This brings us to the recent Missouri Supreme Court ruling on whether or not counties can collect the sales tax on marijuana in incorporated parts of a county. The court ruled that counties can only collect the tax in the unincorporated parts of a county. This is what the state constitutional amendment said, so in that respect the court’s decision makes sense. However, the way the constitutional amendment was written had a different definition of “local government” than was previously used and generally understood in Missouri. Do you think most (or any) voters read to page 19 of a 38-page ballot description to see that, in this case, the definition of a county only applied to unincorporated areas?

Longtime former Missouri State Senator Clifford Jones used to say (I’m paraphrasing here), “You can pass any bill you want. Just let me write the definitions.” That is what the ruling by the Supreme Court is rewarding, and perhaps it had no other choice in the matter. We let initiative petition writers create a major change regarding how local governments operate, which very few people will see or understand, and then that change becomes law.

To be clear, county taxes are almost always collected countywide, not just within unincorporated areas. Yes, there are a few other exceptions, such as utility taxes, but that doesn’t justify initiative petition writers using obscurity as their ally, as in this case. (I am not disputing that a majority of Missourians wanted legalized marijuana. My concern is with the use of legal minutiae in initiative petitions to get other changes made at the same time.)

Missouri needs to reform initiative petition rules to make amending the Constitution more difficult. (In a future post, I will go into more detail about the specific reforms we need.) Otherwise, we will be subject to more well-funded, out-of-state efforts to change Missouri laws using seemingly popular ideas as cover for making major legal changes via obscure and unread ballot language. Did you read the 38-page document that accompanied the marijuana vote and described all of the legal changes? I doubt it.

Robert Moses would be proud of efforts to get what you want by secrecy. We are a republic, not a direct democracy, and we should act like it. Missouri needs initiative petition reforms.

The post “Just Let Me Write the Definitions” appeared first on Show-Me Institute.

On August 6, along with voting in party primaries, Missouri voters are being asked to vote on a constitutional amendment to exempt all childcare facilities outside of homes from property taxes. While we all want more affordable childcare, this proposal is a terrible idea. Any small benefit to families with young children will be more than offset by higher property taxes on everyone else.

Many childcare companies are for-profit businesses. Nonprofit childcare facilities, like those in churches, are already tax exempt. I see no reason why for-profit childcare companies deserve a tax exemption, but for-profit auto repair shops don’t. Yes, childcare is important. So is having a functioning car to safely get to work. The argument that something should be tax exempt because, as the ballot language states, it “supports the well-being of children, families . . . and society,” is essentially meaningless. Nearly anything could be made tax exempt by that logic.

Furthermore, this proposal does nothing to restrain government spending. Any reductions in the property tax base will result in higher property taxes on other entities that don’t have the special exemption, such as your home, your farm, and other businesses. The overall effect may be small, but it will be real.

The property tax base should be set as wide as possible so that the tax rates can be as low as possible for all taxpayers. Shrinking that tax base does real harm, no matter how sympathetic the cause may be. Missouri voters should keep that in mind when they choose in August.

The post Exempting Childcare Facilities from Taxes Is a Bad Idea appeared first on Show-Me Institute.

The first reason it’s important is the policy itself. IP reform has been a long-overdue priority because in Missouri, the threshold to amend the state’s constitution is practically the same as the threshold to amend a law—only when the constitution is amended, it’s much harder to change later. Raising the bar for constitutional amendments—requiring a supermajority or some kind of concurrent majority of voters for passage, as this bill would do—is a rational move that should have been done last year, if not three years ago.

Whatever your thoughts on the various contentious constitutional ballot items over the last several years, not reforming initiative petitions has had an irrefutably enormous impact on policymaking in the state. Of course, two things still have to happen for IP reform itself to become law: the House and Senate have to agree to and pass the same legislative language, and voters will have to pass it into law.

But the second reason the Senate’s move on IP reform is important is more practical and political in nature. Reports in recent weeks suggested that the Missouri House would no longer advance Senate bills so long as House priorities, particularly the IP bill, languished in the upper chamber.

Keep in mind that the House finished its work on IP reform at the beginning of February; the Senate heard the bill in committee a week later . . .  and then sat on the legislation for two months until literally the last legislative day in April. That approach in the Senate—and response by the House—dimmed prospects for all legislation in Missouri, especially as we approached the end of the session in mid-May.

