Missouri’s property tax system works best when the assessments are accurate, the tax base is wide, and the rates are low. That combination will help grow Missouri’s economy for everyone while properly funding the necessary functions of local government. However, a radical change in the system is being put before voters in Webster, Christian, Lawrence, and Dade counties in April. These four counties will vote on whether to prohibit any property tax increases due to reassessments. Current law requires local governments to roll back tax rates as assessments increase, but we all know that taxes still go up, sometimes substantially.

At the Show-Me Institute, we support low taxes, and I am well-aware of how tempting this will be to voters. But using market valuations in reassessment to set tax levels is a good system. While our property tax system needs reforms, eliminating any and all tax increases from reassessments will make Missouri more dependent on other taxes that hurt our economy far more than property taxes do. Hate them as much as you wish, but property taxes indisputably harm economic growth less than other taxes do.

These property tax limitations would reduce the ability of school districts to fund themselves and would make them more dependent on state aid. Consider the following: school districts in St. Louis County regularly receive at least 80% of their funding from local sources, primarily property taxes, and some are over 90%. It is nowhere near that level in Southwest Missouri. Nixa school district in Christian County is only 54% locally funded, while Marshfield school district in Webster is only 46% locally funded. Even Springfield school district, the largest school district in Greene County, where no property taxes changes are proposed, is only 58% locally funded. These changes would make school districts in these counties more dependent on state aid, not less. Again, I’m aware that many voters may view that as a benefit, but it is anything but.

Numerous other harmful effects would come from diluting the market forces (in the form of assessments based on market values) that form the basis of property taxation. California provides us with an example of the harms of these types of property tax caps with its famous Proposition 13, passed in 1978, which dramatically limited increases in property assessments and taxes. Proposition 13 certainly had its intended effect of lowering property taxes for California homeowners. However, it also reduced mobility, significantly increased alternative taxes, limited homeownership opportunities, and caused substantial tax disparities for similar properties receiving similar services. These negative consequences are exactly what these four counties would experience over the long run.

There are also significant constitutional concerns with this legislation. Missouri Constitution Chapter X, Section 3 states that “taxes . . . shall be uniform upon the same class or subclass of subjects within the territorial limits of the authority levying the tax.” So, consider the issue of the Logan-Rogersville R-VIII school district. This school district serves families in three counties. If voters approve these tax changes, the property tax system in one of those three counties would remain unchanged (Greene), while in the other two (Webster and Christian) it would be illegal to have a tax increase from reassessment. It would certainly seem unconstitutional for property owners within the same taxing district who own the same type of property (single-family homes) to face different tax and assessment systems for the same services.

We need property tax reform in Missouri, but this total limitation is too severe. If enacted, the property tax proposals before the voters in these four fast-growing counties would make the region’s overall tax system worse, not better. I hope voters will look past the easy appeal of a tax limit to think about the long-term harms.

The post The Wrong Way to Fix Property Taxes appeared first on Show-Me Institute.

If you clicked on this post without reading Part 1, I encourage you to go back and read Part 1. In that post, I defined some of the energy jargon used in this debate. This post will focus on the provisions of SB 757.

Does SB 757 address capacity factor and dispatchability?

The bill does not explicitly mention capacity factor or dispatchability. Here is a passage from the bill text:

The new replacement reliable electric generation shall be equal to or greater than the full nameplate capacity of any existing electric generating power plant and shall be certified as an equal or greater amount of reliable electric generation by the Missouri public service commission and the regional reliability organization in which the electric utility company operates. (emphasis added)

Unless the public service commission comes up with its own system of power accreditation, it seems this bill will hinge on the actions of our regional reliability organizations.

While I will not go into all of the specific details, the two main regional energy organizations in Missouri—Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP)—have outlined their resource accreditation process for rating power sources and individual power plants (you can read MISO’s method here). MISO’s plan “informs long-term investment and retirement decisions by accurately representing the capacity value of a resource in the prompt year.”

What a statement like that means is that MISO (and SPP also) account for capacity factor and value on the grid by examining different yearly, monthly, and daily variables—all with declared intentions to “maintain reliability.”

