Susan Pendergrass speaks with Jude Schwalbach, senior policy analyst at Reason Foundation, about declining K-12 enrollment nationwide and what it means for the future of open enrollment. They discuss why enrollment dropped in 40 states since the pandemic, how districts have responded to increased competition from charter, private, and homeschooling options, why open enrollment tends to cause far less disruption than critics predict, the case for Missouri to catch up with its neighboring states, and more.

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Susan Pendergrass (00:00):
Thank you so much. Jude Schwalbach, you’re back, I think for the third time, from the Reason Foundation. We appreciate you joining the Show-Me Institute Podcast once again, taking the time.

Jude Schwalbach (00:09):
Yeah, thank you for having me. I’m always excited to join.

Susan Pendergrass (00:26):
We were chatting for a second before we started recording. I talk about open enrollment a lot in Missouri. We don’t have it. In so many places in this country, kids choose where they go to school. They don’t just look at their utility bill, or their parents make this life-or-death real estate decision where they have to look at all the schools before they buy a house so they can pick where they go. Missouri has been really reluctant to let anybody choose a school over being assigned to one. I’ve been saying for some time that we have this phenomenon happening simultaneously: we don’t have as many kids anymore. I’ve talked to demographers on this podcast. We know that birth rates topped out in 2009, kindergarten enrollment topped out in 2013, and graduating high school seniors topped out a year or two ago. It’s a fact you can see all through the pipeline: there are fewer kids. In my mind, that’s going to make open enrollment more attractive, because we’re going to have districts that, for no explainable reason, just don’t have as many kids. Some of our top-performing districts, like Clayton, used to have 2,500 kids and now have 2,000. I keep thinking districts are going to wake up and realize they either have to fire teachers or get in the open enrollment game and actually have faith that they’ll attract students. You recently wrote about this, and that’s why I wanted to bring you on. Tell me what’s going on nationally with these enrollment trends and how you think that impacts this idea of whether kids should be assigned or allowed to pick.

Jude Schwalbach (01:51):
Yeah, so the latest national data we have on K-12 enrollments is from fall 2024. What we see is that in 40 states, K-12 enrollments dropped, by about 1.4 million students between 2019, right before the pandemic, and 2024. However, 10 states did manage to avoid those drops. In two of them, Florida and Utah, enrollments remained flat, they didn’t gain or lose students. The other eight states, places like North Dakota, Delaware, Alabama, and Texas, gained students. They really stand out because they gained students when literally everyone else lost students. They didn’t gain a ton, those eight states together gained around eighty thousand students, but when everyone else is losing and you’re gaining, you look pretty good. There are probably three factors driving this. As you mentioned, there are just fewer kids. The number of births in every single state except Florida

Susan Pendergrass (02:39):
Right.

Jude Schwalbach (02:53):
had dropped between 2014 and 2019, and those are the corresponding kindergarten cohorts five years later, 2019 to 2024. So there are just fewer kids. There’s also migration. There’s plenty of domestic migration occurring. In some states, especially the ones that gained students, they received quite a few new residents from other states. There’s also states, I think it was North Dakota actually, that lost a lot of residents through domestic migration but received a bunch of new residents from abroad, which reversed their general population decline and had them gain students. Presumably those families from abroad brought students with them, which is part of why they’re not losing students.

Susan Pendergrass (03:41):
Mm.

Jude Schwalbach (03:53):
There are various economic factors driving those things. But another component is that satisfaction with public schools is at an all-time low, especially post-pandemic.

Susan Pendergrass (03:50):
Yeah.

Jude Schwalbach (03:53):
Families are starting to choose schools other than public schools at a much higher rate than they used to, because they have more options. There are states with universal private school choice programs now, which ten years ago were just a pipe dream. You could achieve a small, targeted private school choice program, but not much more. Then there are families choosing homeschooling. This has created a much more competitive education marketplace. And it’s not just states with robust private school choice programs where you see increased private school enrollment. Places like California and New York, which have no private school choice, have also seen their private schools increase in popularity in the interim while public enrollment has been declining. So if you’re going to be in this tighter market with fewer students and increased competition from homeschools and private schools, you’re going to want to provide some flexibility within the public system to make it more attractive to families. Flexibility like open enrollment. Sorry, that was a really long answer.

Susan Pendergrass (04:59):
No, I think it’s perfect. It makes me think of the cliche of skating to where the puck is going, rather than where it is right now. I feel like a lot of the pushback from folks is they’re just looking at where the puck is right now. They’re like, well, we’ve got lower teacher-student ratios, fewer kids in every classroom, this is great. Or, bringing in a whole new topic here, the federal tax credit that’s looming for private school choice, where people can donate their tax dollars to a scholarship organization, and you have leadership in the teachers unions telling Democratic governors, you better not do this, because the way we’re going to keep the kids in the public schools is to lock them in. That seems so short-sighted to me, when, like you just said, we can look at the enrollment trends and know that while there are fewer kindergartners today, ten years from now there’s going to be another five to ten percent drop-off in kindergartners. Who are we kidding?

Jude Schwalbach (05:58):
Yeah. As that market gets tighter, the funding those students produce is going to become more important to public schools. If you look at California, there’s a report by their Legislative Analyst’s Office that found that districts initially losing students through open enrollment, where students were transferring to other districts with better test scores, or maybe they wanted different academic opportunities like AP classes, those districts reached out to families and said, what can we do to get you to stay? Families said, actually, we don’t want to leave the district, we just want to go to a different school inside our district. Or they said they wanted a language immersion class or something along those lines. The districts responded to families’ frustrations, and not only did some of them stop the bleeding, they actually gained students from other districts because they were doing something good that families wanted. So when you create a more flexible system, you shouldn’t just assume you’re going to lose students. There’s real opportunity to gain students as well.

Susan Pendergrass (07:09):
Yeah, I’ve certainly heard superintendents say it forced them to stop and think about what they offer. What is our mission? What do we offer? When you have a captive enrollment zone, you don’t need to do that. I studied this a long time ago in Massachusetts, and people would say, well, you can’t really prove that districts respond to competition. But I did research on it and talked to superintendents. They said, we moved the date of our orientation so kids would come visit our school first, or we redid parts of the school that parents had been complaining about. There are these little micro-responses, which is to say they realized that this is no longer a guaranteed monopoly. They have to start responding to families. And in the end, everyone kind of wins.

Jude Schwalbach (08:01):
Yeah, another good example that builds on what you were just saying is Minneapolis Public Schools. For the past ten years, their enrollments have been in decline, largely because of competition with charter schools and other public schools in the area. But recently they reversed that ten-year decline and gained new students, because when they were doing school tours, they started following up with parents, saying, we just want to remind you what you thought, and these are the options we offer that other districts nearby don’t.

Susan Pendergrass (08:24):
Yeah. What’d you think?

Jude Schwalbach (08:33):
This is what makes us a unique education option. I think it’s no surprise that families liked that personal touch and started enrolling in Minneapolis Public Schools.

Susan Pendergrass (08:40):
Yeah, we need it. I know you study school finance a lot too. I wonder, in Missouri anyway, certainly within St. Louis County but across Missouri generally, the number of teachers being hired has only continued to increase. There’s this belief that spending on public education should only go one direction, up, regardless of the number of students, and that the number of teachers should only go up. Our state education agency, one of their only five goals is more teacher certifications, more, more, more, as though there’s an ever-expanding pool of students without looking at the reality. Oddly, I just did a podcast on Social Security and they’re doing the same thing. They’re not looking at the reality of the number of workers, they’re just operating on the assumption that there will always be more. Our schools are doing bond referendums to build new schools in Columbia, Missouri, even though the new ones they just opened are under capacity. Their enrollment is down two or three percent and expected to go down more, but

Jude Schwalbach (09:50):
Yeah, I think state policymakers should take steps to encourage districts to be more thoughtful about how they’re using taxpayer dollars. Indiana, where I live, did something a couple of years ago where districts have to prepare for permanent closures if one of their school facilities has lost ten percent or more of its students over a five-year period. It’s basically saying, look, if you’re not able to attract new students, if your local enrollment is declining, we shouldn’t be keeping these facilities open and draining taxpayer dollars. To be fair, this is a really painful decision for communities. No one likes to close schools, no one likes to rearrange staff. But it’s not fair to taxpayers to keep funding and maintaining buildings that are really only educating a small fraction of students. Florida also publishes a report on school facility capacity, but most states don’t even make this information public. A good first step is just making this sort of data available so families and taxpayers, when they get approached about bonds or hear about decisions to hire more staff, can ask, if your enrollment is declining and your buildings are half empty, why are you doing this? This sort of information helps hold district administrators accountable.

Susan Pendergrass (11:13):
Yeah, and the way schools are funded, and have been for at least a hundred years, these are very long-term commitments, because school districts are in the real estate business. They buy the land, build the building, fund it over fifty years rather than leasing, like a lot of charter schools do. They’re in the business of buying land and building buildings. And teachers, that’s a twenty-five or thirty-year commitment too. That’s also hard to adjust down. There are ways to do it, but districts are making these long-term commitments without paying close attention to the trends happening right under their nose. It’s a very odd situation to me, because you can see this coming, and we’re not getting a response out of the system. And to your earlier point about school choice programs taking students, they’re taking the blame. They’re blaming school choice for the fact that they have to close schools when that’s not actually the reason.

