Two months have now passed since our lawsuit was filed, and so far, the case is proceeding relatively slowly, which we expected. Unsurprisingly, the Office of Administration didn’t immediately surrender and decide to just hand over the documents it’s been giving the AFSCME, so we are still anticipating the case will carry on well into next year. In the interest of transparency, I would have hoped that the OA would have simply provided these documents to us without further delay—transparency for AFSCME should also mean transparency for the rest of the public. But unfortunately, it may take a judge to affirm this notion.

A little more surprising is the fact that AFSCME itself has decided to try and intervene in the case, arguing it has a stake in the resolution of this case. That’s surprising because our litigation doesn’t address AFSCME’s actions, but rather the actions of the government. Time will tell what becomes of this intervention, if anything.

We’ll continue to keep you posted on this important case.

The post Show-Me Institute v. Office of Administration: A Brief Update appeared first on Show-Me Institute.

Taylor asked me during the discussion whether subsidized warehouses and facilities would have to be in operation for a number of years prior to receiving the Aerotropolis tax credits. I said, “I think so,” and the discussion continued.

In fact, having re-read the most recent available version of the legislation, there is no such protection. None. According to the legislation, a warehouse or facility could be built (or not?), receive the credits, and then cease to exist. There is no requirement that the warehouse or facility exist for a period of years prior to receiving the benefit.

Apparently, this is a common misconception. Missouri Rep. Donna Lichtenegger (R-Jackson), told the Southeast Missourian, “The good thing is they don’t get any of this tax credit money unless they perform.”

Again, this is not the case. From a standpoint of accountability and fiscal responsibility, I wish the legislation contained such a provision. However, as it stands, it appears that no stipulation exists.

The post Fact Check: There is No Protection For Taxpayers In Aerotropolis Legislation appeared first on Show-Me Institute.

On Tuesday, I will participate in a panel discussion of the Aerotropolis tax credits at the St. Louis County Library, organized by the Citizens Alliance for Missouri Patriots.

The discussion will be held at St. Louis County Library’s headquarters at 1640 South Lindbergh Blvd., in Frontenac. The event will be in the library auditorium, and will run from 7-9 p.m.

Rodney White, a retired businessman, local author, and speaker, will be the moderator. Dave Roland, executive director of the Freedom Center of Missouri, is the other scheduled panelist.

It is my understanding that representatives from the Regional Chamber & Growth Association (RCGA) have been invited, but have not yet responded.

So please come out for the discussion! All questions are good questions, and you are invited regardless of whether you support or do not support the Aerotropolis tax credit proposal.

The post Come to a Tuesday Panel Discussion on Aerotropolis in St. Louis County appeared first on Show-Me Institute.

The post Economic Liberty and Occupational Licensing appeared first on Show-Me Institute.

Dave Roland, a policy analyst with the Show-Me Institute, testifies before the Senate Governmental Accountability and Fiscal Oversight Committee and the House Special Standing Committee on General Laws about SJR 25 and HJR 57, also known as the Health Care Freedom Act, which would offer citizens the opportunity to modify the Missouri Bill of Rights to formally recognize their right to decide for themselves whether they will participate in any private health care system. Under this amendment, the government would not be permitted to prevent citizens from offering or accepting direct payment for health care services, and neither could it substantially limit the purchase or sale of health insurance in private health care systems.

Related Links

The post Health Care Policy and Constitutional Rights: The Health Care Freedom Act appeared first on Show-Me Institute.

The post How Missouri Cities Define Away Property Rights appeared first on Show-Me Institute.

Last Tuesday, Nov. 9, David Stokes and Dave Roland appeared on the Bernie Hayes Show on WGNU St. Louis AM 920 to talk about occupational licensing generally, and African hair braiders specifically. You can listen to the whole show here.

On Thursday, Nov. 11, Audrey Spalding was a guest on a panel discussing public education and the film Waiting For “Superman,” at Plaza Frontenac. Audrey was quoted in the St. Louis Beacon and on the St. Louis Business Journal‘s blog about the film and the issues of school quality and choice that it addressed.

Thursday night, David Stokes was quoted in a KMOV CBS Channel 4 story about public pensions. Show-Me Institute scholar Dr. Susan Feigenbaum was also interviewed for the story, an issue that the institute has addressed previously. If I could stress one point further, it would be to repeat the point Dr. Feigenbaum made in her interview that governments themselves are to blame for much of the public pension shortfalls by not making adequate contributions during good fiscal times.

