I will admit that calling for the privatization of the United States Postal Service (USPS) by free-market, limited-government policy people like me is hardly new. It’s a pretty standard viewpoint for people in positions like mine, sort of the libertarian equivalent of progressives calling for the government to fully fund public schools. But having said that, it really is time to privatize the post office.

In 1934, a federal law was passed that banned any entity except the USPS from placing items in any mailbox. That is the law that limited UPS and, later, FedEx, to parcel delivery. Even your neighbor is not allowed to put that party invitation in your mailbox. (If you are the type of person who reports neighbors who do so to the USPS, you probably don’t receive many party invitations in the first place.)

Until recently, the best defense of the post office monopoly was that, in all honesty, it worked fairly well. Sure, it was a monopoly that somehow managed to lose money each year, but at least the post office did a good job at its primary job of delivering the mail. You put a stamp on a piece of mail and it was delivered the next day if it was going nearby; two days later if it was going a little further; and three days if it was going a long distance. Big-picture concerns about USPS finances could be overlooked because stamps were cheap and the mail reliably went where it was supposed to go. That is, unfortunately, no longer the case.

A recent report on the post office by federal inspectors general found that, on average, on-time delivery of first-class mail has dropped 16 percent over the past year in the exact areas the post office has targeted for improvements. In St. Louis, over just two days in June at the downtown mail processing center, 2.6 million pieces of mail were delayed. There was no weather or mechanical reason for the delays, just bad operational management. Worst of all, sending mail in St. Louis puts your personal finances at risk. There have been multiple federal court convictions in the past year of St. Louis-area postal workers for stealing checks from the mail. The author knows two people who have had their identity stolen and finances ruined in this manner.

If the post office is no longer doing its main job well but is continuing to lose money, the entire system should be opened to competition. I’m well aware that FedEx won’t deliver a Christmas card for 78 cents (the current USPS rate), but if someone wants to pay more to make sure their Christmas card reaches Grandma before Christmas Day, why shouldn’t they be able to? UPS and FedEx should absolutely have a right to deliver first-class mail and place it into a mailbox where it will be better protected from rain and theft. (A reminder that you buy your own mailbox—the government doesn’t give it to you.)

USPS has long had a less-promoted role as a jobs program for political supporters and interest groups. When he was serving as a presidential advisor in the 1960s, former U.S. Senator Patrick Moynihan famously recommended changing to twice-a-day mail delivery, for the sole reason that it would allow the federal government to double the number of mail carriers.

It seems that, at present, the purpose of USPS is to deliver mostly junk mail in order to fund over $400 billion in postal-retiree pension and healthcare costs. Maintaining a failing monopoly to benefit those retirees may be politically popular, but it’s hardly good public policy. As the use of mail continues to decline, hard choices have to be made. Rural post offices shouldn’t be kept open just to appease rural interest groups, and urban post offices shouldn’t be protected against competition just to appease federal employee unions.

I would favor an attempt to sell the entire post office off to private operators. In 2025, the mail is no longer a necessary function of government (I will agree that it used to be). However, simply allowing other operators to compete against USPS by removing the mailbox monopoly would be a great step, too. You get to choose which phone, television, and internet services you use. You should have choice for your mail delivery, too.

The post Let’s Privatize the Post Office appeared first on Show-Me Institute.

In July 2010, Missouri politicians joined the state’s economic development agency to announce the awarding of $17 million in state tax incentives, along with $39 million in local tax subsidies, to the Mamtek project in Moberly. The project called for making artificial sweetener using a process that would start in China and finish at a new plant in Moberly, creating 600 local jobs here. There was just one problem—it was all a scam.

It may seem unfair of me to criticize a government agency for falling victim to a criminal conspiracy, albeit one that really wasn’t that sophisticated, but government economic development agencies are a Catch-22 for taxpayers. When they do a bad job—as they did in Mamtek—they waste our tax money. As with the Bass Pro Shop in Independence and the Jamestown Development near Springfield, we can list plenty of private business projects government had no reason to get involved in but did to the detriment of taxpayers. But we can only wish they always did a bad job. It’s when they do their jobs right that taxpayers and average citizens really get burned.

When economic development officials do their jobs right, all they are really doing is subsidizing economic activity that likely would have happened anyway for the benefit of politically connected companies. As the old joke goes, economic development officials are great at creating jobs for other economic development officials. For everyone else, not so much. For all their skillful use of political buzzwords and claiming credit when none is deserved, it remains true that “government is a bad venture capitalist,” to quote President Obama’s economic advisor, Larry Summers. Summers was being polite. Government, in the form of local, state, and federal economic development agencies, is a terrible venture capitalist. It’s not that government officials don’t get their bets right often enough; it’s that they actively get them wrong because economic development officials are heavily influenced by the political incentives to reward supporters of the politicians who employ them. A short-term political payoff is more important than long-term success.

