In the previous blog post in this series, I posited that (generally speaking) able-bodied individuals should be expected to pay for their housing, and that for housing to be “affordable” to an individual, it should take up no more than about 30% of their salary, both as a rule of thumb and by the federal government’s own definition. But that’s not the end of the story when it comes to establishing what affordable housing is.

Another major question is this: How far away from one’s employment can housing be to still be functionally affordable for that worker? If I work a minimum wage job on the moon, renting a house on Earth and paying to commute daily to outer space won’t cut it.

For a more grounded example, if a worker’s job is in Overland Park, Kansas, but their housing is 25 minutes away east of downtown Kansas City, would that housing—meeting all criteria before considering location—qualify as “affordable housing”, given the added cost of transportation? If the same job were in Independence—nearly 40 minutes away from Overland Park—would we expect that worker to change jobs to something closer to home, or move to housing closer to their job? How do our expectations change if instead of gas being $2 per gallon, it jumps to $5 per gallon?

This question of affordable housing in the context of geography is a nuanced question that doesn’t necessarily have an intuitive or universal answer. But that doesn’t mean answers aren’t being proposed.

For example, the Housing and Transportation Affordability Index, or H+T Index, attempts to simulate what residents of a given census tract might expect to pay in housing and transportation combined as a percentage of their income. Keep in mind that “transportation” here includes all transportation, including trips to the grocery store, for entertainment, etc., so the H+T Index isn’t an apples-to-apples comparison to the HUD definition or other housing-only definitions of affordability. But the H+T index is helpful for understanding that affordable housing that isn’t close to gainful employment is, for all intents and purposes, not affordable.

Other factors can also play into the definition of affordable housing, including whether affordable housing includes homes for purchase as well as homes for rent; whether affordability considers the mitigating costs of roommates where appropriate; and the extent to which affordable housing could still be inadequate housing in some other qualitative way.

That said, a reasonable baseline definition of affordable housing includes the following: it should generally be paid for by the individual, should not exceed 30% of their salary, and should be available in rough proximity to their place of employment. Now, we can turn to the question we’re exploring in this series: Does Kansas City have an affordable housing problem? Stay tuned.

The post Part Four: Does Kansas City Have an Affordable Housing Problem? appeared first on Show-Me Institute.

Apparently, getting Disney to move a small chunk of its workforce to Lake Nona (a mixed-use development about 20 miles from Walt Disney World) is worth $570 million over 20 years—that’s what Disney is estimated to receive for this move. That’s a lot of money to pass up, so I can’t blame Disney for making the move. However, lawmakers are taking this money away from taxpayers, and they certainly deserve blame for that.

Clearly, Missouri is not the only state that seems to be addicted to handing out money to “help” large companies make decisions. Lawmakers across the country can’t wrap their heads around this important point: Giving away hard-earned tax dollars (or not collecting tax dollars) to manipulate the market and pick winners and losers is a bad idea. The research shows that the broader economy of an area does not benefit from these types of incentives—but the company certainly will.

Missouri and Missouri cities give out and forgo hundreds of millions of tax dollars annually. We’re not the only ones to do this, but we should be the ones to end it. Perhaps we will soon know the “magic” of actually using taxpayer dollars to provide public services to taxpayers.

The post Even Disney Magic Is Swayed by Tax Incentives appeared first on Show-Me Institute.

As this father’s day coincides with the summer solstice, it is an appropriate time to recall the astonishingly accurate calculation of the circumference of the Earth that was made on this same day more than 22 centuries ago by one of the founding fathers of mathematics and scientific measurement.

Like other Greek astronomers and scholars at the time, Eratosthenes (276-195 B.C.), the head of the famous Library at Alexandria in Ptolemaic Egypt, assumed the Earth was round and revolved around the Sun. From his research, he discovered a fascinating fact: Every year, at noon time on this day (June 21) and no other, the Sun shone directly to the bottom of a deep well in the town of Syene (site of today’s Aswan Dam).

Syene was almost due south of Alexandria, and Eratosthenes estimated distance between the two cities to be 5,014 stadia (or 800 kilometers).

When the Sun was at its zenith in Syene—shining directly down a well and reflecting back up again—Eratosthenes surmised that it must cast a tell-tale shadow in more northern Alexandria. Using the obelisk located in front of the library (or using some other tall, vertical object), he calculated the angle of the Sun to be 7.2 degrees south of its zenith in Alexandria.