On Friday, Stokes was quoted in a St. Louis Business-Journal piece by Dave Drebes about the potential for the city of St. Louis to re-enter St. Louis County. (You need to subscribe in order to access the full story online.)

Last, but not at all least, is yesterday’s major Post-Dispatch article on economic development, tax-increment financing (TIF), etc. Show-Me Institute intern Tom Duda and Stokes were both quoted in the story on how “economic development” in the St. Louis area amounts to nothing more than using tax dollars to lure business from one part of the area to another — sometimes only a few blocks away.

As a fun parlor game from the Post-Dispatch article, I’ll give 10 Show-Me Institute bonus points (whatever those are) to the first commenter who correctly cites the blatant red herring argument used by someone quoted in that last story.

The post Show-Me Institute in the Media appeared first on Show-Me Institute.

To help combat this problem/issue, the editorial suggests, we (of course) need a government solution. This is where I start to disagree:

Recognizing the value of animal health professionals, USDA Rural Development has contributed $500,000 to a partnership with the Missouri Department of Agriculture to create a business plan and pilot program for an educational institution to train veterinarians. The program will focus on skills specific to treating food animals.

Like many things, this problem does not need a government solution. In fact, strict licensing of veterinarians may be one of the reasons we have a shortage in the first place. Furthermore, the veterinarians (via their licensing board) are actively involved in maintaining that general supply shortgage, as evidenced by the ongoing lawsuits against horse-teeth floaters in Missouri. As Dave Roland wrote:

Missouri’s Veterinary Medical Board has sued to prevent horse owners from hiring anyone but licensed veterinarians from working on their animals’ teeth. Equine dentistry is a centuries-old profession that veterinarians traditionally avoided, and equine dentists have their own educational programs that offer far more training and experience with horses’ teeth than is offered in veterinary schools. Nevertheless, the law states that equine dentists must be punished with a $1,000 fine and a year in prison for every horse they treat.

Basic economics tells us that the solution to a shortage is: 1) higher prices or salaries; and, 2) reduced barriers to entry. If we make it easier to be a veterinarian (or vet tech, or horse teeth floater) and allow for the market demand to increase prices or salaries for vets who work on farm animals, this shortage will solve itself.

(Note: Don’t take this as a call to completely eliminate all licensing for veterinarians. There are many worse examples of unnecessarily licensed professions than vets. But there are changes that can be made — expanding the role of vet techs, for example — that would reduce the role of government and allow the market to solve this problem.)

The post Shortage? Yes. Government Solution Required? No. appeared first on Show-Me Institute.

This is the perfect segue to note that I will be appearing on the Bernie Hayes show on WGNU 920 AM in St. Louis tomorrow morning at 7:00 to discuss occupational licensing. I will be appearing with Dave Roland to talk about the issue of licensing those who provide African hair braiding in Missouri. Please listen in if you can.

The post Police Raids and Occupational Licensing: Coming to a State Near You appeared first on Show-Me Institute.

During the question and answer session afterward, a questioner who identified herself as a longtime teacher took issue with the merit pay suggestion. She argued that teachers do their jobs because they love their work and are passionate about it, and are not motivated by “greed” like people on Wall Street. There is some truth to this. Certainly, no one goes into teaching expecting to become fabulously wealthy. Still, I was reminded of what my cooperating teacher used to say when I was going through student teaching: “I’m doing it for the money … if they stopped paying me, I’d stop showing up.” Unless someone is independently wealthy, the money matters, and if school districts could pay more to the best teachers, they would likely attract and retain more highly skilled individuals to the profession.

In Superfreakonomics, Steven Levitt and Stephen Dubner argued that one of the major factors for America’s falling educational achievement over the last half century is the movement of educated women into fields outside of teaching, such as law and medicine. That is not a reason to lament women entering the wider workforce, but if there were more upward mobility possible in teaching, far more qualified people — both men and women — would have opted for teaching. Teaching can be an inherently satisfying profession, but it would be foolish to pin the hopes of our educational system on pure altruism.

The post We’re Only in It for the Money appeared first on Show-Me Institute.

Developer Should Bear Risk of Failure

In responding to Judge Robert Dierker’s ruling that St. Louis officials lacked authority to offer hundreds of millions of dollars to subsidize the NorthSide redevelopment plan, the editorial board, in the editorial “Celebrating Decline” (July 12), implies that the plan can proceed only if the city provides the anticipated subsidies. The developer’s own estimates indicate a belief that he will realize a profit of at least $251 million even without those subsidies.

