At the end of January, I traveled to Jefferson City to deliver testimony on House Bill (HB) 1837, and at the time it seemed like the state’s legislature had finally decided to make healthcare price transparency a priority. HB 1837 is a bill that, among other things, codifies the federal government’s healthcare price transparency rules into state law, and was the first of its kind to receive a public hearing in Missouri. But since that hearing it has yet to receive any further attention from policymakers.

As my colleagues and I have written numerous times, Missouri desperately needs healthcare price transparency. And despite the federal government requiring hospitals to publish their price since 2021, fewer than 40% are complying nationally. That’s where HB 1837 comes in.

In addition to codifying the federal requirements into state law, the bill provides new protections for patients who receive health services in Missouri without being adequately informed of the prices beforehand. If patients aren’t told how much a procedure is going to cost before they receive it, there’s no way for them to plan for the expense, shop for a better deal, or even change their mind about the procedure altogether if the price is more than they can afford at the time.

HB 1837, which is modeled after legislation that became law in Colorado a few years ago, would shield patients from debt collection efforts by hospitals that aren’t complying with the required price transparency laws. Patients who find out they were overcharged would also have recourse for financial restitution (a way to get some of their money back).

With Missouri’s legislature, it’s always difficult to know why a bill stopped advancing, but one thing that was clear from the hearing on HB 1837 was that hospital lobbyists were vehemently opposed to it becoming law. The opposition claimed that complying with the transparency requirements would be too expensive. In fact, the cost is one of the primary reasons the federal government cites for not currently punishing noncompliant hospitals. But these requirements have been in place now for more than three years, which is more than enough time for hospitals to budget for this.

Given how confusing and expensive our healthcare system is, Missouri patients can’t afford to wait any longer for hospitals or the federal government to act. Healthcare price transparency would be a real win for Missourians in their battle against ever-rising healthcare costs. There’s still about a month left in the legislative session, so it’s still possible that our general assembly could push healthcare price transparency across the finish line this year, but at this point, I certainly wouldn’t hold my breath.

The post Transparency Stalled appeared first on Show-Me Institute.

A new study from the Institute for Justice finds that even though these things shouldn’t be the case, they are. Institute for Justice researchers studied 397 sunshine reviews (reports used by legislators that evaluate the need for new occupational regulations) from 15 states conducted from 1985 to 2017. They found that occupational licensing lobbies have driven the push for 84 percent of sunrise reviews and about 80 percent of these reviews declined to recommend licensing. What’s problematic is that legislators enacted licensing more often than recommended—twice as often as recommended in the reviews. These stats don’t instill confidence that occupational licenses were enacted to protect consumers, as is often claimed.

Missouri doesn’t require sunrise reviews and therefore wasn’t included in this study, but it does make one question whether Missouri’s occupational licenses were created under similar circumstances. Were Missouri’s various occupational licenses truly created to protect consumers? And are they still serving that purpose? We should have the answers to these questions.

A five-year sunset for all occupational licenses would give lawmakers new opportunities to assess the validity and necessity of occupational licenses. These licenses make it harder to get a job, which reduces supply and raises prices for consumers. Through a sunset process, unnecessary regulations (or even unnecessary licenses) that do not serve the purpose of protecting consumers can be identified and eliminated. A sunset provision would go a long way in supporting workers and consumers.

The post “Sunrise” Study Questions Legitimacy of Occupational Licenses appeared first on Show-Me Institute.

This new business, which has just opened in West St. Louis County and has already received millions of dollars in state and county tax subsidies, is all set to go with a plan to increase profits. Is it going to focus on customer service? Hiring a better sales team? Increasing business efficiency? Apparently not. It is going to focus right away on hiring lobbyists and getting the Missouri Legislature to pass a new, special state tax incentive program for its industry. From the article (emphasis added):

Gateway Studios in August hired Bardgett and four lobbyists from his firm. Kerr said the company is hoping to win support for an incentive program tailored to the music production industry. Pennsylvania has its own program for the industry, which helps draw production companies and acts to the state.