Jude Schwalbach (12:15):
Yeah, there’s a really interesting paper, I think published by Thomas Dee from Stanford in the last couple of years, where he looked at why 1.8 million students left the public school system since the pandemic. He looked at increased competition from private school choice, homeschooling, and changing demographics, whether it’s families moving across state lines or lower birth rates. What he found is that he couldn’t explain why one-third of those students exited the public school system. It’s just unexplained. There are demographic factors, there’s increased competition, those certainly matter, but they aren’t the only reasons. We don’t even fully know why some of these students are exiting the public system. But you can’t change the fact that they are.

Susan Pendergrass (13:00):
And you don’t address it by locking the door. They want to close the gate and lock it to stop it, and that to me is the most short-sighted approach.

Jude Schwalbach (13:09):
Yeah, I think locking students within a particular system without allowing them any agency in school selection is really unfair. If states are going to require you to go to school, you should have some agency in what that school is, because education is a really personal experience.

Susan Pendergrass (13:27):
Mm-hmm.

Jude Schwalbach (13:28):
Maybe you don’t get along well with a particular teacher, or their teaching style isn’t a good fit for you, or maybe you’re being bullied at school. But where you go to school shouldn’t ultimately depend on your parents’ largest financial investment, which is very much constrained by their income. Increasing open enrollment options, where if there’s space available,

Susan Pendergrass (13:45):
Yeah, yeah.

Jude Schwalbach (13:50):
we’re not talking about building new facilities or hiring new teachers to accommodate these students, these are spots that are actually open right now, and allowing students who don’t live in that district or attendance zone to attend that school, I think that’s just a common-sense reform.

Susan Pendergrass (14:05):
Do you think declining enrollment is going to spur that into action more? Is it going to have an impact on whether states like Missouri consider open enrollment?

Jude Schwalbach (14:17):
It seems like it could go either way, honestly. If there’s declining enrollment, that means there are spots available and districts would have an incentive to try to attract new students from other places. But on the flip side, individuals don’t always see the opportunity, they only see the cost, which is, we could lose students. What’s interesting is that when you look at open enrollment programs across the nation, especially the largest ones with the most established data, places like Wisconsin, Colorado, or Florida, you don’t see massive enrollment fluctuations when these programs are launched or even soon afterward. Instead you see small, incremental change, which means districts have plenty of time to adjust. In some cases it could mean they actually reverse course and start gaining students. I know in Missouri there’s a lot of concern in rural areas that they’ll only lose students. But the irony is that if you look at Wisconsin, which also has a lot of school districts, around four hundred, their rural districts actually gained students on net in their most recent open enrollment report. Sure, they lost some students, but they ended up attracting more students from their suburban counterparts. I think rural districts can absolutely compete successfully

Susan Pendergrass (15:22):
Yeah, we have over five hundred.

Jude Schwalbach (15:44):
in a more competitive education marketplace.

Susan Pendergrass (15:47):
We actually just released a report saying exactly what you just said, by my colleague Dr. Cory Koedel, showing that there isn’t a massive, or really much of any, enrollment disruption in the first three or four years after these programs pass, in states that have had them for a long time or even a short time. There really isn’t a disruption in the way that, when a bill gets a committee hearing in Missouri, folks from the school boards association or superintendents association say, oh my god, we won’t be able to keep up, the kids will be coming and going, it’s going to completely throw off our enrollment. But we’ve found there really isn’t a massive disruption. On the one hand, you have a pretty low cost to districts. On the other hand, as you mentioned, there’s a really large benefit possible for an individual family who has a child they have to force onto the bus every day because they dread going to school due to their teacher, bullying, or whatever. It’s a big benefit at the individual level for those families, and the cost is really quite small or very dispersed.

Jude Schwalbach (16:49):
Yeah, one thing I’ll note is that it benefits districts as well. In California there are small rural districts that actively rely on K-12 open enrollment to keep their doors open. One administrator basically said, look, this doesn’t let us hire new staff, we’re not making money off this program, but we aren’t letting staff go either. We’re keeping our doors open and the lights on in our schools. If they didn’t have open enrollment, that would not be happening. They’d have to shut the school or let go of staff. It’s really important to remember this is a real opportunity for districts to gain students.

Susan Pendergrass (17:30):
Yeah. As Cory points out all the time, if you have a fourth grade classroom with ten students and you can add two or three more, your marginal cost is almost zero. You probably already have the textbooks, the computer, the desk is sitting there, it’s literally idle assets. And those three students, even if they don’t bring a lot of money with them depending on how the funding follows the student, that’s a very low marginal cost for some marginal revenue. I think the more districts see it that way, because I don’t think in Missouri that funding for education is going to continue to just go up. We have a tight budget and we know enrollment is going down. That’s going to be a whole new horizon for folks to accept. And partly, similar to the findings across those forty states, we have more old people. We have fewer young people, more old people, and older people are expensive and need a lot of services. So schools and assisted living facilities are going to be competing against each other in a sense, and I think the trend would suggest assisted living wins out because there’s more of those people and fewer children. Some of these trade-offs are going to have to be considered in a way that no one

Jude Schwalbach (18:44):
Yeah.

Susan Pendergrass (18:48):
seems to want to do. So is open enrollment growing across the country, stagnant, or on the decline?

Jude Schwalbach (18:49):
Yeah, I think that’s certainly correct. Since 2021, eighteen states have strengthened their open enrollment policy in some capacity.

Susan Pendergrass (19:06):
Okay. I know our neighbor Kansas did, right? Oklahoma too, our other neighbor.

Jude Schwalbach (19:10):
Yeah, Kansas did it, Oklahoma too. Several of your neighbors have improved their open enrollment policies.

Susan Pendergrass (19:17):
Well, Oklahoma has complete universal school choice. If you move across our northern border, you can pick public or private. If you move across our western border, you can pick any public school. The big pushback on that was that the highest-quality, most desirable districts would see a rapid influx, and they haven’t. In Oklahoma you can either pick a public school or take a tax credit for private school. Then we have Arkansas as a neighbor, and they’re also universal. We’re kind of getting surrounded by it and we’re just holding out as the last bastion

Jude Schwalbach (19:43):
Yeah.

Susan Pendergrass (19:51):
of assigned public schools.

Jude Schwalbach (19:52):
Yeah, I think Illinois and Kentucky are about on par with Missouri, but I think their programs are actually slightly better. Not by much, but

Susan Pendergrass (20:03):
We sort of write off Illinois, like, at least we’re not Illinois, but they have a lot of public sector problems. Yeah, we have no open enrollment, very limited charter schools, and a very small scholarship program. So ninety-five percent of our kids are going to their assigned public school with no other option besides virtual.

Jude Schwalbach (20:23):
Yeah. But to answer your question, I think there’s a real opportunity for open enrollment to continue to grow, especially in states, I think Nevada is a good harbinger of what could be coming. They passed a strong within-district open enrollment policy last year, and that was a bipartisan bill, championed by the governor and Senate leadership that was Democrat. I think part of the reason they wanted to do that was to strengthen their public school system, to ensure that students had a reason to invest in their public schools, especially low-income ones, and one of the ways they wanted to do that was through creating flexibility within the public system.

Susan Pendergrass (21:12):
Yeah.

Jude Schwalbach (21:12):
That was one of the compromises that occurred there. You also see that in Kansas. That was an earlier reform, but also a compromise. That one was passed by increasing funding for public schools, and Republicans got increased flexibility within the public school system for students.

Susan Pendergrass (21:18):
Yeah. I mean, when you poll parents it’s ridiculously popular. Everybody clearly wants to pick.

Jude Schwalbach (21:37):
Yeah, families really want these policies. I think residential assignment works for some people, that’s the form of school choice they like. They like being able to purchase a home in a district and be guaranteed a spot. But if there are extra seats, there should be students who can fill those seats, especially when funding is flexible and portable.

Susan Pendergrass (22:03):
I believe declining enrollment is going to motivate open enrollment. I have a very optimistic view of this: superintendents and school boards are going to wake up and say, our enrollment is declining, the only way we can turn this around is to try to get kids from across the lines. In St. Louis County we have more than a dozen school districts within one county, for reasons that would take a two-hour podcast to explain. It’s very easy for a child to just cross the street and be in a different district, and I feel like districts are going to have a wake-up call and start trying to get those kids from across the street rather than making their parents move. Because it’s going to be that or lay off teachers. You can only keep your teaching staff for a limited amount of time if your enrollment is going down and your schools are staying open.

Jude Schwalbach (22:58):
I think you’re right, Susan. When you look at the NCES projections, which are a little dated at this point, they anticipate losing millions more students by 2031.

Susan Pendergrass (23:08):
Yeah, yeah. So our heyday in Missouri, you could kind of say we had a million students, we had about 952,000 or so. If you wanted to round up, you’d say Missouri has about a million students. Now we have, depending on how you count pre-K and ungraded, somewhere between 830,000 and 850,000. And the NCES projections you just mentioned project that Missouri will be below 800,000, more like 785,000. We can’t even round up to a million anymore. We’re going to be more like 780,000. That’s more than a twenty percent loss, and that’s a lot.

Jude Schwalbach (23:58):
Yeah, enrollment declines aren’t new to the US. This happened in the seventies and eighties, but it took almost two decades for districts to recover their lost enrollment. That’s a long time, and it means you can’t hang on to buildings or staff in that interim when you don’t have the enrollment to justify them.

Susan Pendergrass (24:19):
Yeah, and I think in Missouri, good.

