism, encourages eminent domain abuse,  favors certain types of businesses over others, damages governments that depend on property taxes and have limited say in the decision (i.e., school districts), and all this for something that, in the end, does not succeed in growing the economy. But other than all that, TIF is great.

There are some important pieces of TIF reform legislation in Jefferson City right now. One of the better pieces is Missouri Senate Bill 774. The bill has passed out of the Senate and is now before the House. The most important thing the bill would do is further restrict how TIF dollars are spent in cases where local municipalities in Saint Louis, Saint Charles, and Jefferson counties override a county TIF commission’s decision against a TIF proposal. According to current law, the three above counties have county TIF commissions that make the choice on TIF, but cities have the ability to easily override the county TIF commission’s rejection. Small cities overriding the county TIF commission happens frequently in Saint Louis and Saint Charles counties (not so much yet in Jefferson County). The counties have tried to exercise discipline on TIF use, but small cities keep overriding their choice (Ellisville [initially], Shrewsbury, Saint Charles, etc.) and harming the larger community. Those new limits that SB 774 would enact are needed and would greatly benefit those counties.

The other good thing in the bill is that it adds Boone County to the list of the prior three where these tighter TIF rules would apply. There are great groups fighting corporate welfare in Boone County, and adding Boone to this list of counties is terrific.

Missouri needs TIF reform for all the reasons listed above and several more. Here’s hoping that the legislature will make this extremely important policy change for our state.

The post ‘Tis Time For TIF Reform appeared first on Show-Me Institute.