Late to the subsidy game but catching up fast, Springfield—having seen how St. Louis and Kansas City have operated their own subsidies and failed by every measure—has decided to follow in their footsteps. The trucking industry has long been important in Southwest Missouri, and there are numerous companies, stations, and stores in Springfield to service the various fleets. But not enough for the City of Springfield’s Department of Economic Vitality (that’s its actual name), which decided to use over $4 million in taxpayer funds (along with other subsidies) to entice an enormous new gas station company, Buc-ee’s, to locate in town.

The head of another local convenience store company, Rapid Robert’s, rightfully took issue with the plan. He didn’t object to the competition, but rather the use of tax subsidies in a field full of local companies that had grown without them. His objections fell on deaf ears, and likely would have been meaningless to the members of the city’s “economic vitality” department. They, like economic development officials everywhere, care nothing about history, propriety, or capitalist theory. They care about getting the forms marked up, the tax money spent, and the deal done so that they can claim credit, add it to their resume, and start searching for the next job.

Economist Dick Netzer mocked the exaggerated claims of success made by economic development officials when he wrote, “Who needs oil wells, when a state can be another Kuwait just by increasing the budget of a tiny agency?” Claims of subsidy successes often border on the absurd. The author once heard a Clay County economic development official claim that “All of the growth” in the town of Liberty—a fast growing, exurban community north of Kansas City, the likes of which have been growing across the nation for decades—was due to a tax-increment financing (TIF) package they passed. As if suburbanization hadn’t existed until Missouri’s TIF law was passed in the late 1980s.

Economists Alan Peters and Peter Fisher studied tax incentives closely and concluded that they work about 10 percent of the time and are simply a waste of money the other 90 percent. They added that, like the Clay County officials mentioned above, economic development officials often credit all new employment and growth to tax subsidies.

As Christmas approaches, Springfield residents could get no better Christmas gift than the elimination of state and local economic development agencies. They are a blight on capitalism and an actively harmful influence on the civic and economic life of our state.

The post Springfield Should Eliminate Its Economic Development Agencies appeared first on Show-Me Institute.

DESE released tables for each district that show, on the left side, the spending per student in each school building and, on the right side, the district-wide spending per student on the district’s central office. Both sides should raise a number of questions.

For an example on the left (school-building) side, consider Columbia. Two schools—Midway Heights Elementary and John Ridgeway Elementary—look very similar:

• Midway Heights has 212 students (84 percent White, 24 percent qualifying for free or reduced-price lunch) and John Ridgeway has 234 students (74 percent White, 13 percent qualifying for free or reduced-price lunch).
•  Each spent about $2 million in 2018–19 at the building level (before central office costs)
• But at Midway Heights, 72 percent of the students scored at grade level in English/Language Arts (ELA) in 2018-19, compared to 57 percent at John Ridgeway. In math, the numbers were 82 percent for Midway Heights and 59 percent at John Ridgeway.

So what’s going on? I don’t know, but we now have the data to ask the question. One school seems to be getting a higher return on investment, and it’s worthwhile to figure out why.

Now let’s look at the right (district-office) side for two school districts of similar size—Brentwood (755 students) and Marionville R-IX (757 students).

• Marionville has four schools and Brentwood has three.
• Brentwood spends $5,100 per student—nearly 30 percent of their total expenditures—for their central office. Marionville, on the other hand, spent just $1,900 per student (about 20 percent of their total) on their central office. For the record, Marionville has more than twice the number of low-income students than Brentwood.
• Yet, just like their size and unlike their spending, their test results are fairly similar. At both middle schools, 58 percent of students scored on grade level in ELA in 2018-19. Brentwood High School did better than Marionville’s, but Marionville still scored well above the state average.

Why do some schools have much higher test scores for the same investment and similar students? Why do some districts have nearly triple the central office costs of others of similar size? There are so many questions raised by these data. I look forward to digging in more, and I hope that local stakeholders across the state will do so as well.

The post The data are here! The data are here! appeared first on Show-Me Institute.

Typically, a gift doesn’t require a contribution from the person on the receiving end. But St. Louis taxpayers are ponying up for nearly half the cost of the aquarium, as described in a St. Louis Post Dispatch article:

[Twenty] million of the St. Louis Aquarium’s construction costs will come from an existing tax-increment financing agreement and two special tax districts that carry a 1 percent tax on sales at Union Station. Included is LHM’s intent to use $5 million in historic preservation tax credits to help restore the 11-acre shed.

Show-Me Institute analysts have spent years documenting the failures and abuses of tax-increment financing (TIF), special taxing districts, and historic preservation tax credits. These programs take public dollars and shift investment risk to taxpayers, while allowing private investors to reap the benefits.

If the aquarium is a good idea, why aren’t there private investors lining up to fund the project?