Jude Schwalbach (24:19):
I don’t think they returned to 1970 enrollment levels until 1997, if I remember correctly. There’s the baby bust,

Susan Pendergrass (24:31):
Wow, because the baby boom went through and then there’s a baby bust. But we don’t have a baby boomlet on the other side. There’s no evidence of one right now based on global trends.

Jude Schwalbach (24:39):
Yeah, it was fifteen years later before they even saw that sort of resurgence in births. They didn’t know either, and we don’t know either.

Susan Pendergrass (24:47):
Yeah. Yeah. I like that, that’s hopeful, that’s true. It just frustrates me, because if Missouri wants to hold out as the last residential-assignment state in the era of declining enrollment, I just feel like, there’s a professor from SLU, Ness Sandoval, who talks about Missouri demographics a lot, and he’s not optimistic about where we’re headed. One thing I think we could do to turn it around is throw open the doors on school choice to try to get families to locate here, but we’re kind of doing the opposite. Well, thanks so much. I appreciate you coming on and explaining it. I think it’s pretty interesting stuff, and I think we’re going to have to talk about this more as more enrollment numbers come in and we see how folks respond. I’m hopeful that Missouri legislators will get it and will press for it in the 2027 session. We’ll be pressing for it at the Show-Me Institute, but maybe I’ll use all of your data, Jude, and hope they read it and see what’s on the horizon. That would be awesome. Thank you so much, I appreciate it.

Jude Schwalbach (25:47):
That would be great. Thank you, Susan.

Produced by Show-Me Opportunity

The post Declining Student Enrollment and a Growing Opportunity with Jude Schwalbach appeared first on Show-Me Institute.

Susan Pendergrass speaks with Aaron Renn, author and consultant, and David Stokes, Director of Municipal Policy at the Show-Me Institute, about the recurring debate over whether the city of St. Louis should rejoin St. Louis County. They explore what city county mergers have actually accomplished in places like Indianapolis, Louisville, Nashville, and Lexington, why a full merger in St. Louis would be extraordinarily difficult to pull off, and whether the benefits would even outweigh the costs. They also discuss St. Louis’s demographic challenges, what the Pittsburgh model might offer as a path forward, the cultural barriers that make it hard to attract and retain people from outside the region, and more.

You can find Aaron’s work here.

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Episode Transcript

Susan Pendergrass (00:05): Welcome back, Aaron Renn, to the podcast. So happy to have you and David Stokes, our own expert on cities and counties and all things municipal. I appreciate you coming on, Aaron. There have been murmurings around St. Louis again on a topic that we have revisited for probably a hundred years: should the city of St. Louis be a separate county from St. Louis County?

Before we get to that, I want to ask you something because I was reading the news this morning, and I know that you’ve written about city county mergers before, like cities that are kind of dying and then either pulling in parts of their closest suburbs to sort of make everything look better, broaden their tax base, make their crime numbers look better. I was reading something you wrote a year or two ago about that, and you said that Louisville is a failed example of that. Is that right, basically?

Aaron Renn (01:01): Yeah, I’m a little skeptical of how these things have worked out in practice.

Susan Pendergrass (01:05): Yeah, in terms of losing the flavor and the coolness of the city. Literally this morning I saw an article about how Louisville is having a renaissance and these young professionals are all moving there because they didn’t tear down all their beautiful old Victorian homes, so you can still get one for close to a million dollars. They’ve got a cool art scene and a bourbon scene. So it sounds like maybe Louisville did not lose its personal flavor in the merger. I would be curious to know what you think of that.

Aaron Renn (01:33): Well, I like to put St. Louis in context. I’m glad you mentioned Louisville because many of these river cities have similar characteristics. I like to look at St. Louis as well as three cities in the Ohio Valley: Louisville, Cincinnati, and Pittsburgh. All of them heavily German Catholic in their demographics. All of them are very geopolitically fragmented with many small tiny suburbs throughout. They all have very fragmented neighborhood systems as well, where everybody has a strong sense of neighborhood identity. Where you go to high school is a big social marker. They all have phenomenal collections of urban assets and great historic buildings. They all still have their own unique character in a country where that has sort of bled away.

Aaron Renn (02:31): And they also have curiously underperformed demographically and economically in terms of growth. They’re slow growth places. So one thing I always encourage people is to pan back the lens and don’t just look at St. Louis in isolation. Look at it in comparison or dialogue with some of these other places and see what you can learn from them.

Louisville is actually a quite troubled city in important ways. From a white collar employment perspective it’s doing well, from a blue collar perspective less so. It’s one of the 10 least educated major metros in the country. I don’t want to spend too much time on Louisville, but I want to talk about the city county merger, which is distinct from recombining the city and the county. This has been considered urban planning best practice for 30 or 40 years. There was a book written by David Rusk called Cities Without Suburbs. The idea is that cities that were able to expand their boundaries through either annexation or city county mergers were prospering, whilst cities that did not, like the Clevelands, the Cincinnatis, and the St. Louises, were struggling. So the idea is we need big box government.

Indianapolis, where I live now, had a city county merger in 1970. Louisville did a city county merger, I grew up near Louisville. Jacksonville, Florida, Lexington, Kentucky, and Nashville, Tennessee did as well. What I would say is a few things. Merger is not necessarily bad. For Indianapolis, merger did prevent the city from essentially going down the tubes in important ways. So it really was a win in important ways.

But it did not prevent the historic city from going into the exact same demographic decline as St. Louis. The historic city of Indianapolis has lost almost exactly the same share of its population since 1970 as St. Louis has. Secondly, these are very politically difficult to pull off. They take enormous effort. They often fail multiple times. Louisville had multiple failures.

The most precious resource is always management time and attention. Is this where you want to put all your political chips? And in order to get it passed politically, what happens invariably is that most entities are actually not consolidated. In Louisville, none of the existing incorporated suburban governments were in fact merged. In Indianapolis, the school districts weren’t merged.

This means you don’t necessarily get all of the benefits you think from consolidation, because many things are excluded. And then unlike a corporate merger, where there’s typically a lot of downsizing and cost rationalization, in city county mergers nobody ever loses their job and salaries and benefits might even be harmonized upward to the high watermark. So don’t expect it to save any money. Personally, city county merger might have some benefits for St. Louis. I’m not saying it would have no benefits, but in my opinion it’s not going to be a needle mover and most likely it would be extraordinarily politically difficult and uncertain to pull off.

Susan Pendergrass (06:00): Yeah, no question. It’s been very politically difficult. People don’t want to do it. However, we do have these little tiny school districts and police districts. We have, I don’t know, 28 911 systems. We have a lot of what looks like bureaucratic waste and red tape. To the extent that doesn’t get resolved in a merger, then what’s the point? But I do think, you know, we’ve been talking about the demographics of St. Louis. There were over 800,000 people in the city once. Now there are maybe 280,000 and declining, and we’re in the death spiral of more people dying than being born. We’ve been in that for a while. And I guess it brings up the question of what is St. Louis to do if we are in this death spiral? We’re not having the babies. We’re having fewer babies than we did 15 years ago. So school enrollment is only declining. What is the prescription in that situation?

I’ve been to Cincinnati quite a bit. They’re trying to get people downtown with sports stadiums. It doesn’t really work. Louisville has sports stadiums downtown. I don’t know if people really want to move down there. I don’t see it working in St. Louis. So what is a city in that situation to do?

Aaron Renn (07:18): It’s going to be challenging in a sense because your problems are a little over determined. St. Louis was once a regional capital city, much like a Dallas or an Atlanta or a Denver or a Minneapolis. And it lost a lot of those functions. Many of its headquarters have left. It used to have a lot of professional services firms like ad agencies that did business all over the country, not just for the local market. Now St. Louis, although it’s still bigger than Indianapolis, looks a lot more like an Indianapolis or a Columbus, Ohio, where you have fewer corporate headquarters and most of the service firms are just there to serve the local market. St. Louis has essentially shrunk a little bit in relative importance, and it’s hard to get that back.

The demographics are also quite difficult and create a situation where it’s hard to attract business when you have a shrinking labor force, weak demographic growth, and a weak ability to bring people in from the outside. So it’s a very complicated situation and I don’t think there’s any silver bullet for St. Louis.

Susan Pendergrass (08:39): That’s what I’m asking you for. You have the answers. What’s the silver bullet?

Aaron Renn (08:43): So here are the things I would look at if I were in St. Louis. One of the clear issues that affects all of these river cities is that their wonderful, unique local cultures come with a downside, which is an extreme parochialism that has two negative effects. One, it makes it difficult for the communities to cohesively work together, which I’m not telling you anything you don’t already know. City-suburb divides tend to be bigger. In Indianapolis, regional leadership is mostly all on the same page about the big issues. Same with Columbus, Ohio. Secondly, it makes it very difficult to attract people from out of town because they come there and they can’t make friends, they can’t penetrate the social networks.

Susan Pendergrass (09:15): 100%, yes.

Aaron Renn (09:40): You hear it over and over again in places like St. Louis, Cleveland, even Minneapolis, Minnesota. There are some sayings there. If you want to make friends in Minnesota, go to kindergarten, because that’s when everybody makes their friends. Or Minnesotans will give you directions anywhere but their house. They’re never going to invite you over. St. Louis has that reputation. I don’t think it’s just a reputation. And I know you just had Ness Sandoval on.

Susan Pendergrass (09:53): Yeah.