What Ludwig Von Mises said in 1944 in his famous book Bureaucracy is becoming reality in our state with tax subsides (emphasis again added):

Such executives did not care a whit for the company’s prosperity. They were accustomed to bureaucratic management and they accordingly altered the conduct of the corporation’s business. Why bother about bringing out better and cheaper products if one can rely on support on the part of the government? For them government contracts, more effective tariff protection, and other government favors were the main concern. And they paid for such privileges by contributions to party funds and government propaganda funds and by appointing people sympathetic to the authorities.

The tax subsidies this particular business has already received are bad enough. The idea that a special Missouri state tax incentive would be created to benefit one particular business in Missouri is appalling. There is no evidence that supports the idea that subsidy-focused economic development plans are successful, especially in a growing, thriving area like Chesterfield. Economic development officials and politicians cannot predict the future, and their choices are often based on political favoritism. Furthermore, chasing subsidies often leads businesses to make sub-optimal choices, such as locating in a less productive place to qualify for tax money, or focusing resources on lobbying instead of business improvement (the latter of which, unfortunately, does pay off far too often).

There has been progress made on some fronts in this fight, but creating a new incentive program just because an exciting and hip new business asks for it would be a terrible step backward.

The post A Truly Terrible Idea for West County appeared first on Show-Me Institute.

Recently, St. Louis County decided to use tax dollars to hire lobbyists in Jefferson City. I think that the dozens of members of the state legislature and their staffs from both parties that represent St. Louis County should be the ones looking out for the interests of St. Louis County, not additional lobbyists. Frequently, the lobbyist money is used to try to get more tax dollars sent from higher levels of government to lower levels, as the cycle of taxing, spending, and more debt repeats itself. (I will give St. Louis County some credit here for apparently using the money for policy purposes, at least for now.)

St. Louis County is far from alone. Many Missouri governments have contracted with lobbyists for years, including Kansas City. Elected officials and staff have every ability to drive home their goals and wants to other levels of government. Hiring lobbyists with tax dollars is both a waste and an improper use of tax money.

The post Taxpayer Funded Lobbying Continues appeared first on Show-Me Institute.

Perhaps it shouldn’t be surprising that Burns & McDonnell is at it again, benefitting from a little-debated tax credit expansion passed by the state legislature and signed by the governor that could net them $300 million over 15 years. The Kansas City Star, in a piece worth reading in its entirety, reports that:

Since 2011, Missouri has issued $39 million in tax credits to Burns & McDonnell, according to state records. The company can receive credits for every 25 new jobs it creates and $1 million it invests in its headquarters.

The expanded credit, inserted into the economic development package with almost no debate, will cover not just its physical assets but investment in cloud computing services. It would allow the company to claim 8 times the value of a software license.

Hand-picking which companies have their taxes reduced puts a great deal more power in the legislature, encourages businesses to invest in lobbyists rather than in their core competency, and creates an unjust situation where businesses that don’t receive handouts subsidize their competition through the tax code. If taxes are too high, lower them for everyone—don’t play favorites.

Perhaps most importantly, such tax schemes are so poorly managed that they hardly work. It should not be surprising to learn that the men and women elected to local and statewide office are imbued with no magical forecasting powers to divine the growth industries of tomorrow. It’s a crapshoot.

As a result, Missourians are left holding the tax bill while corporate cronies and their amen chorus in the legislature congratulate themselves. It is unjust, unworthy of the Show-Me State, and an indelible stain on the records of those who would call themselves small-government, free-market conservatives.

The post Taxes for Thee, But Not for Me (Part 2) appeared first on Show-Me Institute.

Yet in the 2019 Missouri legislative session, neither the House nor the Senate passed a single school choice bill. Reform for Bryce’s law, which would provide assistance for special needs students to attend private institutions in order to receive specialized instruction, never made it out of committee. A bill to create Empowerment Scholarship Accounts, which would allow school children to pay for tutoring, tuition, or other education services, was filibustered on the Senate floor. And charter school expansion, which would have extended educational opportunities outside of St. Louis and Kansas City, never received a vote on the Senate floor.

Critics said these programs lack accountability, fail to improve outcomes, and take money away from public schools.

At the same time, the legislature pushed through a gigantic corporate welfare bill for General Motors—a bill that would take money away from public schools, has little accountability, and is based on an idea (placating companies with massive subsidies) that has a track record of questionable results.

