There is a saying in areas prone to significant flooding that “floods bring their own rain.” Like many legends and old wives’ tales, it isn’t scientifically true, but it has a hint of truth to it. In the days after a massive flood—the kind that Missouri is prone to experience—the enormous amount of water sitting in areas it normally doesn’t can generate so much evaporation so quickly that it seems to rain more frequently. Again, I’m not saying it’s true, but it offers an interesting comparison for data centers in Missouri.

When data centers go into smaller cities or rural areas, the assessed valuation they add is so large that it should generate substantial property tax cuts for all involved. How large a difference are we talking? Google just announced plans to build a $15 billion data center in Montgomery County, in east–central Missouri. It remains to be seen how much of that investment will be reflected in property tax totals, but since the largest expense is going to be for the very expensive equipment in the data center itself—and that equipment is taxable—we can safely assume the assessed valuation of the final project will be enormous and almost certainly measured in the billions.

This for a county that had an entire assessed valuation in 2025 of $315 million. Again, that’s every farm, house, car, tractor, building, boat, and cow in the county. Google intends to build the county’s second enormous data center, with an assessed valuation in the billions. Data centers don’t have kids who need teachers. They don’t require much in the realm of public services. What do you think happens when you add huge assessed valuations from businesses that don’t add much to the public service requirements? The answer should be tax cuts, which is exactly what happened in Loudoun County, Virginia. The only way these data centers won’t generate large tax cuts is if the local elected officials make a big mistake and approve massive tax subsidies for them.

Which, of course, is exactly what they will do. Montgomery County officials gave Amazon a huge tax subsidy, just as Festus and Independence city officials did with their data centers. So instead of widespread tax cuts for an entire community, you get, at least in the short and medium term, huge tax cuts for the developers, which might result in slightly reduced taxes for everyone else. Local officials have it all backward. We should use the resources that make Missouri attractive to data centers and promise tax cuts for all instead of special subsidies for a few.

The post Data Centers Can Bring Their Own Tax Cuts appeared first on Show-Me Institute.

This is a good thing. My colleague David Stoked submitted testimony in favor of the effort in January and again in early April.

HB 2069 sets up a statewide framework, largely by adopting industry definitions from the Society of Automotive Engineers and clarifying how existing traffic laws apply. For example, it treats an automated driving system as the legal “driver,” while requiring operators to meet standards regarding certification, safety, and financial responsibility.

The legislation also sets baseline operational rules, including how law enforcement deals with car accidents and registration requirements. Importantly, it also sets up how driverless cars can be employed as taxi cabs.

One point of contention is that the bill pre-empts local governments from imposing their own additional restrictions or taxes. But recent history on ride-sharing tells us that Kansas City and St. Louis would likely bow to local pressure groups whose revenue might be challenged by the new technology. And Missouri’s preemption language is consistent with the approach taken in states including Florida, Texas, Nebraska, and Utah, which likewise centralize authority at the state level and prohibit local governments from imposing their own additional regulations.

The benefits of driverless technology in Missouri—and especially our cities—are immense. It will impact not only private owners, but could revolutionize how we provide public transportation, making it much cheaper and more convenient to users.

It may also finally encourage us to abandon our inflexible, expensive, and inefficient light rail and streetcar systems. As I wrote years ago, “the rail system that is being built likely will be abandoned by the hip urbanite core that it is meant to attract as soon as something sexier comes along  . . . like a Google car.”

Driverless cars are the future of transit; Missouri needs to get in.

The post Missouri Considers Going Driverless appeared first on Show-Me Institute.

I remember when Game of Thrones was at the height of its popularity and its catchphrase seemed to be plastered everywhere I looked: “Winter is coming.” Today a similarly ominous refrain is echoing across the energy sector: Data centers are coming.

A data center is a physical location that houses servers and related hardware that process, store, and transmit digital information. As artificial intelligence use expands, demand for computing power is also rising at a feverish pace, driving the need for more and more energy-intensive data centers.

As in Game of Thrones, there is a certain mystery surrounding how dire the situation truly is.

In April 2024, Goldman Sachs forecast that data centers would rise from 2.5% to 8% of all U.S. electricity usage by 2030. However, Google recently reported a 33-fold reduction in their energy usage for AI text prompts in a single year. It is difficult to predict how much more energy will be needed in the coming years.

Current Missouri law protects average ratepayers from “any unjust or unreasonable costs from service to such customers [such as data centers].” However, this does not mean none of the burden of building new generation capacity will fall on ratepayers, and an overbuild based on overly aggressive demand projections could leave them paying for unused assets.

On the other hand, failure to build sufficient power supply (whether due to demand miscalculation or delays in constructing multiple plants) could cause Missouri to miss out on significant investment in the state. Worse, an underbuild could create real reliability concerns. There is real tension here, and a great deal of pressure to predict and build effectively.

Fortunately, there is a policy that could help alleviate some of this pressure: consumer regulated electricity (CRE).

