Susan Pendergrass and Patrick Tuohey join Zach Lawhorn to discuss their new report, The Public Safety Climate in the City of St. Louis. They explore what the data actually show about crime trends over the past two decades, how St. Louis compares to similar cities like Cincinnati and Memphis, why crime perception lags so far behind the data, the challenges facing the 911 system and police staffing, why public disorder in high-traffic neighborhoods may be doing as much damage to the city’s reputation as violent crime itself, what it would take to make residents actually feel safer, and more.

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Episode Transcript

Zach Lawhorn (00:00) Welcome to the Show Me Institute podcast. I’m Zach Lawhorn from Show Me Opportunity, and today I’m joined by Susan Pendergrass and Patrick Tuohey from the Show Me Institute. Today we’re going to be talking about some work that the two of you have done on public safety and crime, specifically in the city of St. Louis. But before we get into the project, I want to talk to you both about your perception of crime as people who have both lived in and frequently visit the city of St. Louis. So Susan, I want to start with you. Before you started this project, before you started looking at the data, when someone said “Is the city of St. Louis dangerous?” what was your perception before you started this project?

Susan Pendergrass (00:38) I only moved to the city of St. Louis in 2015, so there’s a long period of time before I lived there. I was in D.C. for part of that, and my perception before I moved there was that it was dangerous. The Ferguson incident had just happened and I knew that there was a lot of crime. But then when I moved to St. Louis, my husband and I decided to live in the city itself and we loved our neighborhood. It was the coolest with this super cool house built around the time of the World’s Fair. It was amazing. But I never felt really safe. We started leaving our car doors unlocked because our cars would get rifled through. We had a smash-and-grab right within two weeks. I called to report the smash-and-grab and was told that they don’t take reports on them. That was new for me. We had to keep a lot of lights on outside. We didn’t really walk our dogs after dark. I felt like lots of times I would go by police cars sitting on corners idling, but it didn’t necessarily make me feel safer because I wasn’t sure how much they were doing. I also realized people run stoplights, run stop signs, use the right parking lane to pass, and that was all new for me. So I got this feeling that the rule of law wasn’t enforced very well in the city, and that just doesn’t feel good as somebody who has bought a house there and lives there.

Zach Lawhorn (02:06) Patrick, as someone who lives in Kansas City across the state, two questions. What do you think the perception is over there on the western half of the state? And then as someone who comes into St. Louis regularly, what was your perception of the safety situation in the city?

Patrick Tuohey (02:22) A lot of the issues that Susan and I explored in this paper bore out here in Kansas City. I’ve lived in cities my whole life. I understand that every city is going to have the parts you don’t want to go to, the parts that are rougher than others. Kansas City certainly has that. I’ve had my car broken into here in my driveway a number of times, no real damage, and it’s not something I reported to the police. As far as traveling to St. Louis, I’ve been going to St. Louis since the late nineties. Before I lived in Kansas City, I was in Washington, D.C. And I loved St. Louis. I still do. I would visit Creve Coeur, the Central West End, sometimes stay at the Westin downtown. But living in D.C. and growing up in D.C., I understood that every city is going to have the places that you don’t want to go. I understood that St. Louis often gets ranked higher than it should because the city’s footprint is so small. But it never felt to me that what was going on in St. Louis was way outside the normal limits of what we see in U.S. cities. There are those dangerous parts and you generally know not to go there. There is kind of an urban decline, which can be seen in a lack of services, graffiti, uncut grass. But I didn’t navigate St. Louis or think of St. Louis any differently than I thought of Kansas City, Washington D.C., Boston, or any other place I had been.

Zach Lawhorn (04:03) Yeah, and I’m glad you brought up the population of the city, the MSA. It seems like when there are national or even local news stories written on crime statistics in St. Louis, people will point out that if you’re not talking about the larger metropolitan area, you get down to actually a pretty small population number for U.S. cities. So for this work that we’re going to be talking about, can you define what area you guys looked at? When we say murders are a certain number, what area are we specifically talking about?

Patrick Tuohey (04:38) We looked at the city of St. Louis specifically, just those few square miles. We did not look at the metropolitan area and we did not look at the county. It is fair to want to combine all that data into one region, but oftentimes I think people want to do that to mask the seriousness of homicide and violent crime and property crime in the city. And that’s what we wanted to talk about. What is true in St. Louis is not unique to St. Louis. Kansas City has a crime problem that is not reflected in our metropolitan area. That’s true in Washington D.C., Atlanta, Los Angeles, everywhere. So I understand why people who live in St. Louis feel that you can cook the numbers by just looking at the city, but that’s true in every urban environment.

Susan Pendergrass (05:30) We also compared St. Louis to four other cities, and one of them in particular, Cincinnati, ended up being very similar. We wrote a paper and at the back of the paper there’s a table with variables on which we compared them. Similar size, similar poverty, similar median income, very similar. So to say that St. Louis is this very unique outlier and is the only city in the United States that has this situation where, essentially 100-plus years ago, St. Louis was so much better and more metropolitan and forward-thinking than the rest of the state of Missouri, and safer and wealthier, that they drew a line around the city of St. Louis and said we are going to be our own thing and we’re going to have our own police. It was called the Great Divorce. Now that line, the arrows are sort of pointing different ways, where St. Louis County isn’t necessarily excited to absorb the city of St. Louis and its services, systems, police departments, and 911 systems, because it is a uniquely crime-ridden area in parts. So while it would be nice to, as Patrick mentioned, just water down all the numbers by mixing them into a safer pot, it would really mask what’s going on.

Zach Lawhorn (06:47) Susan, you used the word “unique” there to describe the setup. Patrick, does that genuinely make it harder to talk about this topic? In the last few months you’ve had some public events, and we’re going to talk about those in a minute. But as you’ve gone through this process, do you think the unique setup has made it harder? Is there more throat-clearing and definitional work that goes into it?

Patrick Tuohey (07:12) I don’t know that what St. Louis is dealing with is unique. Yes, the city has a particularly small footprint. It is as if you drew a line around just the bad neighborhood in your community and tried to use that small footprint to describe the whole area. I get that argument. But if it’s true by a matter of degree, it’s not uniquely true of St. Louis. And it’s something that the city needs to deal with and understand rather than try to paper over. As Susan said, there are real problems in the city. Their population decline is only exacerbating those problems because there’s less revenue. And frankly, the history of the city going back decades has been that the image of the city is dysfunctional, and not just on public safety, on lots of issues. So although I understand that people say they don’t just want to talk about the city when it comes to crime, St. Louis, while it’s got lots of opportunities and strengths, doesn’t do itself any favors by combining all this stuff and whistling past the graveyard. People in this country know that St. Louis has a crime problem. You don’t solve it by redirecting people.

Zach Lawhorn (08:30) Okay, and let’s talk about that crime problem. Susan, when we use the word “crime” in this context, what are we talking about? Murders? Car break-ins? Lay it out for us.

Susan Pendergrass (08:42) We have violent crime and property crime. Violent crime is murders, aggravated assault, and robbery. Property crimes are larceny and motor vehicle thefts. In our report, we break them all out separately. Murders are the one crime area that the media likes to focus on: how many murders, which city is the murder capital, did we have 150, did we have 200, are they down? They are certainly down in the last two years, to be clear. Murder rates are down. Aggravated assault rates are not down by as much. And sometimes the difference between aggravated assault and murder is how fast the ambulance drives. We still have a lot of violent crimes against people happening. We certainly have a lot of motor vehicle thefts. That’s an area of crime that spiked during COVID, particularly for Kias and Hyundais, and it’s come down, but it’s still a very high number. While it is wonderful that crime has come down across these areas in many cases, the numbers are still pretty high, particularly on a per capita basis, which is how we translate all the crime rates so we can compare them with other cities.

Zach Lawhorn (10:00) So you said crime is down. Is it fair to classify it as it was really bad and now it’s just bad? It was terrible, now it’s just bad. How would you summarize what you found with the drop in crime?

