Missouri cannot keep putting off energy reform until the next year—change is happening now, and energy demand is growing.

For the first two decades of the 2000s, electricity consumption remained flat without significant growth, as increased demand was offset by increased energy efficiency. However, in recent years energy demand has been on the rise again.

Forbes, the Department of Energy, and The New York Times all note the same driving forces for this increasing demand—data center growth (accelerated by the growth of AI) and a boom in electrical manufacturing (batteries, computer chips, etc.). What is one thing data centers and factories have in common? They both require power 24 hours a day—something non-dispatchable resources like solar cannot effectively provide alone. (Small modular nuclear reactors are great at providing continuous power . . . just saying.)

Some prominent organizations, such as Goldman Sachs and McKinsey & Company, have forecasted that U.S. data center energy usage will double by 2030. To put it into perspective, Goldman forecasts that data centers’ share of total U.S. power demand will rise from its current 3% level to 8% by 2030. This is an enormous amount of electricity—equivalent to the power needed for over 40 million U.S. homes.

Ameren is planning to shut down all coal plants by 2045. To replace coal plants’ production and meet new demand, our state will need to build reliable, powerful, and clean power plants.

Nuclear power can check all of these boxes, but we need regulatory reform to allow nuclear to flourish in Missouri. To replace and meet new energy demand, our state should strongly consider nuclear energy.

The primary policy that has impeded our nuclear industry for decades is the construction-works-in-progress (CWIP) law. This statute prevents utilities from raising rates in order to help pay for construction-works-in-progress, making it much more difficult to develop nuclear projects. CWIP has proven fatal for Missouri’s nuclear industry, as nuclear projects are both extremely capital intensive and subject to extensive holdups in the regulatory process.

Nuclear plants do not arise out of thin air, and they will not be built in Missouri if there are too many regulatory barriers. Eliminating the longstanding CWIP statute by passing HB 1435 and HB 1804 would provide a backstop for the large upfront costs of small modular reactor construction so that utilities can work with both domestic and international nuclear developers to revive our state’s nuclear industry.

In the remaining weeks of the session, the legislature cannot forget about the need for modernization in the energy sector. Electricity demand is on the rise, and Missouri should prepare to meet this demand.

The post Missouri Needs to Be Prepared for Growing Energy Demand appeared first on Show-Me Institute.

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The Discovery School has an amazing story. When the coronavirus struck in March of 2020, the Discovery Center, a children’s science museum, worked around the clock to transform into a licensed childcare center to continue students’ education even if their schools were closed to in-person instruction. Every member of the team agreed to work in person instead of working from home. By August, it had cultivated a community of learners who wanted to keep the good times going. The Discovery Center leased and renovated a building that used to be part of Everest College and created a space for children to do their virtual learning in small learning pods. By January of 2021, it was ready to launch a standalone school. It currently operates as a private school for students in Springfield. The STOP award created an informative webpage on the school, and it is worth checking out.

Simply by being named a finalist, the school is guaranteed at least $250,000 in prize money. The full prize will be announced December 14th at Forbes’ annual 30 under 30 event.

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It was nonsense five years ago when they made the argument to the legislature, and it’s nonsense now.

I won’t republish my entire Forbes piece here, so click the link above if you’re interested in the original editorial. But plainly, the expansion does not operate like the public is now being told it does in TV ads.

• There is no federal pot of money divvied among participants when other states don’t join the expansion. If only one state expanded Medicaid, that one state wouldn’t then receive the funding of the 49 non-participating states. It’d receive money for its program and no more.
• Missouri already receives more in federal support than our federal contribution warrants. We rely more on federal money than most other states, and we’re already getting more than our “fair share” in federal cash even without expansion.
• But perhaps most importantly, there are no “tax dollars” being “sent back” to any state, especially these days. We are in a period of extraordinary deficits, and that means every new dollar spent by the federal government is from debt, not from taxes paid.

Medicaid expansion is debt, plain and simple, and yet it will still require redirecting existing state money currently earmarked for education, public safety, infrastructure, and other priorities to feed the Medicaid program’s insatiable appetite.

It’s Medicaid expansion debt. Supporters should be honest with the public and call it what it is.

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As famed economist Milton Friedman (and others) have emphasized again and again, being “pro-business” is not the same as being “pro-market” or, in this case, pro-consumer. If consumers want a more personal touch with their car buying decisions, then there will be a market for the car dealership experience. And if they just want an electric car direct from the manufacturer, shouldn’t they have that option, too?