The premise of CRE is fairly straightforward: allow consumer-regulated electricity utilities (CREUs) that are disconnected from the ratepayer-supported grid to create “private energy islands” for the largest new customers (such as data centers). This approach makes sense for two reasons:

1. The anticipated surge in demand is expected to be fueled by a small number of users. By isolating the electricity supply of these customers from the ratepayer-supported grid, CRE can help shield everyday customers from spikes in energy prices.
2. The increase in demand is predicted, but it isn’t certain. CRE ties both the risk and the possible rewards of building new power plants to the companies that will use the resulting energy.

This year, New Hampshire passed a law to allow CREUs to generate, transmit, distribute, and sell electricity as long as they operate independently from existing utilities and do not serve the general public (CREUs are still subject to appropriate oversight, such as the Nuclear Regulatory Commission for nuclear plants). Missouri could do something similar, and there are many reasons to do so.

#1: Protecting Ratepayers from Risk

If the projected surge in electricity demand materializes, CRE could help lessen the severity of rate increases by allowing some large customers to be served by independent CREUs. Because these facilities are privately financed and serve only their customers, their costs would not be spread across all ratepayers. If electricity demand falls short of projections, then the excess capacity will have been a poor investment.

#2: Accelerating Capacity Buildout and Investment

 Missouri needs to build new generation capacity. In a permission-first, regulated environment, that process can be slow. Letting CREUs build and operate their own generation facilities could help keep economic development from being constrained by red tape.

Further, CREUs could offer more tailored payment structures and allow companies to align their energy sources with their own environmental or strategic goals—without forcing all ratepayers to work toward those same goals.

#3: Alleviating Pressure

Not only does Missouri face new demand growth, but our two largest electric utilities are dealing with coal-plant retirements. This transition would be challenging even without a new surge in demand. CREUs would allow utilities to focus more on serving their current customers.

CRE could be an ideal response to an abrupt surge in energy demand driven by a narrow set of customers. It would provide price security to everyday ratepayers, give data centers control over their power supply, and decrease the need for governments to predict future energy demand. Data centers are coming, and CRE is worth exploring as a way for Missouri to prepare for them.

The post Data Centers Will Require Innovation in Missouri’s Energy Sector appeared first on Show-Me Institute.

The data center discussion is highly nuanced, marked by an interesting mix of not-in-my-backyardism and yes-in-my-backyardism.

This debate has touched down in Platte County in the Kansas City area, where “Project Kestrel” would grant substantial property and sales tax subsidies to support the development of a new, $100 billion data center campus. But is this the right move for Platte County, or for Missouri?

Missouri is in need of investment, and artificial intelligence and associated data centers already play a significant role in our economy.

However, economic development subsidies enrich individual developers at the expense of taxpayers, schools, and other public services. Using tax subsidies to lure data centers, filmmakers, sports teams, and others into Missouri shrinks the tax base of the region without leading to meaningful economic growth. Opportunity costs are largely ignored, with estimates for economic “boosts” not taking into account what the millions given away in subsidies could have achieved if invested in infrastructure, public safety, education, or tax rebates for Missourians.

Looking at electricity, data centers are enormous consumers that are prompting the buildout of new generation facilities. On a regulated grid, such as Evergy’s in the Kansas City area, building new generation and associated transmission is one of the most expensive processes for average ratepayers, because monopoly utilities are allowed to recoup the cost of their capital investments and typically earn a government-approved profit.

Now, it is true that average Missourians use artificial intelligence, indirectly driving the increased demand for data centers. It is also true that we currently cannot predict with certainty the amount of electricity artificial intelligence and data centers will ultimately require.

In April 2024, Goldman Sachs forecast that data centers would rise from 2.5 percent to 8 percent of all U.S. electricity usage by 2030. However, Google recently reported a 33-fold reduction in energy usage for AI queries in a single year.

Some legislation has been passed in an attempt to shield average Missourians from bearing “unjust or unreasonable” costs of powering new data centers. However, this does not mean that none of the burden of new power-plant construction will fall on average ratepayers. Furthermore, if utilities overbuild generation capacity based on overly aggressive demand projections, average ratepayers could find themselves footing the bill for underused assets.

Yet, there is risk in veering too far in the other direction as well: An underbuild of new generation would likely lead to Missouri missing out on significant investment.

To navigate this dilemma, policymakers in Missouri should think outside of the box. Instead of solely considering solutions inside the regulated, ratepayer-supported grid, Missouri should follow New Hampshire’s example and consider consumer regulated electricity (CRE). The idea is simple: huge customers like data centers are driving up electricity demand and putting strain on the grid and ratepayers. CRE would allow off-grid electricity providers to build and operate generation and transmission facilities whose output would be sold exclusively to these new customers. This approach would help shield Missouri ratepayers from both the rate hikes that would otherwise come with new plant construction and the risk of overbuild. CRE would also provide developers with speed, flexibility, and certainty—attractive qualities that are often lost to red tape and lengthy regulatory approval processes.

Adopting CRE could help ease tensions in Platte County and across the state. Of course, the pressure to offer tax subsidies would remain, but this problem is not exclusive to data center development. Corporate handouts are not the way to encourage economic growth. Instead of trying to lure businesses with subsidies, Missouri should have a free market–oriented economic and regulatory environment; for example, one that is conducive to polices like CRE.

The post Data Centers, Subsidies, and Electricity in Platte County and across Missouri appeared first on Show-Me Institute.

