In Governor Kehoe’s State of the State address, he declared that Missouri is “all-in” on nuclear energy. But the question of how the governor plans to turn this statement into a reality remains.

Part of being “all-in” could include allowing the creation of private electricity grids (often referred to as consumer-regulated electricity (CRE)), to bolster the development of next-generation nuclear technology.

Free-Market Principles and the Future of Energy

Private electricity grids could be key to opening the energy sector up to testing and innovation—something that is difficult on a ratepayer-supported grid.

Due to mountains of regulation, public fear, and high costs, there has been little recent experience in constructing nuclear power plants, as only seven of the 94 operating reactors in the United States were built after 1990. While continued regulatory reforms are absolutely imperative, opening the sector to specialists to gain expertise would be significant.

Specialists will be needed to rapidly deploy any new technology like small-modular reactors (SMRs). However, it is expensive to build new technology (as SMRs would be), since there are likely to be unforeseen challenges. These first-of-a-kind (FOAK) costs usually come down with experience and repetition, but asking regulated utilities to handle it would likely be slow and expensive. Further, it simply may not be a risk that ratepayers are willing to accept.

With CRE, different types of private developers could meet different needs for large projects separated from the grid supported by ratepayers.

Consider an example. CRE would allow a private electricity developer that specializes in SMRs for data centers to partner with a data center developer to meet its desire for clean nuclear energy. This is a very lucrative market—there are significant incentives to specialize in meeting this demand, and this kind of pairing allows each party to do what it does best.

New deployments with less red tape would help test new technologies more quickly and identify areas to improve efficiency—which could reduce build time and lower costs in the long run.

There is a lot of uncertainty in today’s energy sector. There is also the opportunity and the need to innovate. Hopefully, Missouri can use the free market, rather than solely rely on government planning, to help usher in the next generation of nuclear technology.

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Consumer Regulated Electricity and Today’s Economy

CRE would allow off-grid electricity providers to generate, store, transmit, distribute, and sell electricity to new, large customers. They would not be permitted to serve the general public and would still be subject to federal regulations and other rules such as permitting and workplace safety. If a CRE utility (CREU) chooses to interconnect with the regulated grid, it would then cease to be a CREU.

While this might sound like a lot of red tape, it still cuts down on the mountain of regulations and permissions for utilities on the regulated grid that serves the general public. CRE enables innovative, profit-driven entrepreneurs to serve energy-hungry clients building things like data centers.

For example, CRE could allow a new aluminum smelting facility that needs a consistent, high-power energy supply to partner with a CREU specializing in small-modular reactors (SMR). Such a partnership would give the aluminum facility a reliable power source tailored to its needs, with a payment structure negotiated privately between both parties. The aluminum facility could even use industrial heat from the SMR for its own high-intensity manufacturing processes.

Another benefit of CRE is increased flexibility. The energy sector is rapidly changing. Forecasting future demand is difficult even under stable conditions, but today’s landscape makes accurate prediction even more challenging.

Consider artificial intelligence. Many projections warn of an immense spike in electricity demand from data centers needed to power artificial intelligence, while others suggest innovation could make these systems far more efficient. Either way, relying on regulators alone to anticipate these trends and build capacity accordingly is risky for ratepayers who need electricity but also end up paying for new construction.

Free-market mechanisms like CRE would distribute that risk. If demand rises sharply, CRE utilities could more quickly deploy new generation to meet some of it, easing pressure on the regulated grid and diminishing rate hikes. If demand falls short, the CREUs and their customers would be responsible for the financial cost of overbuilding, not captive ratepayers.

Illinois’s willingness to explore CRE shows a growing recognition that the traditional utility model may not be the best way handle modern energy challenges. Allowing CRE in Missouri could attract investment, foster innovation, and relieve stress on the regulated grid and ratepayers. This is a policy Missouri should consider.

The post Illinois Explores Free-Market Energy Policy appeared first on Show-Me Institute.

-Potential reforms to the initiative petition process in Missouri
-The need for better accountability measures in our schools
-The role consultants play in creating harmful economic development policies
-Creating free-market policies in energy
-Big changes coming to welfare policy via the One Big Beautiful Bill
-Kansas City’s expensive failures are a warning, not a model

Click here to find the newsletter.

