Susan Pendergrass speaks with Andrew G. Biggs, senior fellow at the American Enterprise Institute, about the Social Security trustees’ latest report and what it means for the program’s future. They discuss the projected 2032 insolvency of the retirement trust fund, why the trustees’ birth rate assumptions may be too optimistic, the proposed Moreno-Warren plan to eliminate the payroll tax ceiling, the Cassidy-Kaine plan, and why pension experts oppose it, what would actually happen if the trust fund ran out, and more.

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Episode Transcript

Susan Pendergrass (00:00):
I feel fortunate to have grabbed some of your time. Andrew Biggs from the American Enterprise Institute, I appreciate you coming on to talk to us. Social security has been nothing but in the news recently, and you know more than anyone else. So thank you for taking the time.

Andrew Biggs (00:14):
That’s why I’m so cheerful. The more you know about Social Security, the happier you are. But thanks for having me, Susan. It has been busy. I’m really happy to be with you today.

Susan Pendergrass (00:16):
I’m in my sixties. I see something about Social Security running out of money and I pay attention. So just to bring us all up to speed: in the last week, there was a news flash that Social Security is going to run out of money sooner. What does it really mean?

Andrew Biggs (00:39):
Every year the Social Security trustees, which is mostly members of the cabinet, the Secretary of the Treasury, the Social Security Commissioner, and so on, come out with a report projecting the program’s financial health, both in the short term and the long term. That happens every year, and it’s been getting worse every year. In this year’s report, they projected that the retirement trust fund will go insolvent, or run out of money, in 2032. They also projected a significantly larger long-term funding gap in the years thereafter, and this is worth explaining.

When the trust fund runs out, it doesn’t mean there’s zero money to pay benefits. As long as we’re paying a trillion dollars a year in payroll taxes, there will be money to pay benefits. But when the trust fund runs out, it means benefits will be cut, and their projection is somewhere around 22%. The size of that long-term funding gap dictates how big the cuts are going to be in the years thereafter. The trustees lowered their projections for birth rates, and they found that the One Big Beautiful Bill has worsened Social Security’s finances. A variety of things made this long-term funding gap worse. It’s really hard to paint a happy picture. The trust fund can be running out in about six years, and the funding gap and the benefit cuts in years thereafter are going to be larger. It’s a sobering picture.

Susan Pendergrass (02:16):
I’m not trying to pile on, but I think I saw that they extended the time when they expect birth rates to bounce back. Is that true? Because I have not seen anything anywhere, and I’ve spoken to some demographers, to suggest birth rates are ever going to bounce back.

Andrew Biggs (02:35):
Here’s the interesting thing. If you look at the Congressional Budget Office or the US Census Bureau, right now the fertility rate is about 1.6 children per woman on average, and both the CBO and the Census project that’s going to remain pretty much steady, declining a little bit over coming decades. Social Security had a very different picture. As of last year, they thought the birth rate, which is 1.6 now, was going to immediately start rising and go back up to 1.9 children per woman in the next several decades. That makes Social Security’s finances better. More kids being born means more people paying into the system. What they did in this year’s report is moderate a bit on fertility. They said, okay, it’s not going to rise back to 1.9, it’ll rise back to 1.75. So they are still over-optimistic. I’ve talked to some demographers and economists who’ve really focused on the birth rate, and they described the trustees’ assumptions as, quote, fanciful, meaning they just weren’t plausible. Now they’re somewhat more plausible, but they still tend

Susan Pendergrass (03:32):
Okay.

Andrew Biggs (03:48):
to be more optimistic than other agencies. And to me, frankly, this is a concern. You really want the people who are the scorekeepers, the umpires, to be playing it as straight as they possibly can. We know that these guesses are going to be wrong because this stuff is impossible to predict with certainty, but most demographers think the best guess is we’ll stay around 1.6 going forward. You’ve seen a decline, and a good predictor of birth rates is religiosity, the level of religious belief in a country. The US has typically been much more religious than Western Europe, and that’s played into fertility. There has been a big decline in religious belief, particularly among younger Americans, along with all the other pessimism you see among younger people. When people are pessimistic, they tend not to have a lot of kids. So the best guess is we’re going to stay about where we are.

I wrote something the other day saying the bad news in this trustees report is even worse than last year’s, but it could have been even worse. They project a long-term funding gap above 4.4 percent of payroll. What that means is if you took the 12.4% payroll tax today and raised it immediately and permanently by 4.4 percentage points, from 12.4 to 16.8, that would in theory keep the trust fund solvent for 75 years. But a better guess would be a funding gap of around 4.8 to 5 percent. This is real money. For years, people on the left have said, well, okay, we know Social Security has a solvency problem, but it’s a manageable issue. They were saying that when the funding gap was 2% of payroll. Now you’re looking at four to five percent. That’s a lot of money, at a time when a lot of other things are making claims on the budget. We have some difficult choices to make and we really have to start thinking hard about this.

Susan Pendergrass (06:09):
Okay, so what about this idea that’s been floated in the last week of getting rid of the payroll cap? First of all, explain the payroll cap, and then this idea of getting rid of it.

Andrew Biggs (06:17):
Sure. Social Security has a 12.4% payroll tax, half paid by you and half paid by your employer. That applies only to wages up to $184,500. That’s called the payroll tax ceiling, or the tax max. That dollar figure goes up every year, but this year it’s $184,000. You only pay taxes on those wages, and you also earn benefits only on those wages. People say, well, Bill Gates doesn’t pay more taxes than that. But he doesn’t earn any benefits either. So you’re capping both the taxes and the benefits.

To fast forward a little bit: there’s an op-ed in the Washington Post this week from Senator Bernie Moreno, a Republican from Ohio, and Elizabeth Warren, a Democrat from Massachusetts. They say it’s just common sense to eliminate that cap and tax all earnings for Social Security. The interesting thing is how uncommon that would actually be. Our payroll tax ceiling is $184,000. Almost every other country has a ceiling on their payroll taxes for their pension system, and in almost every other country that ceiling is lower. In Canada, you only pay taxes and earn benefits up to around $60,000 in earnings. In the UK it’s about $70,000. In Germany it’s about $70,000. We are already an outlier for how high up the income ladder we tax people. To eliminate the cap entirely is a big deal. It’s effectively a 12 percentage point increase in the top marginal tax rate. I pulled an example of somebody living in New York City. A high-income person already pays 37% in federal income taxes, plus regular Medicare taxes, the additional Medicare tax, state taxes, and city taxes. If you add another 12 percentage points on top of that, their marginal tax rate would be in the mid-60s. And that’s before we’ve fixed Medicare or done anything else. The federal budget is still broke, and you’ve taxed these people as high as you possibly can. So these things that look like common sense, why don’t we just tax everybody,

Susan Pendergrass (08:37):
Right, right.

Andrew Biggs (08:46):
look, there are reasons for that.

Susan Pendergrass (08:49):
And were they suggesting that if I make $300,000 and I pay my 6.2 percent, totaling 12.4 with my employer, on my entire salary, that my Social Security benefit one day would be higher? Are they talking about capping the benefit or just getting rid of the cap on contributions?

Andrew Biggs (09:06):
They haven’t been very specific. They say Social Security would continue to be an earned benefit, which kind of implies you would continue to earn benefits on the additional taxes you would pay. Let’s say if we uncap the payroll tax and base your taxes on your total earnings, you’d also base your benefits on your total earnings. What you get then is, okay, you’re getting all this money from people in the short term, but you have to pay them higher benefits in the long term. That offsets some of the savings. And this morning I was running some numbers looking back to the 1970s. We had a huge run-up in benefit levels from Social Security in the 1970s. The benefit formula we have today is not the one FDR invented. It really happened in the 1970s, where they jacked up benefits in a really foolish way, and then to help pay for it, they increased the payroll tax ceiling. Right now you pay taxes on earnings up to $180,000. If we had just kept the tax max from 1970 and indexed it to wages, it would have been only $95,000. So they essentially doubled the wages on which you pay Social Security taxes. But what happens is they also doubled the wages on which people earn benefits. I’ve highlighted the point that if you have a high-income

Susan Pendergrass (10:38):
Mm-hmm.

Andrew Biggs (10:43):
couple retiring today, they could get almost $100,000 in total benefits, which is absurd. There’s no reason a government program should be paying anybody that amount. If you want that kind of income in retirement, you save more in your 401k. It’s better for you, better for the economy. But it was a result of this short-term step they took in the 70s. They said, hey, we raised benefits too high, let’s jack up the tax max. And they didn’t worry about the fact that in the future you’d have to pay benefits on that. Well, the future is today.

Susan Pendergrass (11:05):
Okay.

Andrew Biggs (11:13):
Now we’re broke again, we need extra money again, and these guys say, well let’s just jack up the tax max. But then you’ll pay extra benefits in the future. It becomes this chasing-your-tail kind of thing.

Susan Pendergrass (11:16):
Yeah. Yeah.

Andrew Biggs (11:25):
And the problem when you do it is there’s no country on earth paying $100,000 a year from a social insurance program, except for us. And the reason we do is these stupid historical decisions. If you’ve got this high-income couple in the US retiring today, they can get almost $100,000 from Social Security. If they lived in Canada, they’d get like $35,000. And that’s perfectly fine. Nobody’s starving to death in Canada in retirement. They just save more on their own.

Susan Pendergrass (11:35):
I’ll say.

Andrew Biggs (11:55):
The irony is that we think of ourselves as a free-market, small-government country, and our Social Security program is enormous, primarily because we’re paying benefits to people that other countries say, yeah, we don’t need to pay benefits to these guys.

Susan Pendergrass (12:11):
And yet people say, I put my money in, I get my money out.

Andrew Biggs (12:14):
Yeah, and I understand it. When I say we shouldn’t be paying $100,000 a year to a high-income couple, you get the email saying, well, I paid in. And if you paid in, you feel you have this moral claim on benefits. The problem is Social Security is still broke. We still need higher taxes or lower benefits. The idea that you’re just going to get your full benefits with the taxes you paid doesn’t work because the system can’t afford to do it. So you have to make the choice: do I want to pay higher taxes or get lower benefits? I’ve got to pick my poison. Most high-income people would prefer to get lower benefits. They care more about their taxes than their benefits. But people are still living in this dream world where this system, which is $30 trillion in the hole, is somehow going to pay them everything they’ve been promised and just screw somebody else. Everybody thinks they’re the guy who’s going to get everything and somebody else is going to get screwed.

Susan Pendergrass (13:14):
Yeah. I definitely hear people saying today, maybe I should go ahead and take it early and then I’ll get grandfathered in and my benefits won’t get lowered.

Andrew Biggs (13:26):
It probably won’t make a difference. In general, the Social Security benefit formula works based on your birth cohort, the year in which you’re born, not really the year in which you claim benefits. And people who are going to do Social Security reform understand the incentives. They don’t want to make it easy for people to game the system. So Social Security reform will probably work itself out in such a way that

Susan Pendergrass (13:42):
Right.

Andrew Biggs (14:03):
you can’t get some big advantage by claiming early. I could think of some conceivable possibilities, but I still would not encourage people to claim early.

Susan Pendergrass (14:14):
Okay, I want to talk about two more things I read in the last week. One was a letter from Tim Kaine about his idea with Senator Cassidy. What’s that idea for fixing it?

Andrew Biggs (14:24):
The interesting thing is people say Social Security reform has to be bipartisan. So we have two bipartisan ideas. We have Moreno and Elizabeth Warren, a Republican and a Democrat. They’ve got one idea, eliminating the payroll tax ceiling.

Susan Pendergrass (14:39):
Third rail.

Andrew Biggs (14:49):
Cassidy, a Republican from Louisiana, and Tim Kaine, a Democrat from Virginia, they’ve got a bipartisan plan. And guess what? Their plan is also terrible. If there’s any lesson from this, it’s that bipartisan doesn’t mean good.

Susan Pendergrass (15:00):
Bipartisanly terrible.