In my recent report, Connecting Nuclear’s Past and Present: Guiding Missouri’s Future, one of the policy solutions I offer to meet electricity demand is consumer-regulated electricity (CRE). In short, CRE would allow for the creation of private energy entities, disconnected from utility grids, in order to serve the largest customers more efficiently.

A recent article on this topic caught my eye. The article mentions that delegates at the World Nuclear Association summit in London discussed forming private energy clusters, disconnected from the grid, to meet surging demand from data centers.

Doesn’t that sound familiar?

Bringing Energy Clusters (or CRE) to Missouri

A few weeks ago, New Hampshire’s governor signed into law House Bill 672, which allows for “off grid electricity providers”—independent and disconnected from the main grid—to generate, transmit, distribute, and sell electricity.

Whether you call it CRE, off-grid providers, or private energy clusters, the concept is similar: enabling private energy systems to serve large industrial customers with less delays, less red tape, and less pressure on the main grid and ratepayers.

Poland and the Netherlands are beginning to consider the use of energy clustering to meet industrial energy needs. The previously mentioned article identifies a few potential benefits from energy clustering:

• It would allow large customers to take their electricity from a co-located generation source
• If a thermal energy source like nuclear is used, large customers could use its industrial heat (high-temperature steam used in industrial processes like manufacturing)
• The energy developer would benefit from simplified project finance
• Both consumers and developers would avoid long transmission lines
• These clusters would also help reduce the burden on grid resources, which are at a premium in most markets and in Missouri

CRE gives large customers the option to use an energy source of their choice, so long as they meet the still-applicable regulations (such as the Clean Air Act for fossil-fuel plants).

As we have seen with the drastic actions of Meta, Microsoft, and Google, there is a market for this type of arrangement as these huge customers have sought connection to nuclear reactors. States and countries are taking notice of these market conditions and are bringing the free market into the energy sector.

Missouri needs to reduce pressure on the grid and attract investment. In the upcoming legislative session, lawmakers should seriously evaluate how CRE—or private energy clustering—could benefit consumers, energy developers, and ratepayers in our state.

Want to read more? Check out these related articles:

Connecting Nuclear’s Past and Present: Guiding Missouri’s Future

New Nuclear Energy: Business-Speed and Business Friendly

Mission Impossible and Nuclear Energy

One Way Missouri Could Keep its Grid Reliable

Weighing Consumer Regulated Electricity to Meet Energy Demand Growth

Missouri Needs to Be Prepared for Growing Energy Demand

The post Is Consumer-Regulated Electricity Going Worldwide? appeared first on Show-Me Institute.

Managing this problem in the current system that is dominated by monopolies is difficult. But what if market forces could be infused into our current system to help address new demand?

An Introduction to Consumer Regulated Electricity (CRE)

One potential policy solution that could complement Missouri’s current system is consumer regulated electricity (CRE). While still a developing idea, CRE is worth considering as Missouri navigates an uncertain and potentially very costly energy future.

In theory, CRE would allow private investors to create new, independent electric power systems (both generation and transmission) using their own capital. These private grids would be scaled to specifically meet new demand growth from large consumers. In order for a CRE entity to operate appropriately, it would need to be free from restrictions placed by the Missouri Public Service Commission (MPSC). That means CREs would need to be unconnected to the regular grid and only serve new industrial and large commercial customers.

It should be noted that these CRE entities would still be subject to federal regulations, such as the Nuclear Regulatory Commission for nuclear projects. These entities would still need to meet federal safety standards.

Considering the Benefits of CRE in Missouri

Travis Fisher of the CATO Institute argues that these private grids—partly free of the massive regulatory red tape for utilities—could be developed more quickly, infusing needed competition and innovation into the energy sector. As “private energy islands” for new, large energy consumers, CREs could potentially relieve strain on the primary grid and ratepayers. Rather than relying on ratepayers to fund new power plants to accommodate rising industrial demand, the market could provide that solution.

This idea aligns with growing momentum in the private sector to pair small modular reactors with corporations (Google, Microsoft, Meta) urgently seeking energy sources tailored to their needs. CRE could allow the free market to guide this practice, and potentially, more quickly match demand with supply as companies would not be subject to current MPSC regulations that limit competition. This could be a boon for economic development in Missouri.

In theory, CRE would not tear down Missouri’s existing framework, but rather, complement it and allow private developers to target growing energy demand from the largest consumers, which are causing the most concern about reliability.

How Could We Potentially Bring this to Missouri?

Bringing CRE to the Show-Me State would likely require a modification of state statute to declare that CRE entities—if they are not connected to existing infrastructure and only serve large, industrial customers—are not subject to state regulation. New Hampshire is one state considering this concept. While further study is needed, CRE is a compelling idea that our lawmakers ought to consider.

The post Weighing Consumer Regulated Electricity to Meet Energy Demand Growth appeared first on Show-Me Institute.

Spoiler alert: It’s taxpayers. Taxpayers foot the bill.

The scale of these data centers is staggering. As Friestad reports, the energy demand from these facilities is equivalent to 100 Walmarts or 40 hospitals​. Their massive electricity needs—driven in part by artificial intelligence—have led Evergy, the regional utility provider, to plan two new natural gas plants and expand renewable energy production by 3,000 megawatts over the next decade​.