Aaron Renn (10:08): He’s talking about you need to get better on migration. Migration isn’t going to improve if migrants are not going to be able to join the social networks here. And that’s not even just international migration, that’s domestic migrants. So I think that’s a huge issue for the city. Cultural issues are hard to solve, but maybe less intractable than infrastructure.

The other thing is looking at Pittsburgh as a sort of model. Pittsburgh hasn’t solved really most of its problems by any means, but it has been able to regenerate in the city a sort of high value economy around Carnegie Mellon and the University of Pittsburgh Medical Center. It’s done quite well. Many Silicon Valley firms have set up shop there. What’s happened in Pittsburgh, although it’s still a demographic decline story, is there’s been a demographic transition in the city. Pittsburgh went from one of the least educated cities in America to now one of the youngest and most educated. Part of it is old people moved and died off and young educated people replaced them. So the total number of people in the city was declining, but there was a churn happening underneath. And the same thing is already happening in St. Louis.

Susan Pendergrass (11:13): How did they do that?

Aaron Renn (11:33): College degree attainment in the city is now well north of 40%. So the people who live in the city of St. Louis are very educated. That demographic churn has raised educational attainment and thus incomes in the city a lot. Now Pittsburgh was different because it was an almost entirely white city. There’s a racial divide in St. Louis and gentrification concerns become more salient. But St. Louis is now an educated city. This is not an old post-industrial blue collar city. The city of St. Louis itself is very educated. And also being very small, it doesn’t necessarily need a massive change to move the needle. In Indianapolis we have a population of over 900,000. Moving that behemoth takes a lot. St. Louis now being smaller has a situation where there could be a big impact from lower numbers of things. So I think a knowledge economy built around Washington University and your medical centers has some possibilities, somewhat similar to Pittsburgh.

Susan Pendergrass (12:45): So much medical.

Aaron Renn (12:58): Carnegie Mellon’s engineering and computer science areas will be a little different. I might also look at Vanderbilt, what’s going on there? What are some peer schools you could watch to see what’s going on? But I think there are actually some reasons to think that the city of St. Louis, believe it or not, could be sort of turning a corner. It has now demographically renewed itself to a higher educational attainment state. Being small, it probably doesn’t have that much further to fall, and you can start building from there. Obviously there are governance challenges, but looking at the Pittsburgh model, studying similar complexes around peer schools, and addressing the culture issues is where I’d look.

David Stokes (13:33): Hopeful.

Susan Pendergrass (13:47): So as a spokesperson for St. Louis, what do you see for the future?

David Stokes (13:52): Well, I would be curious to get Aaron’s thoughts on that size question, about how the city of St. Louis has in fact gotten so small. It’s about 10% of the metro area. How does that affect the pros or cons of any type of a merger? These would not be a merger of equals. St. Louis County would almost subsume St. Louis City into it. How do you think that would affect things for better or worse?

Aaron Renn (14:28): Well, that was the critique of the Louisville merger by two academics at the University of Louisville. I mentioned the book Cities Without Suburbs. They wrote an academic paper called Suburbs Without a City, which basically said if the merger passed in Louisville, it would essentially mean the suburbs take over the city, not the city taking over the suburbs, because the old city of Louisville only had about 260,000 people and the suburbs would numerically dominate. The same thing would certainly happen in St. Louis. If there were a merger, suburban St. Louis County would control the city in essence.

Another consideration, and this is a Cincinnati issue, I interviewed about 15 years ago the mayor of Cincinnati, John Cranley. Here’s what he said, and I think this is an important point. He said, 30 years ago, city county merger was the thing because cities were in decline and you wanted to tap that suburban tax base to fund the city. But now it’s reversed. Now the cities are coming back and it’s the inner suburbs that are actually going down the tubes. And so in Cincinnati today, we have all the corporate headquarters, we have the universities and the medical centers, and we don’t have to share our tax revenue with anybody. If we were merged with the county government, we’d have to prop up all these failing suburbs. And so I think you’re in a similar situation in St. Louis, where the high value activity, not all of it is in the city of St. Louis because of Clayton and so on, but the St. Louis County suburbs are mostly places that are themselves on negative trajectories. Merging the city, which may be on the cusp of being able to bottom out and turn around, with all of these still declining inner suburban areas, might actually be an albatross around the city’s neck.

Susan Pendergrass (15:16): What would that mean?

David Stokes (16:37): I just think one of the differences between St. Louis and Cincinnati, and I don’t know the property tax base of Cincinnati, is that so much of the city of St. Louis is tax exempt right now. Between Washington University, Saint Louis University, and all the government entities, there’s just so much of it. I say that as somebody who supports property tax changes to make them pay something towards it. But I just don’t think the Cincinnati argument applies to the city of St. Louis right now. That property tax exemption part is a huge factor because the most growing, thriving part of it is the entire giant Barnes-WashU-Cortex complex, and the amount of property taxes they pay is miniscule.

Susan Pendergrass (16:38): Hmm.

Aaron Renn (17:26): Well, some of that is a planning issue. And I think the reality is, when you have a complex like that, are all these people going to move to St. Charles? Maybe not. I’ll tell you, I live in the suburb of Indianapolis named Carmel, and a lot of the hospitals and things have been opening facilities here. When these nonprofit hospitals come up here, we will not approve zoning changes for those hospitals unless they agree to make payments in lieu of taxes. You want to come up here and you want a zoning change, you’re going to have to pay. We were actually quite prescient in that one of the local hospital chains opened a for-profit hospital. As part of the approval deal, we said, if you ever convert to nonprofit status, you will continue paying property taxes. And we did that.

So I think there probably is leverage from the city over some of these entities. You don’t have a lot of leverage over a corporation deciding where to put their office, but that’s not a tax exempt situation. The stuff at Cortex is probably not going to leave if you make them pay a little money the next time they come to you for a zoning approval. I think you need to start looking at how to get more money out of these entities that are nonprofits in name only. These universities and hospitals are effectively gigantic hedge funds. Their executives are extremely well compensated and billions of dollars are flowing through there. Undoubtedly the better solution there is to figure out how to tax them rather than figure out how to tax the soon-to-be-dead mall in the suburb over the border.

David Stokes (19:24): Well, yeah, and that’s sort of the trade off, unfortunately, is that they do pay earnings tax. The employees, many of them very highly compensated, pay the earnings tax. And that’s what makes the city more dependent on local income taxes, not less, because they’re either tax exempt or in the case of Cortex, have tax abatements that make them essentially tax exempt.

Susan Pendergrass (19:25): We do have earnings taxes, right? So the folks who work there have to pay an earnings tax.

Aaron Renn (19:53): Yeah. Again, I don’t know exactly the fiscal architecture there. But I would say you don’t want to do a merger simply to do a tax dollar grab. The lesson of Indianapolis is we did that. We grabbed suburban tax dollars and we used it to rebuild our downtown successfully. But here we are 50 years later, and now we have enormous tracts of decayed suburbia that are an enormous problem. Our entire core county is now in a sense the inner city. We have big challenges because we were not able to invest in ways that allow those suburban areas to retain their allure over the long term.

And I’m not saying that’s impossible, but any short term juice you get, cities always rise and fall. Core cities have proven more resilient and more able to regenerate themselves than suburbs. Part of it is because state governments cannot afford to let their state’s largest city or major urban center go down the tubes.

Susan Pendergrass (21:06): Yeah.

Aaron Renn (21:16): Missouri cannot let St. Louis and Kansas City implode. Michigan cannot just write off Detroit and say who cares. But these suburban areas have proven a lot tougher to save. We don’t have a good model. We’ve spent decades thinking about how to rebuild cities and build districts. There are certain things you can pull off in a city around conventions, civic events, gathering spaces, museums, and government that are very hard to translate to suburban settings. So there’s not a great playbook, especially in declining markets, for renewing suburbs. The playbook for suburban renewal, if you want to call it that, is places like Carmel, Indiana, which are growing and affluent, and therefore can build large mixed use centers, new urbanist developments, trails, and parks. The suburbs of St. Louis County are probably tremendously deficient in infrastructure as we would understand it today.

So again, there may actually be some benefits in having St. Louis City rejoin the county in a sense, because then the county functions are spread and amortized across a larger population.

Susan Pendergrass (22:45): It would immediately improve our murder rate because we would be mixing it in.

Aaron Renn (22:48): Yeah, there is some of that. The murder rate is an artifact of the size of the city more than anything. There are places in Chicago with higher murder rates. A former colleague of mine at the Manhattan Institute, Rafael Mangual, did an analysis of Chicago. He said there are areas on the South Side of Chicago that are larger and have more people than St. Louis with far higher murder rates than St. Louis.

Susan Pendergrass (22:56): We get called out because of the small denominator.

Aaron Renn (23:17): And so there is that. The other thing is Chicago is a good example. New York City was essentially a city county merger. In 1898, the five counties that are the five boroughs of New York were consolidated into one city. Philadelphia was also a city county consolidation from the 19th century. But what happens when you create a very large city of say a million people or more is you really have to scale up your government. You have to have a government that operates at that scale.

What happened with Indianapolis was we merged city and county government, but we didn’t really have a government that could effectively manage this new larger territory. It never built out the infrastructure in the suburbs. In New York, the Bronx has subways, great parks, everything built out with proper infrastructure, because it was part of New York and New York had to expand governance to become a city of eight million. Chicago got big in the 19th century and built a city government that could run a city of three million people. And some of the stuff that gets critiqued there, for example, is a lot of city services were organized by ward or city council district. There are 50 city council districts and every city councilor is sort of a little mini mayor of their district. The alderman essentially has veto power over any zoning changes. It’s called aldermanic privilege. So there are a lot of constraints there.