Andrew Biggs (15:04):
Yeah. Look, ultimately Social Security reform is going to have to be bipartisan, given the way the political system works. On the other hand, there is some lesson that if both Republicans and Democrats can agree on something, it might be a terrible idea. With Cassidy and Kaine, they are explicitly, and Cassidy said this, solving a political problem. The political problem is that neither Republicans nor Democrats want to vote for either tax increases or benefit cuts. You’d think Democrats want to raise your taxes and Republicans want to cut your benefits. The reality is they don’t want to do either of those things because they realize both are politically unpopular, which is why we’ve gone 40 years literally doing nothing. So their solution is that we don’t have to make these difficult votes. Instead, the federal government will borrow about $2 trillion, invest that money

Susan Pendergrass (16:02):
Tough.

Andrew Biggs (16:04):
in stocks and private equity, high-risk, high-return stuff. Then they claim they’re going to hold this fund for 75 years so it can build up value. In the meantime, when Social Security’s trust fund runs out in 2032, the federal government will borrow against the assumed gains on this investment fund.

Susan Pendergrass (16:06):
Right. Mm-hmm.

Andrew Biggs (16:29):
They say the borrowing will be at a lower rate because it’s the federal government. And they say after 75 years, all the gains in this investment fund will pay back all the borrowing and we’re all good. And let me count the ways there are problems with that. If you work at the state level,

Susan Pendergrass (16:45):
It’s just kicking the can.

Andrew Biggs (16:52):
state-based think tanks almost know more about this than federal people. A lot of underfunded state pension systems do things called pension obligation bonds. Their pension system is underfunded, they don’t want to raise contributions or cut benefits, so they borrow and invest in the stock market and hope it works. The pension obligation bond is the hallmark of a poorly funded, poorly run pension system. Think New Jersey, Illinois, things like that.

Susan Pendergrass (17:21):
Yeah.

Andrew Biggs (17:23):
There’s a national group of state budget officers that has come out and basically said as an institution, don’t do this. Borrowing for your pension is a bad idea. So it really is fitting for the times that the Cassidy-Kaine plan says, let’s take this worst idea from state and local government

Susan Pendergrass (17:45):
Yeah.

Andrew Biggs (17:47):
employee pensions, which has been condemned as bad practice, and put it on steroids and do that for Social Security. And what it really gets to is they just don’t understand the finances of it. And to be frank, they won’t listen. They have talked to every pension expert I know, and this Social Security world is pretty small. We all know each other on both sides. We may not agree on everything. Literally every pension expert I know says this is a terrible idea.

Susan Pendergrass (17:54):
Yeah.

Andrew Biggs (18:17):
But their political considerations are more important than policy, and that’s the problem with all of them.

Susan Pendergrass (18:24):
I mean, it feels free. They’re basically saying it’s like a timeshare. It just feels free right now. We just borrow the money. Okay, so

Andrew Biggs (18:31):
It’s been pointed out to them that if you can fund Social Security this way, you could fund the entire federal government this way and never collect any taxes. At one point Senator Cassidy was quoted in a newspaper article saying, well, yeah, sure, in theory you could. And I’m like, if something implies there’s a free money machine, maybe you need to question your assumptions.

Susan Pendergrass (18:38):
Sure. Okay.

Andrew Biggs (18:54):
I could give you a whole variety of reasons why this doesn’t work, but one macro point that’s come to me: I’ve been doing Social Security for a long time. I worked in the Bush administration in 2005 when they tried and failed to do Social Security reform. One of the problems we face today is that your elected officials understand Social Security policy much less well than they did 20 years ago. They just don’t understand how the system works. Going back to the Moreno-Warren idea of applying the payroll tax to all earnings,

Susan Pendergrass (19:22):
Yeah.

Andrew Biggs (19:37):
okay, you’re adding 12 percentage points to your top tax rate. There’s a reason Sweden and France and others don’t do this anymore. They used to have incredibly high tax rates. They don’t now. We would end up in many cases with a higher tax rate than most European countries. We have some philosophical dedication to small government and things like that. They don’t. And so if they’re not doing it,

Susan Pendergrass (19:43):
Yes. Yeah, yeah.

Andrew Biggs (20:02):
it’s because there’s a practical reason this isn’t a good idea. The same applies to wealth taxes. That’s been tried in Europe. They’re like, yeah, we’re not doing that anymore because it doesn’t work. But your average senator now

Susan Pendergrass (20:14):
It is happening around the country, the billionaire tax. What happens in 2032 if no one is either brave enough or smart enough to take this on in the next six years?

Andrew Biggs (20:17):
They’re just not aware of these policy issues, and that’s a real problem. It’s like having a guy fix your car who doesn’t know how to fix cars. 2032 is the date. If you have a recession, it might be 2031. It’s not certain, but it is certain it’s happening soon.

Susan Pendergrass (20:47):
Yeah. Okay.

Andrew Biggs (20:53):
There’s a literal reading of the law, which is that Social Security can’t pay out benefits it doesn’t have dedicated resources for. Once the trust fund runs out, the only dedicated resources are mostly the payroll tax, plus a little bit of money from income taxes levied on retirement benefits. And those were cut as part of the One Big Beautiful Bill. So if the trust fund runs out, they’d have to rely on the money they have on hand, which implies around a 22% benefit cut.

A lot of times people assume that benefit cut has to be across the board. If you did it that way, you’d throw a lot of people into poverty. I did some work a year or so ago with a lawyer in DC named Kristen Shapiro, and what we found is that the legal precedent shows the executive branch, meaning the president working through the Social Security Commissioner, would have some discretion. What we found is you could maintain full benefits for about 50% of people, the poorest 50% of seniors, and then cap benefits above that. If you cap the maximum benefit at about $24,000 per year for a single person or $48,000 for a couple, that is enough to make Social Security solid without raising taxes. So the point is simply you have some discretion.

The reality is Congress isn’t going to allow big benefit cuts, for political reasons. On the other hand, are they willing to have the size of tax increases needed, all in one go, to keep Social Security paying full benefits? I don’t think they want that either. So the reality is probably they’re going to borrow a lot of the money. And that’s where you get to the issue of how much more borrowing the financial markets will swallow. We effectively borrow from the public to repay the Social Security Trust Fund, but there’s an end to that. You say, okay, 2032, we have to do something. We have to raise taxes or cut benefits. If in 2032 the stated policy of the federal government is, well, we’re just going to keep borrowing to pay Social Security even though we have no prospect of paying it back, you wouldn’t blame some big market players for saying, yeah, I’m out, because you don’t want to lend money at low interest rates to someone who says they can’t pay it back. Then you start getting a couple of things. One is more federal borrowing squeezes out capital in the rest of the economy, and so interest rates naturally rise.

Susan Pendergrass (23:18):
Right.

Andrew Biggs (23:31):
But then there’s a second element: if you’re afraid the federal government can’t pay you back, over and above that natural increase in the interest rate, you’d apply a risk premium to treasury debt. You’d say, look, Treasury is not this rock-solid investment anymore. It’s more like a junk bond, or like borrowing from Illinois, and you make them pay a premium. That’s going to drive up

Susan Pendergrass (23:43):
US government borrowing. Yeah, yeah, yeah.

Andrew Biggs (24:01):
interest rates, and that makes it tougher not just for the federal government but for everybody. If you want to buy a car or a house, all your interest rates rise. There’s also going to be real temptation to inflate away the debt. The federal government doesn’t want to default on its debt, but

Susan Pendergrass (24:24):
Yeah, yeah.

Andrew Biggs (24:25):
historically the way you deal with this is inflation. Think about all the debt we took on during COVID, shoveling money out the door to everybody, and then we had massive inflation after it. A lot of those people who bought treasury debt didn’t get a good deal, because if you get 20% inflation on

Susan Pendergrass (24:34):
Absolutely. Yeah.

Andrew Biggs (24:47):
a treasury bond with a nominal fixed interest rate, that’s a real problem. So inflation becomes increasingly tempting. You look at this scenario and you’re like, can’t anybody here play this game? Every other country is not going bankrupt. We just have to do what they do.

Susan Pendergrass (24:51):
Yeah, yeah. So could we, if we really got our heads around it and started today or next year, incrementally raise the 12.4%, or incrementally get people used to lower benefits after a certain income or wealth level?

Andrew Biggs (25:18):
Sure. Yes. The way I think about it, there are two ways people think about it: the wrong way and my way. The wrong way is, let’s just pick from this menu of options to make Social Security solvent. We can raise the payroll tax a bit, raise the retirement age a bit, cut cost-of-living adjustments a bit, raise the tax cap a bit, and do these things until the system is solvent.

Susan Pendergrass (25:34):
Yes. Yeah.

Andrew Biggs (25:54):
That’ll get you a solvent program, but it won’t be a program that particularly works very well or is good for the economy. A more effective way is to ask, what do we want this system to do? If you talk about Social Security reform, what you hear is that it’s a social insurance program, a safety net, an anti-poverty program. Okay, it has to do that. And that part is really very cheap, because we don’t literally have that many poor seniors, their benefits aren’t very high, and it’s not a problem to maintain benefits for low-income seniors. When you ask what Social Security should do, nobody is saying we need to be paying high-income seniors $100,000 a year. There’s no public purpose for it. Nobody thought it out in advance. It was simply an unintended consequence. So if you’ve got things that are really costing a lot of money and have no public purpose, and those people can save for retirement on their own, you start scaling that back. The distinction I’m making is between policy changes simply for the purposes of keeping Social Security solvent, and policy changes for the purpose of making Social Security do what it needs to do, the real public purpose, and not doing things that serve no public purpose. My point is the things I’m talking about are things you should do whether Social Security is insolvent or not.

I’ll give you an example: Australia’s retirement system. Australia is a lot like us, not particularly more conservative or liberal, just sort of normal. Their Social Security program essentially is targeted at eliminating poverty in old age. It’s actually a better safety net than Social Security provides, but the benefits decline down to zero once you get above the poverty level. And to help people above that level save for retirement, everybody is enrolled in a 401k-type account. What that says is, if everybody’s participating in retirement plans as they should, the government’s job becomes easier. Their Social Security system costs about two percent of GDP. Ours costs about six percent. It’s a third as costly, provides a better safety net, and it comes because they’re actually thinking about what they’re doing.

Susan Pendergrass (28:18):
Mm-hmm.

Andrew Biggs (28:26):
We’re literally not thinking about what we’re doing. There’s a saying in business: the worst reason to do something is because we’re already doing it. That is literally how Social Security policymaking works. Nobody knows why our benefit formula is what it is or why the tax max is what it is. It’s all just stuff we inherited from the 1970s from people who were not in any way thinking clearly about what they were doing. It was people in the 70s trying to win elections, and we end up with the bag.

Susan Pendergrass (28:52):
Speaking of 2005, there was an attempt to offload a small portion of people’s contributions into the market, right? That failed.

Andrew Biggs (29:09):
That was the Bush proposal. I was in the White House then, kind of in a number-cruncher role, so I knew that stuff pretty well. I did a lot of events with President Bush around the country. When we came up on the 20th anniversary of Bush’s proposal in 2025, I started thinking to myself, what if his plan had passed? What would have happened? So I built a model. Back then they were saying, okay, you’re going to have some reductions in traditional Social Security benefits for middle and high-income people, and then you’re going to have a personal account where you can invest part of your existing payroll tax in stocks and bonds. The total benefit you get at retirement is a combination of those two. People were speculating. Well, we don’t know what the stock market’s going to do. But 20 years later, we’ve got some data, so let’s just see what happened. The results were that for people

Susan Pendergrass (30:01):
Now we do.

Andrew Biggs (30:07):
retiring today, low and middle-income people would have had higher total benefits by a little bit. The very highest-income people, their benefits would be down by a couple percent because the cuts to their traditional benefits would be larger than the gains from their personal account. But even they would be fine; it’s not a big deal. Going forward, it looked like people would do a little bit better with the Bush plan than with the traditional system. But here’s the important thing: the traditional system is broke. We just talked about how it goes broke in 2032, with huge deficits. The Bush proposal wouldn’t have made Social Security totally solvent, but it would have addressed half or two-thirds of the long-term funding gap. So you’d get a system that would have paid you benefits around the same as, or maybe a little bit better than, Social Security, but would be in much more solid financial shape. Today the times are different, and I don’t think personal accounts are really viable. But the point is, if they had done something back then, everything could be easier today. But members of

Congress were just too afraid. Republicans were afraid of taking the political hit. For Democrats, it was too tempting to give the political hit. They knew they had to do something, but they couldn’t swallow hard and say, look, let’s just go in on this thing together. They didn’t want to give Bush the win because by that point Iraq was going badly and they really didn’t like him. So they beat him up. But the problem is Bush served his term and is happily retired in Texas. The people who really got screwed were the ones who depend on Social Security, because we didn’t fix it. And you just hope that’s not what we do again.