Whatever the IP reform bill’s ultimate fate, it’s my hope that the Senate will take the present legislative opportunity to get its act together in the two weeks remaining in the session and, rather than (for instance) stop attempts to get woke diversity, equity, and inclusion (DEI) and critical race theory (CRT) programming out of government, instead stop making excuses and start keeping the promises legislators made to their constituents over the last six months. Tax cuts, school choice, transparency . . . the Senate is suffocating all kinds of reforms right now. That can’t continue.

The post Initiative Petition Reform Clears Senate Hurdle. Great! Now Stop Wasting Time appeared first on Show-Me Institute.

One notable thing about this MPBR legislation is that it’s being advanced as a “resolution” rather than just a “bill.” What makes a House Joint Resolution (HJR) different than a bill is that in contrast to a bill that would change state law and requires a governor’s signature, a joint resolution—if agreed to with the Senate —does not require a signature by the governor and is instead sent to the public. If approved by the public, the joint resolution’s language is then added to the state constitution. If approved by the House and Senate, a vote on the MPBR would happen either this summer or fall.

Although HJR 110 has advanced to debate in the House, when that debate will happen remains to be seen. It may get its vote in the next week, or it may get its vote in the next month; House leadership will determine the timeline from here. But given the friction in the Senate, I hope this resolution gets out of the House fairly quickly to provide some breathing room for a vote before the end of the session, should the Senate continue its slow grind. We’ll keep you posted.

The post Missouri Parents’ Bill of Rights Moves to the House Floor appeared first on Show-Me Institute.

Parents deserve to see what their kids are learning, and taxpayers deserve to know what they’re paying for. If that’s going to happen, however, at a minimum state law needs to be updated to empower these stakeholders to assert those rights.

It will take champions of reform in the Missouri legislature to carry such bills forward, but fortunately there are already several good proposals circulating at the Capitol, including an especially strong one that I testified on this morning. House Joint Resolution (HJR) 110, introduced by Rep. Phil Christofanelli, would put key language from the MPBR directly into the Missouri Constitution—including curriculum transparency, performance transparency, and a host of other items. As a Constitutional item, Missouri voters would also have their final say on the proposal at the ballot box later this year, and I’m optimistic it would succeed with the public. Accordingly, I felt it was important to testify to the House Elementary and Secondary Education committee (which heard the bill) to share my research.

If passed by the legislature and the public, the Constitutional amendment would be an enormous leap forward for both educational reform and transparency. I hope the entire Legislature and eventually the public will have an opportunity to weigh in on this important proposal.

The post Will a Missouri Parents’ Bill of Rights Be Added to the State Constitution? appeared first on Show-Me Institute.

In 1980, Missouri voters approved an amendment to the state’s constitution adding Article X, Sections 16 through 24, which are collectively referred to as the Hancock Amendment. The sections are some of Missouri’s most important safeguards against higher taxes and growing government. But as with most constitutional topics, the Hancock Amendment and its implications are quite complex.

The concerns about this year’s gas tax bill center around Article X, Section 18(e) of Missouri’s constitution, which was approved in 1996. The subsection states that in addition to the other limitations imposed by the Hancock Amendment, Missouri’s general assembly cannot raise taxes or fees above a certain threshold in a given year without voter approval.

To avoid a public vote, the cumulative revenue impact of every bill passed by the legislature each year must be calculated and determined to be below the constitutionally defined limit. If the limit is exceeded, the bills that raise revenue must be submitted for a public vote starting with the largest increase, then every other increase in descending order, until the net effect of the remaining bills is lower than the year’s cap.

Here’s an example. Let’s say the cap in a given year is $100 million, and the legislature has enacted net tax increases of $125 million, and the most expensive bill raises taxes by $30 million. You would only need to vote on that one bill. If the bill is rejected by voters, then the legislature is below the cap. If voters approve the bill, the bill no longer counts toward the Hancock cap. If one single bill didn’t cover the entire gap by itself, that’s where voting on each bill in descending order comes into play.

When the amendment was initially adopted, the cap was $50 million in new revenue but has since been adjusted according to state personal income growth, and for 2021 it was $111.8 million.