But if it’s just one mayor and one city council trying to think about a huge city of 77 neighborhoods and three million people, they can’t keep that much in their head. All they can think about is downtown. And that’s what happened in Indianapolis. The mayor and city council can really only think about downtown. We should have built out structures in townships throughout the city so that you had leadership focused on that area and money focused on that area. That’s what made the suburbs work really well. A suburb like Carmel is basically township sized. We have 100,000 people, big enough to do things, but not so big that our mayor and council can’t keep the whole city in their head and plan and manage the whole city.

So if you merge with the county government, you’re going to have to create an entirely new government structure that allows you to essentially manage every sub area of the whole thing and bring it all up to a standard of services. That’s the other thing they often did in Louisville and Nashville. They merge, but they have a two tier service system where there’s an urban services district for the old city which gets more services, and then the others get less. They didn’t do that in New York. There’s one standard of service in New York, one in Philadelphia, one in Chicago. So if you can’t commit to a single standard of service, you’re basically creating a bogus merger in my opinion. If you’re going to do a merger, you need to obliterate every government and entity in St. Louis County and city, merge them all into one with one standard. That’s not going to happen.

Susan Pendergrass (26:35): That’s not going to happen. What do you think, David?

David Stokes (26:37): Yeah, that’s not going to happen.

Aaron Renn (26:43): So you end up with a lot of problems. Louisville didn’t merge any fire departments. Imagine a city that doesn’t have a consolidated fire department. Imagine a city without a single police department. That was actually Indianapolis. When we merged, the Indianapolis Police Department still patrolled the old city, but the new parts of the city that were consolidated in from the county were still controlled by the sheriff.

Susan Pendergrass (27:13): That is 100% what would happen in St. Louis. Everyone would retain their school system and their police department and their fire department. I lived for a long time in Fairfax County, Virginia, which is a single county government. It’s massive, 150,000 students in their school system. It seems to function with a single police department and fire department. But I don’t think you can backwards engineer that into a place that for hundreds of years has been operating as it has been operating.

Aaron Renn (27:43): Lexington, Kentucky worked pretty well because one, the schools were already consolidated, as in the South it’s typically county school districts. Secondly, there were no other government entities, no township governments, no other incorporated municipalities. So it merged everything. And they were sort of able to solve the urban services district issue because the outer areas of Fayette County were horse farms. They actually put in a kind of green belt rule, you can’t develop out there, because they wanted to protect these scenic landscapes. So there was actually a good reason to treat that differently, because it was a very unique American landscape. Lexington, I think, was pretty successful.

Susan Pendergrass (28:15): They are. I appreciate it when I drive across Route 64.

Aaron Renn (28:39): Lexington was pretty successful and wasn’t especially controversial when they did it, in part because there weren’t all these entrenched interests like there are in other places. If you look at places that did the mergers, they weren’t the Cincinnatis and Pittsburghs. They’ve been talking about consolidation in Pittsburgh forever. It was very hard. And Louisville did it, but it was one of the least consolidated so-called consolidated governments. What the Louisville merger functionally did was dissolve the city of Louisville and reorganize county government. The county government now has a mayor and a council instead of the old fiscal court with the judge executive and all that.

Susan Pendergrass (29:21): That’s kind of what would happen in St. Louis, right?

Aaron Renn (29:36): That’s essentially what they did. They basically dissolved the city and the county government was reorganized, but nothing was merged.

Susan Pendergrass (29:43): Did you have a question?

David Stokes (29:45): I want to get back to the fire district point. We’re talking about why this would be so hard. There’s actually a law in St. Louis that only applies in St. Louis County that makes it impossible to consolidate fire districts. Even if a modest mid-sized suburb annexes an unincorporated part of town, they’re not allowed to provide fire services to that new annexed area, or they can, but they have to pay so much to the old unincorporated fire district that it makes it impossible to do so. That’s just one example of how even if you wanted a full scale merger, it would just be impossible to actually carry through.

Susan Pendergrass (30:34): Why do you think people float this idea, David? Why does it come back every couple of years?

David Stokes (30:38): You know, it’s the old line. I remember a study I read about Pittsburgh and St. Louis many years ago. The question was, are the St. Louis and Pittsburgh areas really inefficient with all the fragmented government? And the conclusion was, well, you would never design a metro area like this, but they’ve both made it work over the last century better than you would think. The conclusion was that St. Louis and Pittsburgh aren’t actually as inefficient as you might assume when you run the numbers.

I think people have trouble accepting that. People look at so many small municipalities, many of them dysfunctional, many of them until recent times funded themselves primarily with traffic tickets, which is a terrible way to fund local government, and that’s not even an exaggeration. And there’s just this fundamental belief that if you can just plan it better you’ll create a better place. I just think it fails.

One of the reasons it would fail, going back to what Aaron led this conversation off with, is that if St. Louis County and St. Louis City joined together, they’re not actually going to lay any government employees off to save any money. St. Louis City government is not going to fire city employees. It’s never going to happen. So you’re not going to save any money and it’s all just going to collapse.

Aaron Renn (32:12): Yeah, New York City and large governments are not more efficient.

I look at it and say, look, I think merger is a solution for failed states, if you want to call them that, in the St. Louis suburbs. Take some micro-suburb that’s a complete scam or is bankrupt and merge it in with its neighbor. Do some consolidation like that, that probably needs to be led by state government, almost like a receivership sort of thing. That’s just kind of good government as you work through it. But I just don’t think the benefits you would gain from trying to do a complete governmental merger of St. Louis City with St. Louis County would outweigh the opportunity cost of how much time and effort you spend on it, when you could be spending that on other things that I think will actually move the needle more.

The downsides are arguably as high as the upsides. There’s no guarantee it’s even net positive in this environment. The time to have merged was when Indianapolis did it in 1970, not in 2026. Nashville did it in the 60s. Jacksonville did it a long time ago.

And then I think it doesn’t fix the fundamental issues around the culture. You’ve got to take a hard look at that and say, it’s maybe very difficult to change. The idea that people who aren’t from here have to be able to move here and get connected and feel like they belong in the city. There’s a couple we know who lived in St. Louis. The wife taught in St. Louis public schools. They’re big urban people. The husband was from St. Louis, and they moved here to Carmel, Indiana.

Susan Pendergrass (33:47): Tell me more about that.

Aaron Renn (34:10): Basically they said, man, people are just so much friendlier here. They make better eye contact, they engage more. It’s just so much more welcoming than it was in St. Louis, even though they were actually in a sense connected because the husband was from there.

So when even people who lived in St. Louis and liked it notice a difference when they leave, that is a killer when you’re already struggling demographically. I had a guy who owned a business in Cleveland who said to me one time, I learned the hard way never to recruit anyone from out of town to work for my company unless that person or their spouse is from Cleveland, because otherwise they will never stay. When that’s where you are as a place, that is just rough. I think that is one of the killers for these river cities.

Susan Pendergrass (35:16): Yeah, what’s the fix for that? I don’t know what the fix is.

Aaron Renn (35:38): I think the optimistic case for St. Louis, and I actually tweeted this a year or two ago, is that St. Louis City educational attainment is really high now. In a sense, it’s a small, highly educated city that is probably going to continue growing more educated. So I think the Pittsburgh option looks viable in St. Louis.

Susan Pendergrass (36:00): And certainly great medical care. I know that the average age is getting older in St. Louis. I think within 10 years, one in four people will be over the age of 65. But we also have an Alzheimer’s research center and access to medical care, which as you get older gets more important. I do think there’s an opportunity to lean in to the medical services that are available, as the country as a whole gets older. I think St. Louis looks more attractive for that reason. So I think you’re right that with universities and medical centers, there’s an opportunity.

Aaron Renn (36:35): Yeah, I think if America’s demographics keep on this trend, a lot of other places are going to get to where St. Louis is. And the thing to be careful of is that when you’re in a declining market, that often prompts centralization of activity and population. What happened with Japan is that once Japan’s population started falling, everybody started moving to Tokyo. It’s Tokyo and a handful of other cities where everything is concentrated, and they literally have ghost towns there.

I don’t think it’s any accident that Indianapolis’ growth really took off once the Rust Belt era and deindustrialization hit the state. Indianapolis and Columbus, Ohio have grown in large measure through drawing people out of the rest of the state as those states declined. Huge numbers of people move from Cleveland to Columbus every year.

Missouri is a little different than that. One of your challenges is that St. Louis does not draw people from rural Missouri. When I looked at the data, it’s not like there’s a massive flow into St. Louis from the rest of the state. So you don’t have that siphon bringing people in.

Susan Pendergrass (37:55): There are public safety issues around that, but yes.

Aaron Renn (38:00): And the issue we have is that we’ve now eaten our seed corn. There’s not going to be next generations of children in the towns I grew up in in rural Indiana to move to Indianapolis anymore. The cohort sizes are going to be smaller. So that pump, even Tokyo is declining now in population. That siphon is draining the water table. We can only rely on that so long.

But I think this is the risk for St. Louis in that kind of environment. People with opportunity might avoid or flee St. Louis and go to Austin, Texas or Nashville. They go to the handful of places in America that are really still growing. That’s a threat even for Indianapolis and Columbus, Ohio. In a declining market, it’s very hard to get people to want to come to a shrinking city because the opportunity space is shrinking. St. Louis’s opportunity space has been shrinking because you’re losing corporate headquarters and your working age population is declining. That dynamic is really going to be a challenge. But within that, the city of St. Louis might end up doing okay. Again, being small actually helps it here.