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In 2001, a group of very libertarian-minded activists launched the Free-State Project, which encouraged thousands of libertarian believers in minimal government to move to New Hampshire. The overall success of the project has been limited, for a variety of reasons, but if imitation is the sincerest form of flattery, then I’d like to see people in Missouri flatter the Granite State and try to do a similar thing here in one of our many cities.

What would such a limited-government, free-market oriented municipality look like in Missouri? To start with, it should be modeled on successful, small-government municipalities like Weston, Florida, and Sandy Springs, Georgia, which provide many local services by contracting with the private sector. It should not be based on the more radical, no-government “utopias” like Grafton, New Hampshire, where the removal of almost all government services led to an increase in bear attacks.

How many limited-government activists would it take to create a free city in Missouri? Not very many. There are hundreds of existing municipalities here with less than a hundred residents where, at most, a few dozen show up to vote in local elections. If, say, 50 true free-market believers moved into one city, what types of changes could they make to create that desired free city?

To start with, they could remove all municipal planning and zoning rules and replace them with private contracts managed by property-owner associations where allowed. Those property-owner associations could manage issues like short-term rentals, trash collection, and home-based businesses.

Municipalities, especially small ones, could focus on contracting with larger cities or counties to provide many services, like policing or building inspections. The new free city could contract with private companies to provide many other services, like trash collection and recreation management. It could similarly contract with nonprofits for some other services where profit opportunities are limited, such as animal shelters. If it had municipal utilities, it could privatize them into regulated, private utilities. The free city could reduce local code requirements, permitting rules, and occupational licensing to the largest extent possible. The important ones, like fire codes and elevator inspections, could be kept, while arbitrary or obsolete regulations, like television repairman licenses and pool-table taxes, could be thrown out.

None of these examples are farfetched. Every one of the above examples is already in place in a city somewhere in Missouri. Private utilities provide water, gas, and electricity to millions of Missourians. Cities contract with counties and other cities for services all over the state. In St. Louis County, every municipality (88 at last count) contracts with the county for at least some inspection services. Nonprofits provide important services to the public, like Pinnacles Youth Park near Columbia, and operate many animal-care facilities. Private businesses operate city-owned golf courses and manage municipal swimming pools throughout the state.

How would a free city fund these services? It would maximize private contracts between residents and companies and enact user fees to the largest extent possible. Low general sales and property taxes could fund the rest, along with revenues shared from other sources, like the gas tax. Importantly, such a city would avoid special deals such as tax abatements or tax-increment financing, for some businesses or people. Making the sales and property tax bases as wide as possible would allow the rates to be as low as possible for everyone. This free city would absolutely avoid the errors of a local income tax such as exist in Kansas City and St. Louis.

Overall, a Missouri free-city project would create a municipal government system not all that different from those in many rural, unincorporated parts of Missouri. It would just be in a more urban or suburban setting. It may seem unrealistic to expect hundreds—or even dozens—of people to make such a move based on political philosophy. But as a model of quality, low-tax local government, it is perfectly realistic. While no city may have enacted all of these ideas, each of them has been enacted with success somewhere. We just need the right number of people to put it together all at once.

I vote we try it somewhere near the Lake of the Ozarks.

The post The Free-City Project for Missouri appeared first on Show-Me Institute.

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This chart is produced by Mark Perry at the American Enterprise Institute, and this version is an update he released in January of 2024. As he describes in an earlier blog post, there is an important pattern in the price trends: the greater the degree of government involvement in the provision of a good or service, the greater the price increase over time.

If this chart is the answer, the question would be something like “Why are free-market principles so important?”

The chart shows that between 2000—2023, inflation was 82.4 percent. Price changes over this time period greatly exceeded inflation in the following categories: Hospital services, college tuition and fees, college textbooks, childcare and nursery school, and medical care services. Housing and food and beverage prices also increased by more than inflation, but barely.

At the other end of the spectrum, prices on electronics, toys, clothes, cars, cellphone service, and household furnishings have fallen, or grown much less than inflation.