Since 7.2 degrees is 7.2 / 360, or one fiftieth of a full circle, Eratosthenes reasoned that the circumference of the Earth must be 50 times the distance made by the curvature of the Earth between the two cities. That worked out to 252,000 stadia, which is within 1 percent of the modern measurement of 40,008 kilometers.

Just as the Sun cannot be directly overhead two distant cities at the same time, it is impossible to think that suddenly doubling the minimum wage in the cities of Saint Louis and Kansas City (with the mayors of both cities strongly supporting legislation to mandate a $15 an-an-hour minimum wage) will not cast a long and dark shadow over the prospects for future employment in those same core city areas.

The law of supply and demand is as immutable as rules of geometry and the law of gravity. If you make something more expensive, demand for it will decrease. That holds true for lemons, lightbulbs, and labor. By dictating businesses double the pay of the lowest-paid workers, cities that pass such laws are making it less attractive for businesses to hire or to continue to employ inexperienced and unskilled workers.

Here are three entirely predictable consequences of artificially setting the price of low-skilled labor far above the market price. First, it will make sense to substitute capital for labor through increased automation. Second, it will depress earnings and cause businesses to raise prices or cut corners in striving to deliver the best value to their customers. Third, many businesses will consider moving to other locations—with ample opportunity for doing so in surrounding suburbs.

Summer solstice comes but once a year. Doubling the minimum wage would damage job growth in Saint Louis and Kansas City every day of every year. It’s a matter of simple math and logic.

The post Father’s Day Thoughts On the Summer Solstice and the Minimum Wage appeared first on Show-Me Institute.

This may be because virtual charter schools are not yet allowed to operate in the Show-Me State. Legislation has been introduced this session that attempts to expand virtual charter education opportunities. Online charters already exist in more than 30 states.

Virtual charter schools could provide an alternative for public school students and homeschool families outside of Saint Louis and Kansas City. The creation of a virtual school network also could create new employment opportunities for educators.

Traditional brick and mortar education may work for most students, but for children who require an alternate learning environment, 21st-century charter schools may be the answer.

The post Are Virtual Charter Schools Right for Missouri? appeared first on Show-Me Institute.

The growing popularity of programs aimed at giving students in public schools expanded access to private education has led to exaggerated fears of such an outcome.

Politico Senior Education Reporter Stephanie Simon sounded the alarm with these words: “Taxpayers in 14 states will bankroll nearly $1 billion this year in tuition for private schools, including hundreds of religious schools that teach Earth is less than 10,000 years old, Adam and Eve strolled the garden with dinosaurs, and much of modern biology, geology and cosmology is a web of lies.” Critics who oppose vouchers and education savings accounts on these grounds are correct in arguing that they compel some taxpayers to support material they may find objectionable. However, they are not the first to make this claim.

For as long as anyone can remember, there have been disagreements about what is being taught in public schools. This happens because individuals are compelled to send their children to schools – public or private – and because they are compelled to support public education through their tax dollars. As a result, individuals with different values and beliefs may be forced into the same system. When parents disagree with their child’s public school they can pay for private school tuition, accept the school’s actions, or seize control and make the school change its position. In all three of these scenarios, some people are being compelled to fund a school that teaches material with which they disagree.

There is simply no getting around the fact that someone’s beliefs or conscience will be compromised in the levying of taxes to support education.

When it comes to tax credit scholarships, however, Simon and others who lump them with vouchers are wrong. Tax credit scholarships do not compel individual taxpayers to fund or support schools they may find objectionable. In fact, the U.S. Supreme Court ruled that opponents of Arizona’s tax credit scholarship program did not have standing because tax credits are not government spending. Tax credit scholarships are funded through individual and corporate donations. The individual is not compelled to donate their money, they choose to do so. The donations never enter the government treasury and the funds are not distributed by a government agency. Other than an all-out private system, where everyone pays for their own child’s education, this is about as close as we can come to a system that does not compel individuals to subsidize schools to which they object.

The distinction between tax credit scholarships and other private school choice programs is an important one, but is somewhat beside the point. The fact remains that it is impossible to create a school that is perfectly neutral when it comes to every person’s beliefs, values, and convictions. Therefore, those who oppose private school choice for this reason are implicitly saying that their rights are more important than others who object to content in public schools, but are compelled to support them.

When the district where I taught banned Slaughterhouse-Five and Twenty Boy Summer, few on the left applauded the district for acquiescing to a parent’s wishes. They deemed the district backwards and lampooned the individual who led the effort to ban the books. I doubt Politico’s Simon or other opponents of private school choice programs have a problem with Philadelphia’s decision to include A People’s History of the United States—a highly controversial book written by known socialist Howard Zinn – in the public school curriculum. Indeed, the left applauds when public schools treat Al Gore’s documentary “An Inconvenient Truth” as bible.