Susan Pendergrass (31:42):
Yeah. Somebody not us in 2045 could be having the same conversation, right? Like, if only in 2025 or 2026 we’d gotten serious. And I do think people mix up the trust fund with the whole program. A lot of people think all of Social Security is going to be bankrupt in six years, versus the reality that we’re still taking in a trillion dollars, we just need about 22% more than what we’re taking in.

Andrew Biggs (32:14):
Yeah. If you go back 20 or 25 years, there were all these arguments about whether the trust fund is real or fair or whatever. The trust fund is essentially IOUs written from one side of the government to the other. I thought at the time the trust fund is not real in an economic sense. It doesn’t make it easier for the government to pay Social Security benefits. It is a pledge that we will pay them, but it doesn’t make it easier to pay them. But here’s the interesting thing:

Susan Pendergrass (32:25):
Right. Al Gore. The lock box.

Andrew Biggs (32:50):
if having a trust fund doesn’t make it easier to pay benefits, then not having a trust fund doesn’t make it harder. The trust fund runs out, we still have taxes coming in, we can still pay 80% of what is owed. If we retarget that, you can maintain the safety net. It’s not like you’re totally insolvent or broke. All those long debates over whether the trust fund is real get resolved because the trust fund itself is gone in six years. So that doesn’t matter very much anymore. But I do hope that, as you said, we’re not in 2045 looking back on a solution of just borrowing $500 billion a year or whatever it’s going to be. People in 2045, when the federal government is bankrupt, the dollar is dropping, and all these financial crisis things we think only happen to other countries are happening to us, they would look back and say, I wish those people were more responsible. The Social Security problem, in a sense, if we went back 25 or 30 years ago, was a manageable problem. The real issue is not the demographics or the benefit growth or whatever. The real issue is just poor stewardship of this program by Congress and respective presidents. It is absolutely a governance problem. It is not a problem of economic or demographic fundamentals. All of that can be handled.

Susan Pendergrass (34:19):
Everyone wants to be Santa Claus, right? No one wants to be the Grinch.

Andrew Biggs (34:22):
It’s very true, but leadership is about giving people bad news. Good news kind of tells itself. Bad news has to be told and people have to be convinced that this is going to hurt, but we’ve got to do it. And we just didn’t have the willingness. President Clinton in the late nineties tried to do some stuff, but he didn’t deliver much bad news because we had surpluses. President Bush was willing to tell people, okay, look, you’re not going to get every penny you’ve been promised. Beyond that, the level of leadership has been very poor.

Susan Pendergrass (35:01):
Hasn’t been good. All right, well, next year when the trustees report comes out, come back and give us more bad news.

Andrew Biggs (35:09):
Yeah, until then, things are looking up. But no, it’s something people want to be aware of, and I think that’s the key thing.

Susan Pendergrass (35:13):
Well, I think one of the more important things you said is that no one understands it. People are upset and arguing over something they don’t understand the mechanics of. I do know people who think they have an account with their name on it that their Social Security taxes went into, and they’re just going to start taking the money out.

Andrew Biggs (35:23):
I have some bad news for that. Your taxes go into Social Security and go straight out the door to pay for your grandmother’s benefits. If you want to know where your taxes are, they’re in your grandmother’s bank account. So go ask her.

Susan Pendergrass (35:45):
That’s right. That’s right. All right, thank you so much. I really appreciate the time.

Andrew Biggs (35:51):
Thank you, Susan. It’s a pleasure to be with you.

Produced by Show-Me Opportunity

The post The Social Security Crisis Is Worse Than You Think with Andrew G. Biggs appeared first on Show-Me Institute.

As a recent op-ed in the Wall Street Journal reports, high-tax states continue to bleed residents and income. Between 2022 and 2023, California lost a net $11.9 billion in adjusted gross income (AGI), New York $9.9 billion, and Illinois $6 billion. Higher earners with income over $200,000 drove much of this exodus. In Massachusetts, they accounted for 70% of outflows, doubling the 2019 share.

Meanwhile, no-income-tax states saw the largest gains. Florida added $20.6 billion in AGI, Texas $5.5 billion, and Tennessee $2.8 billion. Even non-income tax states with more frigid climes saw significant inflows, including Wyoming and South Dakota. In short, states without income taxes dominated the top destinations for both people and wealth.

Missouri, with its current 4.7% top individual income tax rate, sits in the middle of the pack. While we are not a major loser like California or New York, we are far from the magnet status of Florida or Tennessee. Drawing upon IRS migration data, past Show-Me Institute reports have shown that Missouri has consistently lost more people and more income than it gained. This has been particularly the case among working-age and higher-earning households seeking better economic climates.

These national migration patterns emerge at a pivotal moment for Missouri. State lawmakers recently approved HJRs 173 and 174, a proposed constitutional amendment backed by Governor Mike Kehoe that would ask voters to authorize the gradual phaseout of the state’s individual income tax. If approved, the general assembly would begin reducing the tax as revenues grow and would have the authority to speed up the process while modernizing Missouri’s outdated sales tax code.

Eliminating the income tax would align Missouri with proven winners in the migration data, making our state far more attractive to high earners, businesses, and young professionals—key drivers of growth. Moreover, we sit right next door to Illinois, which, while losing top earners at a breakneck pace, is also ranked the least friendly state for middle-class earners according to one report.

The pattern is clear. People and capital continue to flow to states with lower tax burdens and pro-growth policies. Missouri has the chance to join those states. By modernizing our tax code now, we can shut off the outflow of the past and build a more prosperous future.

The post Missouri’s Opportunity to Attract Talent: Latest IRS Data on “Voting with Their Feet” appeared first on Show-Me Institute.

Susan Pendergrass speaks with J.S. Onésimo “Ness” Sandoval, demographer and professor in the Department of Sociology and Anthropology at Saint Louis University, about what the data says about the future of the St. Louis region. They discuss record low birth rates and what they mean for school enrollment, why St. Louis is among the top regions in the country for deaths outnumbering births, how the region compares to Pittsburgh and Cleveland, and why suburbs like Chesterfield and St. Charles are aging faster than most people realize. They also discuss the role of housing supply, school choice, crime, and domestic migration in whether St. Louis can attract and retain young families, and more.

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Episode Transcript

Susan Pendergrass (00:00): Well, certainly not the first time we’ve spoken, Dr. Sandoval. At St. Louis University, you are such a fascinating demographer of the region, and I’ve been following your work as new census data has been released. You’ve been writing about it and creating what I think are really cool mapping tools that folks can look at to see how the St. Louis region is impacted. Thanks for coming on to talk about that. But first I want to sort of expand our view, because pretty sure that I read within the last week that the number of babies born in the United States was at an all-time low. Is that right?

Ness Sandoval (00:35): Yeah, so every year the United States will probably be breaking records. The data coming out for 2025 is a record low, and the data coming out for 2026 is even lower. The first few months of 2026, the provisional data that’s out shows even fewer. And this is what we expected. We call this a demographic shock, because in 2026, whenever you create an atmosphere of uncertainty and fear, rational people do not have children until they understand that their job is safe, there’s not a recession coming, and we’re not at war. When you create this sense of fear, young people do the rational thing and don’t have children. We saw this in 2020 with COVID. We saw this in 2008 with the Great Recession. Anytime there is uncertainty, young people will postpone births. And that’s what we’re seeing. This started in November. We started to see the decline in births, and it’s continued from November, December, January, February. And so this is what we’re going to see.

Susan Pendergrass (01:51): So next year is going to be lower. And when you look at the state of Missouri, I’ve been saying this ad nauseum for years that our K-12 school enrollment is declining and will decline because of that sort of peak in 2008, just before the Great Recession. So our biggest kindergarten class was around 2012, and our kindergarten classes have by and large declined ever since. And so those kids are moving through the system. You can project that we will just have fewer and fewer kids enrolled in our K-12 system in the state of Missouri.

Ness Sandoval (02:06): No, we peaked in 2008.

Susan Pendergrass (02:11): By and large declined ever since 2012. And so those kids are moving through the system. So you can project that we will just have fewer and fewer kids enrolled in our K-12 system in the state of Missouri.

Ness Sandoval (02:24): Yeah, this is true, and we have a pretty good chart. We make these for every city. We’re replacing very large cohorts of children who were born. I have a son who was born in 2007, just before the recession. That cohort that graduated in St. Louis was 40,000 students. The baby birth cohort is now 27,000 students. So that’s just in that one year a 13,000 decline. And it’s going to decline every year for the next 15 to 18 years, because we don’t know what the bottom is yet. It has not reached the bottom.

Susan Pendergrass (03:01): Right. People say where are the kids going? I’m like, they’re not going anywhere. They weren’t born. The St. Louis region, like Clayton is declining, Ladue was, I mean, all of these school districts, I think almost everyone in the county has fewer kids today than they had 10 years ago.

Ness Sandoval (03:07): They weren’t born. Yes, and it’s not just St. Louis County. St. Charles County is experiencing this. There are some parts that are growing, in the Wentzville area, O’Fallon, but if you look at the old St. Charles areas, they’re experiencing decline. Families with children are declining in those areas. We had made an interactive map that I think shocked a lot of people, of seniors outnumbering youth. People could not comprehend this. Like, my gosh, this is not 2000 where youth were dominating these neighborhoods. I live out here in Chesterfield. The entire Route 64 corridor is senior citizens dominating the youth in Chesterfield. People are shocked. More seniors lived in Chesterfield than youth in 2010, and that’s only grown since. This is happening throughout West County.

Susan Pendergrass (04:14): Wow. And your maps actually go down to the zip code, right? You have very granular data.

Ness Sandoval (04:27): Across into Illinois, yes. The only way you can turn this around is young people from across the United States deciding that they want to make St. Louis their home, have a family there, create a business there. This is what I promote. We have to get younger. We really should have a preferential option for families with children. And that’s a hard message for a lot of people because they’re like, wait a minute, we grew from 1970 to 2020. And I’m like, but all of that growth was driven by babies born. Over 1.8 million babies were born. And I tell people, just do the math. 27,000 babies per year times 50. That’s the back of the envelope for what’s coming over the next 50 years. Unfortunately, that’s not what’s going to come. It’s going to be a lot lower than that. People are starting to get it. We’re not going to have 1.8 million babies born over the next 50 years.

Susan Pendergrass (05:33): Yeah, and I think about things like individual school systems building new elementary schools when there have got to be a lot of buildings that are empty. And also, won’t there be more competition for public resources between children and older people?

Ness Sandoval (05:49): Yeah. At my previous job at Northwestern, we did a project on this in one of the suburbs because we were studying seniors. There was a debate about how to spend public money. Was it for transit for seniors or transit for children? This was 2006, and this was the debate happening in Chicago. How do you provide paratransit for senior citizens when that number is increasing? We’re just having this discussion because St. Louis is leading. We’re in the top three of regions. Pittsburgh leads the country, Cleveland is second, and St. Louis is third, tied with Tampa. More people dying than babies born. We simply don’t have the number of babies born for the size of our population. And it’s because we’re a very old region. We’re the ninth oldest region in the country.

Susan Pendergrass (06:58): Yeah, I mean, we used to have 800,000 people in the city of St. Louis, right? And now we’re 280,000 or something.

Ness Sandoval (07:05): Yeah, and I was just looking at the numbers. It is very possible within two years that Kansas City will have more babies born in absolute numbers than the St. Louis metro region. That’s how few babies. I’m talking about the region. Indianapolis is about 700 babies behind St. Louis. Nashville is about 800 babies behind. All of these smaller regions are having lots of babies, and young people are moving there. Your future depends on the number of children born. And when you look at population projections, I kind of know what this looks like. When you fall below Kansas City in number of births, at some point Kansas City will be larger than St. Louis. We can project this out. We’re talking absolute births, not birth rates. We had lots of babies born 10 years ago. We were fine 10 years ago.

Susan Pendergrass (08:09): Yeah, wow.

Ness Sandoval (08:29): We can go back and talk about what happened since 2010.