While Evergy insists that existing customers won’t subsidize these projects, some experts aren’t convinced. The Missouri Office of Public Counsel warns that the increased demand could drive up energy prices across the region​. Even if Evergy builds enough capacity, ratepayers may still bear the costs of maintaining infrastructure that primarily benefits tech giants.

Kansas City approved up to $8.2 billion in tax incentives for Meta alone, a package more than three times the city’s annual budget​. Google has also secured generous tax benefits, though the full scope is still unclear​.

These incentives were pitched as a way to boost local schools and communities. But as Friestad’s reporting shows, and as regular readers of this blog have come to expect, the expected windfalls have been slow to materialize. The Smithville School District, which was promised rising tax revenues, has instead seen a fraction of what was projected. In 2024, Meta paid just $86,839 in property taxes to the district—far short of the more than $1 million in annual payments initially forecast​. Construction delays and city permitting issues have further postponed expected revenues.

The pieces highlight an important debate: Did Kansas City need to offer such massive subsidies at all? Economic development officials argue that data centers wouldn’t come without them, but others suggest that factors like cheap land, energy access, and infrastructure play a much bigger role​.

A broader trend is at play. At least 36 states now offer incentives for data centers, creating a nationwide bidding war​. Critics like Good Jobs First director Greg LeRoy argue that these subsidies often do little to sway a company’s decision, while shifting tax burdens onto residents​.

And while data centers bring major investments, they don’t create many full-time jobs—typically around 100 per facility, despite requiring billions in public support​.

As they have with entertainment districts, hotels, and sports stadia, Kansas City leaders are making a massive bet on data centers, banking on future economic gains. But as the Kansas City Business Journal’s reporting makes clear, the immediate costs are real, and the benefits remain uncertain. Will the promised revenues materialize? Will taxpayers ultimately bear the burden of subsidizing these projects?

The people of Kansas City should demand answers. If policymakers want to keep handing out billions in incentives, they owe the public clear, transparent explanations of when—and if—the promised returns will actually arrive.

The post Kansas City’s Data Center Boom: Another Costly Gamble appeared first on Show-Me Institute.

It’s an obscure state law that every article about government and politics in Kansas City has to include a quote from Harry Truman. As I follow the controversy over the reassessment process in Jackson County, I flash back to my own time working for St. Louis County government during the 2001 “drive-by assessment” scandal. That, in turn, reminds me of this quote from our 33rd President: “The only thing new in the world is the history you do not know.”

In the Spring of 2001, the St. Louis County Assessor had a problem. An enormous number of homes were coming back with a reassessment appraisal increase greater than 17 percent, meaning that a physical (in-person) inspection would be required. The problem was that the assessor had neither the time, the staff, nor (apparently) the desire to schedule in-person inspections of tens of thousands of properties. The solution? Quietly redefine what “physical inspection” meant. The assessor’s office plotted tens of thousands of properties with large valuation increases on maps (probably using Mapquest; Google maps hadn’t been designed yet) and sent assessors off driving around the county. Driving past a house and looking at it was considered a physical inspection. Problem solved, right?

Wrong. Assessments ballooned throughout the county. Taxpayers were livid. They called their council members screaming. A few of them, including my soon-to-be boss, started to investigate. They asked for the filed inspection reports. Once it became clear that individual assessors had somehow been doing several hundred “physical inspections” per day, the scheme was exposed and the scandal exploded.

Huge valuation increases. A poorly managed assessor’s office. Angry taxpayers. Politicians trading blame. Does this sound familiar to residents of Jackson County?

If you look at the property valuations in Jackson County from a decade ago and compare them to valuations in St. Louis, it is hard to dispute that Jackson County property, overall, was underassessed. That is the only partial defense I’ll give to the Jackson County executive and assessor. But for multiple cycles now, especially in 2019 and 2023, the assessor’s office has done a shockingly poor job of managing the reassessment and adhering to the rules of the process. Nobody likes seeing their valuations go up at tax time, but 113 other counties in Missouri seem to be able to reassess property without the process failures that have plagued Jackson County. Taxpayers in Jackson County have every right to be angry.

Taxpayers in St. Louis were angry in 2001, too. Almost immediately, the assessor and revenue director were fired. While it took a few more years, that demand for reforms to the reassessment process led to real change locally and statewide. The law was clarified to define a physical inspection as just that, and the trigger point for an inspection (with homeowner consent, of course) was reduced to the present 15 percent increase in value. Requirements for tax-rate rollbacks by governments were enhanced. Eventually, the St. Louis County charter was changed to make the assessor an elected position. While the present process is far from perfect in the rest of Missouri, the changes that emerged from that 2001 scandal have benefited the entire state.

Which brings us back to Jackson County. Voters and taxpayers need to demand reform. There is already an effort to change the law to elect the assessor, which seems like an obvious improvement. Another change that is needed is to end the tax-rate rollback exemption for the Kansas City School District. Despite its substantial increase in assessed values in 2023 (which is still being contested in court), the district voted once again to keep its tax rate the same. Every other taxing body in Missouri has to roll its tax rate back to at least partially offset assessment increases, but the Kansas City School District gets to enjoy its windfall on the backs of taxpayers. Finally, Jackson County could consider using variable property tax rates, as St. Louis County does, to allow for greater ability to adjust rates by property type in response to future changes.