Once you see the stunning gap between goods and services in industries regulated and subsidized by the government versus goods and services in industries where the government is mostly uninvolved, it is hard to unsee it. This is just descriptive data and is not meant to be a rigorous causal analysis of the effect of government. But where there’s smoke, there’s usually fire.

This is a good reminder of the reason we fight for free-market policies in Missouri. Though often well intentioned, the government is just not very good at providing goods and services efficiently. When it gets involved, we all pay the price. Of course, there are some roles the government must handle (national security is an easy example), but for the most part, we’re better off when it stays out of the way.

The post The Power of Markets appeared first on Show-Me Institute.

Founded in 2005 by Rex Sinquefield, Crosby Kemper III, and Michael Podgursky, the Show-Me Institute has spent two decades championing free-market solutions. With key victories like reducing Missouri’s income tax, expanding school choice, and increasing government transparency through initiatives like the Missouri School Rankings Project and the Show-Me Checkbook, the Institute has driven meaningful progress across the state.

As we look to the future, the Show-Me Institute remains committed to empowering Missourians and policymakers to build a freer, more prosperous Missouri.

The post A Legacy of Liberty: 20 Years of Show-Me Institute appeared first on Show-Me Institute.

Click here to download this publication.

The post Missouri’s Free-Market Policy Guide appeared first on Show-Me Institute.

These are average values, of course, and not everyone can afford an average mortgage or rent payment. However, the United Way also ranks St. Louis second in the nation (tied with Pittsburgh and trailing only Cincinnati) for the highest number of affordable rental units (80) per 100 households.

It’s good to see St. Louis earn a high national ranking in something other than crime; nevertheless, 80 rental units for every 100 households that need a place to live still isn’t enough housing. So, what can St. Louis do to meet the remaining affordable housing demand?

First, local governments need to get out of the way and let the free market work its magic. My colleague Patrick Tuohey has highlighted the harm that misguided government intervention has done to housing markets in both St. Louis and Kansas City:

Kansas City’s adoption of the 2021 International Energy Conservation Code (IECC) stifled new home construction by inflating costs. Builders, facing steep regulatory burdens, simply stopped building. In St. Louis, a reliance on tax credits and incentives for flashy developments has left vast swaths of the city with vacant lots and dilapidated buildings. In both cities, the results are clear: policies that ignore basic market principles fail to deliver desired results.

Second, the demand for low-income housing can be met indirectly by constructing more expensive or luxury housing. More housing, whether low-income or luxury, is beneficial and will positively impact the availability of affordable housing. Even if the construction of luxury housing occurs when there is a greater demand for profitable low-income housing, the filtering effect will help address the need.

Andrew Cline of The Josiah Bartlett Center for Public Policy extrapolates on the positive effect of luxury housing construction, describing the filtering effects of new apartment development:

Building luxury or higher-end apartments draws higher-income renters out of yesterday’s luxury apartments and into the new luxury apartments. Increased vacancies in yesterday’s luxury apartments attract higher-income residents who’ve been living in mid-level apartments. As new construction creates more vacancies, rents come down. That effect filters throughout the housing supply, lowering rents all the way down. 

It is precisely because of this filtering effect that projects like the one in Town and Country are good news even for those looking for something in a lower price range. While a new luxury condominium development may seem irrelevant to someone seeking a more affordable place to live, it nevertheless represents an increase in supply and exerts downward pressure on housing prices.

The post For More Affordable Housing We Need More Housing, Period appeared first on Show-Me Institute.

Click here to download the guide.

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In David Stokes’ latest report, A Free-Market Guide for Missouri Municipalities, the first in a series, he outlines how adopting free-market policies can positively transform municipalities across the state. The report discusses specific ways to encourage competition, streamline bureaucracy, and empower residents to choose services that best meet their needs.

This first installment focuses on the structure and organization of municipal governments, with subsequent guides planned to address taxation, transportation, public safety, and more.

Click here to download the full report.

The post A Free-Market Guide for Missouri Municipalities: Part One: Municipal Organization and Structure appeared first on Show-Me Institute.