Susan Pendergrass (10:13) Crime’s been dropping since the 80s, so we had much worse crime decades ago. It’s been dropping, it spiked during the pandemic, and it is continuing basically down. Now, when you look at the murder rate per capita in the city of St. Louis, it is still on a slightly upward trend, the number of murders per people, and that could be driven by the fact that Missouri is losing population at a pretty good clip. We have more deaths than births. So on a per capita basis maybe not quite the same, but in terms of actual numbers, crime has been coming down for some time. Crime overall peaked in the late 80s and 90s.

Zach Lawhorn (10:58) Patrick, we talked about your perception and the relevance of many other cities. Did that surprise you, the finding that crime is down? Or was that kind of what you expected?

Patrick Tuohey (11:09) No, the data showing that crime in St. Louis was down wasn’t a surprise. It’s certainly been nice to see that it’s been down year after year. This doesn’t appear to be just a one-off good year. And I’ve known that the mayor and the police chief have been talking about these positive numbers for a while. What I was really interested in with this paper was perception of crime. That’s what I’ve really wrestled with, both at events in the city and in the county. It is a difficult problem to overcome because you can have good numbers like St. Louis has and yet people still rely on that decades-old impression. That’s not something you can address just by waving away the numbers downtown. You have to wrestle with it. You have to admit it, and you have to figure out how do you get people to accept good news, and then how do you make them confident that that good news is going to continue? It’s so easy these days, especially with cities, to just be a pessimist and to say that things are down and won’t ever continue to go down. It is a problem that St. Louis has, but St. Louis isn’t alone in having it. The news on crime is good all over the country, yet perceptions about crime all over the country are still very much with us.

Susan Pendergrass (12:43) There’s a survey question that’s often asked: do you feel safe walking outside alone at night? And those numbers aren’t down. As Patrick mentioned, you have graffiti and trash not being picked up and panhandling and homelessness. Those numbers aren’t necessarily down. But we did look at St. Louis on a neighborhood-by-neighborhood basis, and it is true that out of 16 neighborhoods, four or five have basically no crime, they’re crime-free. But then there are some other pockets that have most of the murders concentrated in one neighborhood. So it isn’t equal across all the neighborhoods. There are some that have very little crime, but it’s hard to convince folks of that when they drive through the ones that have public disorder and still don’t feel safe.

Zach Lawhorn (13:29) Susan, as a researcher trying to ultimately figure out why things happen, you mentioned that crime is down across the country. Would it be easier if it was just a few select cities, so you could actually go and say what is Boston doing different, what is Memphis doing? Does it make it harder to find the “why” since it seems like it’s kind of across the board?

Susan Pendergrass (13:45) Yeah. There have been other periods of time when crime has gone down and then gone back up again. I personally believe, and this is not based on any research I’ve done, that cameras being absolutely everywhere makes it harder to commit crimes. You cannot basically travel through the world anymore without being on a camera somewhere. Police body cams probably make it harder to commit crimes too. I feel like we’re getting into more of a surveillance state, and maybe that’s what’s bringing crime down. I’ve heard that Detroit has brought crime down faster than other cities, that Pittsburgh is feeling safer, Chattanooga is feeling safer, Memphis feeling less safe. So it would be worthwhile to look into some of these differences. But I don’t think our research has yet pointed to a clear reason why it’s happening.

Patrick Tuohey (14:41) Let me follow up on that because Susan’s exactly right, and I think your question gets to that point. Crime is down nationwide, down in all cities if I remember correctly, and we don’t really know why. And it’s not just Susan and I that don’t know why. Susan has spoken with public safety and crime experts from all over the country, and that’s really frustrating from a public policy research point of view, because you would love to have that outlier, that one city, maybe Boston or Omaha, that tried something novel and got results unlike everybody else. But crime is so difficult because there are so many contributors. Some people want to point to the availability of guns. Some people want to talk about root causes. Some people want to talk about the number of police, the severity of crime, the clearance rate, population growth, new development, basic services like picking up the trash and making sure the streetlights work. And all of those things are right, all those things contribute. So it’s really difficult to figure out which one is driving the change. And sometimes, as Susan pointed out, you may just get a dip and there’s no explaining it. In 2014, in Kansas City, our mayor and police chief at the time came out and had a press conference because they were so proud of the homicide drop the previous year. There was a lot of back-slapping and self-congratulation. Then when the homicide rate went back up the next year, you couldn’t get those guys to answer a basic question. Policymakers are, and maybe rightly so, really shy about claiming credit, because they don’t want to be called to task a year later when the numbers reverse. The good news is that the numbers are trending down, and that’s always good. The frustration is it’s very difficult to figure out why and then make recommendations. We’re all kind of scratching our heads. Although again, this is a good problem to have. The numbers are heading in the right direction and we ought to be happy about that.

Zach Lawhorn (16:58) Patrick, to get a better idea of the perception side, you did the hard work of going to the people. In January and February you moderated events. We had one in the city of St. Louis and one in St. Louis County. There are full recordings of the events available at showmeinstitute.org. You had a panel of experts and spent a lot of time getting feedback from attendees who lived in the city and the county. What were your takeaways? Are they buying that crime is getting better?

Patrick Tuohey (17:33) No, in a word, they don’t. We gave them a short survey before the event. A lot of them believed that crime was important, certainly, but they didn’t necessarily believe that crime was getting better. They weren’t necessarily optimistic that crime was going to be better in St. Louis City in the next five years, and that was certainly true in the county. I wanted to press these audience members: what would it take for you to believe this good news? And I think sometimes they just didn’t want to believe anything. We got the frustrating line: “there are lies, damn lies, and statistics.” That’s a cute thing to say, but it really doesn’t help you explain your own view. If you’re just going to say you believe it’s bad and always going to be bad, that doesn’t get us anywhere. We were happy to have representatives from the Circuit Attorney’s office at both events, and they struggle with this too. They can do a better job. They can prosecute more and different cases, they can do it faster. The police can certainly improve their clearance rate. But public policymakers in those cities, in every city, are going to have to realize that they may have to continue that grind, doing the hard work of lowering crime, and they’re not going to get the attaboys from the people in their city or the communities around them. That’s just a reality. One of the panelists talked about how perception of crime is often a lagging indicator. When crime goes up, people feel it immediately. But when crime goes down, it may take a few years. The tough news for the people who lead St. Louis City is you may have to keep doing this for another 10 years before you get any credit for being successful. And that’s really tough in politics because people want that immediate payoff, that immediate

Susan Pendergrass (19:15) You

Patrick Tuohey (19:31) applause, that immediate press conference and support.

Susan Pendergrass (19:34) Patrick and I have been thinking about the things that could happen that could make a difference, that could maybe make people feel safer. Number one: when you see a crime happening, you need to be able to have faith that you can report it and somebody will respond. And that is not happening right now in the city of St. Louis. We’ve called several times about crimes and nobody showed up. You need to have faith in the 911 system, and the 911 system needs to function. We have about 28 different systems in the county. They’re building a new 911 center in the city that’s going to consolidate services, but it’s not finished. It’s going to be some time before it’s fully functioning. We also need to know that the police will be able to solve these crimes. They need resources. They need to be able to do DNA testing and rape kits and DNA. They need money to do those things. They need detectives. We need to know that these crimes can get solved, and then we need to know that the crimes are prosecuted. I think if these pieces on the front end, not just the “lock them up” approach, but on the front end, people would feel safer if they felt like they could call somebody and somebody would respond and something would happen. I’m not sure that’s happening right now. And until it does, people, especially when they start having small children, are probably going to move out.

Patrick Tuohey (20:59) What we’ve known since at least 1961, when Jane Jacobs wrote The Death and Life of Great American Cities, is that you sometimes just need eyes on the street. Shop owners, pedestrians, people walking around. Cameras can reduce crime, but they’re kind of abstract and tucked in corners. When a street is vibrant, when it’s got people living there, when you’ve got kids playing in the street and families on the porch, there’s that sense of being watched, being seen. But because St. Louis has been in this population spiral, how do you bring people back into the city? The city talks about economic development subsidies all the time, but that’s about bringing in amenities and employers. Maybe what the city needs to do is figure out how to bring in people. And oftentimes it’s the non-crime-related policies, the housing policies, the regulations, the tax structure, that keep people out. Crime is one of those, but the city could open itself up to urban homesteaders who want to come in and rehab these old houses. What has struck me about St. Louis for the decades I’ve been going there is just the absolutely beautiful old neighborhoods, the incredible housing stock. Susan talked about living in a house that was built for the World’s Fair. There are gorgeous neighborhoods in St. Louis, and it’s the barriers to entry, red tape and government regulation, that are keeping people out, I have to believe. Crime is one of them, to be sure. But I am confident there are people who would love to move into those old houses and revitalize those old neighborhoods, because they’re just so gorgeous and so walkable. And it’s been done in other cities. DuPont Circle in Washington D.C. was a slow process of rehabbing neighborhoods block by block, and now 30 years later it is a vibrant community.