Maybe it’s because aquariums are a pretty risky bet financially. A recent article in The Atlantic outlined the financial struggles of aquariums in big cities across the United States:

The stress of acquisition and maintenance often leads to financial struggle . . . In this century, the Denver aquarium, which opened to much fanfare in 1999, declared bankruptcy in 2002 because of defaults on building loans. (It was purchased by Landry’s, a hospitality company, and reopened in 2003.) More recently, the newly opened Shreveport Aquarium has struggled with almost $500,000 in unpaid construction debt. Many of these spaces are subsidized by tax breaks and bonds, to be paid back when an aquarium becomes profitable. But too often, this goal is not realized. As economic-development projects, aquariums are risky.

The South County Times reports that the St. Louis Aquarium expects 1.5 to 2 million visitors per year. That seems like a curiously optimistic projection. The Shedd Aquarium in Chicago gets just over 2 million visitors per year, and it has 5 million gallons in total volume for tanks and exhibits; the St. Louis Aquarium will have just 1.3 million total gallons.

It’s not clear why planners project the St. Louis Aquarium to nearly the match the Shedd Aquarium in total attendance with a much smaller aquarium in a much smaller city. But if visitor numbers don’t match expectations and revenue lags as a result, (the aquarium is not free; a ticket price of around $24 is expected for adults) will taxpayers be asked to chip in again to cover the shortfall?

If all of this sounds familiar, it should. In 1985, Union Station was renovated in a massive $150 million project that included generous tax breaks. And what was the city left with? A mall in Union Station that was largely abandoned after barely more than 20 years. And thus the cycle begins anew: The mall was sold, was bought by a new developer, and is being renovated with the help of taxpayer dollars.

We all want what’s best for St. Louis, and it’s exciting to see big new projects generate enthusiasm. But the definition of insanity is doing the same thing over and over again and expecting different results. That seems to perfectly describe economic development policy in St. Louis.

The post Aquarium Project Repeats Familiar Mistakes appeared first on Show-Me Institute.

We’ve built a new entertainment district along with several luxury apartment high-rises, corporate headquarters buildings, and hotels—including an 800-room convention hotel. We’re trying to build a new single-terminal airport, revive the 18th and Vine Jazz District, and expand the streetcar. There is also talk of building along the riverfront, possibly including a new sports stadium!

But along with building structures, we’re also building a reputation—and not a good one.

Perhaps you have also heard about a years-long, nation-leading spike in homicides, an underperforming Kansas City Public School District, and a nonexistent affordable housing policy. Maybe you’ve read about blighted structures on the East Side collapsing under their own weight. You may be aware that the police department has about 10 percent fewer uniformed officers than it did before the homicide rate jumped.

These things are related. Our leaders are falling over themselves to offer generous tax incentives to everyone from Amazon to Burns & McDonnell to Cerner while city services are being starved of tax revenue because those companies are no longer paying. Recently, both the Kansas City Library and Mid-Continent Public Library turned to taxpayers to make up for funds lost to such subsidies. Sometimes service providers like the Community Mental Health Fund are less able to help those in need.

Like a crazed Christmas shopper, we’ve paid for much of this development spree armed with credit and questionable judgment. Kansas City’s leaders were warned about high levels of debt in 2012 in the Citizen’s Commission on Municipal Revenue. But since then our debt per capita has only risen, and last year city leaders sought and were granted 40 more years of debt.

If you’re looking for a metaphor from the season, it might be that we’re hanging a lot of shiny ornaments on a dry, dying Christmas tree.

Proponents argue that without generous subsidies, wealthy corporations could not afford to build their luxurious headquarters buildings. Beyond the question of why taxpayers should support such things, the research from around the country tells quite another story. A 2018 study from The Upjohn Institute for Employment Research concludes in part, “for at least 75 percent of incented firms, the firm would have made a similar location/expansion/retention decision without the incentive.”

Another cost of these burdensome baubles on our community Christmas tree is they make it harder for us to keep the tree itself alive and healthy. Consider the time and attention spent on the new airport terminal or the convention hotel that might have been used addressing housing policy or the homicide rate.

We are diverting money and seeing no real gain. So why do city leaders keep doing it?

One reason might be explained by another Christmas metaphor: gift giving. A Show-Me Institute study of tax-increment financing (TIF) projects in Kansas City from 2002 through 2018 found that developers’ campaign contributions to city council and mayoral candidates increased in the years leading up to their TIF applications and then dropped off in the years after TIF was awarded. This finding suggests a TIF-for-tat arrangement between developers and city leaders, and it could help explain why an economic development policy universally decried as suspect remains popular—and increasingly so—in Kansas City.

The final days of a year are often a time to take stock and reflect. As Kansas City prepares for local elections, we need to focus more on the real issues affecting our municipal tree—crime, infrastructure, education, and debt—and less on the distracting and ultimately unsuccessful policies of economic development subsidies.

The post Kansas City’s Christmas Tree appeared first on Show-Me Institute.

As I grew older, Christmas parties became Holiday parties, Christmas Break became Holiday Break, and Santa no longer made an appearance at the Holiday Breakfast, not because I was too old for jolly St. Nick, but because my public school had de-Santa-ed.