For this year’s gas tax bill, the official fiscal estimates suggest that once fully implemented, it could raise between $123–$455 million. On its own, the bill would appear likely to exceed the Hancock Amendment cap, but that’s only one part of the story.

First, since compliance with the amendment’s limit is based on the net effect of all legislative changes in a year, we can’t know whether there’s a violation until Governor Parson finishes signing this year’s bills. It is also important to remember that if one bill raises enough revenue to violate the amendment, as long as there’s another bill that would simultaneously lower taxes or fees such that the net tax increase is below the threshold, the general assembly could still avoid violating the constitution.

Second, the gas tax bill is really the first of its kind. There haven’t been similar past efforts to raise taxes the way it does while avoiding a public vote. The gas tax bill has a refund mechanism, which is explained in the first post in this series. Given the potential complexity of a refund, this part of the bill appears to serve as a tactic to avoid triggering the Hancock Amendment rather than an effort to ensure Missourians pay less tax. Consequently, there are a variety of unanswered questions about how a potential Hancock Amendment violation would be handled. (See here for further breakdown of the questions at hand.)

One thing we do know is that Missouri voters are all too familiar with being asked to raise the state’s gas tax, and since the last approved increase in 1997have shot down every one of them, including a vote in 2018. While we wait to see what’s decided on the topic, it’s fair to wonder whether the legislature’s choice to avoid a public vote will prove to be a wise one.

The post Missouri’s Hancock Amendment and the Gas Tax appeared first on Show-Me Institute.

In August, Missouri voters approved Medicaid expansion through a constitutional amendment. Recently, Missouri’s legislature passed next year’s budget sans funding for Medicaid expansion. As I wrote more than a month ago, the state’s general assembly had real reasons for deciding against funding expansion. Medicaid expansion represents a significant growth in future spending obligations for the state’s budget. Despite claims to the contrary, expansion was set to cost more than $1.5 billion next year, with approximately $100 million coming from state sales and income taxes that would normally go toward other programs.

Missouri’s constitution gives the legislature the sole responsibility of authorizing state spending. Further, it states that constitutional amendments cannot impose new costs without outlining how that cost would be paid for. Since the amendment approved by voters last August has proven to have an enormous price tag, and included no funding mechanism, the legislature decided not funding expansion was a constitutionally valid option.

After the budget was approved, several legislators noted the constitutional amendment still requires eligibility guidelines to be expanded on July 1st, regardless of whether there is funding to cover the cost. Recently, the state’s Medicaid agency began laying the regulatory groundwork for eligibility expansion. But last Thursday, Governor Parson tore up that groundwork and withdrew the proposed changes that would expand eligibility on July 1st. In the statement announcing withdrawal, the governor’s cited reason was the lack of budgeted funding.

Heading into the new state fiscal year, there’s only one thing about Medicaid expansion that’s certain: it will not be happening in Missouri on July 1st. Expansion advocates aren’t going to just sit back and let this go, which is why a legal challenge appears imminent. It’s likely the next step is for someone to be denied coverage who would have qualified under the approved constitutional amendment after July 1st, which will prompt a lawsuit and send the issue to the courts. Judges will have to decide not only whether an amendment can compel the legislature to appropriate funds, but also if eligibility must be expanded absent any funding.

It’s important Missourians take notice of how this situation plays out over the next few months because it could significantly impact the future of our state. Potential judicial action could affect the state’s initiative petition process, the health coverage status for thousands of Missourians, and the allocation of billions in future state revenue.

The post Is Medicaid Expansion Going to Court? appeared first on Show-Me Institute.

When Missourians voted on Medicaid expansion this past August, they were told the initiative would save the state billions of dollars. I wrote repeatedly at the time about how wrong those estimates would prove to be; expansion was then approved by a narrow margin.

With Medicaid expansion set to go into effect in a few months and Missouri’s Legislature now putting together next year’s budget, the true price tag for Medicaid expansion has finally come into focus. The state’s most recent estimates suggest that the first year will require more than $1.5 billion in new spending, which includes a significant portion of federal funding and a state share of approximately $100 million. Where will the legislature find these funds? Instead of searching for the money elsewhere in the budget, the House Budget Committee is questioning whether they need to fund expansion at all.