Hundreds of other examples of conflicts that have arisen in public schools can be found on the Cato Institute’s Public School Battle Map.

Politico’s Simon and others opposed to private school choice are not interested in ensuring that all citizens are not compelled to fund schools that violate their beliefs. They are perfectly fine when politically correct, left-wing thinking is perpetuated in public schools. They simply are attempting to use creationism as a cudgel to prevent parents from having the opportunity to choose a school that aligns to their personal values and beliefs. It is an effort to enforce a left/liberal orthodoxy.

James V. Shuls, Ph.D., is the director of education policy at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Creationism, The Left’s Weapon Against School Choice appeared first on Show-Me Institute.

What could go wrong?

Councilman Russ Johnson has filed a resolution that would direct City Manager Troy Schulte to apply for a Federal Transit Administration grant to study extending the proposed streetcar line to the Country Club Plaza and University of Missouri-Kansas City area.

The current proposal has the line running a 2.2-mile route from River Market to Crown Center. The second leg would add a little more than three miles.

City officials apparently feel they need to go straight to ludicrous speed with this crazy train proposal, but basically all of the same objections apply to the new plan as the old. Kansas City’s streetcar plan attempts to satisfy a market demand for transit that does not exist along the proposed route and will cost at least — and now, potentially far more than — $100 million to get off the ground. In addition, despite city promises, the plan will make the city less competitive, not more competitive, with a spike in local taxes.

Is this really what Kansas City needs to be investing in right now? The Kansas City Star‘s Yael Abouhalkah recently noted that Kansas City has the second-worst debt service burden among the largest cities in the region and one of the highest tax burdens. Why would the city aggravate concerns that are already making it less competitive, and why on Earth would they double down on such a plan?

The post Double Trouble: Kansas City Considers Extending Trolley Line To Plaza appeared first on Show-Me Institute.

In 2010, it appeared that the Missouri Department of Economic Development (DED) could sink no further. After all, the agency had initially awarded tax credits to a Cape Girardeau businessman who pleaded guilty to passing bad checks, and has been scolded by the State Auditor’s Office for (perhaps accidentally) pulling numbers out of thin air that overstate the economic benefits of tax credit projects.

But the DED has outdone even itself. On Jan. 5, the St. Louis Post-Dispatch reported that the agency had awarded $8 million to a redevelopment project that a court judge has ruled no longer exists.

NorthSide Regeneration LLC, the company behind an enormous and ambitious project slated to occur in north Saint Louis, received the $8 million. However, the tax credits that the DED awarded must be tied, according to state statute, to a “redevelopment agreement.”

State statute specifies that such a redevelopment agreement exists only when a city has selected a developer (in this case, NorthSide), by passing an ordinance to award additional local tax incentives to the company. Unfortunately for the NorthSide company, although city alderman passed such an agreement, it was thrown out by a judge in July — so, according to the statute, NorthSide simply isn’t entitled to the money.

This does not mean that NorthSide’s development should halt. The company has put forward a great deal of money to get the project started, and if the developer believes that the project will be successful without government subsidy, the project will move forward. But the DED should not be in the business of subverting state statute.

The Post-Dispatch article includes a sadly amusing quote from DED spokesman John Fougere: “We have to abide by the statute as it stands and as it stands, there are no safeguards for taxpayers.”

Of course, what Fougere fails to mention is that one easy way of safeguarding Missouri taxpayers is not to award $8 million to a redevelopment agreement that has been thrown out by the court. Instead, the department awarded the tax credits, but with a specification that if a court were to throw out the redevelopment agreement again, the company has to give back the money.

In essence, the DED has awarded NorthSide an interest-free loan, just in case the company manages to prevail in court at some point in the future. Why on earth would the DED do this? Surely, DED employees wouldn’t ignore their statutory obligations?

A possible reason is that because NorthSide is in the process of appealing this ruling, the DED viewed the judge’s ruling as not final — it could be overturned. However, it is strange that the DED, especially in light of recent public scrutiny, would not take the more prudent course of awaiting the result of the appeal before awarding tax credits.

Not only does Missouri desperately need a thorough, critical review of tax credit programs in general, it is clear that the workings of the DED need to be examined. This agency awards hundreds of millions of dollars each year, and is neglecting its duty to safeguard taxpayer money.

Audrey Spalding is a policy analyst for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.

The post DED Awards $8 Million in Tax Credits to Developer Ruled Ineligible by Courts appeared first on Show-Me Institute.