Other changes would be easier and don’t require amending the law. Why the Jackson County assessor still has her job after all this mismanagement is a mystery to me.

The 2001 reassessment disaster in St. Louis led to improvements to the overall process that are still in place today, at least everywhere but in Jackson County. Hopefully, the ongoing controversy over the 2023 reassessments in Jackson County can lead to similar, lasting reforms. Jackson County taxpayers deserve nothing less.

The post Jackson County Assessment Disputes Will (Hopefully) Lead to Real Change This Time appeared first on Show-Me Institute.

• “Microsoft deal would reopen Three Mile Island nuclear plant to power AI”
• “Amazon goes nuclear, to invest more than $500 million to develop small modular reactors”
• “Amazon and Google have plans for fueling their data centers: Nuclear power”
• “Oracle will use three small nuclear reactors to power new 1-gigawatt AI data center”

Why are some of the largest corporations, who are the biggest consumers of energy, trying to get nuclear plants up and running?

In my view, energy security—access to sufficient, affordable, and reliable energy—is the key motivator. These corporations likely foresee potential shortfalls in energy supply, particularly for sources that can meet demand at any time.

As these headlines show, corporations are even willing to go “behind-the-meter” in order to have access to clean, reliable, and consistent nuclear power. Behind-the-meter refers to the practice of purchasing power directly from a plant, bypassing tradition utility infrastructure. For Missouri, these national trends again highlight the need to seriously consider nuclear power as a solution to building a reliable grid for the future.

What Big Tech is Saying about Energy

A strong and reliable electric grid is vital. Demand for electricity is growing because of data centers, artificial intelligence, electrical manufacturing, and electric vehicles. More than ever, citizens rely on energy to power their daily lives.

Michael Terrell, senior director for energy and climate at Google, said this:

We feel like nuclear can play an important role in helping to meet our demand, and helping meet our demand cleanly, in a way that’s more around the clock.

When major corporations, whose profits depend on uninterrupted power, express concern about future electricity demand, it is worth paying attention.

A Warning Sign for Missouri

Missouri is not doomed, but if you see a bear running away from something in the woods, it is wise to at least consider why it is running. Big Tech’s movement toward nuclear may be a similar warning signal.

Missouri needs to be prepared for an immense energy transition. Amending the Construction Works in Progress (CWIP) law is one way forward. This would open the door for nuclear construction by allowing utilities to gradually recover costs during construction as opposed to all at once afterwards. Investing in more nuclear power is an investment in a strong, reliable power source that we will need as energy demands continue to increase.

The post What to Make of Big Tech’s Pivot to Nuclear appeared first on Show-Me Institute.

This is also how I would describe the recent Economics of Education Review paper by Dillon Fuchsman, Josh McGee, and Gema Zamarro.  The authors surveyed more than 5,000 teachers about their stated preferences. The 15-minute survey presented teachers with two hypothetical job offers. Would they prefer a higher salary or smaller class sizes? More pay today or more pay in retirement? In other words, “you can go with this, or you can go with that.”

The paper is a good reminder that our policy choices in education are all about tradeoffs and balancing preferences. Lately, we have often heard that teacher pay in Missouri is relatively low. We don’t hear about the tradeoffs that make it that way. For example, as I’ve written before, Missouri has a very low student-to-teacher ratio—11.3 students per teacher. If Missouri increased this ratio, it could increase teacher pay. As I wrote, “If Missouri were to match Illinois’ ratio of 14.3, Missouri teachers could realize a 26.5% increase in their salaries.”

As it turns out, teachers may prefer to be paid more and have higher class sizes. Fucshman, McGee, and Zamarro find more teachers would prefer to add three students to their class and get a higher salary (78% of respondents) than to have three fewer students and lower pay (65%).

The conversation in Missouri has almost exclusively been “We need to increase teacher pay.” A more robust conversation would consider this and other trade-offs we’ve built into our systems.

The post Teacher Pay: You Can Go with This, or You Can Go with That appeared first on Show-Me Institute.

Unsurprisingly, this document found its way onto my desk with a request that I—a Policy Intern of two months—was basically bred for: fact checking. And fact check I did.

My first challenge was that the governor’s office didn’t “show its work” by citing sources for its claims. A Google search allowed me to infer where some of the rankings came from, but others were harder to verify.

Indeed, I found several online sources that issued rankings that were similar but not identical to the governor’s claims.  Here, for example, Missouri is listed as sixth in cost of living, not third. Some were further off the mark; here not only is Missouri not number two for “low cost of doing business,” we’re not even on the list. And with some claims, I was completely lost. What does it even mean to be “third for apprenticeships?” Is it referring to the number of current apprenticeships? Completed apprenticeships? Apprenticeship applicants? What organization even collects that data?