In a recent incident in Massachusetts, Santa was removed from an elementary school’s annual Christmas concert. Though many have decried Santa removals as examples of the public school system’s rejection of religious freedom, to me, they are reminders of a need for more educational choice.

In a 2014 survey, 49 percent of Missourians reported that if they could choose any type of school for their child, they would choose private or home school. However, only 9 percent are actually enrolled in private school, while home school data is not available. Why do so many parents want to send their children to schools of choice?

For at least some parents, the desire to send their children to a private school reflects a desire to send their children to a school that shares like-minded values. Unfortunately, school choice, in the absence of legislation and financial means, is impossible for many parents, as actual enrollments show.

In the New Year, I hope to see educational choice expanded for families across Missouri, for both Santa believers and non-believers alike.

The post Santa Choice appeared first on Show-Me Institute.

Unfortunately for the ethanol industry, everything it claims it can do is already being accomplished by improved natural gas production, commonly called “shale gas,” in the United States. Increasing American energy output? Check. Reducing dependence on foreign oil? Check. Lowering energy costs for consumers? Check. Reducing CO2 emissions to improve our environment? Check. American energy output currently is the highest it has been for decades and our dependence on foreign oil is the lowest it has been for decades. We have shale gas extraction to thank for this, not biofuels such as ethanol that have long had political muscle but no market appeal.

Fortunately for consumers and taxpayers, these amazing changes to our energy industry are being accomplished with limited government involvement. The federal government is not even the primary regulator of natural gas, states are. Natural gas is subsidized to a lesser degree than many other types of energy, especially ethanol. According to the U.S. Energy Information Agency (EIA), in 2010, natural gas produced 80 percent of the non-electricity energy in the country, and received 21 percent of the subsidies. Biofuels, including ethanol, produced just 11 percent of the non-electricity energy in the country, but received a whopping 73 percent of the subsidies.

How has America benefitted from those huge subsidies ($6.64 billion in fiscal year 2010, the most of any type of energy)? Our largest “benefit” has been a major diversion of corn from food — where it was useful — to gas — where it is not. This has helped lead to increased food prices. Nice benefit – higher prices across the entire food chain, from eggs and bread to chicken and steak, and almost all dairy products, costing American consumers billions of dollars.

Most ethanol consumed in Missouri is a result of our state’s deplorable E10 mandate that all gasoline sold includes 10 percent ethanol. However, in some places, E85 gasoline is sold at gas stations as a consumer option. In those places, E85 competes with traditional gasoline on price and quality, like any product in a market economy should. E85 competition should be the model for the industry, not continued reliance upon federal and state mandates and subsidies. Regrettably, organizations such as the Coalition for E85 remain committed to government involvement as a staple of the industry.

Utlaut quotes a number of impressive-sounding totals for ethanol investment in Missouri. Whatever the totals are, they do not hide the fact that without government support, the industry would shrink dramatically – and almost certainly collapse. That may sound unfortunate, but is it really preferable to continue taking tax dollars from everyone else to prop it up? The simple fact is there is no sizable market demand for ethanol.

The growth of the ethanol industry in Missouri and the entire country is tied to government. We have a state mandate that ethanol be in our gasoline. We use state tax dollars to support its production. We have federal mandates that a certain amount of ethanol and other renewable fuels be sold (the RFS), whether people want it or not. We have all of these subsidies despite the fact that shale gas is already moving our energy industry forward and succeeding in ways ethanol can only dream (or lobby) about.

The Renewable Fuel Standard was unnecessary even before shale gas and other improvements rendered it meaningless. Once again, the free market is solving problems on its own. The ethanol industry is like your least favorite uncle at Christmas who borrows money from your parents to buy you a crummy gift you do not want or need and then expects you to fawn all over him. No thanks, we would just like our money back. The RFS needs to go.

David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Ethanol Subsidies Should Be Eliminated appeared first on Show-Me Institute.

As articulated in the legal treatise Antieau on Local Government:

[L]ocal government officials are not limited to the quality and suitability of the article to be provided but can consider the bidder’s experience, skill, ability, business judgment, financial situation, integrity, honesty, possession of the facilities necessary to perform the contract, previous conduct in similar contracts, reputation and record for reliability, as well as any other factors reasonably relevant to a bidder’s successful performance if awarded the contract.

Antieau notes that at least one court has found that “discretion exercised in choosing the lowest responsible bidder must be based upon substantial difference in quality or adaptability.” Taken altogether, these observations make clear that contractors of similar talent, reliability and quality should be considered on basically even terms in a “responsible bidder” legal construction. If a contractor can do a job reliably and well, the real distinguishing mark should be the price.

But in Saint Louis County, this may no longer be the case. The county’s new ordinance requires that for a construction contractor to qualify as a “responsible bidder,” he or she must “participate in or maintain their own Department of Labor-approved apprentice program for each craft which the firm employs and have active, registered apprentices for each program.” The law further requires that “all on-site employees on the project will be employees and that there will be no use of independent contractors or ‘leased employees’ for on-site work.”