I won’t belabor the point too much since this is well-trod ground, but I do want to highlight this video featuring Friedman, and the Friedman quote below, to reiterate the problem here of playing favorites against consumer interests.

You talk about preserving the free market system. Who has been destroying it? The business community must take a large share of the responsibility. You must separate out being pro-free enterprise from being pro-business.

Missouri should take Friedman’s point to heart and let consumers decide for themselves what they want from their car-buying experiences.

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A previous question motion, or “PQ,” allows for a vote on a bill or amendment if a majority of the chamber chooses, even if a filibuster is ongoing. The details of the motion are laid out in Rule 84 of the Rules of the Senate, which describes the PQ as follows: 

The previous question shall be in this form: “Shall the main question be now put?”. It shall only be admitted on written demand of five senators, and sustained by a vote of a majority of the senators elected, and in effect shall be put without debate, and bring the senate to direct vote upon a motion to commit, if such motion shall have been made; and if this motion does not prevail, then upon amendments, and then upon the main question. On demand for the previous question, a call of the senate shall be in order, but after a majority of the senators elected have sustained such a motion, no call shall be in order prior to the decision on the main question.

Translation? Five senators can initiate the PQ, and a majority of Senators can end a filibuster. Why Senators would hesitate to call a PQ isn’t necessarily captured in the rules, of course, and as we’ve seen in previous sessions, spurned Senators can grind the chamber to a halt by opposing motions that require unanimous consent or filibustering other legislation. This eats up time for other legislative priorities, which is essentially the point and central to the threat.

But the PQ shouldn’t be considered in a vacuum or treated as if it were dictated by immutable laws of Senatorial physics. Whereas the filibuster and the PQ are well within the realm of Senate tradition, so too are rules changes that would head off the sort of obstruction that has dissuaded previous sessions from appropriately using the PQ motion; after all, if rule changes were not part of Senatorial tradition, then there wouldn’t be rules explicitly allowing for changing Senate rules. “Tradition,” as it turns out, is both a shield and a sword, and legislators obstructing reform need to realize the “tradition” argument cuts the other way as well.

The real question, then, isn’t whether the PQ and related rule changes are consistent with Senate tradition—they are—but whether Senate leadership has the courage to break the reform logjam. Time will tell, but time is running out.

The post Calling the Previous Question appeared first on Show-Me Institute.

Well, the RTT movement has expanded since then. Today over thirty states have already enacted the law, and it looks like federal officials may be following suit very soon.

Indeed it hasn’t. With a new Congress, bipartisan support, and a potentially supportive President, the prospects for a federal RTT statute passing are as good as they have ever been. If it does pass, it will be a win for patients across the country seeking greater control in the most precarious health situations imaginable. As we’ve said many times before, government should let people help their fellow Americans on terms largely or entirely unencumbered by state or federal bureaucracies. Right to Try laws are fundamentally designed to advance that end — and to offer hope to the most vulnerable among us. 

It isn’t clear when the federal Right to Try law is going to be debated and voted on this year. We’ll update you as the legislation goes through the process.

The post Right to Try Becomes a National Issue appeared first on Show-Me Institute.

Like the Medicaid reform we proposed three years ago, Right to Shop realigns incentives for health care consumers by rewarding them for seeking out cost-effective care. In a Right-to-Shop state, patients would be able to receive a portion of the savings an insurer would realize if the patient went to a lower-cost provider rather than a higher-cost provider. Rather than reinforce the paradigm where the ever-increasing prices we pay for a service go straight toward driving up our respective premiums, Right to Shop shifts the paradigm by empowering consumers in the private market to save themselves—and their risk pools—money that can be used toward other life needs they might have. That means more money can go toward health care spending, but also toward rent, car payments, or whatever else a patient might need, health-related or not.

Here’s how Josh Archambault of the Foundation for Government Accountability, the chief proponents of the idea, explained the concept in Forbes last year:

Right To Shop empowers patients with the knowledge they need to make smart choices about how and where they consume health care. They’re given tools to find the best value providers and, when they choose those options, they get a share of the savings – in cash.

It’s so easy, even a caveman can use it.

“Caveman” is probably a good image here, given that health care shopping was stuck in the Stone Age for much of the last few decades. For most Americans, the price actually charged for our health care when we received it was less of a gripe than the price paid in deductibles, premiums, and copays throughout the year—even though they’re all inextricably connected.