However, we should still be cautious, as utilities also can miscalculate or serve other agendas. For example, California has dramatically increased its amount of renewable energy sources in the past 10 years, which now account for up to 42% of its net electricity generation. In the same timeframe, California has cut its nuclear supply by over half, down to 8%. As a result, the dispatchability problem has reared its ugly head in recent years, as in 2020 California had power outages due to insufficient energy for the first time in over 20 years. Sadly, 2020 wasn’t the end of California’s power struggles, as problems have continued. California’s regional reliability organization, California Independent System Operator (CAISO), has even at times called for residents to “use less power between 4 and 9 p.m.” Whether it was due to miscalculation or prioritizing other agendas, Californians are struggling because of a lack of dispatchability and reliability.

That brings me to my main questions concerning SB 787. Can Missouri citizens confidently rely on these regional reliability organizations (MISO, SPP) to protect their energy needs? Will these organizations continue to prioritize both capacity and dispatchability? Is there a way to ensure that other agendas are not prioritized over our energy needs?

On its face, this bill appears to add protection for Missourians, but these questions are worth answering. If there is any possible room for interpretation, shouldn’t it be made clear that both nameplate capacity and dispatchability must be taken into account?

The post Show-Me Energy: Decommissioning Power Plants Part 2 appeared first on Show-Me Institute.

There are a number of questions surrounding this proposal, and how to fund the Zoo in general. This blog is not the place to exhaustively consider all of them. But there are two essential points that should be at the core of any discussion of the Zoo’s funding future.

First: Should shoppers across the four counties and the city—rich and poor alike—pay for a zoo they may never visit or directly benefit from? Sales taxes are easy to collect, and they can generate significant revenue, but that doesn’t mean they are an economically sound or fair way to fund the zoo. Is it fair to tax someone buying wine in Defiance or Augusta in order to support a zoo miles away in Saint Louis City, that they may never patronize? Moreover, should those in the Zoo-Museum district—working poor included—be taxed twice for the zoo?

One might object that many of the zoo’s visitors come from outside the Zoo-Museum District, often from Saint Charles, Jefferson, and Franklin counties, so they should help pay for this regional amenity. I wholeheartedly agree that those who visit the zoo should pay for it. But a sales tax across those counties would tax far more people who don’t visit the zoo than people who do. As a percentage of total annual visitors, residents from the three above-mentioned counties only comprise 13% of the zoo’s attendance. Now, one could argue that since some people in the Zoo-Museum District pay property taxes for the zoo and never visit, others in the region can make that sacrifice, too. While this reasoning might appeal to those already paying the zoo tax, exporting bad policy doesn’t make it any better.

Secondly: Can the Saint Louis region stomach any more sales tax increases? In many parts of the city and county, sales tax rates are close to 11%, and there is an almost never-ending list of public projects asking for sales tax hikes. In Saint Louis City, a MetroLink expansion proposal includes a 0.5% sales tax hike; in Saint Louis County, Proposition P includes a 0.5% hike for public safety. At what point will the sales tax capacity of the Saint Louis region be exhausted, leaving no room for other projects and initiatives?

It’s important that the zoo has the funds necessary to keep its property and infrastructure in good repair, and no doubt feeding elephants isn’t cheap. But that doesn’t mean just any funding mechanism is appropriate to keep the zoo running. Leaders and policymakers in the region should carefully consider the funding options before them, and not be too hasty to dismiss options like user fees as an appropriate path toward a sustainable funding future.

The post How Should Saint Louis Fund Its Zoo? appeared first on Show-Me Institute.

The City of St. Clair, located in Franklin County, has an airport problem. Namely, the city is losing money on its small, general aviation airport. As the St. Clair Missourian reported last week, the airport has only four remaining tenants and use of the airport is at an all-time low.

So why not simply put up the “for sale” sign? For the last five years, the city government has been trying to do just that. But due to stringent federal regulations, the sale of even a miniscule airport can be an odyssey for local governments.

In theory, when a municipality builds and maintains an airport, whether that be Lambert-St. Louis International Airport or St. Clair Regional Airport, that government is free to do what it pleases with its property, including selling it. However, if a city has accepted federal money to upgrade its airport, as St. Clair has many times, federal regulations, known as the FAA’s grant assurances, tightly restrict that freedom.

