This week we have a new batch of health care perspectives. Yesterday we brought the Cato Institute’s Director of Health Policy Studies Michael Cannon onto the podcast and asked him many of the same questions we posed to Stuart, and I think our listeners will be intrigued at how markedly different Michael’s views are. Click here for that podcast, and be sure to subscribe to the channel to be notified of this content every time we add something new.

Subscribing is especially relevant now, because tomorrow we will welcome the Manhattan Institute’s Chris Pope to the program and will release that podcast shortly thereafter. Like Stuart and Michael, we’ll ask Chris many of the same questions so that our listeners can easily compare the different perspectives emanating from the market movement on issues like Medicaid, private insurance, and state-based health care reforms. Stay tuned and smash that subscribe button.

The post Cato’s Michael Cannon Visits the Podcast appeared first on Show-Me Institute.

Our conversation also highlights that even within the market movement there remains a great deal of disagreement about the best way to reform our health care system. Mr. Butler was an early supporter of an “individual mandate” that required the purchase of health insurance, a position he now has largely rejected but does distinguish from the mandate as passed in the Affordable Care Act.

But the main reason we invited Mr. Butler on the program was to talk about his “Medicare Advantage for All” proposal, which he recently published in the Journal of the American Medical Association. Mr. Butler explains what he means by “Medicare Advantage for All” in the podcast, but to be plain (and perhaps unsurprisingly), I disagree with the idea. I don’t think American patients are well served by the government “designing” a health care system that relies more and more on third-party, government-financed and government-controlled coverage for the vast majority of our health services. Proponents of free market-reforms should, I think, focus most of their efforts on expanding supply to meet public demand for health services, and we’ve certainly talked about those options at length and for some time.

In the podcast, we also talk about Medicaid expansion and proposals for changing how Medicaid is administered. As a general matter, I think Mr. Butler is more optimistic about the prospects of the federal government delegating control more definitively to states to control costs and manage the Medicaid program. I’m not so optimistic. In light of the federal government’s Lucyball treatment of state waiver proposals in both Republican and Democratic administrations, I’m not nearly as hopeful as Mr. Butler when it comes to believing states will be allowed to innovate in the program. All of that said, Mr. Butler provides an important perspective that is already part of a larger debate on the future of American health care.

Mr. Butler’s perspective may not be your philosophical cup of tea, but if it isn’t, rest assured that you’ll have plenty of other flavors to digest in the weeks ahead. In the next few days, we’ll be sitting down with Michael Cannon of the Cato Institute and Christopher Pope of the Manhattan Institute to talk about the future of health care in this country, with more guests planned. We hope these podcasts are informative, and we invite your feedback and ideas.

The post Agreeing and Disagreeing on Health Care Reform appeared first on Show-Me Institute.

The policy—net metering—allows consumers to offset their electric bill with electricity generated from rooftop solar panels. When the solar panels produce more electricity than the home is using, excess electricity is put back onto the grid. The meter “spins” backward, deducting the electricity generated from the resident’s bill. Homeowners pay only for the net amount their meter records, hence the name “net metering.”

Under Missouri law, net metering customers are paid at the retail electricity rate for the power they generate. However, retail electricity prices include more than just generation. Transmission and distribution costs, among other items, are included in a ratepayer’s retail electricity price. In Missouri, only about a third of the retail price is from electricity generation costs.

When net metering customers are paid retail rates, they receive payments not just for the electricity they produce but also the parts of retail rates that are used to maintain the electric grid, which they neither provide nor maintain. But the costs of providing and maintaining transmission and distribution infrastructure don’t disappear—utilities pass on the costs of net metering programs to other customers through higher rates.

The costs passed on to other customers can be quite high. According to research by the Brookings Institute, if a net metering customer zeroes out their monthly bill entirely, they shift $45 to $70 onto regular customers. Before reforms were enacted in 2016, net metering customers in Arizona shifted over $9 million in annual costs onto regular customers. Net metering customers in Nevada received a roughly $500 annual subsidy from regular customers; reforms in 2017 lowered that dollar amount, but only slightly.

Moreover, this cost shift has regressive effects. A survey by the Lawrence Berkeley National Laboratory found that solar panel owners have incomes 50 percent higher than the median income of households that don’t own solar panels. Asking lower-income earners to subsidize wealthier solar panel owners is hardly an ideal policy.