“Apprenticeship programs” are almost always an artifact of union membership. Very few non-union shops “participate in or maintain” such programs, let alone always have “active, registered apprentices for each program.” The latter requirement of “active apprentices” has nothing to do with responsible bids, but it does have everything to do with keeping non-union contractors out. Which, of course, is why it was included. The county’s move will affect all sorts of small businesses, as the St. Louis American‘s Adolphus M. Pruitt noted last month.

The bill restricts non-union contractors from bidding on County projects, thus prohibiting any minority-owned general or prime contractor from County construction work. The bill restricts contractors who don’t have active apprentices. The strange thing about this is that most unions will profess that they are not accepting apprentices. … And the number of minority apprentices active in their programs is dismal.

That is especially bad news in today’s terrible economy. I will explore the “independent contractor” aspect in Part Two tomorrow.

The post Part One: ‘Responsible Bidder’ Does Not Mean ‘Union-Only’ appeared first on Show-Me Institute.

Plainly, it is more than the exercise of peaceful assembly and free speech. The protesters have had almost two months to express their complaints about corporate greed, income inequalities, and the whole notion that life isn’t nearly as fair as it ought to be. What more can they possibly say that they haven’t already said (however obtusely) a hundred times?

In the root sense of the word, to ‘occupy’ a place is to seize it from someone else. In just that sense, the Soviet Union ‘occupied’ Poland in September of 1939.

In the public theater going on in our cities today, the occupiers lay claim to the ground that they occupy — chanting “Whose Streets? Our Streets” and refusing to leave, regardless of city ordinances forbidding the pitching of tents in public places and regardless of the entreaties of elected officials asking them to leave.

According to their argument, the occupiers have reclaimed public space for the “99%” — meaning everyone outside the tiny group of people (the richest “1 percent”) who supposedly control almost all wealth and power. Of course, it is preposterous for the protesters to claim that they speak for 99% of the country — or, indeed, for anyone other than themselves.

Nevertheless, in cities across the country, mayors and other public officials have gone along with this fiction and bent over backwards in trying to accommodate the occupiers.

That was the case in my home city of Saint Louis, where 60 or so protesters were camped at Kiener Plaza, two blocks away from the city’s baseball stadium. At first, Saint Louis Mayor Francis Slay, a Democrat, went out of his way to welcome the “Occupy residents,” as he called them. He offered the occupiers a free permit to gather at the plaza and openly expressed his willingness to overlook the violation of various city ordinances.

Said the mayor in a blog post on Nov. 4:

During the weeks it has been camped here, Occupy St. Louis has had the opportunity to make its points heard during some very high profile events, including a presidential visit (on Oct. 5) and the World Series.

I emphatically disagree with those who say that allowing the encampment to remain during those events showed St. Louis in a bad light . . . Moving the Occupy residents simply to deny them a chance to tell their story to a large audience would have been wrong-headed and wrong-hearted.

But with the Christmas season drawing near (a big event at Kiener Plaza), the mayor wearied of the street theater. He announced that he would put an end to the occupation — promising only to give the group 24 hours’ notice before police would be called. In response, the Occupy St. Louis group accused the mayor of bending to the will of corporate leaders — the dreaded 1 percent. At a meeting with the mayor’s staff, occupiers expressed their outrage by showing up with money taped to their mouths.

The drama ended in the early morning hours of Nov. 12. That is when Saint Louis police arrested 27 remaining protesters and cleared the plaza of tents and signage.

If any moral may be drawn from the “big-hearted” mayor’s falling out with those he so recently lauded as having “important things to say about the direction of the country,” it is this: You can please professional agitators and self-proclaimed victims some of the time, but you will never be able to please them all of the time.

In truth, the protesters in Saint Louis and other cities have no claim to special treatment in the use of parks and other public places — apart from their willingness to flout the law.

The violation of city ordinances may sound like no big thing — against the immensity of the First Amendment guarantees of free assembly and free speech.

But no one ever denied free speech to the protesters. It is they who put the liberty of others in jeopardy. City ordinances that prohibit the pitching of tents in public places ensure that no one group can seize these places and deny or inhibit others in the use and enjoyment of the same space.

In other places around the country, city officials should follow the Saint Louis mayor’s example: They should strike the tents and stop coddling the occupiers.

Andrew Wilson is a resident fellow and senior writer at the Show-Me Institute, which promotes market solutions for Missouri Public Policy.

The post Occupation as Aggression – And Public Theater appeared first on Show-Me Institute.

At the time, there was an incredible amount of blowback, with the deal barely squeaking through the legislature and facing court challenges.

“The whole thing stinks,” said Indiana State Rep. B. Patrick Bauer, then the House Democratic leader. The two companies, he said, “got a heck of an unbelievable deal. We got a bad deal.”

And now, Governing magazine reports that the companies that bought the lease may not be able to make payments related to the deal. The project lost more than $260 million last year.