Right to Shop takes us another step in a better policy direction, toward transparency in pricing, competition for our care, and gentle reform of the third-party payer system we’ve come to expect. If Missouri policymakers haven’t considered the idea yet, now would be a good time.

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And as always, your commentaries are welcome in the comments below.

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This finding probably surprised a few Missourians, but it shouldn’t. Missouri’s state sales tax may be relatively low at 4.225 percent, but locally imposed sales taxes nearly double the average sales tax paid in Missouri stores. This includes extra sales taxes in special taxing districts like Kansas City’s Power & Light District, which can pump the sales taxes actually paid by consumers to well over 10 percent. These sales taxes are, of course, in addition to the state’s income and property taxes, which aren’t exactly low either. This is why Missouri isn’t a “low tax state.”

The Tax Foundation released its 2015 sales tax rankings, and . . . well . . . Missouri still ranks 14th at a rate of 7.81 percent, well ahead of 29th-ranked Florida (6.65 percent), which, of course, doesn’t have an income tax. The Tax Foundation’s report makes special mention of the failure of Missouri’s transportation sales tax last year, which would have added another three-quarters of a percent to the state’s already-high sales tax. Had Amendment 7 passed and bumped the state’s average sales tax to over 8.5 percent, chances are very good that Missouri would have jumped into the top 10 of high sales tax states, ahead of states like California (8.44 percent) and New York (8.48 percent). Missouri’s sales taxes are already bad; this year it is cold comfort to know that they could have been worse.

Missouri needs substantive, across-the-board tax relief. There’s still time for the legislature to act this year—at least on the income tax—but the clock is ticking.

The post Tax Foundation: Missouri’s Sales Taxes Still Well Above Average appeared first on Show-Me Institute.

Our new county-by-county analysis was led by Yegeniy Feyman, who compiled the county-based data for 27-year-olds, 40-year-olds, and 64-year-olds, segregated by gender. We were able to obtain data for 3,137 of the United States’ 3,144 counties….

Among men, the county with the greatest increase in insurance prices from 2013 to 2014 was Buchanan County, Missouri, about 45 miles north of Kansas City: 271 percent. Among women, the “winner” was Goodhue County, Minnesota, about an hour southwest of Minneapolis: 200 percent. Overall, the counties of Nevada, North Carolina, Minnesota, and Arkansas haven experienced the largest rate hikes under the law.

Amazingly, that 271 percent figure conceals something else about Buchanan that is just jaw-dropping. If you use Forbes’ national rate navigator, you discover that a 27-year-old man in Buchanan County can expect an individual insurance policy rate increase of — get this — 411 percent.

This is “affordable”? How can any politician tell his or her constituents with a straight face that Obamacare is working, or that we need to help the Feds implement this disaster in Missouri? Missouri needs market-based insurance reforms, not Obamacare and its Medicaid expansion. Our people deserve better than this raw deal.

The post Thank Obamacare: Buchanan County, Mo., Tops List For Insurance Rate Hikes On Men appeared first on Show-Me Institute.

The top four states in CNBC’s survey are right in the middle of the growth corridor: 1. South Dakota, 2. Texas, 3. North Dakota, and 4. Nebraska. And make no mistake, not all of these states were always ranked so high. As far back as 2008, Nebraska’s CNBC ranking was tracking closely with Missouri’s. But then . . . it wasn’t. Nebraska moved into the top five nationwide; meanwhile, Missouri fell further behind. Kansas is always cited as a reason Missouri should be working hard to make itself more attractive to business, and that remains an obvious argument. But Missouri’s economic problems do not begin and end with Kansas, as the Nebraska example bears out. A broader picture of the region that includes only our immediate neighbors should also concern Missourians: Of the eight states that border Missouri, only two are ranked worse — Illinois and Kentucky, both on Missouri’s eastern border.

Now as we always note, your mileage will vary with these surveys, but as Hafer notes, when just about all of them are showing basically the same thing, it makes Missouri’s economic problems all the more clear.

Should we care about such surveys[?] When they converge, yes. CNBC’s ranking corroborates Forbes magazine’s 2013 ranking analysis that placed Missouri at 29. And a report from CNBC earlier this year showed that using data from the National Association of Manufacturers, Missouri did not even make the list of 20 states with the highest manufacturing job creation since the end of 2009. Notably, Illinois, Iowa, Kansas, Kentucky and Tennessee all made the list.