After consulting longtime staff members here at the Institute, I learned a Sunshine request was probably my best way forward. Sunshine requests legally require Missouri government employees and officials to provide the requested information, provided that they actually have it. Send a request to the correct official—requests tend to bounce around like a customer service call—and if all goes well they will send back the correct records. In some cases, however, you’ll be told that the information does not exist or that there will be a charge for the collection of the information you requested.

So, I typed up a Sunshine request and went to the Governor’s website in search of a contact email to send my letter to. Instead of an email, I saw only this at the bottom of the page:

It’s 2023. Where is the email address? After browsing the website to some length, I concluded that if an email contact point existed for Sunshine law purposes, it was very well hidden. And without an email address, I had to fax it.

Dear reader: if you’re under the age of 35 there’s a good chance you have never had to send a fax before and may not even know what a fax machine is. In short, think of text messaging, but with printers.

While awaiting a response, I pondered the situation. If the Sunshine law didn’t exist, I would have been hunting snipes in my quest for the truth. Yet I felt disheartened by the need to use a Sunshine request. Not every Missourian knows how to do a Sunshine request, or even that they exist—I certainly didn’t before my time at the Institute. It is good practice in any field to cite your sources. Are governments exempt from that expectation? Citizens of Missouri value government transparency and accountability and our governor should respect that value: Show-Me your work.

Several days after I sent the fax, I received a reply. Part two of this blog discusses the response I received from the governor’s office.

The post Just the Fax, Ma’am: Dubious “Rankings” Press Release Emphasizes Importance of Transparency (part 1) appeared first on Show-Me Institute.

The mayor’s irritation may have been exacerbated by Port KC CEO Jon Stephens’ reaction to the border war truce. He oddly offered that despite the truce, the port authority could “proactively recruit” businesses from the Kansas side of the border but that it wouldn’t. The quote does not present Stephens as a team player on economic development reform.

When asked if the port authority was just a way to grant tax incentives while avoiding city council and public scrutiny, Stephens answered [starts at 19:38):

I would say that that’s certainly is not something that I would consider. I view everything [Prima facie] on exactly what is the net benefit. And I can tell you that we’re working very hard on our social equity: how we roll out to communicate exactly what we’re going to do, how we’re going to do it, and how we’re going to communicate to the citizens and their elected officials.

I’m not sure what any of that means, but it’s a disappointment for anyone hoping the answer was simply “no.”

Even if the port authority is a subdivision of the state of Missouri, Kansas City leaders have the ability to rein it in. Its board is appointed by the mayor and state statute allows the city council to, “from time to time enlarge or reduce the area comprising any port district” with the approval of the Missouri Highways and Transportation Commission. Perhaps restricting future Port KC activity to within a quarter mile from the Missouri River is a good way to make sure that it cannot keep issuing incentives downtown or even, as Helling points out, south of Country Club Plaza. In appointing a new board, the mayor could make sure that within that quarter mile of the river, Port KC is acting in the best interests of taxpayers.

Missouri’s economic development policy is littered with legislative good intentions warped by subsidy-seeking developers and consultants. Such legislation must be revisited to clamp down on abuse. In many cases it’s the statutory definitions that must be revisited; in this case it may be port authority boundaries. Port KC has demonstrated it is unable—and perhaps unwilling—to restrain itself to development along the river. The mayor and city council—and perhaps the state legislature—should do it for them.

The post Plugging the Port Hole appeared first on Show-Me Institute.

The Port Authority, or Port KC, ultimately could issue up to $25 billion in bonds over 35 years for the Google data center project, a figure that represents the company’s maximum investment in Kansas City. Think of the $25 billion as a credit limit on a personal credit card. It’s not necessarily an indication of how much Google will invest.

The benefit to Google is that the Port KC can issue Chapter 68 bonds that give Google a property tax exemption for 25 years. Vockrodt goes one step further and makes clear in the story that such subsidies for data centers don’t offer a great return, if any, for taxpayers:

Good Jobs First, a research group often skeptical of corporate incentives, in a 2016 report identified a Google data center project in Oregon from 2006 that received $360 million in subsidies in return for 175 jobs, or $2 million per job. Good Jobs First advised cities and states to treat data center subsidies with caution.

“Internet-based companies have to grow the cloud and they will choose stable areas with cheap electricity,” the report said. “They will barely benefit your local economies because they create so few jobs and often import top-wage labor.”

Once again, Kansas City through its port authority is playing handmaiden to large corporations even when there is so little to gain. (Rest assured, this same story will unfold if/when the USDA considers locations in Missouri.) How is Kansas City supposed to fund infrastructure, education, public safety and all the other basic needs on which we depend if we continually offer exemptions from the taxes needed to provide them?

If taxes are too high for Kansas City to be a competitive place to attract business, then that needs to be addressed fairly for everyone. Offering sweetheart deals to a few while the rest of us pull their weight is no way to operate a city.

The post Port KC Versus Taxpayers appeared first on Show-Me Institute.

While the details of Kansas City’s pitch remain predictably secret, other cities have made offerings, both substantive and gimmicky. Tucson, Arizona, tried to send Amazon CEO Jeff Bezos a 21-foot cactus. Stonecrest, Georgia, recently offered to name part of the town Amazon if chosen.

