I’m skeptical, and you should be too.

This is a claim that cities and states like because it makes their leaders look financially responsible. But it’s often just a result of bookkeeping sleight of hand. Governor Mike Parson made the same claim in January, and it wasn’t true then, either.

The accounting trick consists of merely looking at the cash you have on hand and not considering your long term-debts. Truth in Accounting (TIA), the indefatigable men and women who pore through annual reports, issued its State of the Cities report in February 2024. St. Louis ranked 64th in financial health out of the top 75 cities examined. The authors wrote:

St. Louis’ financial condition appeared to improve due in part to increased tax collections and federal COVID relief funds. Despite the good news, it still had a Taxpayer Burden™ of $11,100, earning it a “D” grade from Truth in Accounting. But the improvement is deceiving, because the city used outdated pension data.

On pages 150 and 151 of the report, available online here, TIA lists St. Louis’s assets and liabilities. The report must use 2022 data because St. Louis is not a stickler about releasing its financial data in a timely manner. Despite being in the red, St. Louis’s cash-basis accounting allows it to consider the money it has on hand without considering its long-term debts. It’s akin to getting a cash advance on your credit card and pretending you’re richer as a result.

If the comptroller wants to make such claims, she should release a complete and to-date copy of the city’s books. Until then, I am going to assume that if it sounds too good to be true, it probably is.

The good news is that we here at the Show-Me Institute, and the fine folks at Truth In Accounting, are dedicated to making sure people understand the truth about city and state finances.

The post Be Skeptical of Claims St. Louis is Running A Surplus appeared first on Show-Me Institute.

The report made a number of claims, according to the graphics presented during the interview. The print version of the story on the website included the following bullet points:

• The construction of CITYPARK and its 32-acre campus created an additional $1.4 billion in economic impact since 2020.
• The direct cost of the privately owned stadium campus—which includes the stadium, team training facility and practice fields, team store, parking garage, and corporate headquarters—was $667 million.
• The overall impact includes approximately $122 million in incremental tax revenue, including $33 million in local and state tax revenue, and $15 million in infrastructure upgrades to lighting, sidewalks, bike paths and streets in the surrounding area.

Those bullet points come directly from the news story.

Kindle said in the interview “We were all very, very, very surprised” by the results of the study. I would be too. The vast research on the impact of professional sports teams indicates they generate no such economic impact. The Journal of Economic Surveys concluded in 2022 that “nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits.”

Kindle added of the research, “We’re very excited, when the time is right, to share it.” When might that be? I emailed CITY SC on May 23 asking for an electronic copy of the report and heard nothing. I emailed again on May 30 and was told the next day, “We haven’t yet released the full study results, just the highlights. It is something we will likely do in the future but timing is TBD.” I asked what event they were waiting on to release the report. It has been over a week and I’ve received no response.

It’s more than fair to wonder if this report contains the flaws of other similar analyses that count only spending at the venue and discount any losses in spending elsewhere. But we don’t know, because CITY SC hasn’t shared it yet.

Does that mean KMOV ran the segment without independently verifying the information?

At the bottom of the KMOV article is an invitation to readers: “For more information on the study, click here.” That link only takes you to a page of news releases for CITY SC, in which the club makes the exact same claims that appeared in the story, word for word. My advice to news outlets is to trust but verify. When it comes to claims of economic impact such as these, the claims are often overblown and based on significantly flawed analyses. Until the full report is available, we won’t know the rest of the story.

The post Trust but Verify: CITY SC’s Claims Deserve Scrutiny appeared first on Show-Me Institute.

Previously, both cities refused to publicly release the details of their bids, including what tax incentives they were offering, claiming that Amazon required confidentiality. Some have questioned whether that is a legitimate claim. But regardless, both cities should, in the name of transparency, release the entirety of their proposals. Maintaining faith in government requires no less.

3:50 pm:  CBS-St. Louis/KMOX News has posted St. Louis’ Amazon HQ2 proposal.

The post Release the Amazon Bids! appeared first on Show-Me Institute.

Related:

• Learn what happened when Olivette, MO, rejected a TIF

The post David Stokes on Crestwood and TIFs on KMOX appeared first on Show-Me Institute.