Zach Lawhorn (23:03) Susan, you mentioned the 911 system. I know in the report you don’t get into specific solutions, and I know we’re still kind of in the measuring-the-problem stage and trying to figure out next steps, but beyond the 911 system, are there any areas you’d consider low-hanging fruit worth considering moving forward?

Susan Pendergrass (23:25) The legislature passed and the governor signed a violent crime clearance grant program last year that cities like St. Louis could apply for, funding to hire detectives, do DNA testing, collect data, and other activities directly focused on solving crimes. The legislature has not appropriated any money for that program. If they did, St. Louis could apply for those funds. We also have, and I don’t know the exact number as I say this, but at least 100 open police positions in the department. Those are hard to fill. The policies that have been tried, like no longer requiring officers to live within the city and across-the-board raises, none of those have really made a difference. So we need recruitment and retention policies that could actually work. And as I mentioned with the 911 system, triaging calls and making sure the correct agency responds when a crime has been committed. There are community violence intervention programs that have been tried in some places, and using neighborhood-by-neighborhood data to focus in on where crimes are really happening. Those are all things we’d like to explore further: what is the cost of these programs, what is the likelihood that they’ll improve things, and what are some feasible ways to get them done.

Zach Lawhorn (24:54) So there’s the PR part of it. The city’s got a PR problem. There’s the need for more cops. We need people to be able to call 911. We need people to actually be prosecuted for crimes. That all seems doable.

Susan Pendergrass (24:58) Yeah.

Zach Lawhorn (25:06) Where do you think the city of St. Louis is at right now? Are we in a good place? Are we in just an improved place where it could still be a few years? How are you feeling about public safety in the city of St. Louis right now?

Susan Pendergrass (25:21) I don’t want to be a wet blanket. I love the city of St. Louis and I want it to succeed wildly. But I’m concerned that they’re going to say murders are down and these other crimes are down, but people are still running stop signs and stoplights, there are still panhandlers, and trash still isn’t being picked up. They’re not really fixing the small things that make people feel safe. They’re sort of focused on these big numbers. It could be like a school improving ACT scores. You have to be really careful if you’re just focusing on one aspect, because these big crime numbers being down could be hiding a lot of other stuff that really needs to be done and focused on. So I’m cautiously optimistic, I guess.

Patrick Tuohey (26:05) I’m optimistic because crime is going down everywhere, and I think it will probably continue to go down at least for the next few years, for reasons that may have nothing to do with the management of St. Louis. Part of it is because Susan and I have been reviewing the research for the last few months, and there is so much out there, primary research on crime and secondary, that talks about exactly the things Susan hit upon: the environment, picking up trash, cleaning up graffiti, fixing sidewalks, making sure the streetlights are lit. We know so much more about what drives crime, or at least what can ameliorate it, that even if we don’t know the specifics of what’s going on now, city leaders and state leaders are much more aware of what they can do to make communities not just safer but feel safe. And again, it is frustrating because you can say the numbers are down, but until people feel safe and want to go downtown and take advantage of what the city has to offer, we’re not going to see that public perception change. So yes, I think the public perception is accurate in as much as that is what people feel, but I don’t think it reflects what’s actually going on in St. Louis or in the county.

Zach Lawhorn (27:20) And we will leave it there. The report, The Public Safety Climate in the City of St. Louis, is available at showmeinstitute.org. If you want to watch the full recordings of the events that Patrick moderated, those are available right now at showmeinstitute.org. Susan, Patrick, thank you very much.

Susan Pendergrass (27:36) Thank you.

Patrick Tuohey (27:36) Thank you.

Produced by Show-Me Opportunity

The post The Public Safety Climate in the City of St. Louis with Susan Pendergrass and Patrick Tuohey appeared first on Show-Me Institute.

The piece focused on five cities: Baltimore, Philadelphia, Chicago, Indianapolis, and Los Angeles, and detailed each city’s experience of homicides.

But what is noteworthy for Kansas Citians is that, based on the Post’s reporting of “crime data from 52 of the country’s largest police departments,” it appears that Kansas City may have the highest homicide rate for 2025—notwithstanding a reduction from previous years.

The homicide rate indicates homicides per 100,000 population; it is a useful tool for comparing cities with different total populations. While Kansas City’s total homicides in 2025 will likely be lower from the peak of 182 in 2023, when adjusted for population, it appears we may be on top. (St. Louis will likely have an even higher rate, but was not included in the Post’s analysis due to its size.)

This should serve as a reminder to all Missourians that it is not enough to reduce crime, though that is welcome. We must adopt policies that demonstrate results year over year rather than congratulate ourselves for drops that may have nothing to do with public policy. And if Kansas City does indeed end 2025 with the highest homicide rate in the country (out of the 52 cities selected for the study), it’s a reminder that public safety—and specifically homicide—must become a greater concern.

The post Kansas City Homicide Rate May Be National Leader for 2025 appeared first on Show-Me Institute.

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This study stands out for its rigorous research design, which credibly estimates the causal effects of attending these schools. Each of the five schools is oversubscribed, meaning more students want to attend than the number of available seats. Admission is determined by random lottery: students whose numbers are randomly drawn are offered admission, while those not selected are not. By comparing outcomes for lottery winners and losers, the researchers can isolate the causal impacts of attending the charter schools on student outcomes.

The schools serve a predominantly low-income Black and Latino population and adhere to the “no excuses” charter model. This model features extended instructional time, mandatory uniforms, strict discipline and structure, and high expectations around academic performance and college attendance. Although “no excuses” schools have recently fallen out of favor, research—including this study—continues to show their effectiveness. The authors describe their findings as showing “large positive effects of enrolling in a high-quality, ‘no excuses’ charter school on academic achievement, enrollment in any college, enrollment in any four-year college, and persistence to the second year of a four-year college” (p. 568).

(The reasons why the “no excuses” model has fallen out of favor are perplexing to me, but this is a topic for a different time. It is especially frustrating because one reason this study is possible—along with numerous other similar studies—is that no excuses schools are regularly oversubscribed, which is a direct indicator that families value them.)

This study contributes to what is now a large body of research showing the transformative potential of school choice. In the face of mounting evidence on the poor performance of Missouri schools, we should embrace policies that can lead to meaningful improvements in student outcomes, including policies that create more school-choice opportunities for our children.

The post School Choice Case Study: Charter Schools in Los Angeles appeared first on Show-Me Institute.

I love science-fiction movies that portray a future, usually bleak, society. Thankfully, the predictions generally have not been borne out, yet. Los Angeles in the 2020s is a much nicer place than was predicted in The Terminator and Blade Runner. I appreciate futuristic settings where the all-powerful government maintains a sense of incompetence, like in Brazil. The byzantine bureaucracy in the future’s all-powerful dictatorship may be more sinister, but I doubt they will become more capable.

There is, unfortunately, one aspect of society that classic dystopian movies and novels did get correct: the surveillance state we live in. Still, one big difference remains between the surveillance state we have today and the one predicted in 1984 and other works. Instead of it being secretly imposed on us by the national government and the military-industrial complex, we have largely brought it upon ourselves with Ring Cameras, Life 360 phone apps, etc. It’s more Truman Show or Rear Window than Blue Thunder.

Which brings us to the expansion of Flock camera systems throughout Missouri. Flock camera systems are license plate readers along roads that connect into criminal databases. They alert police when a car involved in a crime is located. Columbia is just the latest city to contract with the company to install such a system throughout the city. The city council approved the plan in 2024, and they are currently being installed. These Flock plate readers are becoming ubiquitous in towns, counties, and subdivisions. Supporters, including the Columbia police department, claim the cameras will both help solve and deter crimes. Opponents are concerned about privacy violations and potential abuses.