Susan Pendergrass (39:25): Any closing thoughts on that, David?

David Stokes (39:27): Just that the part of Missouri that is definitely still growing, and that probably is attracting those young rural people who are moving to a city, is going into southwest Missouri, the Springfield-Branson area. That’s absolutely the growing part of the state. And even Kansas City is growing certainly more than St. Louis is.

Aaron Renn (39:48): Yeah, it’s not a culturally cohesive state. Springfield and that area are definitely growing, and growing despite the fact that they have nowhere close to the urban assets of a St. Louis. It’s interesting to watch, and we’ll just have to see what happens.

Susan Pendergrass (40:05): It is. I think about it a lot. I’ve been talking about this in terms of school enrollment for years and years, where you could see the biggest kindergarten cohort was after the Great Recession of 2009. You know that that’s the biggest kindergarten cohort for the last 15, 16, 17 years. We do nothing but build schools and hire teachers. We are slow to catch on to these things happening. But I think your perspective is certainly very interesting. On the question of the merger, it’s not worth the cost for whatever benefits there might be. But it still gets talked about, so I appreciate you coming and giving us your thoughts on it. Maybe we’ll have to have you back to talk about it again.

David Stokes (41:02): And Aaron, I want you to come back. I want to find out how we get more roundabouts in Missouri. I love roundabouts. I go to Carmel it seems like once a year for these gigantic youth sports tournaments up at Westfield, just a little bit north of you. My kids’ sports take me there. And I love the roundabouts. You cannot get enough of them.

Aaron Renn (41:09): I’d love to talk about that. My favorite topic.

Aaron Renn (41:24): Yeah, it’s great. We hardly ever have to stop. There are barely any stoplights or stop signs left in our city. It’s amazing. We’re one of the few growing places in America where traffic is better today than it was 20 years ago.

Susan Pendergrass (41:32): They’re awesome.

David Stokes (41:45): People don’t realize how good that is for air quality and everything. You just keep moving along, not stop and start. We need 100 times more roundabouts in this area.

Susan Pendergrass (41:55): Are you pretending that people stop at stop signs in St. Louis? Because let’s be honest, people don’t stop at stop signs.

David Stokes (42:00): Well, they roll them, but it’s still wrong when they roll them. Maybe all the people blowing red lights on Kings Highway at 50 miles an hour are just being environmentally conscious. I need to give them more of the benefit of the doubt, I guess.

Susan Pendergrass (42:12): That’s exactly right. All right, thanks so much. I really appreciate it.

Aaron Renn (42:19): Thank you.

Produced by Show-Me Opportunity

The post The St. Louis City-County Merger with Aaron Renn and David Stokes appeared first on Show-Me Institute.

But what if that weren’t the case? What if the government only assessed the value of your land—and not any improvements you put on it?

That approach is called a land tax, or land value tax (LVT). By separating land from improvements and taxing them differently, governments can encourage property development. In downtown areas, often dotted with parking lots or undeveloped parcels, owners would be incentivized to build or to sell to someone who will.

This need not be an increased cost to owners. Taxes on improvements and land could be set at different rates (ideally zero for improvements) to ensure there is no net increase.

Show-Me writers have argued in favor of this approach for years:

• 2010: A Land Tax Is Preferable to the Earnings Tax
• 2010: Great Article About the Land Tax in the Kansas City Star
• 2012: Kansas City Should Expand, Not Remove, Land Taxes
• 2012: Kansas City Land Tax Should Be Expanded, Not Eliminated
• 2015: Land Taxes and Columbia
• 2026: It’s Time to Phase Out the Earnings Tax. Honestly, Nothing Else Has Worked . . .

The legislature in Kentucky, our neighbor to the east, is considering a bill that would, among other things, allow cities to separate property taxes into land and improvements.

In Missouri, such an effort likely would require a change to the Constitution. Currently, Article X, Section 3 states, “Taxes may be levied and collected for public purposes only, and shall be uniform upon the same class or subclass of subjects within the territorial limits of the authority levying the tax.” Later, Article X Section 4 defines real property as a single class with limited subclasses.

This could easily be changed, perhaps by inserting into Section 4, “Land and improvements upon land may be classified as separate subclasses of real property for purposes of taxation.”

Every city wants to spur development. The structure of our taxing system often serves as a disincentive to build. A land tax is a way for cities to encourage building and development without increasing taxes and without offering taxpayer subsidies. And it’s simple to understand and explain.

As Missouri and its cities look to encourage population growth and development, adopting a land value tax is a simple and straightforward way to do so.

The post Land Taxes: Will the Grass Be Greener in the Bluegrass State? appeared first on Show-Me Institute.

According to the report, “Parson has been a tax reformer, but he has dropped the ball on spending control.” To Parson’s credit, he’s signed multiple bills into law that have cut Missouri’s individual income tax rate. When Parson entered office, the rate was 5.9%, and next year the governor has already announced that it will be dropping again to 4.7%. This will mark the 5th time the rate has been lowered since 2018.

Working against Gov. Parson is his support of the state’s gas tax hike in 2021. During the debate about the gas tax hike, I wrote frequently about my concerns with the bill. I am generally supportive of user fees and gas taxes, but the 2021 bill had a lot of problems. After multiple attempts to convince Missouri voters to raise the gas tax, our elected officials decided they could do it without public support.

At the time, I questioned whether the move violated the state’s constitution. The Hancock Amendment purportedly prevents Missouri’s general assembly from raising taxes without a public vote. But the bill sidestepped the amendment with a convoluted rebate scheme and implementation over several years.

Nevertheless, the biggest mark against Gov. Parson by Cato was the state’s out of control spending, which is another topic I’ve been writing about for several years. Missouri’s budget has grown tremendously under the current governor’s watch, in both size and scope. For several years, it was easy to attribute much of the increase to the federal influx of COVID-19 relief money, but that money is drying up, and Missouri’s expected general revenue (where our state income and sales taxes go) spending is still up nearly 50% from just three years ago.

Though it shouldn’t need to be said, this cycle of perpetual spending increases is unsustainable. Not only is our government spending outpacing inflation, but it’s also outpacing our neighboring states. Gov. Parson’s grade was tied for the worst among Missouri and its bordering states (Kentucky also got a “D”), with the governors of Iowa, Nebraska, and Arkansas receiving exemplary “A” grades.

It should be unacceptable that the Show-Me State lags our neighbors, let alone much of the country, in the stewardship of state tax dollars. Going into 2025, Missouri will have a new governor, and a new chance to improve its fiscal policy grade. Let’s hope our elected officials  take advantage of the opportunity.

The post Missouri Nearly Fails Cato’s Test appeared first on Show-Me Institute.

Among the many things that Missourians will vote on in November is Amendment 6, which if passed would reinstitute a fee on court filings in Missouri to fund a larger pension for sheriffs and prosecutors in Missouri. (The fee was previously $3 before it was overturned by Missouri courts.) There are many troubling aspects of Amendment 6 that I hope Missourians consider before they vote, because the proposed amendment would have effects that go beyond the understandable desire to support law enforcement.

Locally, this amendment is especially bad public policy for St. Louis County residents. St. Louis County has by far the largest number of court filings due to its status as the largest county by population in Missouri and the presence of CT Corporation Systems in Clayton, which is the largest registered agent company in Missouri. What’s more, the St. Louis County sheriff is not a law enforcement agent and is therefore the only sheriff in Missouri who does not participate in the Missouri Sheriff’s Retirement System in the first place. So, to be clear, St. Louis County residents would pay the largest amount of fees into the fund—probably several hundred thousand dollars a year—while at the same time receiving the least benefit of any county. Coincidence? Perhaps. Fair? Definitely not.

Every person in St. Louis County who seeks redress in court, who files for a domestic order of protection, who has to pay a traffic fine, or is in court for any other reason, would have to pay this reinstituted fee to increase the pensions of primarily rural sheriffs and prosecutors. (The St. Louis County prosecutor might be included in this plan, so that’s one person in a million, for a position that is already well-compensated with a generous pension.)

The ballot language for Amendment 6, as is so often the case, is highly misleading. A typical voter will read the language proposing to “levy costs and fees to support salaries and benefits for current and former sheriffs, prosecuting attorneys . . .” and understand that to include the many dedicated deputy sheriffs and assistant prosecutors around the state. It doesn’t. This new fee will only benefit the elected sheriff and prosecutor in each county (and not even the sheriff in St. Louis County). That’s two people per county. Deputy sheriffs and assistant prosecutors have their pensions funded separately and are not affected by this proposal.

As if the misleading language and targeting of one county wasn’t enough to object to, the fact is that funding pensions by court fees is a bad policy. That is why previous attempts to fund a sheriff’s pension in this manner were thrown out as unconstitutional by the Missouri Supreme Court. Imposing court fees that make it harder to seek justice in court, or harder to pay fines ordered by court—especially when those fees financially benefit the law enforcement officials who impose some of them—creates a perverse incentive. Funding for the salaries and benefits of sheriffs and prosecutors should come from general local taxation, and there should be no financial incentive for increased fines, arrests, and so on. But instead of trying change their proposals to address these constitutional objections by judges and others, supporters of Amendment 6 are attempting to do an end-run around the law by changing the constitution. Supporting law enforcement by going around the law is an ironic way to accomplish their goals.