However, the Missouri Constitution makes implementing Criss’ proposal somewhat problematic. The state Constitution requires that funds generated by the gas tax be dedicated to building and repairing roads, bridges, and highways. The goal of a higher gas tax for Criss is that people would use less gasoline by driving less or using more fuel-efficient vehicles, but more and better roads will at least marginally increase people’s incentive to drive by allowing them to reach more destinations more quickly and comfortably. Increased roadwork would also generate a fair amount of air pollution. Those effects probably would not completely eliminate the environmental gains of a higher gas tax, but they are worth considering.

Furthermore, if people drive less but there are more gas tax revenues to spend, we will end up wasting that money on underused roads and highways. In short, while Criss’ proposal is not without merit, implementing it properly would involve a much greater challenge than simply raising the gas tax.

The post A Self-Defeating Proposal appeared first on Show-Me Institute.

No, wait … not interesting. What’s that other word? Oh yeah: tedious. I spent three hours in a hearing room with most of the time taken up by an abstruse discussion of appraiser regulation. The only people in the room who seemed to be actually animated by the subject were the interested appraisers and representatives of appraisal management companies. Most of the representatives seemed to idle the time away browsing the Internet on their laptops and phones. The rest sat there, supporting their heads with their hands and wearing the painfully bored looks of people firmly convinced they are meant for something better in life than this.

Even for all the hearing’s spectacular boredom, however, I did learn a thing or two. First, appraisal regulation is a subject far more complicated than anyone should ever want to know. The big change under discussion that night was the move to a greater reliance on appraisal management companies (AMCs) over the old-fashioned kind of appraisers. This shift has been ongoing for some time but received a big boost when the Home Valuation Code of Conduct (HVCC) essentially became the law of the land. I will spare you most of the further details (if you really must know, I recommend this article) except to say that although it does appear the HVCC is kind of a disaster, the new bill being used to rectify the problems looks like it just benefits the appraisers at the expense of AMCs and consumers.

Now, I fully admit that I am no expert in the field, but when every appraiser testifying for the bill complains that AMCs do less expensive work than appraisers, it sets off my Rent-Seeking Alarm. It sure seems to me that the appraisers are using the problems in the HVCC as a way to limit their competition and raise rates. But I could be wrong. Given the massive complexity of the regulatory code surrounding appraisals, it probably isn’t possible to know how the bill would change the system ex ante, and this presents a massive problem for regulators.

Writing about Democratic members of Congress who did not understand how tax changes in the health care bill would affect large companies, Glenn Reynolds describes this same problem:

The United States Code — containing federal statutory law — is more than 50,000 pages long and comprises 40 volumes. The Code of Federal Regulations, which indexes administrative rules, is 161,117pages long and composes226volumes.

No one on Earth understands them all, and the potential interaction among all the different rules would choke a supercomputer. This means, of course, that when Congress changes the law, it not only can’t be aware of all the real-world complications it’s producing, it can’t even understand the legal and regulatory implications of what it’s doing.

There’s good news and bad news in that. The bad news is obvious: We’re governed not just by people who do screw up constantly, but by people who can’t help but screw up constantly. So long as the government is this large and overweening, no amount of effort at securing smarter people or “better” rules will do any good: Incompetence is built into the system.

The good news is less obvious, but just as important: While we rightly fear a too-powerful government, this regulatory knowledge problem will ensure plenty of public stumbles and embarrassments, helping to remind people that those who seek to rule us really don’t know what they’re doing.

And that’s assuming the legislators actually take the time to try and understand the legislation. What’s more likely is what I witnessed last Wednesday: disinterested representatives killing time until the end of the session by checking their email and text messages. If a regulation is so complex that the regulators can’t even be bothered to understand it, it is likely to be ineffectual at best and counterproductive at worst. In regulation, less is often more.

The post Mr. Payne Goes to Jefferson City appeared first on Show-Me Institute.

Just as encouraging is the finding that scores jumped from 2007 to 2008 within all school types, including campuses run by the Recovery School District, the Orleans Parish School Board and dozens of independently run charter schools.

[…] the quality of education New Orleans’ children are getting is improving. And for the first time, parents have numerous educational choices.

This diminishes the credibility of those who predict imminent doom and gloom with the opening of each new charter. As the editorial points out, it’s not possible to prove that charters directly caused the rising test scores and other positive developments in the New Orleans education market. But it conclusively shows that progress is possible even with a bunch of new charters in town — and charters don’t have to mean the end of life as we know it.

The post Charter Schools Flourish; In Other News, Earth Continues to Revolve Around Sun appeared first on Show-Me Institute.