So what can be done about this problem? One solution is to compensate net metering customers at wholesale, not retail, prices. Net metering customers would be paid the costs the utility saves by not generating this electricity, which would not include the many other costs—transmission, distribution, administration, etc.—that the retail rate includes. This approach better reflects the value of the electricity produced and doesn’t lead to such drastic cost shifting. Alternatively, an additional monthly fee could be charged to net metering customers to offset retail price overcompensation, as Kansas has done.

Rooftop solar power has room for growth in Missouri, but current net metering laws unfairly reward those with solar panels and punish those without. Missouri should consider altering the net metering policy to make it fairer for all ratepayers.

The post Rooftop Solar Power Law Acts as Subsidy for the Wealthy appeared first on Show-Me Institute.

A study released earlier this year from the Brookings Institute drew attention to an often-overlooked aspect of electricity generation—land use.

The determining factor for the amount of land an energy source needs for its operations is power density. Power density measures the amount of land needed to produce a given amount of energy. Each energy source has its own power density. Fossil fuels are quite power-dense by nature, whereas wind and solar power are less dense by several orders of magnitude. In fact, wind and solar energy can require up to 100 times more space than a natural gas plant to generate an equivalent amount of electricity.

The power densities of several forms of electricity generation can be seen below. The higher the median power density (red dot) is, the less space it takes to generate electricity.

These results have important implications for Missouri. Land use for energy purposes was a contentious topic this past legislative session, with overt and covert attempts to block the developers of a wind energy transmission line from using eminent domain to acquire land.

Land is scarce and has competing uses. Currently, however, Missouri’s Renewable Energy Standard mandates an increasing amount of electricity be generated by the least power-dense sources. The Standard requires 15 percent of electricity come from renewable sources by next year, and an initiative petition circulating proposes to increase that number to 50 percent by 2040. Meeting these mandates would require either a significant buildout or utilities buying power from out of state.

The scholars who created the above graph note that “increasing the U.S. renewable energy portfolio will increase land-use, presenting challenges for other sectors such as agriculture.” This concern is especially relevant for Missouri, as agriculture, forestry, and related industries are among Missouri’s top industries and constitute 10 percent of the state’s employment. Missouri is one of the top states in the country for farm operations, soybean production, and beef cattle production, with farmland constituting two-thirds of state land area.

Missourians should be wary of green energy mandates that require massive land use. Shouldn’t land use  be driven by fair competition and markets, not government mandates?

The post Is This Town Big Enough for the Two of Us? appeared first on Show-Me Institute.

Businessman John Wannamaker famously quipped, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” The same may be true for Kansas City’s economic development incentives, but when the City Council sought to study their effectiveness, the folks who benefit from the current system had their own ideas.

Kansas City leaders have been enriching politically connected private developers through a seeming endless stream of taxpayer incentives. Politicians and developers alike claim the subsidies are necessary to revitalize downtown Kansas City. This is debatable. Though taxpayers have subsidized new restaurants and bars, data from the city’s Regulated Industries Division indicate that the number of liquor licenses and health cards has been flat citywide. Subsidies didn’t create businesses or jobs, they merely moved them. And thanks to generous incentive deals, they moved to areas where they don’t contribute to the tax base.

Likewise, the city has given generous subsidies to companies to build their headquarters here; this includes H&R Block, which, rather than actually adding jobs just moved them from elsewhere in the region. Kansas Citians recently learned the subsidies to hotels are so big and numerous that the market is overbuilt—causing the city’s convention and visitor’s bureau to fret that hotel room rates may crash! Meanwhile, all these subsidies direct money away from a school district in which 90 percent of children qualified to receive free or reduced-price meals.

Worse, none of these subsidies appear to be helping Kansas City’s economy. A recent report from the Brookings Institution ranked Kansas City 78th out of the top 100 metropolitan areas in economic growth—a score that is likely padded by the growth of Johnson County, Kansas.

In the face of public unrest over Kansas City’s subsidy culture, the city council called for a study of incentives and their impact. As reported in the Star, the city awarded the study contract to a trade group sponsored by developers and their lawyers. The resulting study, if one wants to use that term, contained so many methodological lapses that a reader could be forgiven for thinking they were intentional. When the report was presented to the council, it was clear that it did not deliver on its basic purpose: helping policymakers adopt better policy.