Susan Pendergrass (08:35): Yeah, please. I’m curious what did happen. I know you call it the death spiral when there’s more deaths than births, but how did we get into this?

Ness Sandoval (08:41): So I moved here for the Great Recession. I moved in 2008 to start my job at SLU. And there was hope when I got here. There was some positive momentum happening. I think the region took it for granted that it didn’t have to do anything. We just have to be St. Louis. We don’t have to do anything. Unfortunately, Nashville came on the scene. Then you started to see regions change. Regions thinking we need to get young. And St. Louis absolutely did nothing. Since I’ve lived here, there’s been a lot of resistance to economic development in the region. Nashville, I think it was the popularity of being young, being pro-development. I went to Nashville to actually look at it, like why are young people there? And I went to Vanderbilt. And I saw this really interesting integration between the city and Vanderbilt University. That does not exist here in St. Louis. Making it a vibrant, cohesive, urban experience.

Susan Pendergrass (09:47): Yeah. Right. Now you step off campus at SLU and you’re in an area you don’t want to walk at night.

Ness Sandoval (10:00): Yeah, and even if it was WashU, right. And then you can talk about the Loop. It never recovered from COVID, traffic is down. I think the region has really struggled to attract young people to stay here and live here.

Susan Pendergrass (10:13): Well, we’ve been looking into the issue of crime in St. Louis quite a bit, and I know it’s down and everyone’s celebrating that fact, but I’m not sure when you survey people and ask how they feel walking alone at night, that it’s changed all that much. Even if the number of murders are down, I don’t know that people feel safer walking alone at night, and that’s got to have an impact on whether you want to stay in St. Louis after you have kids.

Ness Sandoval (10:47): Yeah. I think in the city you move out to the suburbs. The challenge is they work and you live for affordability. So many suburbs are against new development, even though they can develop. We see these debates in Chesterfield, that debate in Creve Coeur, several debates out in St. Charles. They don’t even talk about Jefferson County, because they’re celebrating voting down housing. My point is if you don’t want to build housing, Indianapolis is going to build it. Columbus is going to build it. Nashville is building it. We are no longer in the top 50 in new housing permits in the country. We’re 58th.

Susan Pendergrass (11:34): Why though? Is it because there’s not demand, or is supply being constrained?

Ness Sandoval (11:42): Supply is being constrained. Part of it is, when I speak to people, they say it’s going to hurt my home values. People want supply down. But you understand there’s a consequence to this. And home values are always good in St. Louis. But again, we always say there’s a city that we can look to that’s our future, and that’s Pittsburgh. If you really study Pittsburgh and look at it, you’re like, wow, there’s a lot of things we can learn as a city, and say this is not what we want to be. Pittsburgh leads the country in discounted rates on home sales. When people offer their price, most people do not get the price that they want. It’s a significant discount because the demand’s not there. We are about 20 years behind Pittsburgh.

Susan Pendergrass (12:25): Wow. I think a lot, in what I do, about the educational offerings in the region. Before we were recording we were talking about Texas. Texas, number one, doesn’t have an income tax, and also you can pick your child’s school from the get-go. They have hundreds, if not thousands of charter schools. And now they have a private school choice program that I think 250,000 families apply to. And Missouri has an extremely limited private school choice program, maybe 6,000 or 7,000 kids in the state, and not even the ability within St. Louis County to go outside of these tiny little districts. You can’t even go from Clayton to Brentwood. People really feel strongly about this and fight the idea of opening up the county and letting kids go within the county to any school district, and then the legislature fights it every year. And I’m like, we are just becoming less and less competitive.

Ness Sandoval (13:36): I don’t think people understand. I do a lot of work with schools now. We’re going to lose at a minimum 100,000 children under 15 by 2045. This loss is built into the system based on 27,000 births right now. The numbers are starting to show up in kindergarten. We have a smaller kindergarten class, a smaller first grade class coming in. And so a lot of schools are like, wait a minute, what’s going on? This is just starting. You have another 20 years, because we have these large cohorts that were still born after the Great Recession that are going to be replaced by smaller cohorts coming in. And there is no significant migration of children coming into the region.

Susan Pendergrass (14:28): So there are going to be difficult staffing decisions, and people don’t want to hear it. Like, we cannot continue to hire more teachers.

Ness Sandoval (14:32): You have to close schools. You have to close schools, have to merge schools. I’m doing some work in Parkway. People should not be surprised. Parkway is having meetings this month about what Parkway looks like going forward, and people are discussing consolidation. Rockwood is talking about a 15% decline in 10 years. Go out another 10 years, Rockwood will be talking about school consolidation. St. Charles will be talking about school consolidation in the old St. Charles area, the city of St. Charles. This is coming. Everybody focuses on the city and says the city needs to close schools. But you will see a discussion, I think, between Clayton and Brentwood.

Susan Pendergrass (15:06): For sure. Clayton had 2,500 kids. Now they’ve got closer to 2,000. I mean, that’s teachers, that’s buildings. And I know in Indianapolis, I’ve talked to a superintendent in that area. All parents can pick a public school. And he was like, I had some under-enrolled elementary schools and it was great for me because I put a language immersion program in one to bring parents in. I think the resistance to this idea is all about not wanting kids who aren’t paying property taxes, but I think it’s going to flip. Then you’ll be like, we’ve got to fill these seats. We’re paying the same teacher for 18 seats that we could pay for 22 kids. At some point they’re going to have to start laying off teachers. So I think there are some very difficult decisions ahead that you can see now, and there are things that could be done now, like at least not filling open positions.

Ness Sandoval (16:16): I think universities are seeing this, because many of them are relying on tuition and those dollars are not coming in. A smart university has to make cuts because it doesn’t get any better next year or the following year. There will be fewer students coming in. So universities that want to survive are making necessary cuts to survive.

Ness Sandoval (16:45): Again, we don’t know what the bottom of the birth decline looks like. We just happen to live in a state and a region that has seen a significant decline in children. I keep saying we’re modeling the future for people, either as a good or bad thing. They’re like, we want to be like St. Louis, or we don’t want to do what they did.

Ness Sandoval (17:13): I think a lot of people are starting to understand this. It’s like, we’re letting our children go, and we’re not doing a very good job of trying to keep them here. When you had 1.8 million births, you had enough to let children leave your region, leave the state. You don’t have that luxury anymore. Our models show the region should have anywhere between 1.3 million to a million births coming in over the next 50 years. We hope it’s not a million births, because that means you have an 800,000 decline in your population under 50. Or it’s 1.3 million births, which is only a 500,000 decline. But that’s coming.

Susan Pendergrass (17:43): How does immigration factor into it? Because I remember the last time we talked, you said that St. Louis is not very immigration friendly. And of course, the current national environment is not very immigration friendly.

Ness Sandoval (18:03): Missouri and St. Louis cannot rely on immigration to save it. It’s not a state that immigrants are going to come to in large numbers. They’re going to go to Florida. Miami leads the country. Even though domestic migration has people leaving, international migrants are going there as their top destination. They’re going to Philadelphia, they’re going to New York. We get immigrants who come here, but it’s a very small number, like 6,000 a year. We’re not even in the top tier as a top 25 metropolitan region. And Missouri is not either. So Missouri has to rely on domestic migration.

The data will show that probably for the decade, there will be more people dying than babies born in Missouri. Missouri will start to have from a natural perspective more people dying than babies born. And 91 counties across the whole state will have more people dying than babies born. So Missouri will become dependent for growth on domestic migration.

Susan Pendergrass (19:29): Or do we just accept that we’re not going to grow anymore? What’s the impact of that?

Ness Sandoval (19:33): Again, it’s going to be specific. I do think the Springfield area is going to grow, the Branson area, there’s growth. Part of this is retirement, I think. Kansas City is growing.

Susan Pendergrass (19:42): Why Kansas City more than St. Louis? What’s attracting younger people to Kansas City that is not happening here?

Ness Sandoval (19:49): Kansas City is a younger region. St. Louis is a fairly old region. Kansas City is a lot younger and it has a large Latino population, and that’s the largest growing population in the country, birth-rate wise. Latinos are now the second largest population in Kansas City. They surpassed the Black population, which I think even shocked me, because we thought we knew this was coming, but we thought this was going to be post-2030. The fact that it already happened shows just how many Latinos are moving there. And then you have an exodus of Black residents leaving Kansas City as well as St. Louis. I always tell people, when you have young Black families leave or young Black adults leave, those children ultimately leave too. And so that’s part of the story.

Ness Sandoval (20:48): When young people leave, the children that traditionally were born to those young people are now being born in Charlotte, Atlanta, Houston. The number one challenge for St. Louis and the state is the decline in births. If that doesn’t change, then you’re going to see that decline start to show up in five to ten years in our schools.

Ness Sandoval (21:17): And the private schools will simply go out of business because that’s dictated by the private market. Or they’ll do what many of the Catholic schools are doing. They think, we’re going to have middle school now, or we’re going to be K through 12. But then what about the parochial schools? There’s no growth. They’re just taking children out of other schools and putting them in their school system.

Ness Sandoval (21:45): And so again, I go back to Pittsburgh. Pittsburgh is about how do we manage population decline? The city is growing a little bit, but 100% of the growth in terms of the losses is in the suburbs. And that’s going to happen in St. Louis. When this loss starts to show up in the demographic accounting, most of the loss is going to be outside of the city of St. Louis. It’s going to be in the Chesterfield areas. It’s going to be in St. Charles.

Susan Pendergrass (22:18): So what could be done from a policy perspective? Chesterfield is trying to have this arts and entertainment district. They put in Topgolf and the concert venues. They’re trying to attract younger people there. Is it working?

Ness Sandoval (22:34): It’s not working. I mean, they have the same slight increase. I just posted this yesterday. People are shocked. The growth is in non-family households in Chesterfield. If you look at the new development, I call it downtown West Chesterfield. These are million-dollar homes, very expensive. Very few families with kids are there. These are empty nesters or dual-income, no-kids households. It’s very expensive for young families to get into Chesterfield today, when your entry-level home that was $170,000 in 1980 is $600,000 today. These are the challenges.

Susan Pendergrass (23:23): So build more starter homes?

Ness Sandoval (23:32): You need more entry-level homes. I’m not even going to use the word affordable. You need attainable homes for two incomes. And they can be built. But what I’ve heard is that a lot of cities do not want these homes. They want the $600,000 to $700,000 homes because of taxes. And so there is this tension there.

Ness Sandoval (23:56): Parkway and Rockwood are going to look very different in 30 years. They were very attractive amenities for young families with children. But I look at the data, and my kids are in Parkway. These schools are under-enrolled. You go and objectively look at the classrooms, you’re like, there should be 30 kids in these rooms and there’s 15. It’s great for me as a parent. I’m glad there’s only 15 kids for my fourth grader. One of the classes in Parkway Central, in the middle school, in his math class, there are eight students. I love it as a parent, but as someone who looks at the data, this is not sustainable.

Susan Pendergrass (24:45): Yeah, lots of one-on-one. Yeah. I’m just trying to figure out what would cause a renaissance in St. Louis. It doesn’t feel super safe. It has some great amenities and a great food scene and now MLS soccer. What would it take? Well, number one, you do have the school system problem where the St. Louis public school system is kind of a dumpster fire. So people want to move out if they have small children.

Ness Sandoval (25:32): Yeah, the decision to move out is made within the first three years once the baby’s born. We can see that in the data. When we moved from Chicago, because we lived in the city of Chicago, we wanted to live in the city of St. Louis. I think most people who move from Philadelphia or Boston are living in the city. We thought the city of St. Louis would be offering the same amenities. Because of the Great Recession, I came a year before my family, and we soon realized the city of St. Louis was not the city of Chicago in terms of amenities. And so we ended up in St. Charles. And I think most people make that same decision.

Susan Pendergrass (26:25): Yeah, my husband and I moved right into the city.

Ness Sandoval (26:27): We see it in the data. People are moving into the city from Philadelphia, from Boston, from Houston. But then, like me, if you have children and you’re not going to pay for private school, because that’s a tax in many ways, they’re going to exit out. And then with the Catholic schools closing in the city, there are going to be fewer options.

Susan Pendergrass (26:50): Yeah. But the public transportation is no good. I mean, there are things.