Will Missouri continue down a path of mediocrity? It will unless its leaders — both political and business — grapple with those issues over which they have some control to change in a manner that enticed businesses to start or relocate to our state. Education and tax policies seem like a good place to start the discussion.

Missouri has been headed in the wrong direction for far too long. It’s time to change course.

The post In Case There Were Any Doubts About The ‘Growth Corridor’ We’re In, Here’s Another Data Point appeared first on Show-Me Institute.

I asked Forbes about the tornado of tax cuts that have recently swept across Kansas. He stated that what Kansas is doing is highly important and that states have a tendency to imitate successful actions that their neighbors implement. He used welfare reform as an example of one state enacting a significant policy change and other states following suit. Missouri should be following Kansas’ lead, just as Oklahoma and Nebraska are considering doing.

Missouri already lags behind its neighbors economically. In the past, we have argued that the state should eliminate its corporate income tax in order to boost Missouri’s economic growth. The Show-Me Institute has also examined ways that Missouri could eliminate the income tax entirely.

Missouri’s neighbors are moving forward. The state is at a decision point; will it make real changes or will it stick to the status quo?

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Williamson summarizes his Kudlow exchange thusly (emphasis added):

Jack up economic growth, Mr. Kudlow argues, and all this budget-balancing stuff gets easier. Not so fast, says I. If we had the ability to know in advance how much growth particular economic policies would produce — or even whether they would produce growth at all — then we would never have a recession. We would always be at the sweet spot of maximum real growth. But we are limited and fallible creatures, and right-wing political macroeconomic management is no more reliable, or predictable in its outcomes, than is Keynesian political macroeconomic management. The economy is not a machine, and any time a politician says, “If we will adopt Policy X, we are sure to achieve Statistical Abstraction Y,” he is talking through his hat. The best government can do is maintain stable rules and liberal institutions and try to stay out of the way.

Williamson is right on. The moment a politician thinks she can plan an economy is probably the moment she should no longer be presiding over it, and when your own politicians start talking up “economic multipliers” and “potential demand,” hold on to your pocketbooks, ’cause you’re about to be brought into a massive and expensive public experiment.

Or, put more succinctly, be very skeptical of the promises of economic growth that politicians make to you. Whether it’s magic unicorns or flying cows, hitching your fiscal destiny to the spirits of animal fiction is a plan for frustration, not a plan for the future.

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In response to my recent post about the different sales tax rates on sliced and unsliced bagels in New York, a commenter correctly points out that sales taxes in Missouri are similarly complicated and unintuitive. Under Section 144.014, RSMo, Missouri assesses a reduced sales tax rate — 1.225 percent instead of 4.225 percent — for certain food products but not others.

Forbes enters the discussion:

Missouri, for example, ruled in June that a retail drug store’s self-serve frozen meals, but not its self-serve coffee, would qualify for the state’s lower sales tax rate on food. Why? Food served hot doesn’t qualify for the lower rate. The store staff brews the coffee, which customers get for themselves in Styrofoam cups. But it is left to the customer to pop the frozen lasagna out of the freezer case and into the store’s microwave.

In an apparent attempt to clarify the differences in taxation on food items in Missouri, the Department of Revenue provides some examples. (I find these examples to be more confusing than clarifying, myself.)

Taxes are difficult to follow when they are different and ambiguous. As I discussed in my previous post on the subject, these taxes are associated with high administrative and compliance costs, and that Missourians would be better off if the sales tax were low and broadly based.

The post Missouri Has Its Own Quirky Tax Rules on Grocery Sales appeared first on Show-Me Institute.

Nixon proposed to “right-size” government by merging agencies, eliminating state holidays, laying off more employees, getting rid of state vehicles, scaling back employee pension and health benefits, privatizing child support collections and curtailing Missouri’s expansive tax credit programs.

He may talk the talk, but he doesn’t consistently walk the walk — he has continued to support giving tax credits to specific businesses. Here, I reference the $28 million in state incentives that the Missouri government is giving to IBM to locate in Columbia, Mo., or the proposed $15 million in tax credits to support the Ford plant in Claycomo, Mo.

Even though the incentive package for Ford’s Claycomo plant didn’t pass the state legislature, the governor strongly supported the proposal. According to the Kansas City Star:

The bills’ failure was a disappointment to Democratic Gov. Jay Nixon, who had pushed hard for both the jobs bill and retirement reform, and worked through the day Thursday and Friday to make a deal on their passage.

“Unfortunately, the General Assembly missed a critical opportunity by failing to pass this package,” Nixon said.