This afternoon, I am pleased to appear on the Mark Reardon show on KMOX NewsRadio 1120 to discuss this issue. I will be on during the 3 p.m. time slot. Please listen in if you can.

I support turning I-70 into a toll road, for reasons discussed in the op-ed and in this blog post.

The post Toll Road Twofer appeared first on Show-Me Institute.

Dr. Strauss appears as part of a KMOV report on the status of the “China Hub” proposal in the Missouri Legislature’s Special Session, calling Aerotropolis a “pie in the sky” project. That segment is below:

Meanwhile, Dr. Haslag has written an article for the Columbia Business Times expressing similar concerns on the jobs front, saying that “the models used by DED [to estimate tax credit project success and job creation] have been discredited” predominantly because they fail to incorporate the cost of the government taking money from the private sector to fund the project. Dr. Haslag also tells a brief but useful story about the problem of trying to “count” jobs. (Emphasis mine)

There is a legend about employment and government projects involving Dr. Milton Friedman. During a visit to India, an official was taking Friedman on a tour of a public works project. New machinery was being used, and the official touted the number of jobs that were created by the project. Friedman responded by saying that if you wanted to count new jobs, the project leaders should have provided the workers with spoons instead of state-of-the-art construction equipment. If it is jobs we want, there are lots of silly ways to get those jobs created. A nobler goal is to find a set of rules that promotes opportunity for all, not just gifts graciously handed to a select few.

Our skepticism of the wide array of Aerotropolis job estimates has been well-documented. Dr. Strauss’s and Dr. Haslag’s analyses of the project again confirm the questionable nature of proponents’ jobs assessments.

The post SLU and Mizzou Economists Weigh in on Aerotropolis Jobs Estimates appeared first on Show-Me Institute.

The post Aerotropolis Debate with Ray Hartmann on Charlie Brennan’s KMOX Radio Program appeared first on Show-Me Institute.

The hour-long event is featured in its entirety here.

The post ‘It Wasn’t Their Money to Begin With’: KMOV Special Report Rips RCGA, Aerotropolis appeared first on Show-Me Institute.

access to and a copy of all e-mails sent to, from, and within the governor’s office containing the words “aerotropolis” or “china” since May 1, 2011. I also request all e-mails referencing legislation related to aerotropolis or the china hub. I also request any and all emails or correspondence from or to Speaker Steven Tilley or one of his representatives regarding the possibility of a special session, including any discussion of legislators calling a special session independently of the governor.

In a letter dated July 27, the governor’s deputy counsel informed us that it would take 14 business days — about three weeks — to determine “the approximate time needed to complete processing” and the estimated cost of getting the information. Last week we were informed it would take an additional 30 days to receive these e-mails, meaning we would not receive the requested information until late September — well after the special session has begun — or if it’s in fact 30 business days, well into October.

If this sounds familiar, it should. From just two weeks ago…

We reported yesterday on the National Center for Beef Excellence’s Beef Study That Wasn’t, and last night KMOV reporter Andre Hepkins, who’s been covering the NCBE “meat feasibility” story since last week, sent along this latest development concerning the Beef Center’s elusive meat report:

KMOV’s Craig Cheatham is having his own devil of a time getting China Hub documents, and this part in particular jumped out at me. (Emphasis mine)

On Thursday, the day after the Hub Commission insisted that I refile the request under the Missouri Sunshine Law, I interviewed Mike Jones, the group’s Chairman. Jones admitted that it was his decision to make me refile the request. I told him it was an “abuse” of the process, and that any request for information must receive the same attention as one identified as a “Sunshine” request. He disagreed and stands by his decision.

And now we hear from Cheatham,

I filed a #Sunshine Law complaint today against Midwest #ChinaHub Commission. Is this how you sell #Aerotropolis ? http://tinyurl.com/3zeqh5g

Throw in that our most recent request for information from the China Hub has been referred to the Hub’s lawyers, and all of the sudden, we have the makings of a major problem. Are government record holders trying to run out the clock?

The post Has the Public Records Runaround Begun? appeared first on Show-Me Institute.

So, when we received a bundle of studies, draft studies, and progress reports this week from the Midwest China Hub Commission, the first thing I looked for were documents showing that warehouse space was needed.