Ness Sandoval (26:57): And it’s interesting. We did see a kind of experiment during COVID. When COVID happened, the Catholic schools in the county opened up. A lot of families wanted their children in face-to-face instruction. So they left the city. They did not stay. So we had kind of a quasi-experimental design there. Education was very important.

Ness Sandoval (27:26): A lot of people left the city because of that and never came back. And that started before COVID. But I think this idea of school choice is something where parents want it. We have enough anecdotal evidence. When Normandy closed, the school system closed, families moved to Normandy to get their kids into Francis Howell. There’s enough evidence to show that families want to make these decisions. The question would be, would Parkway accept all of the students that would want to be in Parkway?

Susan Pendergrass (27:56): Yeah, the law would have to say that they would have to. You couldn’t let them pick and choose.

Ness Sandoval (28:15): Yeah. And so the question is, you have a lot of people who would love to be in Parkway. I gave a talk at Marquette and I was shocked because a good percentage of the students there were saying those public school students, but the parents had left to get out to West County for their children. So the question is, do you just let the private market dictate this? Those who can leave the city will ultimately leave the city and get out to West County.

Susan Pendergrass (28:50): There’s movement out. And I think in terms of domestic migration, to get parents to move in, you can go to our northern border, Iowa. The state pays for private school tuition. Oklahoma to the south, the state pays for private school tuition. Kansas, you can go to any public school in the state. It’s 100% open enrollment. Arkansas is one of the strongest for school choice, both public and private. I think we’re going to be surrounded by it and just have our arms folded across our chest. Because Parkway doesn’t want all those kids coming, or Rockwood doesn’t want all those kids coming. Parents are simply going to move across the border to a state where they can pick any public or private school. I’ve talked to some parents who have reached out to say, I’m thinking about moving to the region, is it true I can’t pick a school? And I’m like, it is true. You cannot pick a school. And I think they’re like, forget it. I’m not going to make this big decision on where to buy a house. I think if we don’t do things that are family friendly, and if we don’t get crime under control in some way, or have a 911 system where when you call somebody responds, I think it’s interesting that St. Louis will become this example for the nation of what a dying city looks like.

Ness Sandoval (30:08): We have three examples today: Pittsburgh, Cleveland, and St. Louis. Tampa is kind of unique because it is a destination for retirees. The Wall Street Journal has an article today on Cleveland, the renaissance of downtown Cleveland. And Detroit too, it’s a renaissance.

Susan Pendergrass (30:29): Wow. What about Detroit now? So St. Louis hasn’t figured out our renaissance yet.

Ness Sandoval (30:49): And to be honest with you, I think it will be hard. I’m not pro anything, but I find this whole debate about the city and county interesting. I’m not from here, so I don’t have this history of growing up here. But I think objectively, when I look at the budget of the city of St. Louis and compare it to Pittsburgh, Pittsburgh is a little bit bigger. It’s got 25,000 more people. But their budget is significantly smaller than St. Louis City’s budget. Part of me wonders, because the city is both a city and a county, it doesn’t have enough people or revenue to operate as both. And this is what’s helping Pittsburgh out. This is what’s helping Cleveland out, because that county revenue is spread among more taxpayers. In St. Louis City, the county functions are spread among a dwindling number of taxpayers. The city probably cannot be a county anymore. There’s just too few taxpayers to provide both city services and county services.

Ness Sandoval (32:08): I looked at these budgets and I’m like, my gosh, why is St. Louis’s budget so much more? I’m talking not a little bit more, a lot more than Pittsburgh’s budget. Pittsburgh is having trouble. And I don’t see the long-term fiscal situation turning around for the city because it’s got to provide all of these services. The tax base is going to decline. The next three years are probably going to see population loss in the city. The numbers just came out in March, but we’ll get the numbers in May. It’ll probably lead the country again in population decline for large cities.

Susan Pendergrass (32:58): Are we still a top 20 city? We’re number one in population decline, but what about in population size?

Ness Sandoval (33:01): We’re number one in decline. Last year, St. Louis City was number one. We’re declining. We’re not in the top 20 yet, but we’re very close. If we go back to 2020, we’re smaller than we were in 2020. The only reason we’re not number one in decline is because we had so many immigrants that offset our domestic migration loss. But this will be an interesting 2030 census, because it’ll be the first time the region will go into a census with more people dying than babies born. In the last census, we had about 75,000 natural growth. We’re looking at about 25,000 to 30,000 natural decline going into this census without any domestic migration. I tell people that this story is just starting. We have 74 years of the century left.

Ness Sandoval (34:18): I’m just trying to get people to move from the mindset that this is 2010 St. Louis. You don’t have 36,000 births anymore. You have 27,000 and it’s declining, one of the fastest declines in the country. Because of it, we’re aging very fast, and so we have to shift. The region has to make a choice that we start to organize our economy around senior citizens. There’s lots of money to be made from senior citizens, but we will never be viewed as Nashville or Austin as a place for young people.

Susan Pendergrass (34:52): Absolutely. That Route 64 corridor is just going to be all retirement homes.

Ness Sandoval (35:04): We won’t be talking about single family homes anymore. We’ll be talking about senior housing. We’ll be talking about a workforce that’s going to work with seniors instead of a workforce for children. And there is money to be made in that economy. I’m not saying that this is a bad thing. But again, we can look at other parts of the country where this transition has happened. Local government spending is being consumed by senior citizens, the healthcare of senior citizens, the paratransit of seniors. Seniors will lose their ability to drive. That cost typically gets covered by local governments. And so you will not be providing buses for children. You’ll be providing paratransit to get seniors to their doctors. Churches will have to think about being accessible to seniors. I go to Church of the Ascension and they are not prepared. At Easter, one of the Masses, one-third of this section was senior citizens in wheelchairs. The churches are simply not prepared for a parish that’s going to be 50% of the population at 70 years old and older. Restaurants have to think about this.

Susan Pendergrass (36:30): Wow, that’s crazy. Well, interesting stuff. I hope you’ll come back and talk about this more. And certainly I’m very interested in reading everything that you write about what St. Louis can do. We need to figure out a renaissance.

Ness Sandoval (36:51): We’ve got to get younger. The kids are giving us a try. They’re coming to school, they’re coming here because they have hopes. We just have not responded the way we need to. A lot of companies are starting to recognize this. I talked to the mayor and said, you need to be a more proactive voice on this. But the region, this is not a city of St. Louis issue. This is a St. Charles issue, a Jefferson County issue, a Chesterfield issue. Most of the people live outside of St. Louis city. The loss we’re projecting is going to come from the suburbs. And that’s what’s happening in Pittsburgh, that’s what’s happening in Cleveland. 100% of the demographic loss is in the suburbs.

Susan Pendergrass (37:21): Yeah. Wow, that’s crazy. Well, fascinating. Thank you so much for explaining it. I don’t want to be depressed about it, but it’s not super optimistic. We’ll find a silver lining. Thanks, Dr. Sandoval.

Ness Sandoval (37:59): All right, thank you very much.

Produced by Show-Me Opportunity

The post St. Louis Demographics and the Future of the Region with Ness Sandoval appeared first on Show-Me Institute.

Susan Pendergrass speaks with Josh Bandoch, author of “How to Get What You Want: Mastering the Art and Science of Persuasion,” about why leading with data and logic is often the wrong approach to changing minds. Drawing on more than a decade of research across psychology, neuroscience, economics, and political science, and experience writing speeches for senior government officials and advising executives, Bandoch explains how the human brain feels before it reasons, why persuasion is about shared action rather than winning, and what policy advocates get wrong when trying to move legislators. They also discuss the Granny Test, how to frame arguments around your audience’s moral values, the role of storytelling, and more.

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 Episode Transcript

Susan Pendergrass (00:00): So excited today to talk to Josh Bandoch, author of the soon to be out — or maybe by the time this airs, out — book “How to Get What You Want: Mastering the Art and Science of Persuasion.” I want to say it correctly, which is awesome. I was thinking about this topic — we were talking about this a little bit before we started recording — because we’re both right in the middle of legislative sessions. And in addition to being an author, you work in the policy advocacy space. Is this book meant to sort of address that space, or is it for a more general audience? Because we all want to get what we want, right?

Josh Bandoch (00:37): Absolutely. The book is written for a general audience. It will help folks in the policy space, but also in business, sales, or marketing. The goal of the book is to help people get what they want through persuasion. And for me, persuasion is the difference between having a good idea — whether it’s a good policy idea or a good product idea — and having others embrace that idea.

Susan Pendergrass (01:02): Yeah, I think that’s so important because oftentimes — well, speaking for myself — I come up with policy ideas that I think are great ideas, but I come from data, evidence, research. Let me write a 20-page paper on it and do a statistical model to convince you. And I think that based on what I’ve read in your book, you would say that might not be my strongest approach.

Josh Bandoch (01:24): Well, those things are necessary. Data is necessary, and folks who work at think tanks are paid to do research. I work at a think tank — the Platte Institute — and that is what we’re paid to do. But when I think about persuasion, I start by trying to understand the contours of how the human brain actually operates.

The challenging reality for a lot of folks in the think tank space who are paid to think — maybe you’re a consultant or whatever — is that since we’re paid to think, we think that means logic, data, and reasoning are the way to get what we want. The most challenging reality I’ve encountered is that this is how the human brain is wired — not just my brain or your brain, Susan, but all 8 billion of us on this planet. We feel first, then reason. Sometimes it’s feel, and we never even get to the reasoning. We’ve all been there. That means persuasion actually starts with feelings.

I know the folks in your audience who love the work you do — and you guys do great work — and love the research are going to say, no, that can’t be true. Well, it’s what all the neuroscience says. So it actually means that the logic-first approach to persuasion, whether in policy and think tank land or in sales or anything, is actually illogical — because that’s not how the brain works. The brain works feel first, then reason. We do reason. It’s just that we have to start with feelings.

Susan Pendergrass (03:06): So give me an example. We’ve been working for several years on a policy in Missouri that would allow parents to choose where their kids go to public school — just public school, open enrollment. And we get so much pushback from legislators and others who say this is going to lead to basically the destruction of the public education system. That’s their feeling. And I can provide a lot of evidence from other states that have done it for decades — even our neighbors in Kansas, not so much Illinois — and say it hasn’t happened, but they still believe it. I feel like I can’t put the words in the right order to make them understand what I’m trying to do. So what do I need to do differently?

Josh Bandoch (03:47): Yeah, so there are two parts here. First, you just observe what somebody’s feeling. Because if somebody’s feeling great and they’re inclined to do what you want to do, it’s easy, right? In this case — this is a perfect example — they have negative feelings towards the policy you want to advance. So the first thing you have to do is observe, understand, and address those feelings directly. When you’re in these conversations, what is an example of a raw, visceral negative feeling that somebody expresses?

Susan Pendergrass (04:19): They’ll say in our small rural communities, the high school is the center of it — it’s the heart and soul of the community. And if we let kids out — even though it’s the heart and soul — they’ll all want to leave. And if that happens, not only will the school close, but that will kill the community. That’s what they believe. It’s not reality, but I struggle when I go to testify at a legislative hearing to not sound like I’m just putting facts in front of them and ignoring what they feel. I don’t know how to counter that with reassurance and say, that’s just not true.

Josh Bandoch (05:09): So let me briefly walk you through the process so your audience can follow along. Start with feelings — and what you have to do is generate persuasive feelings. What feelings are persuasive? Ultimately, I think it’s positive feelings. Every time I ask an audience who the most persuasive people they can think of are, a couple of people come to mind: Ronald Reagan, Martin Luther King Jr., JFK. They generated positive feelings. And you do that especially by appealing to your audience’s moral values, which in this case might be different from yours. And then the most effective way to wrap it all up is a story.

So how do you start this process? When you’re talking to folks in the community, or to lawmakers, or to local elected officials who you’d like to see change their stance, start by asking them how they feel. It just unlocks a totally different pathway in the brain.

Susan Pendergrass (06:05): But when you’re saying this — and when I was looking through your book — I was wondering: in today’s political environment, I feel like persuasion is being used a lot less, and people are just making statements and not really defending them, just saying that’s the fact because I said it. Especially with how vitriolic our politics has become in the last decade since you started this research, do you think there’s still a good solid place for the art of persuasion? Or are we just going to stand with our arms crossed and agree to disagree?