Furthermore, any increase in the retirement benefits of elected sheriffs and prosecutors should be accomplished by an expansion of defined-contribution plans available to them rather than an increase in their defined-benefit pensions. Expanding the opportunities for these well-compensated elected officials to participate in 457 retirement plans [which are like 401(k) accounts but for public employees] or similar alternatives is a better way to allow them to save for retirement without further burdening taxpayers.

Missouri sheriffs and prosecutors deserve our support, but Amendment 6 is not the way to show it. There are several good reasons for all Missourians to reconsider their typical support for law enforcement in this case, and for the people of St. Louis County, this choice should be easier than rooting against Stan Kroenke’s Rams in the Super Bowl.

The post Court Fee Increase Would Negatively Impact St. Louis County appeared first on Show-Me Institute.

Last year, we made one of the largest investments in broadband expansion across our state. Thanks to our efforts, nearly 70,000 under-served homes and businesses across our state Now have broadband. But we know we can’t stop now. That is why we are investing an additional $250 million dollars to do even more. If we can put electricity in every home, we can do the same with broadband today. We are not done until every home, every school, every business, and every farm has access to quality internet.

Most Missourians have access to high-speed internet. For those who don’t—who are primarily in very rural areas—the lack of internet can indeed be an issue. Using federal stimulus funds intended for broadband expansion in Missouri to address that problem is fine with me, but it needs to be done the right way.

What is the right way? It’s to focus on the small number of Missourians who truly have little to no internet access. What is the wrong way to address it? The wrong way is to allow the money to be used by cities and towns to create their own municipal internet companies that will compete with the private sector in communities that the private sector is already serving, like in Marshall, Missouri.

Government-owned networks are subsidized by taxpayers by definition and they have often been a failure when tried around the country. Kentucky is the poster child for this at the state level. Local government in Missouri should not be in the broadband business except as a provider of last resort. Local government is poorly suited to providing services in a rapidly changing, highly technical field like broadband and internet services. For most of Missouri, the private sector has been providing perfectly fine internet services for years. Having cities or counties create their own, taxpayer-subsidized, tax-exempt internet companies will easily be a net negative throughout Missouri.

Get it, “net negative?”

The post The Right Way to Expand Broadband appeared first on Show-Me Institute.

Most cities in the United States, including most large cities, do not have any form of local income tax. As of 2019, there are only 17 states with local income tax jurisdictions and only 19 of the country’s 100 most populous cities have some form of local income tax. This means that thousands of cities (including comparable large cities such as Chicago, Omaha, and Nashville) have a lower earnings tax than St. Louis city—their earnings tax is 0 percent!

Even if we’re just looking at the jurisdictions with local income taxes, St. Louis still doesn’t have the lowest rate. Many jurisdictions in Indiana, Kentucky, and Ohio have rates below 1 percent. In Colorado, Aurora, Greenwood Village, and Sheridan have monthly local income taxes of $3.00 or less on those that make over $500 per month, which is a 0.6 percent local income tax at most. Clearly, St. Louis does not have the lowest rate among local income taxes.

Objectively, 1 percent is not all that high, and a few large cities with local income taxes have slightly higher rates. But the earnings taxes in St. Louis City and Kansas City are certainly not the lowest in the country and they are definitely not negligibly low. The additional 1 percent that Kansas City and St. Louis city residents and workers pay creates real negative effects for these cities. The local income tax in Missouri’s two largest cities is higher than those in hundreds of other cities in Missouri and thousands of cities across the country, making our largest cities less competitive while also taking money away from our hard-working citizens. That’s not a false claim.

The post St. Louis City’s Earnings Tax Is Not the Lowest in the Country appeared first on Show-Me Institute.

IRCs are awarded by third-party industry organizations and certify that students have mastered skills needed for a particular job such as a welder, automotive technician, certified nursing assistant, or software developer. Recent research from ExcelinEd shows that, in addition to improving employment prospects, earning an IRC is associated with increases in graduation rates, college enrollment, and earnings.

In the study, which was released this month, researchers looked at outcomes for hundreds of thousands of students and found overall positive outcomes for IRC earners. In Florida, Indiana, and Kentucky, earning an IRC was positively associated with graduating from high school on time. Students in Florida and Kentucky who had earned an IRC were more likely to receive an associate’s degree if they enrolled in community college. The researchers also observed up to a 12 percent boost in wages for full-time workers after high school in Florida and Indiana.

The only potentially negative effect the researchers observed was that credential earners in Kentucky were less likely to graduate with a bachelor’s degree if they enrolled at a four-year college or university. One possible explanation they provided is that “the opportunity cost of each additional year of education is higher for credential earners than non-earners.” In other words, students just may not have thought it was worth finishing a bachelor’s degree and would rather be working.

Unfortunately, high schoolers in Missouri earn only about 8,000 IRCs each year, meaning that only a small fraction of the over 180,000 high school students who participate in a career and technical education program earn an IRC.

Some states have enacted policies that reflect the value they see in credential-earning, and Missouri should take note. For instance, Florida implemented a bonus program for teachers awarding them $25 or $50 for each student who earned an IRC. During the 2007–08 school year when the program started Florida high schoolers earned only 803 credentials total. Last year, they collectively earned over 121,000 IRCs.

Missouri policymakers have already shown a willingness to invest in our workforce—the legislature just passed Fast Track this session to help adults who want to pursue degrees in high-demand fields—but are they funding programs that are proven to work? Clearly, financial incentives have worked to get more students IRCs in Florida, and students have benefitted. With such a payoff for a relatively small investment, teacher bonus pay looks like a win-win-win for the state, teachers, and students.

Listen to our podcast on this subject here.

The post What Does the Research Say about Earning Industry-Recognized Credentials? appeared first on Show-Me Institute.

The words are complicated and confusing. But two years ago, Beau Barnes, a KTRS lawyer, summed it up this way, “It’s a 100 percent certainty that if we don’t do something very soon, this problem continues to get much, much worse very quickly.”

What this means is that, as in so many states, Kentucky’s teacher retirement plan is in a hole that is only getting deeper. It is time to stop digging, and it appears they’re trying to do so. If Governor Bevin signs SB 151, current and retired teachers will be guaranteed pension payments for every dollar that they have been promised, plus an annual cost-of-living adjustment of 1.5 percent. New teachers—only those hired for the 2019–20 school year and thereafter—will be placed in a hybrid, cash balance plan, similar to what just about everyone in the private sector has today. This will allow the state to deal with the debt the plan has accumulated without it growing.

So, why Kentucky teachers are walking out? Are they that concerned about the next year’s crop of new teachers? Or is it just that they don’t really understand the system, the seriousness of the problem, and how reform actually protects their benefits by finding a way out of the financial mess? We found a similar lack of understanding when we surveyed Missouri teachers about pensions. So, while the teacher’s unions are whipping teachers into a frenzy behind the false narrative of “they’re taking our pensions!” Kentucky parents have to scramble to make arrangements for their kids.

A word of caution for St. Louis public school teachers. The financial situation of their retirement fund isn’t much better, and the fight over how much the St. Louis Public School Retirement System (PSRS) needs and how much St. Louis Public Schools (SLPS) is willing to pay is now in the courts.

The post Do Kentucky Teachers Even Know Why They’re Protesting? appeared first on Show-Me Institute.

Missouri leads the Midwest in incarceration rates, and we’re eighth highest in the nation. We just recently lost to Kentucky our position of having the highest incarceration rate for women. If we do nothing to slow the flood of new inmates, Missouri will need to spend about $485 million in the next five years to build and operate two new prisons. For comparison’s sake, the entire budget of the state Department of Corrections is $725 million in 2018. (It was $580 million in 2006.)

According to the Missouri Department of Corrections’ 2016 Profile of Institutional and Supervised Offender Population, 41 percent of inmates are incarcerated for nonviolent and/or drug-related crimes. These two offender groups, incidentally, are the fastest-growing populations since 2011. Missourians could save hundreds of millions of dollars if courts had the flexibility to sentence these offenders to treatment programs or probationary periods prior to locking them up—while still retaining the ability to protect us from violent or habitual offenders.

Furthermore, research indicates that large sentences are not as effective a deterrent as swift capture and conviction. And large sentences are expensive, and not just in terms of the public dollars used to house and feed inmates. They also impose a significant cost on families and make it harder for ex-offenders to re-enter the workforce and become productive members of society.

The good news is that there is a better way.

Other states, such as Texas, have found ways to increase public safety and reduce recidivism while reducing public spending on prisons. Reducing mandatory minimum sentencing in certain circumstances is a part of that public policy strategy. Let’s return to judges the discretion they need to separate violent offenders from those who pose less of a threat. To do nothing will put greater pressure on public coffers while offering no respite from crime.

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Missouri’s tuition increases are lower than most other states because state law prohibits colleges and universities from increasing tuition beyond increases in the consumer price index. The point here is that Missouri’s institutions are getting a double whammy. They are seeing reductions in state revenues and are simultaneously limited from raising additional funds through tuition.

To some, this doesn’t sound so bad. There has been growing concern about the rising costs in higher education. And increasingly, there is concern about the seemingly illiberal attitudes on college campuses that shout conservative speakers down. And we all remember the fiasco at Mizzou a few years ago.

These are legitimate concerns. Indeed, as George Mason economist Bryan Caplan has suggested in his recent book, The Case Against Education: Why the Education System Is a Waste of Time and Money, there are compelling arguments against public subsidies for higher education.