Why is it that school choice bills have such a tough time passing, while subsidies for big business see such little opposition (except from some of those same school choice supporters)?

The answer is quite simple—organization and power. The education establishment is organized and on message. Through the halls of the capitol, lobbyists for the teacher’s unions, the school administrator’s associations, and the school boards’ association walk in lockstep. They have a clear constituency with concentrated interests. Ask any politician and they will tell you the education lobby is one of the strongest in the state.

And what of the reformers? They seem to be a ragtag bunch, dispersed throughout the state. There is no single group bringing them all together. There is no widespread coalition, just a bunch of individuals who think kids deserve to have educational options.

School choice proponents may never have the kind of power that the education establishment and big business have. That doesn’t mean that legislators shouldn’t do the right thing. If they say they are champions of children, then they should champion children and the policies that give them educational options.

The post School Choice Fails, While Corporate Welfare Succeeds in the Missouri Legislature appeared first on Show-Me Institute.

Fortunately, legislators are starting to have regular, and serious, debates about licensing issues. 

One bill in particular, already passed by the House, could go a long way toward unwinding some of the problems imposed by a patchwork of licensing regimes nationwide—by accepting professional licenses obtained in other states here in Missouri. I say it “could go a long way” rather than “would,” for two reasons.

First, the law won’t apply to professions governed by “the state board of registration for the healing arts, the state board of nursing, the board of pharmacy, the state committee of psychologists, or the Missouri dental board.” That reads like a carveout for state professions with formidable lobbying arms, which is to say that while it’s probably a rational political consideration, it isn’t justified on policy grounds. Alas, it is what it is.

Second, and more subtly, for the professions that would be impacted, a lot still depends on the Boards that govern them. According to the text, a Board “shall” issue a license in reciprocity with another state, but only

if it determines that the licensing requirements in the jurisdiction that issued the applicant’s license are substantially similar to or more stringent than the licensing requirements in Missouri for the same occupation, profession, or activity . . .

That the same Boards which historically have helped to lock out competition are also empowered to determine the grounds of licensing sufficiency could be a problem. I can imagine some Boards left unchecked simply determining that Missouri’s standards are pretty much above everyone else’s standards—beating back reciprocity that way. Even examination requirements that could be met by other states’ licenses might still be imposed by these Boards “if [a Board] determines that waiving the requirements for the applicant may endanger the public health, safety, or welfare.”

Again, the devil is in the details, but it is often the details that determine whether a law is effective or not. Whether Boards will adhere to the intent of this reform is a huge concern here.

License reciprocity would be good for pracititoners and consumers alike. Hopefully this reform would bring about meaningful reciprocity. But if it doesn’t, in practice, deliver reciprocity for all of the professions it contemplates bringing reciprocity to, this incremental reform will have to be revisited to ensure its intent isn’t subverted.

The post License Reciprocity Proposal Could Be A Major Reform, But Vigilance Will Be Necessary appeared first on Show-Me Institute.

The author of the quote above is Ian Schrager, creator of boutique hotels and nightclubs, including Studio 54. In a recent Wall Street Journal piece, Schrager talks about the threat and how he is designing hotels to maximize efficiency and deliver a superior service to modern customers. Unfortunately, rather than innovate, some hotels are seeking to use the power of government to thwart competition. And governments are too often willing to do their bidding.

According to The New York Times, the American Hotel and Lodging Association trade group has launched a “multipronged, national campaign approach at the local, state and federal level.” One document shows that the group seeks to work with “a broad coalition of affordable housing advocates, community groups, neighborhood associations, labor, and other progressive entities.” The entire document is worth reading.

We’ve already seen some of this play out in Missouri, although the AHLA document does not cite efforts in the Show-Me State. Some neighborhood association activists have raised unsubstantiated fears about increases in crime. Kansas City’s own Planning and Development Department is exaggerating complaints against short-term rentals such as Airbnb. If Kansas City wants to present itself as a tech-friendly millennial magnet, it ought not keep fighting tech innovations such as Uber and Airbnb. Yet fight them it does.