From my own investigation into the study process—using the open records law to examine the proposal and bids received, draft reports, and emails—it is clear that the incentive report relied greatly on individuals and organizations with interests in maintaining the current system. One email from a development financier made explicit that the study needed to politically protect the subsidies against the interference of “citizen petitioners.” That note was dutifully passed on from the head of the organization that vets subsidy applications, to the city employee overseeing the study, to the vendor writing it. And when the Greater Kansas City Chamber of Commerce drafted a statement opposing an effort by those same “citizen petitioners” to cap tax-increment financing incentives, they cited the study’s findings. The report seems to have accomplished its mission.

The way this study was undertaken should outrage everyone in Kansas City, especially the councilmembers who called for it to be written. The council should retract the study, investigate how it was conducted, and act swiftly to hold individuals and organizations accountable. A new, independent study is needed.

Moreover, the system by which Kansas City awards such subsidies is in need of overhaul. Taxpayer funds should be protected against self-interested developers, attorneys, and consultants, as well as the organizations they fund. Taxpayers have sacrificed too much—and seen too little return—for mere half measures.

The post KC’s economic development study parroted exactly what the city wanted appeared first on Show-Me Institute.

The Kansas City metro area, despite all the talk about innovation and tech jobs, scored 81^st in percentage change in jobs at young firms—one of the worst performances in the United States.

Missouri’s top cities spend hundreds of millions of dollars on incentives and subsidies each year in an effort to improve the economy. Exactly what have we gotten in return for all this spending?

Report after report details exactly how St. Louis and Kansas City have given away such a huge amount in incentives. We’ve rebuilt downtown Kansas City, yet haven’t grown or created jobs in any meaningful way. In fact, it appears we’ve actually overbuilt Kansas City. The population of St. Louis is actually shrinking despite all the investment.

Any reasonable person would look at this and conclude that while these incentives and subsidies may make wealthy developers wealthier, they aren’t actually creating very many jobs or doing much to increase investment. That is certainly what the research says.

So why are we still doing it?

The post Missouri’s Municipal Failure appeared first on Show-Me Institute.

As this pithily-titled piece from the Brookings Institution argues, moving elections on-cycle will both drive up turnout and minimize the effect of organized interest groups. As the author writes:

By exploiting the occasional episode in which a change in state law forced localities to move their elections “on cycle,” [UC Berkeley Political Scientist Sarah] Anzia is able to provide some pretty rigorous causal evidence that off-cycle elections decrease voter turnout and equip organized interests (e.g. teachers unions) to obtain more favorable policy outcomes. Anzia’s findings mesh nicely with other work done by University of Pennsylvania Political Scientist, Marc Meredith, who found that when school boards are given the authority to choose election dates for raising revenue (e.g. bond elections) boards will “manipulate” the timing of elections in predictable ways to ensure an electorate that is most favorable to increased school spending.

That is why I was so surprised when the Missouri School Boards Association announced that it “strongly opposed” the bill. Why would that be? Why would the organization that represents school boards want to drive down turnout in the elections that elect them? I guess they’ll have to answer that one.

A common argument for keeping elections off-cycle is that it somehow keeps politics out of education. That is simply wrong. Schools are a huge state and municipal expenditure and are tasked with imparting skills and knowledge onto the next generation of citizens. Every day, we hand over our state’s most precious resource, its children, to schools. We live in a diverse state where different people have different views about what that education should look like. Any system that we devise to try and manage that will be political.

If education is going to be political, the best thing that we can do is try and make sure that as many of our fellow citizens as possible have the opportunity to make their views known. Moving elections on-cycle allows that to happen.

The post Moving School Board Elections On-Cycle is Good for Democracy appeared first on Show-Me Institute.

The US Department of Health and Human Services (HHS) launched the Head Start program in 1965. It was expanded in 1981 and now has a $9 billion budget. Operated in Kansas City since 2005 by MARC, the program works to provide:

Comprehensive, high-quality birth-through-five early education services that facilitate healthy development including physical and social/emotional development and prepare children for school success.

Is it working? No. According to HHS’s own 2012 report, “after the initially realized cognitive benefits for the Head Start children, these gains were quickly made up by children in the non-Head Start group.” The report indicates this finding is similar to other studies published between 1995 and 2010. 

A 2013 story in The Washington Post is a pretty even-handed write up of the value of pre-K. The author points out that extrapolating findings from the HighScope Perry study (an influential pre-k study of a small group of children in Michigan) to larger populations like Kansas City’s is highly questionable. In discussing the fade out of any initial Head Start benefit, the author wrote:

Some Head Start supporters, like Danielle Ewen, formerly of the Center for Law and Social Policy (CLASP), argue that this says more about K-12, and that what’s likely happening is that poor quality public schools are actually reversing Head Start’s gains.