Nothing in the ruling prevents the developer from pursuing his quixotic vision or from enjoying any profits that might result from its success; rather, it requires that, like all other entrepreneurs, the developer must personally bear the risks of failure instead of pushing them onto the taxpaying public.

Dave Roland — St. Louis

Policy Analyst, Show-Me Institute

The post Developer Should Bear Risk of Failure appeared first on Show-Me Institute.

As unlikely as it may seem, this middle-aged, middle-income, Midwestern state is pushing the envelope on its way toward fundamental tax reform. […]

[A]lthough Missouri’s revenue replacement could prove difficult politically, the benefits from reform could be enormous if the process is administered well and the constitutional amendment is carefully crafted.

In their discussion, the authors cite Prof. Joseph Haslag and Abhi Sivasailam’s recent Show-Me Institute policy study, “Previous Estimates Overstate ‘Fair Tax’ Rates, Harms,” in the appendix.

Laffer, et al., also include a comparison of Missouri and Tennessee, and they provide evidence that Missouri would experience additional growth if it eliminated its personal income tax. From chapter 2:

During the past 10 years, if Missouri had just caught up with the average of the states with no income tax, the average Missouri resident’s income would be more than $12,000 higher. That is amazing. Taxes really do matter. […]

The evidence is clear: States without an income tax outperform in every conceivable fashion than their higher-taxed brethren and have more tax revenues.

Given the data at hand, it is hard to imagine any more conclusive results from a cross-section time series of states that could be obtained in favor of Missouri’s tax proposal. Like many states in our current economic climate, Missouri needs help, and from the looks of it, a switch from onerous income taxes to broad-based sales taxes is exactly what the doctor ordered.

This echoes what Jenifer Roland and Dave Roland concluded in their 2009 policy study for the Show-Me Institute, “All Caught Up: How Tax Policy May Have Allowed Tennessee to Outgrow Missouri.”

The state snapshot for Missouri contains some good news and bad news. In 2008, Missouri’s personal income per capita cumulative growth is higher than the national average, but the state experienced negative net migration for the first time in a decade. This indicates that, when voting with their feet, people are choosing to locate outside of Missouri. On the 2010 ALEC-Laffer State Competitiveness Index, where 1 is the best and 50 is the worst, Missouri has an economic performance rank of 35 and an economic outlook rank of 15.

The post Missouri and the Show-Me Institute Featured in Rich States Poor States appeared first on Show-Me Institute.

The signing of the bill has not ended the debate. In fact, it may only be the beginning. House Republicans have already begun fighting the bill, and some have suggested that the Supreme Court may overturn the bill because it violates constitutional provisions. Dave Roland, a Show-Me Institute policy analyst, has written about the potential legal pitfalls that may be faced by the requirement to purchase health insurance.

More information about the final provisions of the bill will undoubtedly become available to the public in the coming days, so that we may better grasp what exactly the bill entails. However, it may well be shot down before it is scheduled to take effect in 2014. We have three years to really understand the changes this legislation will bring.

As Harvard economics professor Jeffrey Miron pointed out at his Obamanomics lecture last week, such intense conflict could be a good thing for the American people. This butting of heads can lead to gridlock, which can help prevent either side from getting everything it wants. Taking into consideration all of the debate and conflict initiated by the bill so far, it may look completely different by the time 2014 rolls around.

The post You Have Three Years to Understand the New Health Care Act appeared first on Show-Me Institute.

Research assistant John Payne will be a guest on the Freeman Bosely Jr. morning show on KATZ 1600 AM, once again talking about the St. Louis–area Metro transit system. His segment is scheduled to start somewhere between 11:00 and 11:15 a.m. If you want to listen but are not in St. Louis (or don’t have a radio), you can listen online at www.gospel1600.com. You can also read John’s op-ed about MetroLink expansion and watch his recent appearance on Fox 2 news.

Also today, policy analyst Dave Roland will be the keynote speaker at the Missouri Libertarian Party Convention in Jefferson City! He’ll be speaking about the importance of capturing the hearts and minds of Missourians in our efforts to spread the ideas of liberty and take practical steps toward increased freedom. The Show-Me Institute doesn’t engage in electoral politics, but we’re always happy to share our ideas with others — so, Democrats, Republicans, Greens, what have you, be sure to let us know when you’d like us to speak at your events, as well. We’d love to talk to you.