As an opponent of these cameras, I will readily admit the claims about crime are true (although perhaps overstated) and that some good comes from these cameras. I am glad the murderer of the CEO in New York City was caught using the power of the vast surveillance system (much of it on private property) in Manhattan. I am also happy that the cameras can help solve many, lesser crimes.

I rarely read about supporters of the cameras acknowledging their opponent’s concerns, however. Even with the safeguards from abuse that Flock and local police have put in place, including a limited time that it maintains the data and a focus on the plate rather than the driver, these systems undoubtedly will be abused by some. For example, a police chief in Kansas used the system to stalk a former girlfriend.

Just as concerning is the troubling idea that your car is being tracked incessantly as you simply travel around. I am aware there is no “legal” right to privacy in public settings. That doesn’t make this kind of tracking right, though, and being concerned about such systems doesn’t make you a conspiracy theorist.

More legally secure but even more morally troubling is the embracing of Flock systems by private neighborhoods. If there is anything more terrifying than giving your local busybody homeowner’s association head some sophisticated tracking equipment, I have yet to see it. Imagine Tom Cruise in Minority Report, but this time it’s a Karen who’s angry about a high school party. Just because you don’t have a right to privacy when driving in someone else’s subdivision does not justify that subdivision tracking your comings and goings along (usually) public streets.

Nobody, including me, wants local government to be a partisan debating society where every decision is put through a philosophical prism. However, I wish that more of the part-time local officials around the state would have some type of larger political philosophy instead of just doing whatever the city manager or police chief recommends. These license plate readers and similar systems may be legal, but that doesn’t mean they are right, and the speed at which the entire system is expanding around Missouri is frightening.

Caged birds are safe but hardly free. Politicians at every level need to push back against the expansion of the surveillance state. The pursuit of happiness includes the ability to exist without being tracked. At this point, we may get to 1984 yet. The best we can hope for is that it is more like Idiocracy than Soylent Green.

The post The Surveillance Society Is Here appeared first on Show-Me Institute.

These big convention hotels, entertainment districts, and sporting events don’t fail to live up to expectations in just Kansas City and St. Louis. They fail expectations all over the world.

L.A. is plowing ahead with infrastructure upgrades—expanding the rail system, modernizing LAX, and revamping the downtown convention center. These projects are fueled by a mix of federal funds, city dollars, and airport fees, with the idea that the influx of tourists will help offset the costs.

Mayor Karen Bass is pitching the Olympics as an opportunity not just to showcase L.A.’s iconic landmarks like Hollywood and Venice Beach, but also as a chance to shine a light on its diverse communities—Little Bangladesh, Little Armenia, and beyond. It’s a noble goal, but L.A. could take a massive financial hit if things go sideways.

And these big events are always going sideways.

The 1984 Olympics held up as their north star were a financial anomaly, largely because the city smartly used existing venues. Fast forward to today and the stakes are higher, with a nearly $7 billion budget hanging in the balance. LA28, the private group organizing the games, insists it will foot the bill through sponsorships, ticket sales, and global TV rights. But if costs spiral out of control, L.A. taxpayers will be left to pick up the tab. The city and state have agreed to cover any budget overruns, which is a colossal gamble.

We’ve seen it before—the pandemic-delayed Tokyo Games ballooned to $14 billion in costs, and Rio’s 2016 Olympics cost a staggering $24 billion, with both events blowing past their budgets. L.A. is trying to avoid that by sticking with existing venues like the Coliseum and Rose Bowl. Even with these cost-saving measures, there’s no guarantee that the numbers will add up.

The reality is the Olympics often leave host cities grappling with long-term debt, gentrification, and displacement. This risk applies to the recently closed Paris Olympics. Groups like NOlympics LA are already sounding the alarm, arguing that the games could exacerbate L.A.’s housing crisis and deepen economic disparities.

The 2028 Olympics could be a golden opportunity for L.A., but recent history tells us it is more likely to be another costly boondoggle. With so much on the line, Angelenos should keep a close eye on how this plays out.

The post The L.A. Olympics Will Likely Be an Economic Failure appeared first on Show-Me Institute.

We have all seen the television ad where the man walks into the sandwich shop and orders bread but nothing inside of it because that’s all he can afford. “Everything is so expensive these days,” he says.

That may well be how many Americans are feeling, but I only wish that were true for our government. The price tags for government’s infrastructure “improvements” are becoming astronomical, and at some point we have to recognize that this isn’t an unfortunate fact of life. The high cost is a choice, not a requirement.

Let’s start with the high-speed rail disaster in California, which was originally approved in 2008 for an estimated cost of $33 billion; the current estimate is $135—for a system that won’t have anything completed until the 2030s at the earliest. Actually connecting Los Angeles and San Francisco, as promised, is many more years away. All this for a system that hasn’t laid any track 15 years after it was approved.

It doesn’t have to be this way. In Spain, they built an entire 2,500-mile system of high-speed rail for $62 billion. That’s obviously a lot of money, but it got them an entire, advanced rail system for less than half of what California will spend for two routes at best.

Unlike high-speed rail, elevators have been around for a long time. There is nothing fancy about an elevator. Yet in New York City, a project to replace 70 elevators at transit stations cost taxpayers $5.5 billion, or about $80 million per elevator. Elevators for subways may indeed be more expensive than in office buildings, but in Germany they have managed to hold the cost to less than $10 million per elevator per transit station. Something is deeply wrong with how we fund government infrastructure in America.

Closer to home, St. Louis County is considering several options for its governmental complex in Clayton. The most expensive and most comprehensive plan—which includes replacing the main county administration building with an entirely new building among other projects—is estimated by the county to cost around $600 million. If that sounds preposterous, it should. The key part of that proposal—the new administration and public safety building in downtown Clayton, is estimated to cost $250 million for a 190,000-square-foot building. (This doesn’t even include the cost of demolishing the existing buildings.)

Currently, a 21-story residential tower has been approved by the city for downtown Clayton. It would have 299 units, some retail space, and over 300,000 total square feet. What is the total estimated cost of that project? $106 million. This residential tower would be significantly larger than the new county building, yet it would cost approximately $150 million less. Based on cost per square foot, the proposed county building is almost four times as expensive.

In Robert Caro’s book The Powerbroker, about Robert Moses, the autocratic boss of New York city and state infrastructure projects for four decades in the mid-20th century, Caro spent an entire chapter detailing the way Moses employed various interest groups to get his projects going, no matter the cost. Moses had support from a wide cross-section of interest groups because he made sure that they all made money from his projects. Construction companies, contractors, labor unions, consultants, banks, law firms, the list goes on. If any politicians started opposing his projects, there was an orchestrated campaign of pressure from all these groups to get it approved. The people who benefitted from these enormous expenditures benefited greatly and quickly. The taxpayers or commuters who paid more than they should have did so in small increments over time via higher taxes, tolls, or other fees, but they didn’t feel the higher costs all at once. So the taxpayer shakedown has continued on to the present day.

In simpler terms, the developer of the high-rise in Clayton is spending its own money to build it, where St. Louis County officials are not. The county is spending taxpayer money, obviously, and when you do that in Missouri’s largest and richest county you can get away with spending a lot of it. Taxpayers aren’t going to revolt over an extra $50 a year in taxes spread out over 365 days of sales tax on purchases or mixed in at the end of the year with a dozen other property taxes on their bill. This is why you end up with a proposal for a new county building that costs four times more (per square foot) than a new, private building nearby.

Addressing this overall problem is going to be extremely difficult. Every option for change involves cutting off someone else’s golden goose. For now, let’s just hope St. Louis County government doesn’t put the New York Transit Authority in charge of the new elevators. Then it’s going to really get expensive.

The post Government Infrastructure Costs Are Out of Control appeared first on Show-Me Institute.

Back in July, my colleague Graham Renz wasn’t thrilled with the proposed deal, but conceded that it was better than what taxpayers had been offered in 2017. That deal involved public subsidies and set-asides worth $120 million; the current deal’s public cost was about $40 million in local subsidies plus the $30 million in state-issued tax credits. If the tax credits are reduced as the St. Louis Post-Dispatch suggests, the total value of all the incentives may be closer to $52 million. That is a lot, but less than what has been considered previously.