But those documents show something entirely different.

According to reports commissioned by the China Hub Commission:

[Existing warehouse space] provides a short, medium and long-term solution for warehousing and ground handling needs in respect to this project.

And:

[Runways, ground handling, and warehouse space are] sufficient to manage and handle wide body air cargo flights from China. A recent on-site visit by a major international logistics firm has provided validation.

In fact, a study commissioned by the St. Louis Regional Chamber & Growth Association (RCGA) estimated that 45 million kilograms of cargo could be shipped to international destinations. Incidentally, that is almost exactly the amount of cargo that could be handled by existing facilities, according to the Midwest China Hub Commission reports.

And yet, as legislators were debating creating $300 million in tax credits to subsidize warehouse or facility construction, the RCGA pushed to publish a report purporting to show that $300 million in construction tax credits would result in more than 27 million square feet of warehouse space being construction, and that 20,000 jobs would be needed to construct and operate that space.

To add insult to injury, KMOV recently reported that the RCGA receives a great deal of taxpayer money, and doesn’t keep track of it very well.

What floors me is that given previous studies commissioned by proponents — including the RCGA itself — that 27 million square feet RCGA estimate is nonsense. And so are the related jobs estimates.

All of this leaves me wondering, what is that $300 million actually for?

After all, based on warehouse space analysis commissioned by China Hub proponents, $300 million for construction subsidies is likely $300 million too much.

The post According to China Hub Reports, Warehouse Space is Sufficient appeared first on Show-Me Institute.

The legislative special session — assuming it is called — will probably take place in September, which means independent researchers won’t get to see, let alone test, the fundamental assumptions in this “feasibility study” until long after a $360 million vote is taken on the issue.

Truly absurd. Taxpayers deserve better than this from their community and political leaders. Much, much better than this.

The post So the NCBE’s “Mystery Meat” Study Won’t Be Published Until… After the Special Session? appeared first on Show-Me Institute.

The Midwest China Hub Commission hired the National Center for Beef Excellence to examine how much beef and pork could be exported to China via Lambert. The NCBE says a China hub at Lambert could send up to 11 million pounds of meat to China.

The news report in its entirety:

We’ve discussed again and again how beef is ineligible for export to China. The NCBE’s use of the word “meat” is nondescript enough to suggest beef can be exported without admitting that it can’t, and when “beef” is evoked specifically in KMOV’s discussion here, it’s always in the context that it “could” mean “big bucks” for the state, presumably in the same way that someone “could” make a lot of money distilling bathtub alcohol if it were legal to sell it. That’s a crafty way for the NCBE to announce its findings without spilling the beans about beef, but it doesn’t really add anything to the conversation on Aerotropolis.

Then there’s the question of the study itself: Namely, where is it? We asked the China Hub Commission about getting a copy of the NCBE report, and in about a day we’d received in the mail a stack of various, unpaginated NCBE documents that related to the China Hub, but did not include anything that looked like a study or that supported the substance of the news reports about it — namely, that 11 million pounds of meat could be exported to China after lawmakers passed the Aerotropolis legislation.

So far, no one else we’ve asked has been able to find the report, including those who covered it. Where, precisely, is this study? If nobody has a finalized copy or even a draft copy of what was reported, why… was anything reported? Or better yet, how was it reported?

There were some very revealing details that we did find in that pile of China Hub documents, however. More on that shortly.

The post Hey National Center for Beef Excellence, Where’s the Beef? appeared first on Show-Me Institute.

As I’ve written previously, the city’s Land Reutilization Authority (LRA) owns more than 9,000 parcels of vacant land, and isn’t selling most of it. Cheatham investigated two properties where the LRA had turned down great offers, for no apparent reason. To my (happy) surprise, Cheatham’s investigation led to the LRA re-evaluating its rejection of one offer to buy property: Anthony Barber’s offer to purchase 1252 Academy Ave. in order to develop the property into a restaurant. You can see 1252 Academy in the photo below.

Photo by Thomas Duda

According to Cheatham’s report, the LRA met with Barber today to reconsider his offer. The agency may, facing public scrutiny, accept Barber’s offer.