The post Turn On, Tune In, Drop By appeared first on Show-Me Institute.

The bulk of the trial, which will continue on Feb. 25, was devoted to testimony by Washington University economist Michele Boldrin, who clearly doesn’t think much of the projections and forecasts developer Paul McKee used to persuade city officials that his development was viable and worthy of more than $390 million in tax increment financing (TIF).

“I find these numbers completely unbelievable,” Boldrin said. “Pie in the sky” was another frequent characterization.

And, later, “This is something that if an MBA student came up with this as a term paper, I’d throw him out of the office.”

Boldrin’s main argument, repeated many times, was that no justification was given for any of the especially rosy growth and employment estimates. For example, the development company, NorthSide Regeneration LLC, estimates:

1. That property value growth rates will be as high as 20 percent in 2010, and 15 percent in a number of following years.
2. That more than 20,000 new, permanent jobs will be created as a result of this development.
3. That there will be buyers for 6,000 new homes, valued at an average of more than $450,000.

Dave Roland, a policy analyst at the Show-Me Institute, testified briefly that the north side area, which you can explore here, is not as blighted as NorthSide asserts. He, and Terry Artis, the owner and founder of the River City Examiner, took video of some of the areas NorthSide had noted as being especially blighted. The video, which is a publicly available court record, is linked below.

Dave Roland – A Look at Purported Cases of North Side “Blight” in St. Louis from Audrey Spalding on Vimeo.

The post WashU Economist Testifies NorthSide Forecasts “Made Out of Thin Air” appeared first on Show-Me Institute.

On Thursday, the U.S. Supreme Court announced, in Citizens United v. Federal Election Commission, that the First Amendment does not permit the government either to ban certain speakers from engaging in political speech or to restrict the amount of money that a person or group can spend on political communication during a campaign. Many commentators nationwide are extremely concerned that this influx of cash will distort the political process, allowing wealthy individuals, corporations, and labor unions to purchase political influence and degrade the ability of ordinary citizens to affect the political process.

While the fallout of this case is not likely to be as dire as many are predicting, there is reason for voters to be concerned about the degree to which these moneyed interests might influence the political process. As the system currently exists, politicians have every incentive to prioritize fundraising because they believe (rightly or wrongly) that the more they spend, the more votes they will ultimately receive. Thus, particularly as elections draw near, they spend a large percentage of their time soliciting contributions for their campaign’s “war chest,” and many focus on paid advertisements more than on debates.

But despite these concerns about wealthy interests’ ability to commandeer the political system, ordinary Missourians have at their disposal the wherewithal to neutralize the influence of campaign contributions without spending a dime — if only they demonstrate the doggedness and cooperation necessary to do so. You see, regardless of how much money a politician or interest group spends, only a voter can control their vote. If enough citizens believe strongly that the influence of money in political campaigns should be limited, they can use their most valuable assets — their votes — to change the incentive structure for politicians.

My proposal is that such a group of concerned voters could pledge to ignore party, ideology, and rhetoric, and to cast their ballots based solely upon how much money each of the candidates raised — and the lower the amount of contributions, the better. If as few as 5 percent of registered voters (which in many elections could constitute a decisive margin) committed to voting for the candidate in each major race who amassed the third- or fourth-largest “war chest,” I’d wager that politicians in close races would quickly respond by de-emphasizing the importance of fundraising.

Yes, this is a radical solution. At least in the short term, it depends on the idea that no single candidate is worth electing if doing so will only perpetuate a political system that depends more on the power of the checkbook than on the power of ideas. Many may be unwilling to make a commitment that might result in casting a ballot for a Green Party candidate, a Libertarian, or even an independent, “tea party” candidate. But the formation of this sort of voting block is the most immediate, most direct way for those concerned to send a message that when it comes to campaign financing, perhaps less is more.

Dave Roland is a constitutional law expert and a policy analyst with the Show-Me Institute, a Missouri-based think tank.

The post Missourians Can Combat the Political Influence of Moneyed Interests appeared first on Show-Me Institute.

Also, I appeared last night on KMOV Channel 4 in St. Louis to talk about the Show-Me Institute’s several state income tax studies that were conducted by others here. (Why did I do the interview if others did the work? Because I was the only one available at that exact time, that’s why.)

There have also been a number of stories about the earnings tax in the Kansas City Star. In the interest of brevity, I’ll just link to the one column in the Star that favorably discusses the idea of replacing the earnings tax with a land tax. Another piece takes a less glowing approach, but we appreciate the Star taking the debate seriously.