Both deals were promoted at the time as the best deal taxpayers could get. We know now that wasn’t true. The owners of the new franchise stand to make a lot of money from this deal. While city and state officials should welcome investment in the area, they don’t need to put public funds at stake. Just ask Stan Kroenke, who is investing about $1.6 billion of his own money to build a sports complex in Los Angeles using only privately raised funds.

The lesson here for public officials at every level is that there is almost always a better deal to be had. In fact, if you want to protect taxpayers, the best deal might be no deal at all.

The post The MLS Deal Keeps Getting Better for Taxpayers appeared first on Show-Me Institute.

We are in danger as a society of creating a self-fulfilling prophecy. We tell everyone that teaching is a thankless, underpaid job and then we wonder why we see declining rates of people going into teaching. 

It is time for us to engage in a little positivity. Teaching is a great profession.

Take for evidence the results of a recent working paper by Alberto Jacinto and Seth Gershenson. Using survey data from the National Longitudinal Survey of Youth 1979 (NLSY) and the attached Child and Young Adults Supplement (CYA), they examine whether children pursue a career in the same field as their mothers. Their data include jobs of 4,572 children and 2,488 mothers.

Interestingly, they find that children of teachers are significantly more likely to go into teaching than children of nonteachers. They write, “19% of the children of teachers go on to become teachers, compared to only 8% of the children of nonteachers.” While they see some similar trends in other comparable jobs, such as nursing, the relationship between mothers and their children’s jobs is not as strong anywhere as it is in teaching. As Jacinto and Gershenson note, “there is something unique about teaching, as there is relatively strong inter-generational transmission of the profession, even when compared to “similar” professions.”

Jacinto and Gershenson don’t have an explanation for why this is so. They wonder, “Does the transmission of teaching occur because of parental pressure, network membership, information and choice set, or a combination of factors?”

I have a hypothesis: teaching is a great job and the kids of teachers know it!

Sure, there are challenges; it’s work and all work has its thorns and thistles. Nevertheless, teaching as a profession has many redeeming qualities.

Teaching is a job with purpose. As Justin Tarte, the executive director of human resources in the Union R-XI School District wrote on Twitter: “What most adults will never experience in their jobs: A student visiting them years later to say thanks for being there when nobody else was. A parent writing an email saying you changed their child’s life & they can’t thank you enough. That’s why being a teacher is awesome.”  

Teaching provides a stable middle class income. People think teachers make much less than they actually do, typically underestimating the average amount by nearly $19,000. Plus, benefits for teachers are nearly twice as generous as they are for workers in the private sector.

Teaching provides a family-friendly schedule. There are few other jobs where you get winter break, spring break, summers off, plus an additional allotment of “sick” or “personal” days throughout the year.

I could go on, but I think you are getting the point—teaching is a great profession. It’s time we said so.

The post Despite What You’ve Heard, Teaching Is a Great Profession appeared first on Show-Me Institute.

But urban decline isn’t unique to Missouri. People all over the United States are voting for suburbs and exurbs with their feet. Giving tax dollars to a few more bars and restaurants won’t change that.

In their paper, “Beyond Gentrification,” researchers Joel Kotkin and Wendell Cox lay out the case that:

The spurt of urban core growth that occurred immediately after the housing bust was short lived. The preponderance of metropolitan growth has returned to the suburbs and exurbs, as had been the case at least since the late 1940s.

Kotkin and Cox make their case with census data: Suburbs are growing much faster than urban areas. Claims by urbanists such as Richard Florida that “creative class” millennials would come to cities and stay were wrong, as Florida himself admits. Unfortunately, cities like Kansas City and St. Louis spent billions of dollars exacerbating the problems of gentrification through subsidies, and continue to do so, chasing a myth.

If city leaders only understood that they are swimming against a nationwide current, they might be a bit more circumspect in their distribution of taxpayer dollars. But whether it’s misplaced faith in the promises of urban developers or the allure of campaign contributions from those same companies, something is compelling policymakers to invest taxpayer dollars in projects that benefit the developers at the expense of the communities where they are undertaken. Meanwhile, organizations such as the Downtown Council in Kansas City vacuum up tax dollars and spit out absurd population growth claims.

Kotkin and Cox point out what any close observer of Missouri’s urban politics already knows:

It seems clear that gentrification has not benefited the poor and may well have harmed them by spiking housing prices and, perhaps less obviously, restructuring urban economies in ways that hurt blue collar workers. Reporters and politicians might swoon over the latest “hip” urban manifestation, but the poverty rate is still two-thirds higher in urban cores than in the suburbs.

Beyond Gentrification then focuses on three cities—Chicago, Dallas, and Los Angeles—to flesh out what is happening in cities across the country. These things are happening in Kansas City and St. Louis, too. And no convention hotel, trolley, or new stadium will turn this around. We know, because other cities are pinning their hopes to developments like these, and it isn’t working. It won’t work for us, either.

City leaders across Missouri need to understand their cities’ competitive advantages and promote them. (The Show-Me Institute has already catalogued some for both Kansas City and St. Louis.) They need to deliver on infrastructure, public safety, and basic services efficiently and effectively. And they need to resist diverting tax dollars in pursuit of urban development that often does more harm than good to the surrounding communities.

The post Kansas City and St. Louis Battling National Trends appeared first on Show-Me Institute.

The study, issued by the government of the District of Columbia in December 2017, “aims to calculate the combined state and local tax burdens that would apply to a hypothetical family at five different income levels living in D.C. as well as the largest city in each state.” Kansas City is included and St. Louis is not, and neither are some cities that we’ve identified as peers. But the data are valuable nonetheless.

The estimated tax burden for a family earning $50,000 in Kansas City—the median income is $47,000—is $5,444. That’s 10.9 percent of income and includes income, property, sales, and auto taxes. This places us 8th in the country, ahead of places well-known as expensive such as Boston, New York, Portland, Seattle, Denver, and Los Angeles.

Dave Helling of The Kansas City Star has pointed out that taxes in Kansas City are also regressive. This report supports that conclusion regarding auto sales taxes, stating that “Providence, Rhode Island; Bridgeport, Connecticut; and Kansas City, Missouri are the cities with the highest automobile tax burdens across all income levels.” Combined with all other taxes, a Kansas City family earning $25,000 pays a combined tax burden of 12.6 percent; 8th highest of the cities measured. For a family earning $100,000, the burden is lower at 11.2 percent, placing us 12th.

What’s worse, the sales tax estimates are low for Kansas City. On page 39, the study lists Kansas City’s sales tax rate to be 8.475 percent, but anyone living here knows it goes much higher due to the proliferation of special taxing districts across the city.

Individuals can determine for themselves if City Hall is providing a return worthy of the investment, but the debate over whether taxes are high is settled. Kansas City is a high-tax city. Our taxes are regressive, too, but they are certainly high.

The post The Tax Burden in Kansas City Is High appeared first on Show-Me Institute.

The version of the bill in front of the Governor has changed since it was first introduced. Previous drafts would have allowed for similar sales tax hikes in Saint Charles, Franklin, and Jefferson counties. The narrower focus of the bill means distant shoppers won’t have to subsidize the zoo (which is fair), but it also means a smaller portion of the public will shoulder the burden of supporting a “free” zoo. It also means city and county taxpayers could be taxed twice for the zoo. 

Currently, the zoo is supported by visitor spending, donations, and a property tax levied in Saint Louis City and County. So if a sales tax is passed, city and county voters will pay two taxes for the zoo. And while taxpayers would get an improved zoo for that extra money, the new funding wouldn’t fix the underlying problem with the zoo’s funding structure: free riders.

Since no admission is charged at the zoo, city and county taxpayers support the zoo for everyone, from Saint Charles residents to visitors from Hawaii. Predictably, the issue of fairness arises: why should just city and county residents pay for the zoo? While some propose a regional taxing structure to remedy the free-riding problem, in reality it would convert only a portion of the free riders into supporters. A fairer solution would be to charge admission for those not paying zoo property taxes. (For perspective, a $2 admission fee for residents outside the city and county, assuming a 10% reduction in visitors, could raise more than $3.5 million a year.)