Two of the more cumbersome assurances for a city like St. Clair are Nos. 5 and 25. Assurance No. 5 obligates St. Clair to maintain it as a public airport and not dispose or sell any part of the airport without FAA approval. The FAA will only give approval if St. Clair can show that closing the airport improves aviation in the area. In addition, the dispensation to sell the airport does not free St. Clair from reimbursing the federal government all recent federal grants. This will cost the city more than $750,000.

Assurance No. 25 prevents any revenue from the airport from being used for non-aviation purposes. According to the assurance, money from the sale of an airport is airport revenue. So to sell, St. Clair will have to submit a report on fair market value of its airport to the FAA, and put all sale proceeds from the sale into an escrow account for other regional airports to use on aviation-related purposes. The FAA has already rejected a number of St. Clair’s valuations as too low, further delaying any possible sale.

St. Clair’s experience trying to sell its own money-losing airport should act as a reminder to Missouri municipalities on the complications of having a public airport and accepting federal dollars. It is better to support the development of private airports or lease existing airports to private owners than to spend money and time begging the federal government to let them get rid of a bad investment.

The post What It Takes To Get Rid Of An Airport appeared first on Show-Me Institute.

David Stokes, a Show-Me Institute policy analyst, makes recommendations for provisions that should be included in the proposed Franklin County charter.