Of course, Missouri voters did approve the petition to expand Medicaid eligibility, but the issue is whether the constitutional amendment requires the legislature to come up with the funds. Our state’s constitution, like the U.S. Constitution, gives the legislature the “power of the purse”—the responsibility of authorizing all state spending. The constitution also provides that amendments cannot impose a new cost without outlining how that cost would be paid for. Unfortunately, the Medicaid expansion amendment, which will have an enormous cost, included no such funding mechanism.

The House Budget Committee’s stance is that without such a mechanism, the legislature is under no obligation to include funding for Medicaid expansion in next year’s budget. The committee’s move is just the first step of many if the legislature wants to avoid appropriating the funds necessary for expansion. But if the eventual budget does not include funding for expansion, the issue would probably be challenged in court.

While discussions on this topic are just beginning and will likely continue for the remainder of this legislative session, it’s important to recognize what’s happening here. There are legitimate constitutional questions being asked here, and despite what you may hear, this is about more than simply the politics of Medicaid expansion.

The post Medicaid Expansion Brings Missouri to a Constitutional Crossroads appeared first on Show-Me Institute.

The post Constitutional Revision in Missouri: 1945 to the Present appeared first on Show-Me Institute.

In this essay, John Dinan of Wake Forest University examines the amendment process in detail, looks at the types of amendments that have been passed over the past three-quarters of a century, and identifies measures that could be taken to reduce the frequency of amendments in the future.

Click on the link below to read the entire essay.

The post Report: Amending Missouri’s Constitution appeared first on Show-Me Institute.

This essay (also available here) addresses those questions through a thorough examination of the constitutional convention of 1943–44 starting with the campaign to win public support for the convention itself; continuing through the selection of delegates, establishment of procedural rules, and consideration and adoption of proposals; and concluding with the election in February 1945 in which our current constitution was ratified. Despite a different political climate and changes in the issues that matter most to Missourians, there are lessons to be taken from the 1943–1944 constitutional convention for anyone interested in the possibility of a constitutional overhaul in 2022.

The post Constitutional Revision in Missouri: The Convention of 1943-1944 appeared first on Show-Me Institute.

How would legislators do it? As our readers may know, the most commonly attempted way to amend the Constitution has been via a two-thirds vote of Congress and ratification by three-quarters of the states. But perhaps less known is that two-thirds of the states themselves can call their own constitutional conventions for the purpose of independently proposing amendments to the Constitution. As the National Archives notes, “None of the 27 amendments to the Constitution have been proposed by constitutional convention.” That no amendments have been proposed in this way,  however, doesn’t mean amendments can’t or won’t be, and if supporters of a Missouri Senate resolution have their way, the 28th Amendment will be the first of its kind to have been initiated by the states themselves.

There’s a lot in the resolution itself about what it intends to do and how, but here’s the heart of the resolution:

Now, Therefore, Be It Resolved by the members of the Missouri Senate, Ninety-ninth General Assembly, First Regular Session, the House of Representatives concurring therein, hereby apply to Congress, under the provisions of Article V of the United States Constitution, for the calling of a convention of the states limited to proposing amendments to the United States Constitution that impose fiscal restraints on the federal government, limit the power and jurisdiction of the federal government, and limit the terms of office for its officials and members of Congress;

Later provisions lay out the precise nature of the convention and what it may consider—it’s worth your time to read—but the key reform elements of the bill are clear enough: federal fiscal limitations, federal power limitations, and federal term limitations. Beyond that, the exact reforms are open to debate, albeit circumscribed by the reform language of the bill itself to prevent a runaway convention. Resolutions like this one have passed in ten other states and may also pass later this year in North Carolina, as well, so it’s certainly an active idea nationally.

Twelve states aren’t enough to initiate a convention, of course; to initiate it, thirty-four states will have to pass similar resolutions. But the objectives of the resolution here are worthwhile enough, and its prospects plausible enough, to highlight here. If the bill passes the House, Missouri would become either the 11th or 12th state to sign on to this initiative. We’ll keep you posted if that happens.

The post Resolution for Article V Convention Deserves Serious Consideration appeared first on Show-Me Institute.