If this is the case, children in the Kansas City Public School District can expect to see no long-term benefit whatsoever. Russ Whitehurst of the Brookings Institution points not only to research on Head Start, but to large scale pre-K programs such as the Tennessee Voluntary Pre-K (TVPK) program. In those follow-up studies, children in the control group soon outperformed those who received the preschool benefit.

Using the state test data and the full randomized sample, the evaluators report negative impacts for reading, math, and science scores at the end of third grade for children assigned to TVPK. The negative impacts on math and science are statistically significant and substantive: children randomly assigned as preschoolers to TVPK had lost ground to their peers who had randomly not been offered admission to the pre-K program.

Whitehurst revisits this in a 2018 paper in which he writes:

Unabashed enthusiasts for increased investments in state pre-K need to confront the evidence that it does not enhance student achievement meaningfully, if at all. It may, of course, have positive impacts on other outcomes, although these have not yet been demonstrated. It is time for policymakers and advocates to consider and test potentially more powerful forms of investment in better futures for children.

As we wrote in a previous post, policymakers in Kansas City may not be interested in confronting such evidence. This is especially true of Whitehurst’s observation that direct aid to families, such as the earned income tax credit (EITC), “produced substantially larger gains in children’s school achievement per dollar of expenditure than a year of preschool, participation in Head Start, or class size reduction in the early grades.” 

Designing public policy is not easy. Neither is delivering effective education on a large scale. But we need to rise to the challenge of both. As it stands, the proposal of pre-K in Kansas City is unlikely to lead to significant long-term benefits for the children involved, especially if they matriculate into underperforming K-12 schools. A program with questionable efficacy that taxes the very low-income families it is meant to help seems, on balance, to make this plan more harm than help.

The post Pre-K in Kansas City Likely Won’t Deliver on Its Promises appeared first on Show-Me Institute.

On Tuesday, March 12, I appeared as a panelist on an American Public Square discussion titled “Pre-K for All?“ about the upcoming April ballot measure. Proponents of pre-K point to a single, small-scale study of a specific pre-K program conducted from 1962 to 1967. The study, called HighScope Perry, did show a positive relationship between participation in the program and educational and financial success. However, the program that was studied was intensive, expensive, and only included 123 children. While the Mayor and Mid America Regional Council (MARC) specifically cites the HighScope Perry study, the plan they endorse for Kansas City is nothing like what was done there.

Russ Whitehurst of the Brookings Institution has written at length about the failure of larger-scale pre-K programs such as Head Start and the Tennessee Voluntary Pre-K Program to generate impressive results. We’ll discuss that research more in future blog posts. But in a survey of the research on various school-readiness interventions, Whitehurst pointed out that direct aid to families, such as the earned income tax credit (EITC), “produced substantially larger gains in children’s school achievement per dollar of expenditure than a year of preschool, participation in Head Start, or class size reduction in the early grades.” That is a fascinating bit of information and should be of interest to anyone who is serious about helping low-income children.

During the panel discussion I offered, “You could do more for poor families in Kansas City by removing the sales tax on food and by exempting, say, the first $26,000 of earnings from the earnings tax. You can do more by aiding families—giving them more money in their pocket—than you can by taxing them and providing a program.”

But Mayor James was not having it. He responded, “There’s no way that you can tell me, regardless of what study you may cite,” that by reducing taxes on the poor that they, “are going to use the money to educate their children.” And maybe they won’t, but the data Whitehurst cites don’t specify how families spend the extra money. EITC funds are not earmarked, yet this direct support to low-income families still outperformed pre-K according to Whitehurst’s research.

Perhaps what low-income families need is not to have more money taken away from them in order to provide them more services. Perhaps what they need is more money, more flexibility, more agency to address their own challenges as they see fit. Perhaps telling poor people that government knows best how to spend their money and educate their children isn’t the best way to solve problems. The research (at least if we go beyond a specific study that seems cherry-picked to support a rosy view of Pre-K programs) seems to suggest this, if only policymakers will listen.

The post Pre-K Supporters Dismiss Research on Efficacy of Pre-K appeared first on Show-Me Institute.

The author of the Brookings Institution study referenced above does not know about Kansas City proper, or more specifically about downtown Kansas City. The Downtown Council itself apparently can’t provide worthwhile numbers either. Trying to piece together the data requires investing a lot of time and resources going through Census data at the county level. Until someone does that in 2019, we can rely on a 2016 paper for the Show-Me Institute by Wendell Cox, “Kansas City—Genuinely World Class.”