Markets offer three mechanisms that facilitate school choice. First, they allow for a level of diversity in school offerings that traditional, centrally managed school systems are not able to. Second, they encourage competition between providers, improving the quality of school options for students and families. Third, markets are incredible information gathering institutions, and a more market-driven system can help bring attention to better educational practices and ways to meet family needs that can then be copied by other schools.

When I think about policies that increase the diversity of options, encourage competition, and spur innovation, open enrollment and education savings account (ESA) programs come to mind.

Open enrollment allows students to attend any public school district. In Missouri, a voluntary open enrollment policy has been discussed but never implemented. Open enrollment legislation has passed through the House for four consecutive years but has not had enough momentum to push through the Senate. Open enrollment empowers parents to choose the district and school that best suits their children and strengthens school districts by forcing them to compete for students. Through the addition of open enrollment, competition and increased feedback could spur needed innovation and growth, while at the same time matching families with districts that best suit their needs.

While Senate Bill (SB) 727 expanded Missouri’s ESA program (MOScholars), there are issues with financing. MOScholars is still not publicly funded, as robust ESA programs in other states are. Due to this, many families are left out of the program. A stronger ESA program would give more parents the ability to vote with their feet to support schools with beneficial education practices.

Education cannot be forgotten—our state is experiencing chronic absenteeism and lower academic scores. On the Missouri Assessment Program (MAP), Missouri students have failed to bounce back from the pandemic drop. In English/language arts (ELA), no grade-level cohort has matched or surpassed its pre-pandemic levels. Almost all ELA scores today are actually lower than they were in the first post-COVID year (2020–2021), with 5th graders being the only exception. Sixth graders have fared the worst of all grade levels—in 2018-2019, 46 percent scored proficient or advanced in ELA. In 2021–2022, that number dropped to 43 percent, and by 2023–2024, it sunk to 38 percent.

Hopefully, SB 727 will not be the end of the road for needed change. Markets do matter in education, and school choice policies can greatly benefit our state.

The post Missouri Needs More Market Forces in Education appeared first on Show-Me Institute.

Think of some of the top GDP growth states in the nation: Florida, Texas, Tennessee. None of these states have a state income tax. Free markets really do matter, and it has been demonstrated time and time again around the world and in the United States.

The Fraser Institute issues a periodic ranking of states according to “economic freedom.” According to its most recent ranking, Tennessee came in third—right ahead of number four Texas, but behind number one New Hampshire and number two Florida. Missouri came in at a respectable, but distant, number 15 ranking. Almost all of the “least economically free” states in Fraser’s report (New York, California, Illinois, West Virginia, and New Mexico), saw population loss.

Not coincidentally, Texas, Florida, and Tennessee have also dominated the U-Haul Growth Index, which measures the ratio of one-way, inbound U-Hauls versus one-way, outbound U-Hauls.

Granted, it is hard for Missouri to be Texas or Florida when we do not have the geographical gifts that those states enjoy.

But Tennessee is right on Missouri’s border and has much in common with the Show-Me State. Tennessee eliminated taxes that hamper growth (such as the Hall Tax, which taxed stocks and bonds), prioritized education reform to increase school choice and accountability, and its leaders are embracing its identity as a pro-growth, freedom-loving state.

Missouri has made recent progress in lowering the income tax burden. Since 2017, the top income tax rate has decreased from 6 percent to 4.7 percent for 2024.

Bringing the number down to zero should not just be a talking point—it ought to be a serious goal. If we want to be a top growth state, a nationwide destination for families, and attract more businesses, lowering the income tax is a great place to start.

I can speak from experience: having no state income tax is a luxury and a draw. Don’t we want that in our state too?

The post Slashing the Income Tax to Zero appeared first on Show-Me Institute.

But this situation isn’t the result of immutable laws of nature. It’s a choice made by policymakers who single out education for “protection” against the market forces that we take for granted when we choose to purchase anything from a car to a hamburger. Putting power in the hands of the consumer has paid off in countless aspects of our lives, and it explains why new and better products are constantly being introduced. Why wouldn’t we expect educational outcomes to improve in the same way if families rather than bureaucrats were put in charge?