In the 2017 legislative session, HB608 was an effort to pre-empt the current hodge-podge of municipal regulation that is being driven by the hotel industry’s concerns. The bill kept political subdivisions from imposing fees or prohibiting short term rentals outright, while permitting those subdivisions to impose “reasonable regulation” to “protect the public’s health and safety.” It may have been this last part that doomed the effort, as supporters of STRs feared that “reasonable regulation” was too broad a concession. As of this writing, January 4, there does not appear to be a similar bill proposed for 2018.

More recently, Airbnb announced a deal with Missouri in which it would start collecting and remitting state and local taxes on behalf of their owners. In their statement they estimated this would amount to $1.1 million in tax revenue.

New internet platforms such as Airbnb and VRBO (Vacation Rentals by Owner) offer great opportunities for consumers and for business innovators like Schrager who are up to the task. The churn of the free market—although sometimes ugly in the short term—is the reason why our country enjoys so many technological advantages and conveniences. Allowing big business to use its influence over government to thwart innovation by protecting existing markets isn’t just bad for Airbnb, it’s bad for hotels, government revenue, and consumers.

The post Want Better Hotels? Then Support a Free and Open Market appeared first on Show-Me Institute.

But perhaps the most important ethics reform enacted this session was the legislator-to-lobbyist cooling off period, sometimes called the "revolving door" law. Similar to a non-compete agreement for elected officials, the law requires that legislators wait six months after their term ends before they can start lobbying their former colleagues on someone else's dime. Even if that general practice wasn't already the law in most states, it's simply good policy to make sure folks in public office have unambiguously undivided loyalty to their constituents. Forcing a break between a policymaker's public service and possible private lobbying helps to accomplish that end.

Congratulations to the General Assembly for making ethics reform a matter of primary importance in 2016… and following through on it. The legislature, and the state, will be all the better for it.

The post Session Notes: Ethics Reforms Get A Boost appeared first on Show-Me Institute.

• Paycheck Protection: This First Amendment-supporting reform passed the Missouri legislature by veto-proof majorities earlier this year. Unionized government employees should not have to underwrite political speech that they don't support. Paycheck Protection flips the equation around, allowing employees to instead opt-in to a union's politics, or keep their hard-earned money. Unfortunately, the Governor vetoed the bill last week; fortunately, we can expect the House and Senate to return to the legislation in the next few weeks to try to override that veto. The reform is one of a raft of government union accountability measures that are long overdue in Missouri.
• Ethics reform: Ethics legislation has already cleared both chambers that would limit elected officials' ability to act as paid political consultants, but a number of other good bills remain on the table that have a solid shot of passage. Among the most important bills that I hope will build some momentum as the session continues is a bill that would enforce a "cooling off period" between the time a legislator leaves office and the time he or she becomes a lobbyist. Effectively a non-compete agreement, this cooling off period would help to ensure that taxpayers have the undivided loyalties of their elected officials while those officials are in office. 
• Tax reform: While Kansas City and St. Louis decide whether to end their earnings taxes themselves in a few weeks, the legislature has continued to debate whether to cut taxes statewide, as well. One proposal would extend the income tax cut passed in 2014, reducing the top rate to 5% over a period of years. That would be a modest cut, but it would be an important one that would signal the state was open for business. The legislative chambers may also debate whether to phase out the state's earnings taxes directly, but it is unclear whether the House and Senate will make those reforms a priority this year.
• Tax incentive reform: We've talked for years about the problems that are created when governments cut special tax breaks for cronies, and a number of bills in the legislature would make progress on the tax incentive fronts at both the state and local levels. One bill in particular would reform tax increment financing decisions in the St. Louis area by, among other things, changing what development projects can receive if a county TIF commission rejects a TIF proposal.
• Obamacare's Medicaid expansion: While it was a live issue as late as last year, it appears Obamacare's Medicaid expansion is going nowhere in Missouri in 2016. That's appropriate; Medicaid is a broken program, and rather than double-down on this broken status quo, state and national leaders should focus instead on reforming it.

The post At Session’s Midpoint, Reforms Loom Large On Legislative Agenda appeared first on Show-Me Institute.