• Restrict size of council
  1. The Law of 1/N states that the larger the size of the legislative body you have the greater the spending levels. While there are exceptions, this is a widely accepted rule of public choice economics.¹
  2. Five or seven councilmembers should be target for Franklin County. Five would likely work just fine. The salary should be set high enough to reasonably compensate for their time and effort.
  3. Workload and salary should be considered when setting council size. 56 % of Franklin County lives in an unincorporated area, while 44% lives in cities or towns. If you have too many councilmembers, there will be a large discrepancy in the workload for each member. People who represent all municipalities will have far less work than those who represent mostly unincorporated areas.
  4. Some at-large districts may be considered, such as Jackson County, Kansas City or St. Louis City. Independently elected county officials (see below) are probably preferable to that.
• Maintain at least some other countywide elected officials
  1. The U-Shaped spending theory of Gersen and Berry states that local governments can have both too few and too many elected officials.² This is a very interesting new theory that I believe has a great deal of validity. In short, the levels of spending increase with too few non-legislative elected officials, decrease as the number of non-legislative elected officials increases, and then increases again as you have too many non-legislative elected officials. The reasoning for this is voter difficulty in properly assigning credit, or blame, in cases where there are a very small or very large number of elected officials.
  2. Prosecuting Attorney, Sheriff, Assessor and Treasurer should be kept as elected positions. These officials either make policy decisions or serve as important checks on other offices.
  3. Public Administrator, Recorder of Deeds, Highway Engineer, Circuit Clerk and Collector of Revenue should be changed to appointed positions, with circuit judges having input on PA and CC. These offices generally perform duties as established and do not make policy decisions.
  4. County Clerk should follow the example of St. Charles and become the elected elections chief. It is imperative to have an elections official who does not answer to the other local officials and is independently responsible to the voters. (Or a board appointed by the governor, which is not recommended here.)
  5. Partisan elections should be kept (except for judges). In larger local governments, partisan elections allow voters a simple check on other officials.
• Restrict power of individual councilmembers
  1. No filibuster.
  2. Lack of authority to introduce spending bills is a dramatic but effective method to control spending. It is used in Saint Louis County, where all spending requests must come from the County Executive.
  3. Legislation should not be able to be killed in committee.
  4. Remember that when setting the requirement for the number of meetings each year, a council can always meet more often than needed, but not less than required. 48 meetings for Jackson and St. Louis Co., 24 for St. Charles. St. Louis City meets weekly, with exceptions. (Work sessions and committee meetings not included.) I recommend the St. Charles total.
  5. County Executive should have veto powers over bills, and council the authority to override veto with a supermajority vote.
  6. Council Chair should have enough power to effectively run council business, but not too much power to dominate, provided council size is kept small. Council Chair can also have a higher budget or salary because of the higher work load.
  7. Bills passed over the objection of county boards (such as approving a zoning change rejected by the Planning Commission) should require a supermajority for passage, like a veto override.
• Restrict power of County Executive
  1. No authority to make any expenditure without council approval.
  2. County auditor should report to, and be appointed by, the council, not the executive.
  3. All department heads and commission appointments require council approval.
  4. Council must have sufficient staff to perform independent research and analysis in case of disagreements with the executive office.
  5. Department of Administration should direct most day-to-day county business, and their employees should be civil service.
  6. Council should have subpoena power to conduct investigations in extraordinary circumstances.
• Judiciary
  1. Franklin County should consider going to non-partisan court plan system. This would not be done as part of a charter, so it can be left aside for now. Judges should also have at least a voice in selection of circuit clerk and public administrator.
• County employment
  1. A merit-based, civil service system shall be the basis of employment within Franklin County. This must be clearly laid out in the charter.
  2. The civil service system should not include department heads, nor a base level of staff for the council, county executive and other elected officials.
• Intergovernmental Cooperation and Partnerships
  1. Nothing in the charter should prohibit or limit the rights of current and future elected officials to enter into these types of arrangements, including partnering with other governmental entities, cross-boundary taxing districts, government outsourcing, the use of public-private partnerships, and more.
• Eminent Domain
  1. Most of the laws regarding issues eminent domain takings are governed by state law, and will be whether a charter is adopted or not. However, this commission should consider putting a strict interpretation of the uses of eminent domain into the charter in order to limit its uses within Franklin County as much as possible.
• Tax Incentives and Regulatory Controls
  1. Similar to eminent domain, the commission may wish to consider requiring supermajority votes on issues such as tax increment financing and other tax abatements.
  2. In a related issue, the commission may wish to consider putting strict limitations on future regulatory and planning actions that would affect the historic uses of property and Constitutional right of property owners. For example, planning ordinances that might conflict with agriculture uses could require a supermajority vote of the council.
  3. I realize these statements might conflict with the recommendations not to limit future officials in the previous section on government partnerships. However, eminent domain and land use laws strike at the heart of the freedom of the people of Franklin County. Intergovernmental cooperation and public-private partnerships are merely methods of providing services. That is an important distinction.
• Government Transparency
  1. Bills should take at least two meeting to be passed, except in emergencies. If the new council meets weekly, it should be three meetings.
  2. Public comment period should be before all votes, including veto override attempts.
  3. Roll call votes should be required on every bill at final passage.
  4. Substitute legislation should not be allowed to be both adopted and finally passed during the same meeting.
  5. Bills passed more quickly due to emergency status should require unanimous passage.
  6. The Charter should require council meetings to be held at a time and place convenient for the public to attend, i.e. night.
  7. Exceeding the mandates of the Sunshine laws should be the goal, not merely compliance.

¹ Weingast, Shepsle, and Johnsen, “The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics,” Journal of Political Economy, 1981, vol. 89, no. 4.

² Berry and Gersen, “The Fiscal Consequences of Electoral Institutions,” University of Chicago, John M. Olin Law and Economics Working Paper no. 344, June 2007.

Related Links

The post General Guidelines For Charter Governments: Testimony Before the Franklin County Charter Commission appeared first on Show-Me Institute.

A online shout-out to former intern Phil for bringing this story to my attention.

The post You Are Now Free to Move About Franklin County appeared first on Show-Me Institute.

This will be played in some circles as a lack of regionalism in the community, with Kansas residents unwilling to support an institution on the Missouri side of the river. I don’t think it is a big deal, because Kansas residents support the zoo every time they attend by paying an admission fee.

This is a more complicated question in St. Louis, where residents of both St. Louis city and county pay a tax for the zoo, and everyone gets in for free. I think that residents of the surrounding counties should be given an option whether to tax themselves to support the zoo or instead have to pay an admission fee. But I don’t think certain people should pay a tax to support a free zoo so that everyone else can also enjoy it for free. (And, yes, I realize you pay for the parking lots, and the train, and the food and drink sales, and the children’s zoo, so you probably spend plenty of money when you attend no matter where you come from.)