This is great news! If the LRA sells 1252 Academy, that is one less vacant eyesore, and one less property the city has to spend money maintaining — and those costs can add up. Furthermore, I am sure the neighbors of 1252 Academy will prefer living next to a restaurant rather than a vacant, boarded-up city property.

But the LRA’s decision to reconsider its decision on 1252 Academy makes me wonder whether the agency is open to reconsidering other offers it has rejected. According to Show-Me Institute research, the agency has rejected offers to purchase more than 2,200 of its properties. Only about a quarter of them were rejected because the agency thought the would-be buyer didn’t have the means to complete the project. The most common reason for rejection was that the agency was holding property for “future development.”

Of course, in most cases, that future development has yet to materialize.

Is the LRA open to taking a fresh look at some of the other offers it has rejected? As part of my research into the city’s landholding policies, I’ve worked to collect the data necessary to put together a list of other offers that might be worth reconsidering. It would be wonderful if the agency would seriously consider recanting some of its past rejections.

The post Is Saint Louis Now Open to All Development? appeared first on Show-Me Institute.

KMOV reporter Craig Cheatham has also looked into this issue and you can watch his investigation tonight at 10 p.m.

Ultimately, this research leads to the question of whether holding property is really the best development policy for Saint Louis. It isn’t the case that all of the LRA’s rejections involve people who try to buy properties without sufficient funds — only about a quarter of the LRA’s rejections cite “insufficient financial resources” as the reason for rejection. Instead, the most frequent reason for rejection is that the property in question is “being held for future development.” Yet, in its rejection letters to would-be buyers, and in its minutes, the LRA does not state what that future development is or when it will take place.

From 2003 through 2010, the LRA has rejected roughly one out of every two offers it has considered. This doesn’t mean that the agency has accepted the other offers. In fact, the LRA has accepted fewer than 25 percent of the offers it has considered, meaning that the agency rejects two offers for every offer it accepts. The rest are counter-offers, which frequently do not result in a sale.

So, why not let more people who are trying to buy LRA property purchase it?

Moving properties off of the LRA’s rolls will, at minimum, mean that the city will spend less in taxpayer funds maintaining these properties, and can collect more property tax revenue. Furthermore, rejecting an offer today in favor of a hoped-for offer in the future entails taking on a great deal of risk. It is likely that the hoped-for development will take years, if not decades, to materialize … or may never come about at all.

Otis Williams, deputy director of development at the Saint Louis Development Corporation (which oversees the LRA), made a revealing comment when talking to Milhaven today (after my appearance). Milhaven asked what was so bad about selling LRA property, even if it isn’t developed. After all, LRA properties are vacant. In the case of a privately held vacant property, at least the city would no longer be paying to maintain it (cutting the grass on these properties alone costs about $1 million per year). Williams responded:

When we sell it, it is a real estate transaction, at that point, and they own it. Unless they don’t pay the taxes, or we pursue them in court through right of reentry … once you sell it, you’ve pretty much lost control.

If the city were to focus on encouraging all development, not just development that matched its overarching plan, there wouldn’t be concern about losing control of a particular property. However, Williams’ statement makes sense in light of the fact that the city focuses on encouraging only its notion of the right kinds of development.

Does this top-down development approach work? It doesn’t seem to. The LRA owns more property today than it has in the past, and is still trying to control exactly who can buy property and what they can do with it. Perhaps it is time to take a different approach.

The post Why Not Sell City-Owned Vacant Property? appeared first on Show-Me Institute.

I think the key issue here is the idea of competition. In a report for San Diego, the authors at Reason put it well (emphasis added):

“Taxpayers win whenever there is competition, even when the competition is won by public sector providers” said Adam B. Summers, policy analyst at Reason Foundation and co-author of the report. “They get more accountability, better results, and lower costs. […]”

Private screening companies are used at only 16 airports in the county. Springfield-Branson would have been no. 17. The very existence of competition brings a greater degree of efficiency to the TSA, even if it continues to do the screening in the vast majority of American airports. I know we aren’t used to thinking about the terms “government employees” and “complacency” together, but if the presence of competition in a small number of airports serves to reduce the TSA’s complacency, that benefits all of us.