In Figure 3 on page 6, Cox offers us the chart at the top of this post. As you can see, populations have not grown in the urban parts of the Kansas City but rather in the areas outside the city proper. In fact, the urban and near-in suburbs are shrinking. This is expected to continue. Cox writes:

According to the Mid-America Regional Council, population growth will continue to be concentrated in the suburban counties. Between 2010 and 2040, it is projected that approximately 45 percent of the population growth will be in Johnson County, which will make up the bulk of the 55 percent of metropolitan area growth that is projected to occur in the Kansas suburbs. The Missouri counties are projected to constitute 45 percent of the metropolitan area growth, with Cass County accounting for 18 percent and Jackson County for 11 percent (Figure 4).

Lots of organizations spend a lot of money trying to attract people and jobs to Kansas City. All them have an incentive to show that all that money—in many cases tax dollars—is well spent so that their budgets will be expanded. Successes seem rare and the data aren’t promising. But if city leaders are serious about attracting residents and jobs, we need to have a serious conversation about what is working and what is not.

The post Follow-up on Kansas City Population Trends 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.

The State of the Heartland Factbook 2018, a joint effort by the Walton Family Foundation and the Brookings Institution, uses 26 different socioeconomic measures to detail the performance of the 19 states that compose America’s Heartland. This data is compiled into the full report, and is accompanied by an interesting interactive database.

This new information makes it easy to compare Missouri to the other states in our region. However, the comparison is hardly flattering. The two best examples of Missouri’s stagnation are the change over time in Gross Domestic Product (GDP), which is the total value of everything produced by the people and companies of the state, and standard of living. Measuring the change in GDP from 2010 to 2016, Missouri only grew faster than two nearby states (Mississippi and Louisiana), averaging a 0.8 percent compound annual growth rate (CAGR). Most of the other states had a CAGR of over 1.0 percent.

Standard of living (which the authors measure as GDP per capita) showed practically identical results, with Missouri once again coming in third from the bottom (again ahead of only Mississippi and Louisiana). While Missouri showed a positive CAGR of 0.5 percent in standard of living, the majority of the states where data was reported averaged at least a 1.0 percent CAGR from 2010 to 2016.

The story was the same with regard to wage growth. Missouri held its popular position of third from the bottom, a CAGR of 0.4 percent from 2010 to 2016.

Clearly, there is work to be done in Missouri if we want to climb to a position where we are competitive with the states surrounding us. Policy initiatives that spur economic growth will be key in helping turn the Show-Me state into a better place to work and live.

The post Are Missouri’s Neighbors Passing It By? appeared first on Show-Me Institute.

Sixteen districts responded with contracts showing superintendent salaries ranging from $125,000 to $294,000 per year. We also looked at an evaluation of those same school districts from the Stanford Center for Education Policy Analysis (CEPA), which measured the performance of 3rd-grade students in 2009 and then, five years later in 2014, measured the performance of the students in 8th-grade. The object of the CEPA study was to determine if students experienced a full five years of academic growth in five calendar years.

The table below shows superintendent salaries from 2011 to 2014 and student performance growth from 2009 to 2014 for each school district that responded to our sunshine request.

The average academic growth between 3rd grade and 8th grade in these 16 districts is 4.7 years. Only three districts had five or more years of growth over the five-year period studied—Fort Zumwalt, Parkway, and Wentzville.

Because the time covered in the Stanford study (2009–2014) doesn’t align exactly with the superintendent salary information (which only goes back to 2011), we can’t make a perfect comparison of the salaries against performance. But based on the four years for which we have both sets of data, it’s difficult to see a direct connection between the two. Of the three districts with more than five years of growth in the table above, only Parkway paid its superintendent above the average rate from 2011 to 2014.

In fact, evidence of any connection between superintendents and student performance is hard to come by. One Brookings Institute study looked at the effect of superintendent turnover on student performance in North Carolina and Florida schools. It failed to find a significant connection. Nor did the study find a relationship between student performance and superintendent longevity.

Such studies make it appropriate to question why superintendent salaries are so high. There are certainly plenty of reasons why people think they should be high. Superintendents are like the CEOs of the school district. They oversee the management and budget of all the schools in the district. Perhaps most importantly, they hire principals and other administrators in the district, who in turn hire the teachers.