There are few solid arguments, however, for not allowing colleges and universities to raise tuition to the level they deem appropriate.

I understand the sentiment of wanting to make college affordable, but there are better ways to do it. For example, as mentioned in SMI’s Blueprint on Higher Education, Missouri could encourage competency-based education programs or income share agreements.

Prices are the thing that help the free-market flourish. Prices tell producers where they can make profits, and prices allow consumers to choose wisely. Tuition caps are anti-free market because they distort the true cost of a college education by artificially keeping the sticker price low. It’s time to remove these artificial caps and allow more free-market policies into higher education.

The post Tuition Caps on Higher Education Are Anti-Free Market appeared first on Show-Me Institute.

THE SOLUTION: Right to work.

Right to work ends forced unionism and lets workers decide whether joining a union best serves their interests. This means that being a member of a union cannot be a requirement for employment, and gives employees the final decision about whether they want to give money to a union that may or may not have their best interests at heart.

In 2017, Missouri passed Right to Work, but in 2018, the state will hold a referendum on that law.

WHO ELSE DOES IT? Alabama, Arizona, Arkansas, Florida, Georgia, Guam, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and Wyoming.

THE OPPORTUNITY: If the state’s Right to Work law is put into full effect, Missouri will join the majority of American states that already have right to work laws, finally placing Missouri employers and employees on a level playing field with other states.

KEY POINTS

• Missouri will be better able compete with neighboring right-to-work states in attracting businesses.
• Existing unions will be more responsive to the concerns of members, thanks to the credible threat of members leaving the organization.
• Employees will have greater control over their representation in negotiations with their employer.
• Employers will have greater flexibility in managing their businesses and making their operations more successful.
• Private employers are the focus, but similar laws in the public sector, like paycheck protection, should be pursued by policymakers as well.

SHOW-ME INSTITUTE RESOURCES

Policy Study: A Primer on Government Labor Relations in Missouri

Op-Ed: Rise of the Roosevelt Law: Is Reform in Government Unions Coming to Missouri?

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

The post 2018 Blueprint: Right to Work appeared first on Show-Me Institute.

The prevailing wage sets a floor for pay, but it can actually hurt the workers it’s intended to help by denying employment to people who can do the job at a more competitive price. To make matters worse, making projects more expensive also means that less taxpayer money will be available for other priorities.

THE SOLUTION: Let the market set wages.

Rather than dictate wages, the government should have policies that support a healthy jobs environment where higher wages for all sorts of construction projects—including public construction—develop on their own without the harmful effects of wage floors.

Policymakers must keep in mind that project delays can hurt their communities over time. It would be better to let the market set wage rates for these projects and to begin delivering those public services sooner rather than later.

WHO ELSE DOES IT? States with no prevailing wage law include Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, Virginia, and West Virginia.

THE OPPORTUNITY: Moving away from market-distorting policies like the prevailing wage will help the state promote job growth and spend taxpayer money efficiently.

KEY POINTS

• These reforms would promote job growth and make public works projects more affordable.
• Taxpayers get the most bang for their tax buck when their money is spent efficiently and effectively.

SHOW-ME INSTITUTE RESOURCES

Blog Post: Special Interests Inhibiting Joplin’s Recovery?

Blog Post: Playing Favorites on the Board of Aldermen?

Blog Post: The Race Is On: Wisconsin Pushes to End Project Labor Agreements and Prevailing Wage

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

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But RTW isn’t the only labor reform where states are scrambling to beat their peers to the finish line. Indeed, states are also looking to reform their project labor agreement (PLA) laws, which circumscribe who can work on some public projects, and their prevailing wage laws, which can affect the price taxpayers pay for public projects.

And as in Missouri, the policy pairing of PLAs and prevailing wage has hit the top of the reform list in Wisconsin.

Prevailing wage requirements and project labor agreements would be prohibited under a proposal in Wisconsin’s 2017-19 biennial executive budget and tandem legislation speeding through the state legislature.

Gov. Scott Walker (R), already recognized for his tough stands against organized labor, included a single sentence in his 644-page budget proposal Feb. 8. The language repeals the state’s prevailing wage requirements and bans “any unit of government in the state from requiring or considering the use or lack of use of a project labor agreement by a contractor as a condition of bidding on a public works project.”

The state legislature could beat Walker to the punch under separate bills that would prohibit state and local units of government from requiring project labor agreements as part of public works programs. The Senate passed its version of the PLA bill, Senate Bill 3, by a vote of 19-13 on Feb. 8. The Assembly’s Committee on Labor approved nearly identical legislation, Assembly Bill 24, on a party-line vote Feb. 9.

The post The Race is On: Wisconsin Pushes to End Project Labor Agreements and Prevailing Wage appeared first on Show-Me Institute.

The report indicates that the total value of all corporate welfare in Missouri is a whopping $5.8 billion. That makes the Show-Me state the 10th-most subsidized in the union. Missouri subsidizes business to a greater extent than all of its neighboring states except Kentucky. (We even beat out Illinois!)

Of the top five corporations in Missouri that receive corporate welfare money, three are headquartered in Kansas City: Cerner, H&R Block, and DST Systems. They account for $2.3 billion in subsidies, about 40 percent of Missouri’s total.

Little wonder, then, that Kansas City—a high tax city—must borrow money to provide basic services such as dangerous structure teardown or infrastructure maintenance—we’ve given boatloads of our tax revenue away to wealthy corporations. Perhaps it’s time policymakers change direction; after all, for all the business Missouri residents subsidize, we’re still one of the slowest-growing states in the union. 

The post Kansas City, King of Corporate Welfare appeared first on Show-Me Institute.

We here at the Show-Me Institute were very interested in Amendment 3 because the issue was so complex and multifaceted. From the funding mechanism (cigarette taxes) to the policy it would support (early childhood education) there was more to the question than met the eye.

Now the people of Missouri have spoken, and by a 60% to 40% margin (as of this moment), they soundly rejected Amendment 3.

There is much parsing of this election to be done, but I do want to offer a couple of quick reactions:

• Missouri does not like cigarette taxes. Not only did Amendment 3 fail, but so did Proposition A, a much smaller cigarette tax (by a 55% to 45% margin). These initiatives are just two in a long line of cigarette taxes that the state has voted down. At 17 cents, Missouri has one of the lowest cigarette taxes in the nation, and it appears we want to keep it that way.
• Voters can read between the lines. At first glance, it looked like Amendment 3 would win in a walk. According to Ballotpedia, the first polling on this issue back in July had the issue winning 53% to 29%. As more and more information came out and voters became more informed about the issue, that support eroded and eventually became opposition.
• Ideas matter.  Not all of the campaign finance numbers are in, but according to Ballotpedia numbers, the “Yes” campaign outspent the “No” campaign by a wide margin, $12.8 million to $5.7 million. But it was to no avail. In the end, the arguments matter more than the spending, and the proposal failed.

I don’t think we need to close the door on pre-K, though my colleague Emily Runge’s piece earlier this week has definitely caused me to temper enthusiasm for it (which I didn’t have a great deal of to begin with). We do need to think long and hard about how we structure it and pay for it.  As we argued in 20 for 2020, a voucher-based system that puts students and parents in charge is the best way to structure pre-K if we’re going to do it, and we should be skeptical of any plan that does otherwise.

The post Amendment 3 Falls, Hard appeared first on Show-Me Institute.

At first glance, I can see why folks might want to support such an effort. Smoking is bad, so we should tax it. Preschool is good so we should provide it.

Oh, how I wish it were that simple!

In my new essay, Amendment 3: The Good, the Bad, and the Ugly, I break down all of the intricate issues involved in this proposed constitutional amendment. What is the impetus for this proposal? Is there really a need to be met here? Is pre-K as big of a deal as supporters say it is? Do tobacco taxes have any downside?

I hope that the essay will increase understanding about the possible consequences of this amendment (intended and unintended) and help Missourians cast more informed votes as a result.

The post Analyzing Amendment 3 appeared first on Show-Me Institute.

The post Amendment 3: The Good, the Bad, and the Ugly appeared first on Show-Me Institute.

The recently released National Financial Capability Study (NFCS) indicates that the average individual in the United States is not very financially literate. Based on responses to a six-question quiz on basic financial concepts (take it here), the average adult scored a whopping 3.16 correct answers. Some good news is that adults in Missouri are slightly less financially illiterate: We answered an average of 3.25 questions correct.

The financial literacy quiz is designed to see how well adults understand basic financial relationships, such as the role that interest rates play in making savings decisions, how interest rates and inflation are related, and how mortgage payments work. As pointed out in the Council for Economic Education’s 2016 “Survey of the States, not knowing how your money grows when put into savings increases the chances that you will not save enough for the future. And if you do not know the relationship between interest rates and inflation, you are more likely to make poor investment decisions that could cost you dearly in the long run.

Studies find that financial literacy education outside the home improves scoring on the quiz. In Missouri, unlike many other states, K-12 students are exposed to personal finance education, especially in high school coursework. While the most recent results indicate a lot of ground to make up in financial literacy, at least Missouri is headed down the correct path.

If you are curious how Missouri’s score compare to others, the table below reports the survey results for the nation, Missouri, and its neighboring states. Though most of the scores are pretty close (and low), Missouri did better than the national average and five of its neighbors.

Results of 2015 Financial Literacy Quiz

Source: National Financial Capability Study.

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