Josh Bandoch (06:35): So at one level, the answer is absolutely yes, because humans haven’t evolved radically over the last 10 years. Everything in the book is backed by a tremendous amount of research, largely based on how the human brain works, and then lots of practice. At another level, we do have real reason to be concerned, which is what you just pointed to — is persuasion still possible in today’s political environment?

Look, there are only two paths forward. One is that we continue to relish in all the negativity, toxicity, and polarization, or we step back from it. I don’t think, aside from a couple of folks who spend their lives on X, that anybody is really going to say our politics are healthy. So it’s incumbent on us to have better methods to walk back from that, as opposed to just running down that toxic lane even further.

Susan Pendergrass (07:41): So in addition to what happens in state and federal legislative bodies, where I spend a lot of my brain power, how does somebody take the principles of your book and apply them in their personal life? Is this about manifesting goals, or how do they apply those same principles?

Josh Bandoch (08:00): Well, maybe I can sketch out briefly what some of the principles are so we can talk about them. The first step for persuasion — well, I guess two things. One is understanding what persuasion actually is, and I think even this is a mindset issue. We oftentimes think persuasion is about winning. And Susan, if I win against you, what does that make you?

Susan Pendergrass (08:17): A loser.

Josh Bandoch (08:18): That’s terrible, right? You’re a loser and you don’t want to work with me. So persuasion isn’t about winning. It’s not just about launching your logic at people — we’ve discussed that already. It’s not simply about convincing somebody. The Latin root of the word “convince” means to vanquish or to conquer, and conquest is barbaric. So what is persuasion? It’s about shared action — something we voluntarily do with others. That’s the shared part, and it’s action — it’s about getting things done. That’s already a much different understanding of persuasion.

When you bring that approach to your personal and professional endeavors, it’s different because you’re really trying to work with people and figure out how to move forward together. The first step of persuasion for me is adopting what I call the persuader’s mindset — it’s about them, not you. That’s why when we talked about school choice in the community, it’s like, okay, what are their concerns? Take their concerns seriously. That applies in your personal life too — maybe you’re having a debate at home with your spouse or a friend or a child. You have to understand who they are and what they care about, and to the extent possible, proceed on their grounds, because they’re much more comfortable there. This applies to any situation you’re in, no matter what it is.

Susan Pendergrass (09:32): That’s awesome. And you mentioned professionally — sales. I feel like there are a lot of books on how to sell. How does your book differentiate from what’s come before?

Josh Bandoch (09:47): Well, a lot of folks — keeping it in the policy space — are trying to corner people into saying yes to something they otherwise wouldn’t say yes to. What I’m really trying to understand is what would motivate and excite somebody to work with me on something. And that requires generating the positive feelings I talked about, appealing to their morals, telling great stories, and some of the other things I get into in the book. But those are some of the big ones. And it all has to happen simply.

Susan Pendergrass (10:31): In a simple way, right? I’m not going to hold this against you, but I am a grandmother. And I did see the Granny Principle in the book — so explain what that is, because I want to remind myself of this principle a lot. I have a PhD in public policy. I’ve put a lot of years into studying what’s good and bad public policy. And every single year in the halls of Jefferson City, I just see bad public policy happen in the hallway. They’ll say, well, we’ll just give that part up and add this part. And I’m like, no, no, no — you basically just blew up the quality of what you were trying to do. And I see that if I’m coming from up here and things are happening on a completely different level, I’m spinning my wheels. I’m not furthering my goals of getting good public policy passed — which I believe, no matter who’s in the governor’s mansion or the White House, good policy is good policy. And I struggle to make it happen in Missouri. I think the Granny Principle could be part of my problem, so would you please explain what that is?

Josh Bandoch (11:32): Totally. The last chapter of the book — in some ways the least exciting but the most important — is called “Ace the Granny Test.” And what’s the Granny Test? Would your granny understand what you’re saying? You assume granny is a smart lady who is not an expert in any particular thing. So you have to explain things with clarity, simplicity, and precision.

One of the troubles we encounter in think tank land is that we love to dump tons of data and logic and reasoning and examples on people, and it’s overwhelming. We also encounter the curse of knowledge — we know so much that we kind of assume our audience does too. And we oftentimes think, well, they just don’t understand me, that’s their fault and their problem. No, no, no, no. It’s your fault and your problem, because they don’t understand you and they just move on with life.

When you talk to an elected official, you have about 60 seconds to capture their attention. Maximum. So if you’re not crystal clear and simple in how you explain things, they say in that typical apologetic way, well, thank you so much, I’ll take that into account — and then they move on. Clarity and simplicity are premium virtues in communications, and they require a lot of hard work to achieve. Can you distill your 30-page white paper into 30 seconds?

Susan Pendergrass (13:01): Yeah. I’m trying to do cards now — the most simple four-by-six with colors. And in their defense, I’m not coming down hard on legislators — they’re not specialists, they’re generalists. It might be education committee and transportation committee and appropriations, whatever. They have to know a lot of different areas, and even though Missouri and Illinois have long sessions — like five or six months a year — they have other lives much of the time. It is hard for them to grasp things in a short amount of time. I’ve had some back and forth with my colleagues who say we should still write high-level academic papers. I’m like, I’m doing four-by-six cards now. I’m sure there’s a middle ground there, but it’s hard to find.

Josh Bandoch (13:59): Well, the four-by-six is a great place to start. What’s your thesis? What are you trying to say? Can you get that into one sentence? Do you have a couple of key points you’d like to make? But then how do you turn that into something compelling? I would say you do at least one of two things. Ideally, you would have a story. If you’ve got 30 seconds to pitch school choice, you might start by saying, let me tell you a story about little Bobby or little Sally — this is what it meant to him, he was here and now he’s here — and you condense that story. Or you make a moral claim that’s going to grab their attention. People’s morals differ based on, roughly speaking, their politics, but you have to make a moral claim that’s going to resonate with them.

So if you’re talking to somebody on the left, their morals are sensitive to claims over equity. If you were talking to somebody in an urban school district and you wanted to get them to support school choice, and let’s say they’re on the left, you might say, look, our school system is deeply inequitable and we need to fix it. And they’re like, huh, yeah, it is — tell me more. You’ve got to figure out what you want to say, but then make sure you’re framing it in a way that is compelling for your audience.

Susan Pendergrass (15:15): So if folks want to find your book and learn how to get what they want, when and where will it be available?

Josh Bandoch (15:22): It’s available April 21st, and it’s available anywhere you can buy books — Amazon, Barnes & Noble.

Susan Pendergrass (15:24): And you said you spent 10 years researching this — tell me about it.

Josh Bandoch (15:33): Yeah, a combination of research and practice. Ten years of on-and-off reading as much as possible — psychology, neuroscience, primarily.

Susan Pendergrass (15:41): Yeah, that’s fascinating. It is — surprisingly, for what I do full time — an easy part to forget. I’ve always felt like if I just lay out facts and fair arguments, the rest will take care of itself.

Josh Bandoch (15:58): Well, those things are necessary, but they’re not sufficient. They’re necessary because our job, working at think tanks, is to make sure the foundation is strong. We have a policy recommendation, and we have to make sure we have really good reasons to think it’s going to be effective — that it’s been tested elsewhere, or all the data indicates this is probably going to work. That’s necessary. It’s not sufficient. The persuasion layer on top of that is what takes your good idea to a good idea somebody else wants to embrace.

Susan Pendergrass (16:30): Yeah, I think it’s great. Like you said, it’s helpful in so many parts of your life. It comes right up to the very edge of manipulation, but pulls back a little bit. It is helpful for getting what you want — whether you’re buying a car or agreeing with your spouse on the paint color for the wall. It’s a really smart approach.

Well, thank you so much for joining us today on the podcast and telling us all about it. It’s fascinating stuff and I really appreciate you taking the time. Thanks, Josh.

Josh Bandoch (16:58): It’s a pleasure, thank you so much.

Produced by Show-Me Opportunity

The post How to Think About Persuasion in Public Policy with Josh Bandoch appeared first on Show-Me Institute.

This is a much-needed improvement to school accountability in Missouri. Parents and community members will finally have access to clear information about how their local schools are performing.

Following the governor’s address, I wanted to re-up my post about school report cards from last May, which helps to explain why the letter-grade requirement is sorely needed and how it improves upon our current school report card system.

It is printed in full below.

———

Information Overload and Missouri School Report Cards

Have you ever started reading the warning label on an over-the-counter drug like aspirin or ibuprofen? Ever finished one? Probably not.

Drug warning labels are classic examples of information overload—so packed with details that they become practically useless. Unfortunately, the school report cards produced by the Missouri Department of Elementary and Secondary Education (DESE) suffer from the same problem.

In theory, these report cards should help parents and community members quickly understand how their local schools are performing. When well-designed, they can promote transparency and inform decision-making. But if a school report card is not organized and does not emphasize the most important information, it functions like a drug warning label. It can include a lot of detail but be of little practical value.

If you’re curious to see this for yourself, here is a link to the school report cards made available by DESE. Choose a district, then a school, and you can scroll through a vast amount of information. However, after you’ve taken the time to look through it all, you may realize you haven’t learned very much. DESE’s report cards may be comprehensive, but they fail to deliver what busy families need most: clear, accessible information about school quality.

Now, contrast the Missouri report cards with this report card for Briarmeadow Charter School in Houston, produced by the Texas Education Agency. At the very top, letter grades in four categories are displayed prominently:

• Overall Rating: A

• Student Achievement: A

• School Progress: A
• Closing the Gap: A

With just a glance, you know where this school stands.

Texas is not alone in this approach. States such as Florida, Illinois, and Louisiana also use summary performance indicators on their school report cards to give the public a clear picture of school quality. Unlike Missouri, these states are courageous enough to rate schools based on performance, and most importantly, publicly identify schools that are failing to educate their students.

It’s no coincidence that students in states with strong transparency and accountability policies, including clear and informative school report cards, consistently outperform Missouri students academically. These policies are key drivers of school improvement, and without them Missouri is only likely to fall further behind. School report cards that are informative about actual school performance are a simple way to get our state moving in the right direction.

The post Meaningful School Report Cards are on the Way appeared first on Show-Me Institute.

Property taxes are a vital and efficient source of revenue for local government, but various factors, including harmful abatements, inconsistent assessment practices, and consistently poor management in Jackson County, have eroded trust in the overall system.

The Solution

Property taxes work best when they are predictable, broadly based, and targeted to the local services that people benefit from. Right now, property assessments in Missouri are unpredictable and seem random to too many people. While tax-rate rollbacks help reduce these negative aspects of property taxes, the high inflation of recent years has limited the effectiveness of rate rollbacks. Missouri assessors should more uniformly assess residential property by using an average-based system instead of individually assessing every property, which leads to increased variance in values among neighboring properties and undermines trust.

Key Facts

• The 2025 Jackson County reassessment was once again a procedural disaster, leading to distrust in the system. Making Jackson County Assessor an elected position should improve the process by giving the voters and taxpayers someone to hold accountable.

• Surprisingly, cities in Missouri rely less on general property taxes than cities in any other state.

• Missouri local governments, such as school districts and fire districts, rank third among the 50 states for reliance on personal property taxes.

Which Taxes Damage Growth the Most?

Source: https://x.com/cremieuxrecueil.

Going in the Wrong Direction with Recent Reforms

In an effort to address the impact of higher property taxes in Missouri, the legislature first passed a senior property tax freeze option in 2023 and made major changes to the property tax system in 2025 during the special session. There are many problems with these bills, not the least of which are serious constitutional concerns that will likely be fought over in court. These plans are harmful simply because they reduce the property tax base. Unless local governments cut services in response to the enactment of these plans, they will almost certainly lead to higher tax rates on properties that are not subject to the property tax freezes or limitations, such as commercial property and multi-family housing. There will also be significant pressure to increase alternative taxes, like special sales taxes. Most concerningly, there will be an increased reliance on income taxes to fund local school districts through the foundation formula. Increasing our dependence on income taxes will harm economic growth in Missouri.