But with little evidence that superintendents are making a significant difference in student performance, it’s reasonable to ask why districts are paying them so much. The people in the school hierarchy who have the most effect on student achievement are teachers—and at an average salary of around $53,000, they earn around one-fourth of what superintendents earn. That’s not even considering the school pension system, which definitely favors the higher paid. All of which takes us back to a question that James Shuls raised in an April blog post: Is this really where we want to spend our money?

The post On Superintendents and Their Districts appeared first on Show-Me Institute.

But one of the most attention-getting findings contained in a newly released report from the Brookings Institution titled “How Trump’s Steel and Aluminum Tariffs Could Affect State Economies“ might cause you to think otherwise.

As the Brookings report points out, Missouri’s imports of steel and aluminum amount to $1.4 billion, or 7.4 percent of our state’s total imports. By that measure, Missouri’s exposure to tariff-driven increases in the price of those two commodities is the highest of any state in the country. But how meaningful is that metric?

Joseph Haslag, chief economist for the Show-Me Institute, points out that the metric is misleading for a couple of reasons. One is the presence of a large automotive sector in our state, and the other is the simple fact that Missouri is just not a large importing state.

A better measure, therefore, is to look at Missouri’s exposure relative to our state’s total output of goods and service—its gross domestic product. By that measure, Missouri falls from the state that is “most exposed” to steel and aluminum purchases to the 8th most exposed state—still not anything to be happy about.

At both the state and national levels, agriculture is one sector of the economy that is likely to suffer. As Blake Hurst, president of the Missouri Farm Bureau, told me, “Farmers are going to be hit two ways—having to pay more for tractors, combines, and other equipment made from steel and aluminum, and also having to deal with the possible loss of foreign markets due to retaliatory tariffs on U.S. agricultural exports.”

 Watch this space for further information on how changes in tariffs and trade agreements are likely to affect Missourians.

The post How Would Missouri Fare in a Global Trade War? appeared first on Show-Me Institute.

The WDAF story goes on to point out:

The city has “banned the box” since 2013 and said it’s been a big success. Employers can still do background checks, which could prevent someone from getting hired. But getting rid of the check box can help eliminate the stigma [that would] prevent qualified candidates from getting hired just because of their criminal history.

That is certainly a noble goal. But research from respected universities and public policy organizations casts doubt on the effort’s effectiveness. According to The Atlantic magazine,

. . . banning the box may actually be hurting some of the exact groups of people it was designed to help, according to a few new studies. In a recent paper from the National Bureau of Economic Research, Jennifer L. Doleac of the University of Virginia’s Frank Batten School of Leadership and Public Policy and Benjamin Hansen of the University of Oregon looked at how the implementation of ban-the-box policies affected the probability of employment for young, low-skilled, black and Hispanic men. They found that ban-the-box policies decreased the probability of being employed by 5.1 percent for young, low-skilled black men, and 2.9 percent for young, low-skilled Hispanic men.

The left-leaning Brookings Institution found the same, detailing what happens when the felony conviction disclosure is removed:

Employers are forced to use other information that is even less perfect to guess who has a criminal record. The likelihood of having a criminal record varies substantially with demographic characteristics like race and gender. Specifically, black and Hispanic men are more likely than others to have been convicted of a crime: the most recent data suggest that a black man born in 2001 has a 32% chance of serving time in prison at some point during his lifetime, compared with 17% for Hispanic men and just 6% for white men. Employers will guess that black and Hispanic men are more likely to have been in prison, and therefore less likely to be job-ready.

In short, ban-the-box policies are likely hurting minorities.  Hiring discrimination is a thorny problem, but not all such problems have easy or obvious solutions. If your proposed solution is hurting the people it is intended to help, it’s probably time to think about a new approach.

The post Does Banning the Box Work? appeared first on Show-Me Institute.

One key finding is the difference between where most children attend school and their parents’ preferred type of school:

The vast majority of small town/rural residents taking our survey have had children in public district schools for at least one school year (87%), while much smaller proportions said the same of private schools (15%), homeschooling (11%), and charter schools (8%).

The table below shows the preferences of rural parents (and, for context, all parents) regarding the kind of schools they would like their children to attend:

Like parents in the rest of the nation, small-town/rural parents chose private school as their first option most often; interestingly, a larger proportion of these parents also chose homeschooling as their first option as compared to urban or suburban parents. 

It is no wonder, then, that small-town/rural parents are overwhelmingly in support of education savings accounts (ESAs) at 74 percent responding favorably. ESAs are publicly funded accounts that are controlled by parents so they access a variety of approved educational services for their children. Depending on a child’s needs, parents can use the ESA to pay for things like private school tuition, online learning programs, or different types of therapy. Because the money in an ESA can be used essentially like a debit card, it allows parents to tailor their child’s education. Compared to other school choice programs like vouchers and charter schools—which were still popular—ESAs were the favorite. 