One six-year-old report found that private screeners did a better job than government employees, but another report said that there are no cost savings because the TSA still overseees the private security companies, which operate according to the same requirements, rules, etc.

I believe the real reason for this denial of the private screening option has more to do with organized labor. From the KMOV Channel 4 report on this story:

The American Federation of Government Employees, the nation’s largest federal employee union, has praised [TSA Administrator John] Pistole’s decision.

TSA employees will be deciding on union representation shortly. Government unions are generally the most ardent opponents of any type of privatization.

Anytime I write anything about Branson, I always think, “What would Yakov say?” So, here is my best attempt at a Yakov Smirnoff–style joke about this situation:

In USA, people worry they the screeners will touch their junk as they board the plane. In Russia, people worry about the plane itself because the whole plane is made of junk!

Fire off better jokes in the comments, if you dare!

The post Private vs. Public Airport Screeners: Who Gets to Touch Your Junk? appeared first on Show-Me Institute.

Last Tuesday, Nov. 9, David Stokes and Dave Roland appeared on the Bernie Hayes Show on WGNU St. Louis AM 920 to talk about occupational licensing generally, and African hair braiders specifically. You can listen to the whole show here.

On Thursday, Nov. 11, Audrey Spalding was a guest on a panel discussing public education and the film Waiting For “Superman,” at Plaza Frontenac. Audrey was quoted in the St. Louis Beacon and on the St. Louis Business Journal‘s blog about the film and the issues of school quality and choice that it addressed.

Thursday night, David Stokes was quoted in a KMOV CBS Channel 4 story about public pensions. Show-Me Institute scholar Dr. Susan Feigenbaum was also interviewed for the story, an issue that the institute has addressed previously. If I could stress one point further, it would be to repeat the point Dr. Feigenbaum made in her interview that governments themselves are to blame for much of the public pension shortfalls by not making adequate contributions during good fiscal times.

On Friday, Stokes was quoted in a St. Louis Business-Journal piece by Dave Drebes about the potential for the city of St. Louis to re-enter St. Louis County. (You need to subscribe in order to access the full story online.)

Last, but not at all least, is yesterday’s major Post-Dispatch article on economic development, tax-increment financing (TIF), etc. Show-Me Institute intern Tom Duda and Stokes were both quoted in the story on how “economic development” in the St. Louis area amounts to nothing more than using tax dollars to lure business from one part of the area to another — sometimes only a few blocks away.

As a fun parlor game from the Post-Dispatch article, I’ll give 10 Show-Me Institute bonus points (whatever those are) to the first commenter who correctly cites the blatant red herring argument used by someone quoted in that last story.

The post Show-Me Institute in the Media appeared first on Show-Me Institute.

Really, all I want to do here is let you — our beloved readers — know of this excellent database from the Environmental Working Group. Have some fun with it. Check out your own zip code. Put in the names of politicians or former spouses. There is no end to the potential enjoyment! (Finally, I assure you that the David Stokes from Missouri in the database is a different David Stokes.)

The post New Farm Subsidy Database appeared first on Show-Me Institute.

Many superintendents in the Saint Louis area make more than $200,000 in salary alone, and receive thousands more in non-salary benefits, such as car payments and annuity payments. For example, Cheatham found that the Clayton superintendent receives $750 per month as a car allowance. This isn’t surprising. In my study of more than 450 Missouri superintendent contracts, I found many odd benefits, including the award of a house.

Most staggering is the finding that the Ferguson-Florrisant Superintendent, Jeffery Spiegel, was awarded health insurance for life for himself and his dependent after he retires at the end of this year. The school board estimates that the benefit will cost more than $200,000, but they have no idea what the cost will be in reality. After all, who knows how long Spiegel will use the benefit?

Cheatham and I both attended the Ferguson-Florrisant School Board meeting on Sept. 8, immediately after the St. Louis Post-Dispatch uncovered Spiegel’s outsized benefit. There was tremendous turnout, to the point that several attendees had to stand. This was unusual; the teachers I sat with said that the board meetings are usually more sparsely attended.