It would be better for the state to substantially change the biennial property assessment process. Missouri should eliminate the practice of sending thousands of assessors out into our neighborhoods every other year to individually assess every property. The Missouri State Tax Commission could work with county assessors, local realtors, and online real estate resources to determine average county increases (or decreases) in valuation for each reassessment cycle. Each residential, commercial, or agricultural property in a county could be adjusted based on the county’s average for that particular class of property. Tax rates could then be adjusted based on that average, and the vast majority of homeowners would be subject to the same resulting increase (or decrease) in their overall property taxes. This method would eliminate wide discrepancies from house to house that undermine faith in the current tax and assessment system.

Rolling Back Tax Rates in Kansas City

Families and property owners within the Kansas City 33 School District have been hit particularly hard by the continuously mismanaged assessment process in Jackson County and the unique rate-rollback exemption for that large school district. In 2023, when assessments in the school district went up 24%, the school board kept the tax rate exactly the same. That placed a real burden on homeowners, who saw their property taxes skyrocket. In 2025, after another round of substantial and contentious assessment increases, the school board approved a very slight 10-cent rate rollback. The Kansas City 33 School District should be required to roll back its property tax rates as assessments increase, just as every other taxing entity in Missouri does.

Change the Underlying Property Tax Base

Property taxes work best when the item being taxed is immobile. Taxing cars, boats, livestock, grain, and business equipment is not sound tax policy. While there is no way of knowing how many Missouri cars are improperly registered in Illinois, Kansas, or Arkansas in order to avoid Missouri’s property tax, the number is likely high. Missouri should phase out personal property taxes in a revenue-neutral manner by replacing them with slightly higher real property taxes.

Free the Livestock

Missouri farmers, ranchers, and tax assessors spend significant time counting and calculating the taxes owed on livestock, but the total tax revenue raised for all governments on all livestock throughout the state only amounts to about $10 million. Those paltry revenues do not justify the effort that goes into collecting the tax in the first place. Missouri should eliminate the personal property tax on livestock and replace it with a slightly higher tax rate on farmland.

Policy Recommendations

• Remove the Kansas City 33 School District’s exemption from property tax rate rollbacks (Missouri Constitution, Article 10, Section 11(G)).

• Eliminate personal property taxes, or, at a minimum, require that those tax rates roll back like real property taxes and expand RSMo §92.040 (which allows lower personal property taxes on business equipment) to more cities than just St. Louis and Kansas City.

• Eliminate personal property taxes on livestock as a wasteful expenditure of time and effort.

• Repeal or substantially amend the laws allowing for senior citizen property tax freezes.

• Change to a reassessment system for homes that is based on community sale averages, not individual property assessments.

The post Property Tax Reform appeared first on Show-Me Institute.

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.

Drug warning labels are classic examples of information overload—so packed with details that they become practically useless. Unfortunately, the school report cards produced by the Missouri Department of Elementary and Secondary Education (DESE) suffer from the same problem.

In theory, these report cards should help parents and community members quickly understand how their local schools are performing. When well-designed, they can promote transparency and inform decision-making. But if a school report card is not organized and does not emphasize the most important information, it functions like a drug warning label. It can include a lot of detail but be of little practical value.

If you’re curious to see this for yourself, here is a link to the school report cards made available by DESE. Choose a district, then a school, and you can scroll through a vast amount of information. However, after you’ve taken the time to look through it all, you may realize you haven’t learned very much. DESE’s report cards may be comprehensive, but they fail to deliver what busy families need most: clear, accessible information about school quality.

Now, contrast the Missouri report cards with this report card for Briarmeadow Charter School in Houston, produced by the Texas Education Agency. At the very top, letter grades in four categories are displayed prominently:

• Overall Rating: A
• Student Achievement: A
• School Progress: A
• Closing the Gap: A

With just a glance, you know where this school stands.

Texas is not alone in this approach. States like Florida, Illinois, and Louisiana also use summary performance indicators on their school report cards to give the public a clear picture of school quality. Unlike Missouri, these states are courageous enough to rate schools based on performance, and most importantly, publicly identify schools that are failing to educate their students.

It’s no coincidence that students in states with strong transparency and accountability policies, including clear and informative school report cards, consistently outperform Missouri students academically. These policies are key drivers of school improvement, and without them Missouri is only likely to fall further behind. School report cards that are informative about actual school performance are a simple way to get our state moving in the right direction.

The post Information Overload and Missouri School Report Cards appeared first on Show-Me Institute.

Once again, several bills have been filed that would drastically improve Missouri’s telemedicine laws. As I’ve written before, Missouri was one of the best places in the country for telemedicine a few short years ago. Patients and providers were given a plethora of options for how they communicated, which greatly expanded access to health services across Missouri. But after the emergency declaration for COVID-19 ended, Missouri reinstated a variety of measures that needlessly restrict telemedicine access.

According to a report from the Cicero Institute, Missouri’s telemedicine laws are lacking in three key areas. First, our state is not what Cicero calls “modality neutral.” What this means is that Missouri’s telemedicine laws don’t allow for several modes of communication that have shown to be successful in other states. At least one bill filed this year attempts to move our laws closer to modality neutral by allowing telemedicine services to be provided via audio-only (not video) technologies. This is something mental health providers are very interested in.

Second, Missouri restricts telemedicine access across state lines. If you’re in St. Louis and need a doctor, why shouldn’t you be able to see a provider over telemedicine who practices in Illinois? With so many Missourians struggling to find the healthcare they need, expanding telemedicine access to any licensed provider who’s willing to treat Missourians seems like it should be a no-brainer.

Finally, Missouri makes it unnecessarily difficult for providers to write prescriptions for their patients, especially if they’ve only ever seen them over telemedicine. The process is even more cumbersome if the provider is an advanced practice registered nurse (ARPN). Clarifying the prescribing process and making it easier for APRNs to treat patients via telemedicine should be a benefit to both patients and providers. Fortunately, there are several bills filed this year that tackle these issues.

It’s time for Missouri’s elected officials to recognize that it’s not 2019 anymore. Telemedicine has come an incredibly long way in recent years, yet Missouri’s laws still treat the service as if things are the same as they were pre-COVID-19. Hopefully, this is the year Missouri’s policymakers take notice and take the actions necessary to expand telemedicine access.

The post On Hold for Telemedicine appeared first on Show-Me Institute.

Elections and inaugurations are a time for reflection and a recommitment to principles. As Missouri prepares for the new administration of Mike Kehoe, it’s worthwhile to consider the performance of his predecessors—especially on issues relating to fiscal management of taxpayer resources.

The Cato Institute, a libertarian-minded think tank based in Washington, DC, rates the fiscal performance of governors. The good news is that Governor Mike Parson is not the worst governor in the United States, but he’s the worst one who claims to care about limited government.

Cato has issued its report every two years since 1992. The report methodology, available online here, issues a letter grade based on each governor’s success at restraining spending and tax increases. Parson earned a D grade in 2024. Author Chris Edwards wrote, “Parson has been a tax reformer, but he has dropped the ball on spending control. The general fund budget has jumped from $10.5 billion in 2022 to an expected $15.6 billion in 2025, a 49 percent increase in just three years.”

The D grade placed Parson 40th of the 48 governors rated. Florida governor Ron DeSantis was ranked 19th and Virginia Governor Glenn Youngkin came in 15th. Parson was closer to Minnesota governor and recent vice-presidential caudate Tim Walz, who came in last. Of Missouri’s neighbors, governors of Iowa, Nebraska, and Arkansas each earned an A grade, ranking 1st, 2nd and 4th respectively. Even Illinois governor J.B. Pritzker and California’s Gavin Newsom outperformed Parson, placing 32nd and 35th respectively.

If one uses Republican party identification to denote a preference for small government and low taxes—and that is arguable these days—Parson’s 40th-place ranking stands out even more. It made him the worst-scoring Republican in the nation. And 2024’s score is not a fluke; Parson scored a D in 2022 and a C in 2020.

Parson doesn’t just compare poorly to other current governors; he scored poorly compared to past Missouri governors. Parson’s letter grades surpass only those of Mel Carnahan (scoring D, D and F) and Robert Holden (F). Parson even seems to score worse than Jay Nixon, whose scores were B, C, D, and D. (If you’re wondering, Matt Blunt was the best scoring governor since 1992, earning Missouri’s only A in 2006 and a B in 2008.)

Note that the report’s methodology changed for the 2008 report but has remained the same since. Previous iterations relied on many more variables, but the outcomes are unlikely to have been much different.

Missouri’s total spending has practically doubled in the last five years, including not just the general fund, but other dedicated state funds and federal money. That total spending jumped from $27 billion in 2019 after Parson’s first year in office to a little more than $50 billion for 2025. It now costs three times as much to run Missouri as it did in the Carnahan and Holden administrations!

Parson’s profligacy stems from the decisions he’s made since the federal government’s COVID relief funds flooded Missouri’s budget with billions of dollars in one-time cash. States were given considerable discretion on how to use much of the relief funding, not to mention the state tax dollars the federal cash freed up for other uses. Unfortunately, Parson, with the help of Missouri’s General Assembly, fell victim to the allure of so-called free money.

Today, Missouri’s budget is littered with what were once temporary initiatives that never ended and now receive permanent funding. Or, perhaps worse, formerly federal obligations that are now borne by state taxpayers.

Key among these includes Parson’s decision to use state funds to maintain the higher childcare subsidies the federal government subsidized during the COVID pandemic, now costing state taxpayers at least $70 million annually. Parson also failed to meaningfully manage Medicaid spending. Missouri’s lackadaisical approach to checking program recipient eligibility, after the federal government lifted its COVID-era ban on the practice, has likely cost taxpayers hundreds of millions of dollars thus far.

In addition, Parson increased state employee pay by 7.5% plus an additional 3.2% cost of living increase last year. These raises were paid for with a temporary influx of state funds, but because the increased pay was not made commensurate with employee reductions, the higher salaries will require new permanent funding sources and will increase the obligations of the already underfunded state pension system.

Governor-elect Kehoe has a difficult job ahead of him administering government and working to attract more families and employers to the Show-Me State. Unfortunately, his predecessor has done him—and the people of Missouri—a great disservice by failing to properly manage taxpayer funds.

The post Missouri Must Do Better at Controlling Spending appeared first on Show-Me Institute.

Our two biggest cities—the economic engines of the state—have failed to grow as well. The City of St. Louis is emptying out, dropping from 622,236 in 1970 to 301,578 in 2020, though the larger metropolitan area has absorbed much of that loss. Kansas City saw dramatic population drops in the 80s and 90s, though recent growth has brought us up to over 500,000 around where we were in 1970. (Even still, the Kansas suburbs have been growing at a much higher rate than the city proper for decades.)

U-Haul publishes a migration index each year. For 2024, Missouri ranked 28th for growth.

Where is everyone fleeing to? The largest beneficiary of Missourian departures is Kansas—which is not a surprise to those of us here in the eastern part of the state. Kansas’s suburbs offer better schools, seemingly better-maintained infrastructure, and lower crime. Second is Illinois, with Texas, Arkansas and Florida rounding out the top 5 destinations.

(Aside: Yes, Florida and Texas have better climates than Missouri, but so do plenty of other states. Florida and Texas also have no state income tax. The Tax Foundation reports that low-tax states saw greater population growth than high-tax states.)

Missouri’s portion of the national GDP is shrinking as well. We produced 2% of the nation’s GDP in 1997. Today we produce only 1.5%.

Missouri’s leaders, at the state and local level, must decide if they are satisfied with our slow and steady decline. If they aren’t, what are their plans to reverse it? It can’t be more of the same, where we have driven up housing costs through foolish energy policies, or failed to deliver basic public safety. It certainly cannot be a continuation of former Governor Mike Parson’s profligate spending.

The Show-Me Institute has some ideas, thank you for asking, and most of them are about helping Missourians by getting government out of the way of families, businesses and entrepreneurs.

Not everyone will agree with our proposals. That is fine. But every leader should be asked: if not these policies, then what is your plan for reversing Missouri’s glide path to oblivion?

The post Missouri is Shrinking appeared first on Show-Me Institute.

The “Green Line” is dependent on approximately $600 million in federal funds; funds I hope it doesn’t get. I suggest that cutting the national debt can start right here. As national politics affects local policy, I am hopeful that upcoming changes to federal policy will be the death of this plan. Indeed, some key voices, including Les Sterman, the past director of the East-West Gateway Council of Government, have recently called for the project to stop.