This essay explores the potential of free-market forces to improve education in Missouri in three ways: by increasing the variety of offerings available to students (in terms of both curricula and educational approaches); by using competition among educational providers to improve the quality of education; and by facilitating the spread of successful models so that the benefits of innovation are enjoyed by all students.

Click here to read the full report.

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James V. Shuls speaks with Russell S. Sobel, Professor of Economics and Entrepreneurship at the Baker School of Business at The Citadel, about his latest paper, “Why Markets Matter for Human Progress & Prosperity.” They discuss how free markets drive innovation, prosperity, and human flourishing, the historical context of market-based economies, the pitfalls of government intervention, the long-term benefits of entrepreneurship and competition, and more.

Read the full paper here.

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Produced by Show-Me Opportunity

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This playbook has been released at a convenient time for the City of St. Louis—the city is currently overhauling its Strategic Land Use Plan (SLUP). The current SLUP was adopted in 2005 and has seen 23 amendments since. It suffices to say that the document is dated. The city intends for the new plan to be adopted by the planning commission by the end of 2024.

There are some benefits of having strategies in place to guide future land use and development of a city. However, cities also must be careful about avoiding central planning. The city outlines its guiding values for the SLUP, the first of which is “quality of life.” Are there ideas in the HSAP guide that St. Louis could use to realize this goal?

To improve quality of life, the goal should be to make the city a place where people want to live, work, and build. Increasing the supply and diversity of housing available can help work toward this goal. How can this be achieved? By simplifying the regulatory landscape. While the SLUP will not change the zoning code on its own, it will inform future updates to the zoning code, and these updates should incentivize development and lower costs, not the opposite.

Specifically, two potential reforms are decreasing or eliminating parking minimums and authorizing accessory dwellings. Parking minimums are mandates that require a set number of parking spaces in a new development. Many U.S. cities are reducing their parking minimums and finding that decreases the cost of new housing and offers other benefits, including making their cities more walkable. Accessory dwelling units (ADUs)—additional living spaces or dwellings on the lot of a larger home—are also gaining traction. Take for example the City of Seattle, which has allowed ADUs since 2019 and is experiencing strong growth in this form of housing. Both changes have the potential to increase the housing supply to meet residents’ needs and support the city’s goal of increasing quality of life.

Anyone can provide public input regarding the City of St. Louis’s plan by completing a survey on the SLUP website. This is an opportunity for residents to emphasize the importance of not stamping out market forces that will spur housing supply. Hopefully, the plan will advocate simplifying codes and decreasing costs.

The post What’s Up, SLUP? appeared first on Show-Me Institute.

In this episode, Susan Pendergrass speaks with Ryan Bourne, the R. Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute and editor of the book The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy. They discuss the effects of price controls, recent interventions in the economy, how to remind people about free market principals, and more.

Ryan Bourne occupies the R. Evan Scharf Chair for the Public Understanding of Economics at Cato and is the author of the recent books Economics In One Virus, and The War on Prices. He has written on numerous economic issues, including fiscal policy, inequality, minimum wages, infrastructure spending, the cost of living and rent control.

Listen on Apple Podcasts 

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Produced by Show-Me Opportunity

The post The War on Prices with Ryan Bourne appeared first on Show-Me Institute.

Certain municipalities, such as the City of St. Louis, have mandated that if certain residential and commercial businesses engage in new constructions or major renovations, they must install, maintain, and operate EV charging stations on their own dime.

HB 2062 would provide statewide exemptions for churches and nonprofits from EV charging station mandates. But what about everyone else?

As I have written before, these types of mandates are an unnecessary government intrusion into the free market. All businesses should be protected from EV mandates—not just churches and nonprofits.

At the local level, the City of St. Louis has also included some exemptions from its mandate. Businesses that the city council has determined a visitor wouldn’t typically stay long enough at to warrant charging their vehicle are exempt from the mandate. Currently public-level charging is exceptionally slow (which is part of the reason why installing them is wasteful), but what happens when charging improves and people use charging stations during shorter stops? Will many of these businesses no longer be exempt?

A stronger version of a state law with more than just narrow exemptions would render these concerns at the municipal level moot. While it’s nice to see protections from these mandates offered to some, shouldn’t those protections be extended to all businesses in our state?

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