A zoo sales tax would worsen the ever-growing sales tax burden for city residents. With the passage of the MetroLink sales tax hike in April, the city’s sales tax rate jumped to 9.179%, the 13th highest of major US cities (and higher than in New York City, Los Angeles, and San Francisco). If a zoo tax were to be approved, the city’s base rate would top 9.3%, and in some areas littered with special taxing districts, be as high as 11.3%. For many city families, these tax increases mean hundreds of dollars a year they cannot spend on food, school supplies, and other goods and services.

We all love the zoo, and there’s no denying it could use some cash for infrastructure and other projects. But taxpayers should think hard about whether sales taxes are a fair way to fund this famous Saint Louis institution.

The post Double Taxation: Saint Louis Zoo Edition appeared first on Show-Me Institute.

The Gateway City is now home to the 13th-highest base sales tax rate of all major U.S. cities. Yes, Saint Louis has a higher sales tax rate than New York City (9%), Los Angeles (9%), and San Francisco (8.75%).

With city voters’ approval of Proposition 1—a half-percent sales tax for MetroLink expansion and other “economic development” projects—the base sales tax rate in Saint Louis will rise to 9.179 percent from 8.679 percent. While that might not sound like much, those nickels and dimes add up for families struggling to make ends meet. For instance, if the median city household spends 10 percent of its income on goods in the city, the recent hike amounts to more than $175 in extra taxes annually. Perhaps wealthy denizens of the Central West End can afford that burden, but many in less affluent parts of the city cannot.

Unfortunately, the city’s base sales tax doesn’t even tell the whole story. Saint Louis is littered with dozens of shadowy special taxing districts, such as transportation development districts (TDDs) and community improvement districts (CIDs), that charge sales taxes of their own. TDDs and CIDs can each charge up to a one-percent sales tax. When you stack a TDD and CID on top of one Saint Louis’s base sales tax, you could be paying more than 11 percent in sales tax! Add on the city’s 1.5-percent restaurant tax, and diners in the city will soon be paying more than 12 percent in taxes on their purchases.

Some cities have high sales tax rates to compensate for low property or income taxes. For instance, in certain southern cities, policymakers have decided to fund public services through consumption taxes (e.g., sales taxes) rather than property or income taxes. But Saint Louis doesn’t have low property taxes to compensate for, and it has both an earnings tax and a payroll tax! Sure, the city only collects property taxes on 60% of real property by value, but that’s in part because the city owns tens of thousands of properties and has engaged in decades of generous tax giveaways. None of Saint Louis taxes is low.

Is the additional tax resulting from the passage of Prop 1 at least worth it? Almost certainly not. The North–South MetroLink line it’s slated to fund won’t be built, even in the best-case scenario, for at least a decade. Assuming the route is eventually built though, promises that it will lead to economic revitalization don’t align with past experience. After two decades to work its magic, light rail has utterly failed to keep people and jobs downtown or spur the ever-elusive “transit-oriented development.” In reality, the approval of Prop 1 simply means that those who can least afford the burden of extra taxes will pay for a luxury amenity designed to lure wealthy suburbanites out of their cars.

While there is no sales tax “ceiling,” voters will only put up with so much, and residents and businesses can only afford so much. Before policymakers propose another pie-in-the-sky project, they should consider if the taxpayer piggybank they’ve grown accustomed to raiding will always be there.

The post How Much Can Saint Louis Taxpayers Take? appeared first on Show-Me Institute.

But is MetroLink underdeveloped? One way to answer that question is to ask whether the existing supply of light rail meets demand. Based on ridership trends, the existing supply of light rail may actually exceed demand. Ridership plummeted during and shortly after the recession in 2008 and has failed to pick back up even while economic conditions have improved in Saint Louis.

Another way of determining if MetroLink is underdeveloped is to compare it to other light rail systems. The table below lists light rail systems from across the country, and looks specifically at the length of each system, as well as the population and geographic size of the urbanized area (UZA) where the system is located.

Note: Track miles are compared to UZA and not ‘Service Area’ (SA) because SA includes modes besides light rail (e.g., buses) and is a direct correlate of track miles. Thus, SA is simply a function of track miles, and not a measure of the metropolitan area a system serves.  See National Transit Database Glossary for more.  
Source: Track miles from agency websites, and UZA data from National Transit Database.

Given this perspective, we can see that in terms of track miles, Saint Louis has a rather robust light rail system compared to other cities. While there is variation across systems, Saint Louis has more miles of track than the average and the median system. In fact, of these 18 systems, Saint Louis is the 7th-largest (and if we excluded systems with heavy rail, the 5th-largest). MetroLink is even larger than some heavy rail systems, such as Metrorail in Miami-Dade County (24.4 miles), and is just about as large as Atlanta’s system (47.6 miles).

However, what matters is not just the length of a system but also the length of a system relative to the size of the area it serves. To measure this, we divide the size of an area by the miles of track its system has—the figures in the fourth column. (For a more complete picture, I’ve also included population as the last column.) In short, the lower the number in the fourth column, the more miles of track per square mile of land, and so, the more developed a system is. By this measure, Saint Louis has one of the more developed systems in the country and compares well to many cities, with a system that is far more developed than the average. Saint Louis even compares favorably to Los Angeles!

Based on this analysis, Saint Louis’s light rail system does not appear underdeveloped. It may even be overdeveloped (or, perhaps, it developed too quickly or along poorly chosen routes). Before pushing for another expensive MetroLink extension, shouldn’t officials ask if we already have more than we need (and can afford)?

The post MetroLink Underperforms, but It Is Not Underdeveloped appeared first on Show-Me Institute.

In fairness, my colleague Joe Miller recently wrote that there are some reasons why a city might rightfully consider building a new terminal. The cost of current maintenance may be more expensive than a modern replacement, or a new terminal may be needed to accommodate increased traffic. Neither of those apply to MCI. While our traffic is up moderately, no one is arguing that we need to build for increased capacity. In fact, the new terminal proposal from the Aviation Department would reduce the number of gates we have now.

No one is arguing that the costs of maintaining the current MCI are prohibitive, either. Supporters of a new terminal seem to have strictly cosmetic concerns.

As for doing what we want airports to do, MCI is serving admirably. Consider the recent developments.

• In 2014, MCI picked up service from Spirit Airlines, and Seaport Airlines added service. Southwest announced that service to Ronald Reagan National Airport in Washington, D.C. has been approved.
• In 2015, Spirit started offering direct nonstop flights to Los Angeles. Allegiant Airlines will be flying nonstop to Florida from MCI, and Southwest offers new direct service New York LaGuardia, and Orange County, California. American Airlines added nonstop flights from Kansas City to Miami.
• And in 2016, Frontier Airlines will add flights to Atlanta, Chicago, and Philadelphia. Southwest recently expanded service in the form of direct flights to San Antonio.

In January, the Star catalogued some of MCI’s gains, including that annual traffic has grown each year since 2012 with the terminal we have now. Supporters of a rebuild point to possible (but by no means certain) increases in traffic as a result of a new terminal. But as Miller concluded in 2014:

To sum it up, the airlines (and common sense) say that building an expensive new terminal will not increase demand for air travel. Quite the contrary, the higher costs to airlines and passengers may mean fewer flights. Even if we agree with business leaders that MCI requires more amenities, certainly there is a cheaper way of providing these than a $1.2 billion new terminal plan. The cost is so much greater than the supposed benefits that the plan looks more like a vanity project than a sound investment.

In short, Kansas City’s airport is doing well. It has won high marks for its convenience; we’re unlikely to suffer the long waits seen at other airports because MCI does not use the TSA for security. Importantly, airlines seem eager to come and expand their service (despite their claims to the contrary). It is unlikely that Kansas City could improve on this. In fact, in taking on mountains of debt we risk losing the competitive advantage that many of us now take for granted. 

The post MCI Is the Envy of its Peers appeared first on Show-Me Institute.