I’d like to see St. Charles, Franklin, and Jefferson counties institute a property tax (in the long run, hopefully just a land tax) for support of the zoo. Then the rate could be lowered even further — and it is already a pretty low tax. I also think the other counties should get a representative on the governing board of the zoo if they opt in.

Again though, it’s perfectly fine with me if the residents of those counties choose not to tax themselves for the zoo. In that case, they should pay an admission fee — simple as that. I’d love to hear someone from a surrounding county argue that they should pay neither taxes nor an admission charge to come to the St. Louis Zoo. All aboard the free rider train!

The post Kansas City Zoo Tax for Kids Who Can’t Read Good and Wanna Learn to Do Other Stuff Good Too appeared first on Show-Me Institute.

Removing the party symbols would hardly be a disaster, but I still don’t support it. Simply put, such symbols are an easy and simple way to provide people with voting cues, and this helps people cast a more informed vote. In this instance, the symbols may only be a very minor cue that only provide additional information to a few people, but it is still a cue — and one with negligible costs, at that. For a more detailed analysis of why party labels improve voter information, check out the op-ed I wrote last year about Franklin County’s charter proposal to move toward nonpartisan elections. The overall proposal for Franklin County was fine, but the idea to move to nonpartisan elections was bad enough to rescind my support for the entire proposal.

Thanks to that reliable elephant Combest for the link.

The post Political Party Symbols and Voter Cues appeared first on Show-Me Institute.

That was what a Franklin County employee told me when I asked why election results reported in the same format were less detailed in 2007 and 2008 than they had been in 2006 (and earlier years). In 2006, the reports had a figure labeled “times counted.” This was simply the number of ballots cast in a particular race, paired with the total number of registered voters eligible to vote in that race. And it allowed turnout to be calculated. In 2007 and 2008, that figure was missing.

At first, because I’ve seen it so often, I assumed the missing data was caused by a computer error. Even though the format hadn’t changed, I figured it must have been omitted accidentally on the hard copies I was given.

I was wrong.

The “times counted” figure was gone, not missing. It simply stopped being reported in more recent years. Because it confused people.

Who exactly it confused wasn’t made clear (the county clerk’s office, perhaps?). It certainly hadn’t confused me. Although, I admit, the “times counted” figure gave me pause the first time I saw it, I was able to figure it out. Anyone with an interest in the results would have figured it out, either on his own or with a quick phone call to the county clerk’s office.

Instead of recording the information with that assumption, Franklin County opted to make its election results “clearer” for laypeople. And less detailed.

Now you can see how many total votes there were in a given race, but that figure is practically meaningless. Because voters can vote for more than one candidate in many school district elections, total votes don’t tell you how many ballots were cast — and the number of registered voters isn’t listed, either. You can see turnout for the entire election, but for individual races, you’re in the dark.

Who wins and who loses is no doubt important information to store, but that is only one part of an election’s outcome. Being able to see how many people voted, how many were eligible to vote, and the percentage turnout for individual races is equally interesting and informative.

Think: A school district can employ hundreds, sometimes thousands. When a proposed tax levy increase for a district is on the ballot, it will affect employee salaries. Does that create an incentive for district employees to vote for the levy? Absolutely. And if turnout for that election is lower than the number of district employees… Well, it’s very suggestive, at least.

As someone trying to create a database that lists school district election turnouts, this lack of information is frustrating. But I am not writing this post because I have an axe to grind. I am writing it because I think Missouri citizens have one — and not just against Franklin County. In other Missouri counties, though not a majority, the trend is toward less information.

When pressed for unincluded numbers, county clerks and staff generally point out to me that they are not required by law to record those details. But reverting to a less-sophisticated system of election reporting seems both counterproductive and unneccesary. If the system is in place already, why downgrade to make it less informative? It just doesn’t make sense. And neither does the excuse given.

Missouri citizens should be angered by the assumption that they are too dim to understand thorough election result reporting. After all, what good is access to public information if that information tells us next to nothing?

The post Less Confusion … and Less Information appeared first on Show-Me Institute.

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