Look at all these glamorous people eating canapés and drinking champagne in their seersucker suits and sundresses! Oh, no—is that what I think it is? RUN!

If you think it’s not a great idea to fund educational programs via cigarette taxes, you can start to feel like a skunk at a garden party.

Here in the great state of Missouri, on November 8 we will vote on a constitutional amendment that would establish a 60-cent tax per pack of cigarettes to create a fund for pre-K education. Backers believe that it would generate as much at $300 million per year, which would pay for tens of thousands of Missouri children to attend pre-K. They have an impressive advertising campaign and a strong social media presence highlighting the bipartisan support they have assembled for their plan.

On one level, I am sympathetic to their cause. I understand that there are perfectly defensible reasons to support raising cigarette taxes. Smoking is terrible, and we want fewer people to do it. Raising taxes will deter them. If we can provide pre-K with the funds such a tax generates, we’re killing two birds with one stone.

But there is more to this plan than meets the eye.

The largest financial backers of the amendment campaign have been big tobacco companies. Why, you might ask, is an industry looking to increase taxes on itself? Well, paired with the 60-cent tax on all packs of cigarettes is a 67-cent surcharge on so-called “wholesale” cigarettes—cigarettes produced by “small tobacco” companies not party to the landmark tobacco settlement that required the big tobacco companies to pay states in exchange for protection against future lawsuits. Big tobacco pays right around 67 cents per pack into these funds, giving small tobacco an edge in the marketplace. This amendment would eliminate that advantage.

What’s more, many anti-smoking and cancer-fighting groups have decided to oppose the amendment. They argue that a 60-cent tax is not substantial enough to deter folks from smoking.

For those of you keeping score at home: We have a cigarette tax campaign that is funded by big tobacco companies and opposed by the American Cancer Society. If I’m a skunk at the garden party, at least I’m in good company.

Setting the parlor intrigue aside, it’s hard for me to not think that for many Missourians, the real draw here is getting something for nothing. I don’t smoke, so I would never pay this tax. Most Missourians, particularly educated and wealthy ones, don’t either, so they won’t have to pay. If the state generates enough funds, there is good reason to believe that many middle-class children of nonsmokers will get pre-K without their parents having to pay a dime.

If we think one step further though, we see the problem. Cigarette taxes are about the most regressive tax we could possibly institute. Poor people pay the brunt of them. If this tax was going to be passed in 1950, when nearly half the population smoked, it would be spread more evenly across the populace. But it is 2016, and only a specific subset of Missourians smoke. What’s worse, a lot of those people are addicted to cigarettes, and we are preying on that addiction to fund something that we want.

Look at what happened in Arkansas, which instituted a lottery in 2008 to provide scholarships for students to attend college in the state. Like cigarettes, lottery tickets are disproportionately purchased by poor people. In Arkansas, scholarship recipients are disproportionately middle- and upper-income, making the scholarship lottery a pretty clear upward transfer of wealth. Sure, it sounded great at the outset, as non—lottery ticket buying parents eyed scholarships for their kids, but on the backs of the poor? It just feels unseemly.

There are reasons to support providing scholarships to pre-K to students in the state, but the how matters. How we fund those services, how we determine who is eligible, and how we pay for them is critically important. These considerations can get lost in big promises to people with little skin in the game.

The post A Skunk at the Pre-K Garden Party for Cigarette Taxes appeared first on Show-Me Institute.

At first glance, I can see why folks might want to support such an effort. Smoking is bad, so we should tax it. Preschool is good so we should provide it.

Oh, how I wish it were that simple!

In my new essay, Amendment 3: The Good, the Bad, and the Ugly, I break down all of the intricate issues involved in this proposed constitutional amendment. What is the impetus for this proposal? Is there really a need to be met here? Is pre-K as big of a deal as supporters say it is? Do tobacco taxes have any downside?

I hope that the essay will increase understanding about the possible consequences of this amendment (intended and unintended) and help Missourians cast more informed votes as a result.

The post Analyzing Amendment 3 appeared first on Show-Me Institute.

The post 2016 . . . Time to Amend the Constitution? appeared first on Show-Me Institute.

Along with the Hancock Amendment, this amendment would restrict the power of the legislature. Therefore, the legislature should be commended for proposing this amendment. Constitutional amendments like this, along with a balanced budget requirement (which Missouri has), give legislators an easy way to say “no” to special interests.