In California, where unions such as SEIU and Unite Here successfully pushed through a $15-dollar minimum wage law, the very same unions are seeing a backlash after workers discover they’re left out of the deal. It turns out these unions also pushed through exemptions to the minimum wage for unionized workers. Now businesses have a choice of paying $15 an hour for a nonunion worker or about $10 an hour for a union worker. A clear incentive to buy union labor.

Needless to say, workers feel betrayed. Alicia Yale, 42, a waitress at a hotel in Los Angeles and a mother of two children, is critical of the union’s policy.

"Why is it more of a benefit to be in a union? The union isn't really doing anything for us," she told the LA Times. "It's completely upside-down. They want to pay us less than the minimum wage… We should get the raise just like everybody else does."

From a union executive’s position, advocating lower wages for union workers may make a lot of sense. True, your members get paid less, but if the end result is more union workers, that will translate to more union dues.

Here in Missouri, union money is still going to the $15 minimum wage campaign. One of their slogans is “$15 and a union.” Union workers who are part of their campaign might want to ask their union’s executives for some clarification: “Will I be cut out of this deal, like union members in California were?”

The post When Unions Bargain for Lower Pay appeared first on Show-Me Institute.

On Tuesday, April 5, Saint Louis voters will decide whether to extend the city’s 1 percent earnings tax for five more years.

Without a doubt, this is a hugely important decision.

In inviting me to talk to you, Ron Zager (co-chairman of the Missouri Progressive Action Group), asked that I begin by presenting both sides of the argument—for and against the earnings tax .

I am happy to do so. It makes for an interesting—and even a startling—contrast.

Supporters cite three principal reasons for extending the earnings tax:

1. It is simple, fair, and easy to collect. Businesses withhold $1 out of every $100 from the paychecks of all of their employees and pay it directly to the city. They also pay a 1 percent tax on their net profits.
2. It brings in a lot of revenue—almost as much as the combined receipts from the city’s property, sales, and utility taxes. It provides a third of the city’s General Revenue Fund, used to support fire, police, courts, streets, parks, recreation, and other day-to-day city services.
3. A large portion of this revenue is like manna from heaven. People who commute into Saint Louis from the surrounding suburbs account for more than half of the city’s annual earnings tax receipts of about $160 million. And why not? The high-earning commuters are significant consumers of city services, swelling the daytime population of the city by about 35 percent.

To sum up the case in favor of retention: The earnings tax is critical to the continued functioning of city and the continued provision of police and other services to a population that includes a high proportion of low-income residents. It is a real lifeline. The city would be in danger of going bankrupt without it.

Opponents have three main reasons of their own for eliminating or phasing out the earnings tax:

1. It encourages people and businesses to move out of the city.
2. It also encourages an ongoing merry-go-round of tax carve-outs and special favors for large and well-known firms. The city does not extend the same benefits to thousands of smaller businesses, which take care of most of the daily needs of people who live in the city, such as the neighborhood grocer, cleaners, pharmacist, or auto repair shop.
3. Though not a regressive tax (applying the same 1 percent to people at all income levels), it is a cruel one. Unlike federal and state income taxes, there is no exemption from the city earning tax for working people at or below the poverty line. The tax hits the first dollar of income even from the lowest-paying jobs. A still greater problem is the narrowing of job opportunities in parts of the city experiencing a rapid out-migration of people and the closure of many small businesses.

The minuses are really the flip side of the pluses I have just mentioned.

Yes, the earning tax is easy to collect, but it is also easy to avoid. As a business owner, you can avoid the tax on your net profits simply by moving your business to the suburbs—anywhere outside the city. There is no earnings tax in Clayton, here in Frontenac, or anywhere else in Saint Louis County and other surrounding counties and municipalities. If you did move your business, many or even most of your employees who already live in the county would, out of their own self-interest, applaud your decision. And others who live in the city would be given a reason to move to the county.

Yes, the earnings tax pays many big bills for the city. By the same token, it provides a strong incentive for individuals and businesses—who have bills of their own to pay—to relocate in order to avoid the tax.

By collecting more than half of earning tax revenue from commuters, the city is (inadvertently) making a powerful argument for downtown-based law firms and other businesses with a large number of highly paid employees to take flight—for both economic and personal reasons. At one stroke a firm can give many of its officers and employees an instant 1 percent raise while sparing them the bother of a long commute. So what can the city do to prevent such businesses from moving?

If you are the sitting mayor or other high-ranking city official, here’s the answer: Offer big potential flight risks all kinds of tax breaks and other incentives to stay downtown. Find ways to abate property taxes to keep prestigious firms from leaving downtown. Waive the half-percent payroll tax (separate from the earnings tax) for large employers such as Anthem and Wells Fargo. And lobby the state for more handouts.

But of course, given your obsession with preserving earning tax receipts, you do that only for the big guys and you forget all about the little guys who are so numerous (even in decline) that you know little or nothing about them.

A classic example of how this works can be taken from 2011, when Stifel Financial Corp., which has had its corporate headquarters in downtown Saint Louis since 1890, announced plans to buy its downtown office building and expand its workforce in the city by a couple hundred people. Mayor Francis Slay called it “tremendous news for the future of downtown.” He also helped Stifel get some $17 million in public financing for the purchase and renovation of the building.

Why would a large and successful financial firm need help in feathering its own nest? Ron Kruszewski, Stifel’s CEO, said it all: “There’s very little investment going on right now without some incentives.”

That prompted Bill McClellan of the St. Louis Post-Dispatch to comment in one of his columns: “When liberals like me argue for comprehensive health care, critics call us socialists. But when businesspeople demand public money to underwrite their projects, hardly anyone says anything.”

(I’ll take issue with McClellan on one point here: There is at least one institution that has fiercely and consistently opposed all forms of corporate welfare and crony capitalism, whether it is providing public funds for new corporate headquarters, public funds for professional sports stadiums, or any other kind of commercial development. That is the Show-Me Institute.)

To sum up the minuses: the earnings tax is a tax on work and enterprise, and when you tax something, you get less of it. In this case that means fewer jobs and less growth. The earnings tax has also encouraged unfair and unwise favoritism in tax practices—decisions made up on the fly to keep big-name businesses from bolting to the county. It’s time for a long look at Saint Louis city government—how it is financed and, more fundamentally, how it thinks.

Let us take a moment to consider decade-to-decade changes in the relative importance of Saint Louis among major cities in the United States over a long period of time—both before and after the introduction of the earnings tax in 1954.

According to census data, the last time Saint Louis moved upward in the ranks of U.S. cities was in the 1890s. The population grew from 452,000 people at the beginning of the decade to 575,000 in 1900, and Saint Louis moved from being the 5th largest city in the country to the 4th (behind New York, Chicago, and Philadelphia).

Of course, that was just prior to the Saint Louis World’s Fair. In that same amazing year of 1904, Saint Louis also hosted the world’s third modern Olympics—following the 1900 Olympics in Paris and the 1896 Olympics in Athens.

Saint Louis held onto 4th place until the 1920 census, when it was overtaken by Detroit and Cleveland, dropping to 6th. It was passed by Los Angeles in 1930 and Baltimore in 1940, falling to 8th. It remained in that spot in the 1950 census—when the city’s population hit an all-time peak of 857,000.

At that point the city’s population went into a steep decline that continues to this day. Since 1950, its population has dropped from close to 900,000 to a little more than 300,000—discarding almost two-thirds of its human body weight—and Saint Louis has gone from being the 8th-largest city in the country down to the 60th, behind such places as Tulsa, Oklahoma, and Wichita, Kansas.

It would be absurd to place all or even most the blame for this decline on the earnings tax. It would be equally absurd to deny that the earnings tax has made a significant contribution to the depopulation of the city and the growth of surrounding areas.

For one thing, we know that downtown Saint Louis no longer rules the roost as the unchallenged commercial center of the Saint Louis region. Clayton has become a strong second center, and other places around the county are also filled with offices and business enterprises. It is only in Saint Louis City that you find acres and acres of abandoned houses, deserted storefronts, and boarded-up factories.

Here’s a statistic that may surprise you: There are now more people who commute into Saint Louis County . . . both from the city and from Saint Charles and other counties . . . than there are people who commute into the city from the county or other jurisdictions. There are 236,000 people commuting into the county versus 172,000 commuting into the city, according to recent census data.