The survey should help correct the perception that school-choice policies would mostly benefit urban students. In fact, a study from the Brookings Institute found that 73 percent of students in Missouri live within five miles of one or more private schools. In many cases, distance is not the primary obstacle keeping rural students from private schools.

ESAs would allow families to customize their children’s education. That could mean sending kids to a private school, purchasing supplies for homeschooling, or getting tutoring help for a child with special needs. As more and more evidence suggests that school choice—particularly ESAs—resonates with a majority of parents no matter where they live, shouldn’t we shape our education policy accordingly?

The post What Rural Parents Want appeared first on Show-Me Institute.

While many of the existing private schools are located in St. Louis City, St. Louis County, and Jackson County, there are many throughout the state. Last year researchers at the Brookings Institution calculated that 73 percent of Missouri students have a private school within five miles of them, while just 65 percent have another public school within their district and 54 percent have a public school outside their district that is within five miles. The point here is that a private school choice program could expand educational options for students throughout the state, possibly more than any intra-or inter-district choice program could. This session, Missouri lawmakers will consider such a program.

Empowerment Scholarship Accounts, or education savings accounts (ESAs) as they are often called, enable students to receive support to attend the school of their choice. Unlike a voucher, which sends state funds directly to a private school, an ESA is like a debit card. The student and her parents can use the card to purchase school supplies, pay for tutoring, or even to pay for private school tuition. An ESA program currently under consideration in Missouri would be funded by tax-deductible donations made by individuals or businesses. While the donor receives a credit towards his or her taxes, Missouri students receive much more—opportunity. In essays for the Show-Me Institute, I’ve written about how these programs function and how they could save the state a significant amount of money.

Currently, 18 states have scholarship tax credit programs and 6 have ESA programs. By passing an ESA program, lawmakers can tap into the wonderful resource we have throughout the state—private schools. They can equip parents to take ownership of their children’s education and allow them to decide where their children will be educated. And, importantly, an ESA program can generate savings for the state.

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There are some great NFL press conference moments. Jim Mora’s incredulous “Playoffs? Playoffs? I hope we can just win a game.” Herman Edwards’ punctuated “You play. To win. The game.” Mike Ditka’s forlorn “If I was fired, I’d quit right now.”

But perhaps the most emotional press conference moment came from Arizona Cardinal’s coach Dennis Green, who, after losing a game to the Chicago Bears, angrily pounded the press conference podium and shouted “They are who we thought they were, and we let them off the hook!”

I was reminded of this exhortation last week when NCES released the results of the 2015–16 Private School Universe Survey, an exhaustive analysis of the landscape of private schooling across America. I spend a lot of time in Missouri and across the country talking about private school choice programs, and hearing people’s opinions about private schools and their potential as options for children. Based on people’s perceptions, I’d like to invert Dennis Green’s shouts and say that private schools aren’t what you think they are.

When they hear the words “private schools,” many people think about toney suburban campuses speckled with lacrosse fields and tennis courts. Others think about single-sex Catholic schools run by the Christian Brothers or Sisters of St. Joseph.

Neither of these images is fully representative of the diverse set of private schools in our nation today. So what do we know about private schooling in America today?

The 34,576 private elementary and secondary schools are, on average, quite small. The average enrollment was only 142 students across all schools, 100 students in elementary schools and 263 students in high school. Forty-six percent of private schools enrolled fewer than 50 students.

Single-sex schools are extremely rare. Only 4 percent of private schools in America were single-sex, evenly split between 2 percent all girls and 2 percent all boys.

Catholic schools only make up 20.3 percent of all private schools, though it should be noted that they enroll 38.8 percent of all students. A full 32.7 percent of private schools are nonreligious.

Perhaps surprisingly (though not as surprising if you read this great Brookings Institution paper on the geography of school options across the country), 30.2 percent of private schools were located in rural areas or in small towns.

As to racial demographics, private schools do differ from traditional public schools in meaningful ways. While public schools are roughly 50% white, 16% Black, 25% Hispanic, and 9% all other races, private schools are 69% white, 9% Black, 10% Hispanic, and 12% all other races.

One last data point worth mentioning; private school enrollment is on a serious decline. In just 15 years, it has dropped from 6.3 million children (in 2001–12) to just 4.9 million (in 2015–16).