Now, this is not a full-throated endorsement of the proposed amendment. There are a couple of things that bother me. First, there was an amendment that passed setting the cap at fiscal year 2008, the so-called “high water mark” of state revenues. Considering that the general revenue is expected to increase 3.9 percent  from $7.3 billion this year and that net general revenue for fiscal year 2008 was slightly more than $8 billion ($8,004,309, to be exact), the cap probably will not matter for . . . a while. Second, the spending limits will expire in five years unless lawmakers extend the time limit. So even if the voters approve the amendment, there is a distinct possibility that the cap can expire before it ever has the chance to restrict spending. Finally, the cap only applies to general revenue, which is where lawmakers have the most leeway in regards to spending, but it is not hard to imagine lawmakers putting down in statute specific spending items they want preserved and directing specific monies to funding them.

Despite my issues with the proposed amendment, the legislature should be commended for trying to push spending restrictions. However, it is unfortunate that such restrictions would have to be so watered down before it can pass.

The post The Next Half Measure appeared first on Show-Me Institute.

The post The Missouri Compromise appeared first on Show-Me Institute.

Early in this year’s legislative session, members of the General Assembly asked me to offer testimony on the Health Care Freedom Act, which was proposed as a constitutional amendment that would recognize the fundamental right of citizens of Missouri to decide for themselves how they will pay for their health care, and that no government could rightfully interfere with that decision. In my testimony, I pointed out that if courts decided that nothing in the U.S. Constitution prevented the government from mandating the purchase of government-approved insurance policies, a constitutional amendment of the sort contemplated in the Health Care Freedom Act could offer a legal “Hail Mary” — a last line of defense that might prevent further congressional intrusion into citizens’ lives.

Despite overwhelming support in both the House and Senate, the Missouri General Assembly did not agree to let citizens vote on this constitutional amendment. Instead, the legislature placed the original bill’s language into House Bill 1764, which would allow voters an August referendum on adopting a new statute. Many of the legislators and citizen groups who had worked to pass the original bill are now hailing the passage of HB 1764, implying that if the people vote to adopt this statute, it will have the same effect as the proposed constitutional amendment might have. Unfortunately, this is simply not true. Missouri voters may well use this referendum as a political statement through which they can express their opinions about the federal health care reform law, but the text that might have been legally useful as a constitutional amendment will have zero legal effect as a statute.

The text that will be presented at the referendum states, in part: “No law or rule shall compel, directly or indirectly, any person, employer, or health care provider to participate in any health care system.” A court called upon to evaluate whether this provision would be effective against any federal enforcement of the health insurance mandate will first point out that because the language makes no reference to any particular government, it must be assumed to apply only to law- or rule-making subdivisions of the state of Missouri. Not only is it virtually unheard of (and generally futile) for a state statute to attempt to bind the federal government or one of its agencies, the plain text of the bill says nothing to suggest that is its purpose. A court looking at this provision as a statute will almost certainly end its analysis there.

However, even if the court infers that the General Assembly intended to prevent the enforcement of certain federal laws, the statute will fail. In order for the Health Care Freedom Act to have any hope of being effective, it would have to give citizens the basis to argue that health care freedom is a fundamental right beyond any government’s rightful authority to transgress. If the citizen could make that argument, there would be a very slight chance that the U.S. Supreme Court might consider such a fundamental right sufficient to prevent the government from punishing those who chose not to abide by the individual insurance mandate. A statute, however, is not the mechanism by with citizens establish fundamental rights or liberties — they put those in their constitutions, where they are insulated from repeal or avoidance by future legislation. Thus, even if HB 1764 had purported to establish a fundamental right or liberty, courts would have been unlikely to take them seriously. It just so happens that HB 1764 does not even make such an effort, further diminishing any legal usefulness it otherwise might have had.

To be clear, I do not mean to suggest that proponents of the Health Care Freedom Act are intentionally misleading people as to the likely effect of HB 1764. But Missouri’s citizens deserve to know that the bill and the upcoming referendum it authorizes can only be considered a political statement. Even if the people adopt this statute at the August referendum, their rights and liberties will be no more secure than if the bill had been defeated.

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