Avatars can make their way through the flowering dogwoods, stop to view a spinning Missouri state seal overhead and browse displays about information technology opportunities and facts about the state.

I wonder whether they can eat official Missouri dessert ice cream cones, catch official Missouri invertebrate crayfish, and dance the square dance, the official folk dance of the state of Missouri. (I don’t know, because I’m not on Second Life!)

The Information Technology Services Division has already hired someone they recruited on Second Life. In the virtual world, he was a kitten. The article doesn’t say what he turned out to be in real life.

And state involvement in this online community goes even further:

In November 2008, the Missouri Government Island was established. A plan is under way to use virtual construction machinery, even bulldozers, to make the island the shape of Missouri. This will become home to several state government entities.

“We understand that we are the only state to go out and obtain our own island,” Grecian said.

Now, I don’t want to be overly critical of this because it sounds like expenditures on the project have been negligible so far. But there’s a fine line between staying ahead of the pack when other states are too conservative in taking advantage of new technology, and going off the deep end. If other states aren’t buying islands, that’s probably because states just don’t need their own virtual islands. And there are lots of options for state agencies to use social networking — for example, through Facebook pages — to get in touch with people in more direct ways. I thought the whole idea of using online networking was to avoid the bulldozers and stuff you need in real life. If you have to create a virtual MoDot in order to recruit people on Second Life, how is that an improvement over planet Earth?

The post Second State appeared first on Show-Me Institute.

I recently asked a group of fourth grade students what they would vote for if children could vote. Their answers were so simple and yet so profound. They said they want to be the smartest they can be when they leave school. They want time to play, time to read and food and medicine for those who are hungry or sick. Children want things to be fair. They want to be safe. They want everyone to get what they need. And they want us to protect the Earth.

The op-ed talks about the "common good" and argues for more spending on public schools and government programs. But it inadvertently points out the problem with this approach:

Would we underfund education if we knew it was our child who would not receive the educational intervention she needed?

Would we fail to fund health care for children if we knew it was our child who could not see a doctor if he were sick?

The answer, of course, is "no." And that’s why it’s important to put parents in charge of their children’s education and health care. When parents get to make choices for their children, they have their best interests at heart.

The post I’m Thinking of a State (Part 2) appeared first on Show-Me Institute.

I don’t blame Blunt for pandering to a powerful constituency. Lots of politicians?Democrat and Republican?have used the alleged problem of foreign oil as part of their justification for providing more welfare to corn farmers. But just because everyone says we need to end our “dependence” on foreign oil doesn’t mean it’s true.

The most fundamental thing to understand about oil economics is that oil is that it’s an interchangible global commodity. (It is, in economics jargon, fungible) if we stopped buying oil from Iran or Saudi Arabia, they would just turn around and sell their oil to China, France, or Japan instead. Oil-exporting countries, by and large, don’t care who they sell their oil to, and the laws of supply and demand ensure that they’ll be able to sell their oil to somebody, albeit perhaps at a somewhat lower price.

It’s sometimes argued that all the oil in the Middle East requires us to get involved in foreign conflicts like the war in Iraq. But this doesn’t make a whole lot of sense either. Obviously, there are lots of good reasons to prefer a peaceful, democratic Middle East to one ruled by erratic despots. But despots seem just as willing as anyone else to sell us oil. Foreign countries don’t sell us their oil as a personal favor. They sell us oil because we have the money to pay for it. No matter who’s in charge in Iran or Saudi Arabia, they’ll most likely be interested in the revenues that come with oil exports. And as the richest country on Earth, we’ll have little trouble outbidding other nations for the oil we need.

But doesn’t our dependence on foreign oil make us subject to blackmail from those countries? Jerry Taylor and Peter Van Doren, two economists at the Cato Institute, explain why this is silly:

Even if you think that OPEC has the means and motive to use this alleged oil weapon, there’s not a thing we can do about it. First, even if every drop of oil we consumed came from Oklahoma, Texas, and Alaska, a cutback in OPEC production would raise domestic oil prices as high as if all our oil came from Saudi Arabia. That’s because there are no regional markets for oil — only global markets — and because prices always reflect opportunity costs in free markets, regional prices invariably rise to the world price. In 1979, for instance, Great Britain was “energy independent” — virtually all the crude oil it consumed came from the North Sea. But the oil price spike of 1979 hit Great Britain as hard as it hit Japan, a country dependent upon imports for its oil. No country can wall itself off from the world market.

The post The Oil Weapon Myth appeared first on Show-Me Institute.