More astonishingly, Indiana officials say that the terms of the deal mean that if the toll road project defaults or goes into bankruptcy, the companies that bought the toll road could either find new investors, or the toll road would be returned to the state, with Indiana keeping the $3.8 billion.

In this case, it appears that the Indiana government got a pretty good deal.

Compare the case above to the news that developers are asking Saint Louis County to issue $7 million more in debt to finance the NorthPark development. The NorthPark development was also launched in 2006, during the height of the real estate bubble.

From the St. Louis Post-Dispatch:

“The developers are not only seeking to refinance the mortgage, but they’re also upping the size of it by almost 50 percent,” said Brian Tournier, director of research with Ascent Investment Partners in Brentwood, which specializes in bond investments. “And the county, ultimately, will be on the hook.”

As business owners know, the reward for taking on risk is the possibility of making a profit. The risk of failure is why so many of us do not set out to build a better mousetrap, be it Pets.com, Myspace, or Zynga.

What is so shocking about the Indiana toll road case is that it was a situation where government allowed the private sector to take on risk — for a price. If the state really won’t be held financially responsible if the project continues to lose money, then the state managed to shift all of the risk associated with the project to the private companies that invested in it.

In the case of NorthPark, it looks like the county is getting ready to take on more risk. And why, exactly? NorthPark could stand to profit if the development is successful. But if it isn’t, the county could lose. Proponents may point to job or investment increase estimates. But those numbers frequently fail to materialize.

There is no better example of what can go wrong when government takes on risk than that of the fiasco in Harrisburg, Pa. The city took on $125 million in debt to rebuild and expand its incinerator, which it hoped would become a money-maker. Instead, the incinerator project is more than $288 million in debt. The city, bankrupt as a result, has to cancel Christmas (well, its annual Christmas parade).

When you hear elected officials talking breathlessly about taking risks for the promise of money or jobs, think about Harrisburg or Mamtek, right here in Moberly, Mo. Though the jobs and investment numbers promised may be little more than a dream, the risk of failure is real.

I have to say, in light of other failures, this line from Saint Louis County Councilman Steve Stenger (D-Dist. 6) about NorthPark troubles me: “The county knew the risks going in to this development. But that’s a risk that you have to take if you want progress.”

If officials want to get into the business game of taking on big risks with the potential to make big profits, they should get out of government. In business, if you make the wrong choices and fail, you are financially responsible. When government tries to take on the risk of private businesses, taxpayers are on the hook for failure. And sadly, government officials rarely are held accountable for bad bets.

In this case, Missouri can learn from Indiana and Mamtek. A better move is to leave risk and profit to the private sector.

The post Risky Business appeared first on Show-Me Institute.

If you want to demonstrate affection, or strenghen your relationship, then giving a gift—even at the risk that it won’t be appreciated as much as you hoped—is the only way to go. […]

The point is that while gifts are financially inefficient, they are an important social lubricant. They help us make friends and create long-term relationships that can sustain us through the ups and downs of life. Sometimes, as it turns out, a waste of money can be worth a lot.

My utility for the book exceeds the $15 that my sister spent on it. For this reason, it makes up for at least part of the wealth that I likely destroyed in my gift-giving activities this year.

The post More on the Economics of Gift Giving appeared first on Show-Me Institute.

In its rush, the department awarded the taxpayer money despite the fact that the company’s application had more than 100 discrepancies, which would have, if not caught, cost the state hundreds of thousands of dollars.

It was important that the money be awarded in 2009, because if the department had waited until the beginning of the following year, the development company, NorthSide Regeneration LLC, wouldn’t be eligible for additional tax credits in 2010. The statute creating the Distressed Areas Land Assemblage (DALA) tax credit caps the total amount that the state can pay out at a cumulative $20 million per year.

“As expected, there is a desire to gain access to the maximum allowed issuance ($20M) before the end of this year,” wrote Sallie Hemenway, DED director of business and community services, after meeting with NorthSide representatives in early November 2009.

NorthSide applied for the tax credits to cover part of the initial costs of its $8.1 billion redevelopment of parts of downtown Saint Louis and portions of the city’s north side. As reported in NorthSide’s tax credit application, those costs have so far, for the most part, involved purchasing and maintaining a large amount of property.

The DALA tax credit was created ostensibly to encourage developers to take on large-scale projects in low-income areas. According to the tax credit statute, development companies eligible for the tax credit are entitled to 50 percent of money spent to purchase property, as well as 50 percent of environmental assessment costs, closing costs, real estate brokerage fees, demolition costs, and maintenance costs. Furthermore, eligible companies are also entitled to 100 percent of interest costs, loan fees, and closing costs.

In accordance with the statute, the bulk of NorthSide”s application was made up of reported costs: how much the company said it had spent to purchase property, maintain it, and how much the company had spent in brokerage fees and interest costs.

Saint Louis city ordinance makes it possible to check NorthSide’s property price claims against public documents.

The city of Saint Louis requires individuals and businesses that purchase property within the city to file a document stating who bought property, from whom, and for how much. The document, known as a “certificate of value,” also includes the property address, the date that the record was filed, and a signature of the purchaser attesting to the truth of the price reported.