Somehow, Clayton and other municipalities receiving this great daily influx of commuters have been able to handle it . . . without instituting an earnings tax or having everything from the streets to public safety fall to pieces. Why is it any different for the city of Saint Louis? Why is the city unable to cope without taxing the earnings of people who come there to work?

Let’s turn then to the question of whether it is possible to phase out the earnings tax without throwing the city into bankruptcy and fulfilling the worst predictions.

Bear in mind that the proposal on Tuesday’s ballot in the city calls for phasing out the earnings tax over 10 years—whittling away at a $160 million funding gap that would occur in the year 2026 through spending cuts or revenue enhancements averaging $16 million a year between now and then.

Is $16 million a year too tall a mountain to climb? Somehow, in the city’s desperate efforts in recent months to persuade the Rams and the NFL to keep the team in Saint Louis, the city funneled $16 million through the Saint Louis Convention & Visitors Center Commission to pay legal fees and other expenses in what turned out to be a losing effort.

Before that, Mayor Slay and Missouri Gov. Jay Nixon were prepared to raise about $400 million to pay for a large portion of the cost of building a new downtown stadium for the Rams. That alone would have equaled the revenues from the earnings tax over a two-and-a-half-year period.

If almost any large business you can imagine were to lose customers year after year—eventually losing more than half of its business base—you would expect it to downsize drastically, if not go out of business.

Why is it—despite the steady, continuing loss in population—that the city’s budget continues to grow, if only slowly, from one year to the next, with few if any large reductions in its workforce?

Faced with such questions, city officials typically shift the focus to public safety, saying they need more rather than fewer police and firemen. Public safety accounts for a little over half of general funds expenditures. Why, then, is it so hard to trim the other expenditures that make up about 45 percent of the budget?

There are other ways that the city can either cut expenditures or raise revenues besides the shock of instituting sudden and drastic increases in property or sales taxes. It could raise hefty sums of money by privatizing assets such as the airport or the water system.

It could also make a serious effort to raise some revenue from its large nonprofit institutions. As Post-Dispatch business columnist David Nicklaus pointed out in a recent article:

These universities and hospitals depend on city service but don’t pay property taxes. Boston and other cities have negotiated payments from their big nonprofits; Saint Louis could try to do the same. Eliminating the 1 percent earnings tax should make it easier for these institutions to attract and retain employees; wouldn’t they pay something to make the tax go away?

But none of those things is going to happen without a fundamental change in thinking on the part of city officials who have come to look upon the earnings tax as the sine qua non of Saint Louis city governance.

Following the last election, when voters re-approved the earnings tax, city officials heaved a sigh of relief, agreed that the tax did indeed put the city at a competitive disadvantage, and promised to study alternatives. That was five years ago. And since then they have done nothing.

Maybe if the vote is closer this time, they will begin to think differently. But maybe not. Maybe they will just go on hoping for miracles while continuing to pursue policies that have contributed the city’s decline and fall from the heights it once occupied as a great American city.

The post The Saint Louis City Earnings Tax: Lifeline or Noose? appeared first on Show-Me Institute.

Far from it. Of the 77 U.S. cities that KPMG ranked (which was not exhaustive of all major metros), Saint Louis ranked 45th and Kansas City ranked 46th. Among the cities cheaper than Saint Louis (and Kansas City) are regional competitors like Nashville, Omaha, Cincinnati, Memphis, Indianapolis, Cleveland, and Oklahoma City, to name a few. Worse yet, Saint Louis was more expensive than all 18 Southeastern cities KPMG looked at, from Atlanta to New Orleans.

So where did the Post-Dispatch get a top ten ranking for Saint Louis? If we only consider regions with populations greater than two million (of which KPMG ranked 31), Saint Louis is the 9th cheapest. I will leave it to the readers of this blog to decide if Saint Louis should pat itself on back for being cheaper than New York, Los Angeles, and Chicago, when it has higher costs for businesses than Nashville, Memphis, and just about every other regional competitor. But if we do decide to use population as criteria, it seems more justified to look at metros with populations similar to those of Saint Louis and Kansas City (between two and three million residents). When we do that, Saint Louis is 7th and Kansas City is 8th out of 14 such cities. That seems awfully middling.

That’s probably why, if one reads the study that the Post-Dispatch reports on, they’ll find that it does not claim that Saint Louis is among the most competitive cities in the country. KPMG didn’t even break down cities by population in the study, choosing instead to do so by region.  The Post-Dispatch story (while citing the study) is actually based on an ancillary KPMG press release, which lauds Cincinnati, and is careful to note context.

Titling an article “St. Louis among most cost-competitive cities for business, report says” when the report in question says no such thing is a questionable decision for a newspaper of record. But this is not just a problem with the headline. The article itself is equally misleading, and it was not a headline writer who placed this story front and center on the Post-Dispatch’s website less than a week before a vote on multiple tax issues (where the city’s business climate is an issue). 

The post Report: Saint Louis, Kansas City *Not* Among Most Cost-Friendly Cities for Business appeared first on Show-Me Institute.

During the negotiations to lure the Rams to Saint Louis in the 1990s, Saint Louis agreed to spend $15 million on practice facilities for the Rams. As part of the agreement, the St Louis Regional Convention and Sports Complex Authority (RSA) would retain ownership, allowing the Rams to avoid any property taxes, but would lease the property back to Rams at a low rate ($25,000 per year).

When time came to build the practice facilities, the city did not have the wherewithal (or perhaps the stomach) to fund the entire project. The city agreed to pay $5 million, Saint Louis County paid another $5 million, and a private organization called Fans Inc. put up $2.5 million. The Rams covered the rest. The city’s $5 million contribution came from diverted amusement tax revenue, while the county’s support came from hotel/motel taxes.

One might think that the city came out ahead in the final deal, avoiding paying everything it initially said it would and pushing at least some cost off on the Rams. But it didn’t work out that way. The Rams organization claimed the city owed it money for not covering the entire cost of the practice facility. That charge, along with a penalty for failing to finish the (entirely publicly funded) Dome on time, totaled $13 million. The Rams agreed that they would drop their claim if the city took on the task of suing the NFL over the $29 million relocation fee the NFL had charged the Rams for leaving Los Angeles. If the city won, it would have had to split the proceeds with the Rams 50/50 (despite the fact that Saint Louis, and not the Rams, had covered the relocation fee). The city lost the case.

To sum up the story of Rams Park: the city and county paid $10 million up front, and agreed to pursue (and pay for) a losing court case against the NFL. They then leased Rams Park, likely at a loss, to the Rams for twenty years. All of this money came from local tax revenue—revenue that was supposed to offset the costs of other parts of this sweetheart deal. The Rams, despite paying little/nothing for its fields and getting shielded from as many taxes as possible, may now get Rams Park (valued at $19 million) for one dollar.

When the city hall discusses what pro football cost Saint Louis and what tax dollars it generated, Rams Park rarely figures.  But it should be a lesson for local residents, because side deals like these make sports franchises more expensive than people realize, and make less tax gains less lucrative than backers hope.

The post Rams Park: A Case Study of Professional-Sports Welfare in Saint Louis appeared first on Show-Me Institute.

Sadly, the humiliation is not over yet. The St. Louis Regional Convention and Sports Complex Authority (RSA), the public authority that handled the leasing of the Edward Jones Dome, also owns the Ram’s former practice facilities in Earth City. They leased those facilities to the team for $25,000 a year. While it’s tempting, this blog will not discuss why the Rams were allowed to pay rent equivalent to that of a two-bedroom apartment for a complex valued at $19 million. Because that’s not the worst part. Apparently, the RSA signed a deal with the Rams giving them an option to buy this complex (again, valued at $19 million) for one dollar in 2024.

The RSA does not believe that the deal with Rams holds following the team’s departure. The authority is looking to sell the land to help cover the costs of the failed bid to keep the Rams. The dispute will now go to court, and residents can hope for a favorable outcome. But whichever way a judge rules, Saint Louis residents should be wary of the pitfalls of government deal-making.  

The post Even after Departure, Saint Louis’s Deal with Rams Gets Worse appeared first on Show-Me Institute.