I’d offer three short reflections.

1.It’s time we update our understanding of what private schools looks like. There is an incredible amount of variation within private schools. On average, they are small, more likely to be religious, and are probably located within a city or suburb. But that’s about all we can say. If you have a mental picture of what a private school looks like and assume they all look like that, you’re probably guessing wrong.

2.School choice risks being too little, too late. As I have argued for years, private schools, and particularly the urban Catholic schools that have a proud tradition of serving low-income and minority students, are closing by the hundreds. School choice is a way to stanch the bleeding—but without a greater sense of urgency, there will be no schools left for children to choose. We cannot be surprised to see private schools serving fewer and fewer minority children when all of the schools that have served them in the past are closing.

3.Private schools should do a better job of reaching out to minority communities. If private schools want to grow, reaching out to growing populations is the way to make it happen. I’m heartened by efforts like Notre Dame’s Task Force on the Participation of Latino Children and Families in Catholic Schools, but we need many more organizations working to connect minority children to educational opportunities in private schools. School choice is also an indispensable part of this effort, as it is perhaps the only tool that can help bridge the gap between what people can afford and where they can go to school.

Private schools are not a monolith. They are a part of the diverse landscape of education in America, and their decline should trouble all of us.

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The only problem with that interpretation is that it isn’t true.

So says a new report from the Brookings Institution that analyzes the percentage of students in each state who might reasonably benefit from a school choice program. For their analysis, the authors of the study map out where students live relative to schools and report the percentage of students with one or more school options (traditional public, public charter, or private school) within a five-mile and ten-mile radius.  

The authors found that 73 percent of Missouri students have one or more private schools within five miles of where they live. The authors argue that these students could potentially benefit from a private school choice program. By contrast, only 65 percent of students have multiple options operated by their district within five miles (and thus could benefit from an intra-district choice program) and only 54 percent of students have non-district options within that radius (and could thus benefit from an inter-district program.)

As we think about the students in Normandy and Riverview Gardens who ride buses more than 30 miles as part of the inter-district transfer program, it is easy to see how a private option would allow these students to remain closer to home during the school day.

But it’s not just there that school choice can help. As the cold hard numbers tell us, there are many more students within reasonable reach of private schools than most people think. These options should not be dismissed out of hand.

Private school choice programs may not provide choices to all students, but they will expand options for a great many. From a policy standpoint and from a moral standpoint, they are worth exploring. 

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Hathaway and Litan found that the more population growth an area experiences, the more likely the area is to see startup activity. Tax migration flows show that Missouri has seen a net outflow of people since 2011, driven by larger outflows from Kansas City and Saint Louis. While it is still possible for Missouri, Kansas City, and Saint Louis to grow in entrepreneurial activity despite a net migration loss, Hathaway and Litan find that those areas with fast and positive migration have more entrepreneurial activity. Unfortunately, that migration isn't really happening in the Show-Me State.

The business consolidation rate that Hathaway and Litan use is calculated by dividing the number of firms (e.g., Home Depot) by the number of establishments (individual Home Depot stores) within an area. Business consolidation can be a good indicator of business cost pressures, because as the costs of maintaining a firm’s establishments increase, business owners may decide to close or consolidate establishments. Therefore, a falling business consolidation ratio (i.e., each firm operates more establishments) indicates that overall, firms are expanding. On the other hand, a rising ratio indicates that firms are contracting their business operations.

The business consolidation ratio for older firms in Missouri seems to be declining over time, which may suggest that, on aggregate, these businesses are able to manage their costs of doing business and are expanding. For startups, however, business consolidation has remained flat, suggesting cost pressures may continue to be a problem for these new or relatively new companies. The chart below captures these trends.

Remember: the downward slope of a line is a good thing, and reflects better conditions for a firm’s expansion. Policymakers should take a closer look into the startup environment, because review of Missouri, Kansas City, and Saint Louis shows that startups aren’t doing nearly as well as older and more established firms in terms of expansion. Over the last 10 years or so, the gap between established firms and startups has grown without pause.

How can Missouri policy help foster an environment in which entrepreneurs not only want to operate here, but also enjoy enough success that they are able to expand their operations? My first post in this series outlined how Kansas City businesses are enticed to move to lower-tax environments, indicating that tax policy might be a good place for policymakers to start. In addition, with Missouri ranked 29th in least-burdensome regulations for startups, (see page 49)., regulatory reform is another area where improvement would be welcome. 

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