After extensive review of the certificates of value filed for each of the 731 properties for which NorthSide claimed tax credits, it appears that there were more than 100 price discrepancies between what NorthSide reported to the state and what the company had reported to the city. Ninety-five of the discrepancies were in NorthSide’s favor: The price reported to the DED was more than that reported to the city while nine property prices in the application seem to understate the respective prices NorthSide reported to the city. Those discrepancies add up to more than $500,000, out of the $25 million that NorthSide reported it had spent to purchase property.

Seeing those discrepancies, the DED did not reject the application, which would appear to be the prudent approach in order to safeguard taxpayer money. Instead, according to copies of emails obtained from the DED with a Sunshine Law request, the department worked long nights during the Christmas holiday in order to make sure that North Side was awarded the most state money.

List of Apparent Discrepancies in Tax Credit Application Filed by NorthSide Regeneration LLC

The post North Side Saint Louis Developer Appears to Have Inflated Expenses in Tax Credit Application appeared first on Show-Me Institute.

When you look at all the media coverage of the Census marketing campaign, it’s easy to forget that most people won’t receive their forms until the middle of March. With each new Census, there’s more advertising and it starts earlier — kind of like how stores try to stretch the holiday shopping season by bringing out the Christmas decorations earlier and earlier in the fall.

I hope it’s another 10 years before we encounter a vast campaign promoting the 2020 Census.

The post Have a Merry Census appeared first on Show-Me Institute.

In a blog post dated today, a Facebook representative explains:

We adapted a collection of positive and negative emotion words built by social psychologists. Examples of positive or happy words include “happy,” “yay” and “awesome,” while negative, or unhappy words, include “sad,” “doubt” and “tragic.”

Although I find this index to be very interesting, I have some questions about its methodology and its accuracy.

First, this index does not account for the overall happiness of people who do not use Facebook. The population that does use the site is not representative of the general population; Facebook users have been demonstrated to be more affluent.

Why does the graph indicate that people are happier on Thanksgiving than on Christmas? Is that because people typically say “Happy Thanksgiving” and “Merry Christmas?” Plus, holidays are more highly trafficked than others, since people are home from work. If the Y-axis is a simple summation of the status updates (is it?), then this extra traffic would exaggerate the quantity of overall happiness.

Furthermore, the accuracy of this index depends on the genuineness of the status updates. Do status updates accurately reflect the relative value of a person’s sentiment? I am skeptical. On my own profile, I recently posted:

Chrissy Harbin loves her new coffee maker !!!!

But did I really? If I won the lottery, how many exclamation marks would I have to use to demonstrate my relative excitement? Did I unintentionally inflate the level of gross national happiness that day?

The post Gross National Happiness Index on Facebook appeared first on Show-Me Institute.

As our web presence grows, there are more sites than we can single out that have linked to us or discussed our posts and studies, so I just want to issue a general thank you to everyone who has participated in the web conversation about the direction Missouri needs to take. But a few websites must be specially thanked. We could not do this blog without the daily headlines at johncombest.com. Every morning, like a CWE rooster, John gets up and sorts through the day’s headlines so that thousands of Missourians don’t have to. Many of the articles we discussed were first found through his site, and because we occasionally forget to give him credit for the links, let it be known that he is the man!

The writers of the Prime Buzz blog over at the Kansas City Star have been tremendous to us this year. Their daily Blog Roll post has linked to our posts several dozen times, and driven a great deal of traffic our way. Just the other day, they gave my post about Kansas City’s budget report the top placement in the Blog Roll, and we saw a nice increase in visits because of it. We can’t thank them enough for the inclusion they give our thoughts on their site.

The other website that deserves our public thanks is Missouri Political News Service. The editors over there are always willing to post our op-eds and policy studies, which we greatly appreciate. In the think tank industry, if a tree falls in a forest and nobody is around to hear it, then it does not make a sound. MOPNS helps to make certain that our work always makes a sound, and we thank them for it.

There are many other sites that deserve our thanks as well. To our regular readers, we thank you the most — and, to our commenters, please keep up the great conversation.

The post Show-Me Daily Gives Out Holiday Props appeared first on Show-Me Institute.

Comments to the Post-Dispatch article bring up some criticisms of the move. Here they are, with my responses:

1. Singapore Math is a fuzzy “new math” fad. Wrong. Singapore Math teaches that there is one right answer, emphasizes correct recall of arithmetic, and covers topics similar to those in U.S. textbooks. It’s innovative in its use of diagrams and problem-solving techniques, and the word problems are extra challenging. Singapore would not do so well on international assessments if its students sat on pillows and meditated about rectangles, or whatever they do in “new math” classes.