Let’s consider the charge of bullying. Companies like Uber and Lyft have bargained hard with local regulators, trying to get rules changed to fit their business model. But let’s not forget how for-hire vehicles were regulated in Kansas City and St. Louis before these companies came along. Regulatory bodies (often representing existing taxi companies) capped the supply of cabs, fixed pricing, limited business practices, and stifled innovation. When Uber and Lyft tried to enter these markets a couple of years ago, regulators and taxi representatives fought over every inch of regulation, and the fight continues in Saint Louis. That foot-dragging is what prompted efforts to regulate these companies at the state (rather than the local) level. So who are the bullies? The regulators who micromanaged the entire taxi market for generations, or Uber and Lyft?

Now let’s talk about tax revenue. Under the current regulations, ridesharing drivers would not have to pay local earnings taxes in Kansas City and Saint Louis simply for picking up passengers there. According to one Kanas City Star author, Uber will be using city streets but not paying for them. First of all, provisions in these bills don’t specifically target the earnings tax; they prohibit municipalities from charging any kind of special tax on ridesharing companies, which happens. And second, the idea that streets would be starved of funding because of earnings-tax losses just isn’t credible. Kansas City has long treated street maintenance as the red-headed stepchild of the budget-making process, with only 3% of the city’s funding going to streets. In fact, in the upcoming budget, the tax-incentive budget is equivalent to the streets’ capital budget. When we consider that this includes both federal and state fuel tax support, and that many Uber and Lyft drivers are Kansas City residents who pay other taxes, the idea that we need to kill regulatory reform to give Kansas City a larger cut seems a bit much. Any increased tax revenue would be more likely to go the Kansas City Area Transportation Authority than to streets.

Companies like Uber and Lyft are pushing for long-overdue reform in cities across the country. And unlike their opponents, they aren’t seeking to outlaw their competition—only to run their businesses their way. They only have political clout because residents in Missouri see the great benefit of these services and want to use them. If newspaper columnists or policymakers don’t like Uber’s business model, they don’t have to drive for Uber and they don’t have to ride Uber. But they shouldn’t be allowed to make that decision for the rest of us, or empower those who would. 

The post Kansas City Star Worried over “Bullying” from Uber, Lyft appeared first on Show-Me Institute.

So: How many Senators, charged with working for the public interest today, intend to seamlessly curry favor with their former colleagues on someone else's behalf immediately after leaving office? The public deserves to know.

The post Exactly How Many State Senators Plan to Immediately Become Lobbyists? appeared first on Show-Me Institute.

Geri’s father and husband were both union members. And she was initially fine with joining. But now she wants out.

Geri’s situation is worsened by the fact that she has a moral objection to many of the activities of her union. Her union, the International Brotherhood of Teamsters, spends heavily on politics. According to the Washington Times, they spent $5.9 million on lobbying and campaign contributions in 2014 alone. “It breaks my heart,” she told me.

Geri called her local’s business agent to ask about the political spending. She says it didn’t help anything. I also called Geri’s local to ask about their stance on forcing people to join the union. I’m still waiting for a call back. 

Thousands of Missourians are in Geri’s situation—forced to pay for a union’s services while skeptical that the union is actually doing anything for them. Giving workers the freedom to opt out of a union is one way to hold a union accountable. Giving workers a regular secret ballot vote on whether to keep their union is another way to make union executives listen to the concerns of the people they represent.

I had the opportunity to interview Geri; the video is available via the link above.

The post Geri’s Story: Holding Unions Accountable appeared first on Show-Me Institute.

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Roger Kurtz, executive director of the Missouri Association of School Administrators (MASA), insisted that the tax cuts would take our state over the fiscal cliff. His organization sent out a document that warned each school district of the impending funding cuts that would ensue if the bill passed.

Commenting on the tax cuts, Bruce Moe, executive director of the Missouri State Teachers Association (MSTA), stated, “Now is not the time to turn our backs on our teachers and their students.”

The Missouri School Boards’ Association (MSBA) actively lobbied against last session’s tax cut bill. In recent months, they have continued warning their members about the evil tax cuts.

Not to be outdone, the Missouri National Education Association (MNEA) placed television ads against the tax cut bill:  “It’s hard to believe. Corporate special interests got an $800 million tax break, paid for by cuts to local schools.”

With the vocal opposition of the MSBA, MASA, MSTA, and MNEA to broad tax cuts and their insistence that Missouri shouldn’t cave to “corporate special interests,” we should have heard a lot from these groups in the past few weeks. After all, the legislature reconvened in Jefferson City to contemplate $150 million annually in tax subsidies to “corporate special interests.”