Not to be outdone, Kansas City Mayor Sly James took to the internet in a “desperate” attempt to get attention by spamming Amazon’s website with hundreds of fake product reviews each extolling the town.

This is all reminiscent of Google’s contest to choose the first city to host their Google Fiber service back in 2010. Like Stonecrest, for example, Topeka, Kansas, actually did change its name to Google. In the end, Google Fiber selected Kansas City, Kansas—our neighbor to the west—to offer its service. In doing so, they told The Kansas City Star, “We wanted to find a location where we could build quickly and efficiently. Kansas City [Kansas] has great infrastructure and Kansas has a great business-friendly environment for us to deploy a service in.”

Similarly, Amazon’s request for proposals includes that Amazon has a preference for “A stable and business-friendly environment.” While Kansas City is genuinely world class, our government is definitely not business-friendly. Property taxes and sales taxes are high, and on top of that the city charges a 1 percent earnings tax. The head of the Economic Development Council said that the city uses tax subsidies to mask the full impact of Kansas City’s regulations. Let’s not forget an unaccredited school district and a years-long spike in the homicide rate. Even one of the prominent consultants working on our Amazon bid, Richard Florida, does not include Kansas City on his list of top-five prospects.

Regardless of the outcome of this process, Kansas City must do a better job demonstrating it is a good place to locate a business. Government must be small and responsible, taxes low, and services efficient. That is not the city we are now, and gimmickry will not get us there.

The post Like Google, Amazon Wants Good Government over Gimmickry appeared first on Show-Me Institute.

The Royal is a Kansas City institution, one whose fall catalog of rodeos, barbeque, and livestock competitions herald the start of winter and the region’s holiday season. Thanks to tens of millions in sales tax revenue STAR Bonds, those traditions will soon move away from the Royal’s current digs in Kansas City, Missouri, to nearby Kansas City, Kansas. Kansas’s $80 million contribution to the project is about double what American Royal was publicly trying to get out of Kansas City, Missouri, officials just two years ago to keep the Royal in the city’s West Bottoms.

But did Kansas even have to “build it” with taxpayer money to entice the American Royal to move? The Royal’s brand is defined by its history in the Kansas City area—even Kansas City’s baseball team is named after the organization—so it’s safe to say that American Royal wasn’t going to move its operations to Texas or Florida.

But setting aside for now the important question of whether this is an appropriate role of government (it isn’t), Wyandotte County has been seeing significant economic growth that would have made it an attractive landing spot for the Royal anyway. More families are moving there today than were coming 10 years ago. In 2004, 1,871 tax filers—bringing more than $57.6 million dollars of income—moved to Wyandotte; fast-forward to 2014, and tax filers were pouring in 25% faster, bringing in around $74 million with them.

Wyandotte County was “building it”—a functioning economy that has, in contrast to its basket-case reputation, attracted investments from Google, Amazon and others in recent years—before Kansas’s $80 million incentive was ever put on the table.

But Wyandotte’s recent successes don’t justify Kansas’s decision to subsidize the American Royal move. Indeed, the state’s $80 million giveaway has all the hallmarks of bad policy and poor judgement from Kansas’s political class. The American Royal was already getting cheaper land and a prime location close to its support bases in Johnson County, Kansas, and Kansas City, Missouri. The tens of millions in taxpayer support is just the KC Strip on top of this gravy train sundae.

Kansas? Sure, it gets a talking point in the battle for the economic soul of the region, but it’s a point that is likely to be eclipsed by the next round of billion-dollar business-poaching that’s certain to come.

While the Royal’s decision could be seen as a slap in the face of its historical roots, Kansas City, Missouri isn’t exactly a victim in the matter, either. The city has a terrible track record of poaching Kansas businesses in precisely the same way and is an equally bad actor in the billion-dollar tax-incentive border war that has bedeviled the region, creating no strategic advantages on either side of the border.

To put it delicately, the bull manure is blowing onto taxpayers from both sides of State Line Road. It’s time to end this tax incentive rodeo and finally pursue a mature economic development policy—one that doesn’t force taxpayers to build the fields of their politicians’ dreams.

The post Creating a Field of Dreams for the American Royal appeared first on Show-Me Institute.

But I was more disappointed that in his quest for an interesting headline, Yael again shuttled past a decade's worth of Show-Me research on the earnings tax. Rather than simply Google "Show Me Institute replace earnings tax," Yael chose to bowlderize a recent Show-Me blog post and ignore a host of detailed Show-Me reports published since the mid-2000s, showing how the earnings tax is destructive to growth and how it can be replaced. The newspaper didn't need a Woodward or Bernstein on staff to discover the research: just a passing familiarity with the Internet and glancing engagement with the earnings tax issue.

The research is there. It's been there for a long time.

Yet the argument against an earnings tax doesn't just spring forth from some economics lesson. That the Star doesn't find a city taxing the paychecks of the poor and subsidizing the rich a "compelling" reason to phase out the tax is its own commentary on the present state of the paper. I can accept that the Star has an entrenched and dire interest in maintaining the current taxing system, which at least explains the content and tenor of so many of the Star's editorials these days.