During the public comment session, a number of parents and teachers spoke about the health insurance award. All disagreed with it. In fact, several speakers and attendees noted that the school district had offered retiring teachers continued health insurance for three years after retirement. Some asked why wasn’t that good enough for the superintendent.

I naively thought that in the face of the recession, bad publicity, and disgruntled teachers and parents, perhaps Spiegel would voluntarily relinquish the health insurance for life. Instead, the school board’s president, Les Lenz, spoke at the end of the public comment session to defend the compensation award.

The award is cost effective, Lenz said. Instead of having to find a superintendent quickly, and incur the costs of hiring a consultant to find that new superintendent, the school board could simply award the additional benefit in order to bide more time.

I wonder what the board members were thinking when awarding this potentially incredibly large benefit. After all, the school board will have to conduct a search for a superintendent eventually, regardless of whether the board postpones the search for a year. Does the board think that the search costs will be much lower next year?

As I’ve noted before, this award is especially bad policy because it has an uncertain cost, and because the form of the award obscures its cost from the public. The school board may estimate that the award will cost $200,000, but the cost could be lower, or much greater. Had the board awarded Spiegel a significant raise — say, $40,000 — that could well have been enough to entice him to stay in the district. It certainly would have been a more budgetable cost.

I encourage the Ferguson-Florrisant School Board to be more transparent when awarding superintendent benefits in the future. Furthermore, I am baffled by the board’s stance that this is sound school district budget management.

P.S. — Cheatham’s investigation of school administrator pay continues tonight, on Channel 4, at 10 p.m.

The post Supersize Compensation appeared first on Show-Me Institute.

Also, I appeared last night on KMOV Channel 4 in St. Louis to talk about the Show-Me Institute’s several state income tax studies that were conducted by others here. (Why did I do the interview if others did the work? Because I was the only one available at that exact time, that’s why.)

There have also been a number of stories about the earnings tax in the Kansas City Star. In the interest of brevity, I’ll just link to the one column in the Star that favorably discusses the idea of replacing the earnings tax with a land tax. Another piece takes a less glowing approach, but we appreciate the Star taking the debate seriously.

Dave Roland was quoted in the St. Louis Post-Dispatch with his thoughts about the government spending millions to retrain St. Louis auto workers for the anticipated green jobs of the future. You can probably guess how he felt about the insane proposition that the government has any idea what the jobs of the future are.

Finally, our research assistant Josh Smith did his first radio interview with the Eagle, 93.7 FM in Columbia, about the proposal to require a prescription for all sales of medicine containing pseudoephedrine. Needless to say, Josh (and I) think that proposal is wrong, to put it politely. I should clarify that it was Josh’s first radio news interview while he has been with the Show-Me Institute. He has been on the radio before. In fact, I am pretty sure he was the seventh caller when he was in fourth grade and won tickets to the New Kids on the Block Show. He is still pretty psyched about that. …

The post Show-Me Institute in the Media, and Dr. Haslag on With McGraw Tomorrow appeared first on Show-Me Institute.

I could support the film tax credits if they actually did attract money from outside of Missouri. But, as I have blogged previously, this just doesn’t happen; states tend to spend more attracting filmmakers with tax credits than the filmmakers generate in the state. I have not been able to find information about how much money Up in The Air generated for Missouri, but I would not be surprised if that number is less than the $4.5 million in tax credits that it was awarded. I will continue to look for this information.

Instead of film tax credit programs, Missouri should spend its money on programs that create jobs that are better-paying and longer-lasting. We see from the KMOV video that these film tax credits do not result in sustained job creation. Certainly, many St. Louis residents are cast as extras in these films, but these jobs are low-wage and temporary. According to the casting call for Up In the Air, extras were compensated only $7.05 per hour (before taxes) and they were asked to work for just one day. Aspiring actress Adrienne Lamping was quoted in the video saying that she got to work on set for a week, but discloses that she does not have an acting job lined up in the future.

I understand why states like Missouri want to attract filmmakers. Certainly, it’s exciting for the hoi polloi to recognize their local haunts on the big screen and to spot celebrities like George Clooney. Unfortunately, however, almost nobody discusses the sheer cost of these programs.

The post Film Tax Credits Are Bad for States appeared first on Show-Me Institute.