What did we hear from the alphabet soup of education groups?

The post Education Establishment On Boeing Tax Subsidies: Crickets appeared first on Show-Me Institute.

On Nov. 9, the Washington Missourian published a letter to the editor in which I wrote that the Missouri School Boards’ Association (MSBA) uses your tax dollars to fight for keeping your taxes high.

Well, as you might expect, MSBA took issue with my letter. The funny thing is the part of the letter with which they took issue.

Was it my claim that MSBA is gearing up to battle against tax cuts in the next legislative session? No.

Was it my claim that they are hosting a series of anti-tax cut meetings? No.

Was it my claim that they hadn’t invited anyone who is pro-tax cuts to the meetings or that they are not interested in a debate on the issue? No again.

Was it my statement that our tax dollars go to MSBA to fund their efforts to keep our taxes high? Sadly, no.

Carter Ward, executive director of MSBA, took issue with my claim that I would have had to join MSBA if I had been elected to the school board. He wrote, “The decision to join MSBA is made by local boards of education as a whole and is voluntary. No school board in the state is required to belong to MSBA or to spend any money with the association.” Of course, state statute requires every school board member to undergo training that only the MSBA can provide, but never mind that.

He went on to claim that Missouri is a low-tax state and cutting our taxes further would be a “recipe for disaster.”

There you have it, MSBA thinks your taxes are low enough and they will fight to keep it that way.

The post MSBA Verifies That They Are Fighting To Keep Taxes High appeared first on Show-Me Institute.

At the conclusion of the 2013 legislative session, Missouri senators shut down the tax credit that would have opened up millions more to Saint Louis NorthSide developer Paul McKee.

I would like to take credit for this. But unfortunately, there is no one who can really take credit for this happening. Making a bill become a law can often be a confusing and messy process. In this case, the Distressed Area Land Assemblage Tax Credit (DALATC) was set to expire this year, and there were bills proposed to extend the credit. At the last minute, however, the DALATC extension was tacked on to a different bill, House Bill 698. HB 698 was a hodgepodge type of bill including various tax credit provisions.  Eventually, a senator filibustered the bill so it did not pass. (Show-Me Institute Policy Analyst Patrick Ishmael has more detail about the legislature’s failure on this bill here.)

Is this going to stop or hinder in any way NorthSide development? Of course not. McKee’s project has already received more than $40 million in state tax credits, and the City of Saint Louis has promised close to $400 million more in local incentives. Plus, the project still has potential to tap up to $20 million in credits from the state before the DALATC expires later this year.

There is no doubt that McKee wanted access to the $45 million more that extending this tax credit would have opened up. But the project will just have to “make do” with the $440 million in government assistance it will receive.

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The post Three Ways Bad Public Policy Hurts Missouri appeared first on Show-Me Institute.

Apparently, in other circumstances, you can play big and always win big if you know the right people and have enough money. Especially if your name is Paul McKee.

I recently wrote about the lack of progress on McKee’s NorthSide Regeneration project in North Saint Louis, despite the $40 million he has already received in tax credits.

One specific state tax credit, that only McKee is eligible for, is set to expire in April. But not if he can help it. Seventeen lobbyists registered on Monday to represent the NorthSide project, which the St. Louis Post-Dispatch notes is the same amount that represents Ameren Corp. and Anheuser –Busch, combined.

When will McKee end his relentless pursuit of tax credits?

Unfortunately, priorities shift when business becomes intertwined with the government. Relying on the government often incentivizes companies to hire people with the ability to work with government, not the ability to complete projects.

Ludwig Von Mises discusses this problem in Bureaucracy (pages 76-77, if you are interested). He writes, “Why bother about bringing out better and cheaper products if one can rely on support on the part of the government? For them [corporate executives] government contracts … and other government favors [are] the main concern.”

This reliance on government favors is not necessarily McKee’s fault; he did not create the system. But this is not an excuse to let it continue. We need to change the system that encourages businesses to spend significant resources on government lobbying instead of investing efforts into their business. It is time for Missouri to cease “business as usual” and put an end to corporate welfare.

The post Gotta Spend Money To Make Money? appeared first on Show-Me Institute.