In 2004, MetroLink planners predicted there would be 80,000 boardings per day on MetroLink trains by 2025 in St. Louis, Missouri (that number excludes Illinois users). In the first quarter of 2024, there were about 18,800 actual boardings per weekday for the entire system, including Illinois (page 23 in link). (Ridership goes up slightly in the summer with baseball games, but not that much this summer, for obvious reasons.) We can just admit that MetroLink usage has been substantially less than projected. St. Louis should focus on serving the existing system as best it can instead of doubling down on failure with this latest expansion fantasy.

The “Green Line” plan only projects 5,000 boardings per day, at best. Even if that turned out to be accurate—and history suggests it won’t be—that is a very low number. Serving about 2,500 people per day (one person equals two boardings, on average) for over $1 billion is a terrible use of tax dollars. This project should not move forward.

The post Absurd Light Rail Project Marches Onward appeared first on Show-Me Institute.

Missouri’s roads are often a mixed bag. Urban areas, such as Kansas City and St. Louis, face heavy traffic loads that strain infrastructure, while rural areas contend with neglect stemming from budget limitations. Harsh weather conditions further exacerbate the wear and tear, leaving many roads riddled with potholes and cracks. Rural highways critical for agriculture and trade can quickly deteriorate without sustained investment.

A recent post by the blog Construction Physics contained a chart depicting the road quality of the top 19 cities. It depicts the percentage of non-interstate roads at different quality levels, measured by the International Roughness Index (IRI) and tabulated by the Bureau of Transportation Statistics and Federal Highway Administration (FHWA). I’ve added St. Louis and Kansas City for comparison using the same scoring system.

Missouri’s interstates, whose standards and funding largely come from the federal government,  rank 15th out of 50th according to the IRI score. But our non-interstate roads rank 32nd, behind our neighboring state of Kansas (1st) but well ahead of Illinois (37th). Kansas has earned a reputation for relatively well-maintained highways, thanks to strategic funding and regular maintenance schedules. Illinois has committed significant resources to upgrading its aging infrastructure through recent legislative initiatives.

Importantly, both Kansas and Illinois employ toll roads to fund road maintenance. Missouri should, too. Show-Me authors have written extensively on tolling and road maintenance more generally. While Missouri recently increased its gas tax, it’s too soon to know how impactful it will be.

Improving Missouri’s roads requires more than patchwork solutions. Lawmakers and transportation officials must focus on sustainable funding mechanisms, better prioritization of projects, and more efficient use of resources. Policies that balance the needs of urban centers and rural areas will be critical in ensuring that all Missourians benefit from reliable roadways.

The post Kansas City and St. Louis Road Quality appeared first on Show-Me Institute.

There is a part of Illinois that may actually be interested. On election day, voters in seven Illinois counties approved a referendum (non-binding, obviously) on seceding from Illinois and creating a new state without Chicago. This makes a total of 33 counties that have passed this Illinois Separation Referendum, as it is called. Twenty seven of these counties either border Missouri or can be connected to Missouri by other counties that have also passed the referendum. Five more counties could connect to Missouri if just two more counties pass it, too. (One county, Iroquois County in northeast Illinois, is going to have to look toward Indiana.)

While the referendum calls for leaving the current state of Illinois to create a new state, like the West Virginia model that I assume they are following, I think Missouri needs to get aggressive here. In the same way that President Trump could embrace destiny by acquiring Greenland, I think Governor-elect Kehoe should take that approach as well.

Territorial switches between states are rare, with Maine and West Virginia being the two most famous examples. North and South Carolina made a very minor land exchange as recently as 2017. The last time Missouri made a territory change was 1950, when Missouri and Kansas exchanged some land after flooding along the Missouri River border. The primary expansion of Missouri territory after statehood was the Platte Purchase, which added our six northwest counties to the state. However, that land was ceded from unorganized territory, not another state.

So, let’s get this done, Missouri! Let’s grow our state’s territory and population the old-fashioned way—by taking it from someone else! (Though we’ll do it peacefully, of course.)

The post Let’s Grow Missouri, Literally 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.

In a UBI program, lower-income people are guaranteed an amount of money from the government. (In theory, that “guaranteed income” would apply to everyone, but so far most programs around the country have just been enacted for lower-income people.) UBI programs are different from the myriad other welfare programs in that there are generally no rules on how the money is spent and the requirements for admission into the program are easier. Compare this to food stamps and Section 8 housing vouchers, which obviously can only be spent on food and rent, respectively, and the general complexity of many other welfare programs.

Two studies have been released recently that actually tried to properly account for the success or failure of UBI programs in Denver, Texas, and Illinois. The results aren’t pretty. In Denver, the UBI program was focused on finding housing for the homeless. However, there was almost no difference in results between the groups that received significant sums of money and the control group that only received $50 per month. The control group did just as well at finding housing as the other two groups over the course of a year. While supporters of the program are trying to paint it as a success, the fact is that many homeless people eventually find housing, and the UBI payments made no difference in the results.

In Texas and Illinois, a UBI program gave some people $1,000 a month and a control group $50 per month. After the period of the program, the control group—who received less money—had a higher employment rate and were in better financial position:

The study, which began during the COVID-19 pandemic when unemployment was high, found that employment rates fell in the second and third years among recipients compared with the control group. On average, incomes rose significantly for all groups, though slightly higher for the control group. Incomes for recipients of the $1,000 rose from just under $30,000 to $45,710, while incomes for the control group started at a similar level but grew higher, to $50,970.

People responded to receiving free money by working less, which is exactly what you might expect. It’s also exactly the wrong way to help address poverty. The pilot program in St. Louis should be ended. The Missouri Constitution prohibits gifts to private individuals, and that is exactly what a UBI program is. But this would be a bad idea even aside from the legal issues. UBI programs just don’t work.

The post Universal Basic Income Programs Are Guaranteed Failures appeared first on Show-Me Institute.

These two deserve each other. Let’s examine the usage projections that were used to convince taxpayers to approve funding(and various extensions).

Projected passengers for MidAmerica Airport, back in 1997 when the airport was built? Two million.

Plog Research Inc., one of the consultants for the MidAmerica project, estimates 2 million air passengers will be served by the Downstate airport.

Actual passengers in 2022? 163,000. (And trust me, they celebrated that wildly.)

Projected MetroLink ridership after the construction of the cross-county MetroLink extension? 80,000 daily boardings in Missouri alone by 2025.

Actual daily boardings in Missouri in 2023? 16,700.

Public agencies habitually overstate ridership and understate costs to justify these massive projects of all types. High-speed rail, anyone? 

It is worth noting that the current five-mile MetroLink extension to the airport in Illinois cost $98 million, while the proposed MetroLink extension in St. Louis, which is also five miles long, is estimated to cost $1.1 billion. A billion-dollar difference for the same length of route. To paraphrase Everett Dirksen—himself a son of Illinois—a billion here, a billion there, pretty soon you’re talking real money.

It is great that we can finally connect two massive transportation boondoggles that don’t take anyone for a ride but taxpayers.

The post MidAmerica Airport and MetroLink Deserve Each Other 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.

In that post where I corrected the record on Missouri’s actual starting teacher salary, I noted some additional facts related to Missouri’s staffing policies:

Missouri ranks 43rd in average salaries for instructional staff. Meanwhile, Missouri ranks 48th in student-to-teacher ratio, with 11.3 students per teacher. In comparison, Illinois’s ratio is 14.3 to 1, ranking the state 28th. In 2021, revenues for Missouri’s public schools were $15,809 per student, which is 31st overall nationwide. These data suggest that part of the reason Missouri’s teacher salaries are relatively low is due to staffing choices made by school districts themselves. It is funny when you question the narrative with facts how some people like to twist what you are saying. On Twitter, for example, one person responded by asking, “Are you upset the teacher/student ratio is so low, too?” That’s a strange interpretation. I’m just offering an explanation. It’s simple math really.

Missouri school districts could choose to hire fewer teachers and pay them more or hire more teachers and pay them less. They choose the latter.

Let’s work this out a bit more. Let’s assume everything remains constant (the number of students and the state’s payroll for teachers), but we change the student-to-teacher ratio. If Missouri were to match Illinois’ ratio of 14.3, Missouri teachers could realize a 26.5% increase in their salaries.

By choosing to hire fewer teachers, Missouri schools could choose to raise average teacher salaries from $51,557 to $65,244. This would push the Show-Me State’s ranking in average teacher salary up to 16^th in the nation.

If we moved the students enrolled per teacher figure up to match Florida’s 19.6 to 1 ratio, it would result in a 73.4% increase in teachers’ salaries. This would raise Missouri’s average teacher salary up to $89,426 and would put  Missouri second only behind New York.

All of the policy attention has been on Missouri’s minimum teacher salary of $25,000. According to the Missouri State Teacher’s Association, only one district in the entire state starts teachers at that rate (the Middle Grove School District, with 35 students).

Of course, raising a student-to-teacher ratio is not as simple as the mathematical exercise I’ve done here. Nevertheless, the point remains. School districts make staffing decisions and those decisions impact salaries as much, if not more, than the state-mandated minimum salary.

Note on the calculations used:

average salary = P/T = P/S x S/T, where S= students, P=payroll, T=teachers.

So if spending per student (P/S) is constant, salary varies proportionately with S/T. If MO had the same S/T ratio as Illinois then average teacher pay in Missouri could rise by 26.5% (100 x 14.3/11.3) with no change in spending.

The post Raising the Student/Teacher Ratio Would Increase Teacher Salaries appeared first on Show-Me Institute.

You may ask, “So what? Isn’t this just splitting hairs?”

Undoubtedly, being second to last is hardly better than being dead last. But this correction is not simply about making Missouri teacher salaries look marginally better. It is about calling for clarity when it comes to this important policy discussion.

Right now, the Missouri Legislature is debating measures that could cost taxpayers hundreds of millions of dollars to increase teacher pay. To date, no lawmaker has been provided accurate information regarding Missouri teacher pay. That’s the problem.

Take, for example, this NEA report in which Missouri ranks 50th. The figures from this report are being described as the average starting “teacher” salary. But the numbers are actually the average starting “district” salary.

“So what?”

But this distinction matters! Each year, Missouri hires thousands of new teachers. An actual calculation of the average starting teacher salary would use the data from each of these teachers. A district that pays well and hires a bunch of teachers would pull the average up.

The NEA report calculates the average starting salary of Missouri’s more than 500 districts. It counts small, low-paying school districts the same as it counts large, higher-paying school districts.

If the Middle Grove School District, which according to the Missouri State Teachers Association is the only district to start teachers at the state minimum of $25,000 and has just 35 students, were to hire one teacher, and the Parkway School District, with more than 17,000 students, were to hire 20 teachers at the starting salary of $44,250, the NEA report would count each district once and say the average starting salary was just $34,625. In reality, the average of those 21 new teachers would be $43,333. This is a difference of more than $8,700.

If you haven’t noticed, Missouri has a lot of school districts Our state has more than 550 school districts, which ranks 11th in terms of total number of districts. Meanwhile, Missouri is 21st in the number of students. Florida, which has about two million more students, has just 75 school districts. All of these figures come directly from NEA reports. Taken together, these facts mean the NEA calculation of district averages leads to lower averages and lower rankings for Missouri teacher pay.

The NEA reports Missouri’s starting salary as $33,234. But what is Missouri’s actual average starting teacher salary?

According to data I have obtained from DESE, the average regular term salary for a first-year teacher in Missouri was $38,367.33 in 2022. This figure was provided directly by DESE after my request. The increase of more than $5,000 would move Missouri up to 37th on the NEA report.

While we’re at it, I’d like to note some other relevant data. Missouri ranks 43rd in average salaries for instructional staff. Meanwhile, Missouri ranks 48th in student-to-teacher ratio, with 11.3 students per teacher. In comparison, Illinois’s ratio is 14.3 to 1, ranking the state 28th. In 2021, revenues for Missouri’s public schools were $15,809 per student, which is 31st overall nationwide. These data suggest that part of the reason Missouri’s teacher salaries are relatively low is due to staffing choices made by school districts themselves.

Missourians deserve an honest discussion about Missouri’s teacher salaries. For that, we must have all the facts.

The post Breaking: The Actual Starting Teacher Salary According to DESE appeared first on Show-Me Institute.