But I don't have to accept the self-serving cronyism that the Star would have us all perpetuate by keeping the earnings tax gravy train running. Neither does anyone else.

Kansas Citians deserve a serious discussion about the negative impact—on families, on businesses, and in the aggregate—of funding city government through an earnings tax. Fortunately for the city's taxpayers, the Star won't be mediating that debate. Not this time. Not anymore.

The post Kansas City Star Defends Corporate Welfare, Again appeared first on Show-Me Institute.

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

The post KMOX Interview on Mizzou’s Problems appeared first on Show-Me Institute.

“That reputation hasn’t made it out here,” responds the Google executive.

While online universities haven’t exactly obtained an “Ivy league” status, they certainly are impacting the education market.

Massive Open Online Courses (MOOC), such as Udacity and edX, provide free access to lectures, readings, and coursework. Participants can receive a certification or credit, which may be used for educational or professional purposes. In January, San Jose State announced a partnership with Udacity to offer remedial courses to incoming freshmen.

Last week, Southeast Missouri State University (SEMO) announced it would explore another type of online model, competency-based education. The model is based on Western Governors University (WGU), which is basically “all-you-can-eat.” Students pay one flat rate per term. This allows students to skip ahead by testing out of modules. It would be possible to earn a degree in one year for under $6,000.

While the quality of these programs and the acceptance by employers is debatable, MOOCs and competency-based programs are competition for state universities like SEMO and San Jose, who have had to adapt to attract students looking for a flexible, low-cost college experience.

The post SEMO May Embrace All-You-Can-Eat Education appeared first on Show-Me Institute.

A Columbia University study suggested that with a fleet of just 9,000 autonomous cars, Uber could replace every taxi cab in New York City—passengers would wait an average of 36 seconds for a ride that costs about $0.50 per mile. Such convenience and low cost will make car ownership inconceivable, and autonomous, on-demand taxis—the “transportation cloud”—will quickly become dominant form of transportation—displacing far more than just car ownership, it will take the majority of users away from public transportation as well. With their $41 billion valuation, replacing all 171,000 taxis in the United States is well within the realm of feasibility—at a cost of $25,000 per car, the rollout would cost a mere $4.3 billion.

Back in November 2013, we observed largely the same thing without the benefit of the Columbia study:

In contrast to light rail, the rapidly progressing leaps in driverless car and cycling technology are allowing people more freedom and choices in how they get from point A to B. Indeed, the future of transportation is in flexibility, not inflexibility. Google driverless cars allow for cheap and easy transit while respecting individual freedom. In several places, state legislatures have altered their traffic laws to allow for such cars.

Sadly, Kansas City is still bent on building what the people do not want, 19th-century fixed rail. Meanwhile, it fights innovation from Uber and Lyft. Our conclusion then remains true today:

The fixed rail they will be installing downtown offers none of that flexibility or popular appeal. Rails do not take passengers where they want to go; rail takes people where city planners want or need them to go (not to mention a car ride to the stations in most cases).

To add insult to injury, the rail system that is being built likely will be abandoned by the hip urbanite core that it is meant to attract as soon as something sexier comes along … like a Google car.

The post Transit of the Future; You Read It Here First appeared first on Show-Me Institute.

What old-timey look at the past would be complete without a monorail light trail streetcar? Kansas City politicians are determined to employ 19th-century fixed rail transit, thinking wrongly that it will solve our problems. We’ve written extensively about why rail is bad for Kansas City. You can read about it here.

The most jaw-droppingly insipid claim is that such policies will draw the creative class. Never mind that there is no research to back up this claim — Kansas City already is rapidly becoming a fact-free city. In fact, a vocal proponent of streetcars who claimed to speak for millennials just announced that he is leaving Kansas City for the East Coast to seek greater opportunities. This supports the writings of my Show-Me Institute colleague: the so-called creative class goes where the jobs are, not to streetcars or airports.

Meanwhile, city officials view actual future-looking technologies such as those that Lyft and Uber provide with hostility because officials are mired in 19th-century protectionist cronyism. How are Kansas City officials going to react to the inevitable arrival of driver-less Google cars? Demand that cars undergo a background check? Require that each one contain a detailed street map? This is not forward-thinking; in fact, it’s not thinking.

Speaking of Google, Kansas City Mayor Sly James and others love to extol Google Fiber, as if Kansas City, Mo., won that national bidding war to bring them here a few years ago. We didn’t. We lost to Kansas City, Kan. We were just lucky enough to be next door. Kansas City, Kan., won because they demonstrated small and efficient government, not heavy-handed regulation and federal money.

In looking to create density downtown, city officials are falling over themselves to offer up any sort of taxpayer subsidy, handout, or corporate welfare package to bring density — sometimes just to move jobs two blocks. Yet they are unable or unwilling to deliver basic services to the rest of the city. This is not forward-thinking, it is urban cannibalism.

If Kansas City officials are serious about building a brighter future, they need to shed the city’s knee-jerk tax-and-regulate policies and start doing the few things a city can do well: maintain the streets and parks, fight crime, provide quality education, and do so while keeping taxes low. Then the city won’t need to pick winners — because the winners will come to the city on their own.

The post Kansas City’s War On The Future appeared first on Show-Me Institute.