The recession has provided a new opportunity to evaluate the appropriateness and the effectiveness of specific government programs. I do give credit to the governor for communicating his commitment to reduce state expenditures. However, I wish that he would advance a consistent message regarding tax credits.

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In the second part of his post, he links to an article on Slate that cites a study analyzing electricity consumption patterns in the wake of government policy intended to “nudge” consumers into using less energy. First and foremost, this study is not relevant to my argument. In the case of Missouri’s green rebate program, which is what I discussed in my commentary, individuals receive a cash rebate when they buy energy-efficient appliances. The study cited in the Slate article looks at a case in which the electricity company simply sent its customers a home energy report that included charts and a list of tips on how to improve energy efficiency. The program considered by this study included neither a financial incentive, nor an upgraded appliance. The only conclusion that I would feel comfortable making from the study is that pamphlets do little to influence individual behavior. The study suffers from additional shortcomings, as well. For example, I disagree that a change of 1 percent or 3 percent is significant. This variation could be attributable to multiple other variables, such as a change in the price of energy or a seasonal change in the weather. The study also did not prove that the customers it identified as “liberals” reduced their energy consumption as a result of the home energy reports. Again, this reduction could have stemmed from any variety of other factors. Furthermore, because the percentage change and the sample size are both so small, a completely different result could conceivably be selected from the raw data.

According to a report published by Peter Huber and Mark Mills at the Manhattan Institute, the claim that we can meet future energy demand through conservation and efficiency is a myth. They provide evidence that, despite dramatic gains in energy-efficiency, aggregate energy consumption has increased over history:

The American economy has experienced massive efficiency gains: for each unit of energy, we produce more than twice as much GDP today than we did in 1950. Yet during that period of time, our national total energy consumption has tripled. Paradoxically, when it comes to energy, the more we save, the more we consume. […]

“Efficiency fails to curb demand because it lets more people do more, and do it faster—and more/more/faster invariably swamps all the efficiency gains,” Peter Huber and Mark Mills state in The Bottomless Well. Or, as Huber characterized this “efficiency paradox” in a 2001 Forbes column: “More efficient jet engines … cheaper tickets … more passengers … more jets in the air.” The same holds true for cars, lightbulbs, power plants, and everything else that uses energy.

Furthermore, an economic moral hazard problem is often associated with buying green products. Energy-efficient appliances make doing dishes and laundry cheaper, which subsequently encourages individuals to use these appliances more frequently than they had before. Increases in energy efficiency mean that there is a decreased need for the existing energy supply, which leads to a reduction in the cost of energy, consequently shifting the demand curve for energy to the right. Similarly, there is evidence that owning a fuel-efficient car encourages people to drive more. A person could become less inclined to turn off light bulbs when they are more efficient, just as a person could be more inclined to run his washing machine or his dishwasher when it is not full.

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McWiliams begins by citing a 2006 academic study in New Zealand that determined Londoners could reduce their environmental impact by purchasing lamb imported from New Zealand rather than lamb produced in England, because factors other than transportation often play a far larger role in environmental impact.

Mcwilliams continues by discussing how economies of scale in production can positively distribute environmental costs:

To choose a locally grown apple over an apple trucked in from across the country might seem easy. But this decision ignores economies of scale. To take an extreme example, a shipper sending a truck with 2,000 apples over 2,000 miles would consume the same amount of fuel per apple as a local farmer who takes a pickup 50 miles to sell 50 apples at his stall at the green market. The critical measure here is not food miles but apples per gallon.

We’ve argued on this website before that locavore policies constitute a new form of protectionism. This is true, but likely not a very compelling line of reasoning for locavores.

In this case, the economically efficient and environmentally efficient solutions do not have to be polarly aligned. Locavores should understand how their actions may fail to uphold the values they are rooted in, because of logistics and unintended consequences that haven’t been thoroughly considered. It’s even more important to view with a skeptical eye any legislation, government purchases, or changes in trade policy based on the reasoning that local consumption equates to environmentally friendly consumption.

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This is good news for Kansas Citians, who have been largely spared from the harshest wrath of the current housing “correction.” Saint Louis residents haven’t fared nearly as well, with the latest housing price index indicating year-over-year price declines of 5.2 percent. In fact, Forbes lists Saint Louis as number 4 in its “Riskiest Real Estate Markets” list.

Leading Kansas City on Forbes’ list were San Jose, Calif., San Francisco, Calif., Salt Lake City, Utah, and Austin, Texas.

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