2. Wentzville is spending an inordinate amount of money on this program, when the old curriculum worked just fine. Singapore Math is less expensive than other programs out there. Workbooks sell for less than $10 each. I could go on and on about the cost-effectiveness of this curriculum, but I’d sound like one of those Christmas ads for Target. In an increasingly diverse education market, people consider school districts, charter schools, private schools, virtual schools, and homeschooling when deciding where they’ll live and how they’ll educate their children. Districts are going to have to try different methods and occasionally invest in new materials so that they can compete.

3. If students leave Wentzville and encounter another curriculum, they’ll be confused. It seems to be students from the United States, not Singapore, who are confused when the countries are evaluated against each other. The possibility that a student may one day encounter an inferior textbook is no reason to forgo a good curriculum. Besides, school districts across the country are going to use different materials; no math program would satisfy this objection.

4. Singapore Math is copyrighted, so parents won’t be able to help their kids with homework. Does whoever wrote this comment think other math books are all in the public domain? As I mentioned above, Singapore Math is cheap. Parents could buy the materials for a few dollars, if they want to have them on hand. But that probably won’t be necessary, because the Singapore Math website offers a free help forum. Besides, Wentzville is holding meetings to teach Singapore methods to parents and get their input.

I applaud Wentzville’s excellent choice.

The post A Wise Math Decision in Wentzville appeared first on Show-Me Institute.

Last week, Cynthia asked whether November elections would get more people to vote on school issues. We looked at Missouri school district tax levy elections from 2000 through 2003, and, not surprisingly, the answer is yes.

It’s a strong yes. Like Warren County, four out of the five remaining school districts that held both an April and November tax levy election during that period, saw nearly twice as many voters show up in November, if not more. If you want more voters, November is the month to put a tax increase on the ballot.

But if you want a school district’s proposed tax increase to pass, you have a better shot in April. And, whatever the reason, that’s the month most school districts put financial proposals on the ballot.

For tax levy proposals specifically: From 2000–2003, there were 85 in April, nearly four times as many as those in November. The success rate for those in April was about 60 percent. For the November tax issues, it dropped to about 45 percent. More voters doesn’t mean more money.

This past April, when reporting on the Columbia School District, I stood outside of polling places during the school and municipal election and asked people how they voted. Those who voted for the district’s tax levy increase often mentioned their ties to the district.

It’s my suspicion that a greater number of April voters are connected to school districts than are the ones who show up in November. And school employees are just not as likely to vote against a levy that would generate more money for their district. Most of a school’s annual income goes toward paying employees — often as high as 80 percent.

Maybe November voters dilute that influence. Maybe November is just a cold month, with Christmas looming, and people tighten their purse strings. I seriously doubt school board members plot when to hold financial elections. But if a levy fails in November and it shows up again on an April ballot, it’s a better bet.

The post The Odds appeared first on Show-Me Institute.

We shall start with the two largest papers in our state. Both the Prime Buzz blog in the Star and the Mound City Money blog in the Post-Dispatch have been frequently linking to our posts or articles. We are lucky in Missouri to have great newspapers serving our two largest cities, and we thank both of them for the links.

The proprietors over at Missouri Political News Service have enthusiastically posted many of our studies and op-eds this year, as well as plenty of links to our blog posts. They have been a big part of getting the word out on our work, and we wish them continued success and a great holiday season.

Every time the Show-Me Institute makes the papers, Missouri Pulse has been the site that consistently asks why we are always labeled as "conservative," while other groups get the "non-partisan" moniker? It’s a good question — and, for the record, we think "free-market" is the most accurate label, if one must be used.

Arch City Chronicle and Blog KC have given us a mention on occasion, for which we thank them, while Jason Rosenbaum and the others at the Columbia Daily Tribune politics blog have given us some much-appreciated coverage lately — particularly regarding the education conference we hosted.

Fired Up! has linked to us a few times, and I am sure I am missing a few other blogs out there as well. Being that there now more blogs than people on the planet, it would probably be impossible to note all the ones that have mentioned us. But we appreciate it every time, whether it’s a link, a critique, or a compliment.

Well, that’s just about it. I can’t think of any that I might be missing. … Oh, wait — how could I forget Mr. John Combest, the esteemed maitre d’ of johncombest.com. His links have played a huge part in letting people know about us, and we wish him and everyone else listed here a very happy holiday season.

The post Holiday Best Wishes for the Blogworld! appeared first on Show-Me Institute.

On the same subject, the Sunday Joplin Globe had a very reasonable editorial on the assessment situation in Jasper County and around the state. While I don’t agree with the Globe that we should replace property taxes with higher income or sales taxes (particularly income taxes), it was nice to read their well thought-out editorial. I do agree with them on the importance of having a general debate about how we tax and spend here in Missouri. We have not agreed with the Globe’s editorials much here at SMI, with their opposition to toll roads and support of Internet taxation, but this was a good one.

For my own ideas on how we can change the assessment system in Missouri, here is my recent article on the subject. Also, don’t forget that your property taxes are due by December 31! And the above links came from Combest, so let’s give him a Christmas shout-out!

The post Property Taxes in the News appeared first on Show-Me Institute.