Dave Roland was quoted in the St. Louis Post-Dispatch with his thoughts about the government spending millions to retrain St. Louis auto workers for the anticipated green jobs of the future. You can probably guess how he felt about the insane proposition that the government has any idea what the jobs of the future are.

Finally, our research assistant Josh Smith did his first radio interview with the Eagle, 93.7 FM in Columbia, about the proposal to require a prescription for all sales of medicine containing pseudoephedrine. Needless to say, Josh (and I) think that proposal is wrong, to put it politely. I should clarify that it was Josh’s first radio news interview while he has been with the Show-Me Institute. He has been on the radio before. In fact, I am pretty sure he was the seventh caller when he was in fourth grade and won tickets to the New Kids on the Block Show. He is still pretty psyched about that. …

The post Show-Me Institute in the Media, and Dr. Haslag on With McGraw Tomorrow appeared first on Show-Me Institute.

First, it is more than likely that the money spent by filmmakers via tax credits would have been spent anyway in the market, by private individuals. If a hotel hadn’t rented a room to a member of the film production crew, they could have rented it to somebody else. If the restaurant hadn’t seated the producers at a table, they could have given the table to another party. I think that it is fallacious to assume that, had it not been for the tax credits, these Missouri resources would have been unemployed.

McCarty writes:

Harbin also misses the fact that the movie industry is nontraditional.

Saying that something is a fact does not make it a fact. The only thing that makes an industry like filmmaking “nontraditional” is the fact that the government has intervened to such an extent that it has distorted the market. Health care is another industry that is often described as nontraditional, but as I have described previously on this blog, health care is subject to the same market mechanisms as any other industry.

McCarty also writes:

Lastly, Harbin mentions that it may be better for Missouri to leave the filmmaking to other film states “like California.” She may not know this, but California found itself weakened between 1998 and 2000. Between those years, the U.S. lost $10 billion worth of film productions to Canada, which passed film tax incentives. Southern California alone lost about 35,000 jobs due to the shift to Canada.

It makes economic sense that California would produce fewer films because it had to compete with states and other countries. Filmmakers like Jason Reitman are smart businesspeople, and they will go wherever they can get the best deal. I disagree that this refutes my statement that Missouri shouldn’t feel that it has to compete with other states for filmmaking, however.

Michigan has pursued the filmmaking industry particularly aggressively, and its state legislature is already discussing repealing the program. Missouri would be smart to specialize in producing according to its comparative advantage (i.e., in products that aren’t filmmaking), and then realize gains from trade with those states. Missourians will still be able to enjoy the benefits of the product (i.e., film), and at a much lower cost (i.e., the price an admission ticket at a movie theater vs. the price of subsidizing the production).

As another advantage of producing according to its competitive advantage, Missouri would have an opportunity to differentiate itself. Instead of producing the same products and services as other states do, Missouri could produce the goods and services that are uniquely Missourian.

Furthermore, McCarty did not dispute my argument that targeted tax credits hurt businesses in non-favored industries. By providing special advantages to a select industry, targeted tax credits force everyone else in the market to compete at a disadvantage. In a previous blog post on Show-Me Daily, Dave Roland explains this better than I do:

True economic development happens best when governments allow businesses to compete on a field that offers no special advantages to any of the players. The government does a grave disservice to its citizens when it assumes the responsibility for picking winners and losers in the market, rather than letting businesses succeed or fail on their own merit.

Another argument of mine that McCarty does not address is the one relating to the supreme opportunity cost associated with film tax credits. What else can Missouri do with this money? What is so special about the film industry, in contrast to other industries? Why doesn’t Missouri target hog farmers or economic research analysts or education or infrastructure?

Maybe in a couple of years, each state in the union will offer tax credits that are targeted to filmmakers, thereby negating the artificial comparative advantage that currently exists in states like Missouri. I can only hope.

The post A Rebuttal to Ray McCarty’s Rebuttal appeared first on Show-Me Institute.

“Part of the reason (traditional public) schools have gotten into the situation they are in — having quality problems — is they effectively have a captive audience. They don’t have to earn students,” said Dave Roland of the Show-Me Institute, a think tank that promotes free-market solutions to public policy.

“Wealthy parents already have the option of moving into the best school districts, or the best zoning within districts,” he said. “The idea of school choice is we make sure low-income parents have the same range of options.”

The post Dave Roland Quoted on Charter Schools appeared first on Show-Me Institute.