Susan Pendergrass speaks with Judge Glock, director of research and senior fellow at the Manhattan Institute and contributing editor at City Journal, about the growing debate over data centers in Missouri and across the country. They discuss why some communities are banning data centers while others are welcoming them, how Loudoun County, Virginia became the global epicenter of data center development and what it has meant for local tax revenue, whether concerns about noise, aesthetics, and energy use are valid, and more.

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Episode Transcript

Susan Pendergrass (00:00): Thank you for coming on the podcast again, Judge Glock. We’re going to talk about something that is certainly in the news and certainly good and bad for Missouri in the past week. We’ve had stories about both new data centers being announced and more communities banning them. What’s your take on that? You live in Virginia. In Missouri, we are certainly at odds with each other between one area that is going to have both a massive Amazon and a massive Google data center and then very close to that a large county that just banned them. Where do you think this is going?

Judge Glock (00:36): In some sense, it’s going the way of a lot of American projects in that there’s going to be a diversity of local responses to them, which I think is actually quite OK. One of the things I gather when I talk to some of my friends across the pond in the UK or in Europe is that they basically have to have this grand national debate about data centers, whether to allow them and where to allow them. That’s obviously an important and worthwhile debate, but in America what we’re going to have, and what we’ve already had, is a near infinitude of local debates about data centers. I think that’s the right path. When you nationalize or centralize these issues, you create more veto points for people who want to refuse any sort of growth. You also force certain kinds of growth on people in areas that aren’t necessarily favorable to them or most likely to benefit from them. The American system of fairly decentralized governance, combined with a fiscal horse-trading side where the main benefit of local data centers is the fiscal bump local communities can get, I think is going to lead to a more positive outcome than a more centralized system that tries to create a single answer for a whole country or state.

Susan Pendergrass (02:07): But we have at least one county in Missouri that within the last few days said, regardless of the money, we’re a community and these things ruin towns and communities. I wonder if it isn’t going to be like driving across some states like West Virginia where the biggest, ugliest, most pollution-spewing plants are there. I wonder if it’s because Virginia was willing to have them. Now you have these communities in Missouri that are like, we’ve got acres and acres of land and we don’t care what it looks like, versus these other communities that are saying we don’t want big white buildings everywhere. That to me is a very interesting dynamic, because I feel like they’re going to end up in places where nobody wants to build anything else.

Judge Glock (03:02): Yeah, and that might not be the worst outcome. Can I give a quick segue into the history of something called environmental racism? This was a movement started to some extent in the South in the 1970s and 1980s to meld general anti-industrial, pro-environmental sentiment with the burgeoning civil rights movement. The argument at that time was that evil polluters were forcing their factories into places that were poor and largely Black or minority-majority areas, and that this was a travesty because it was burdening people with increased environmental harm, pollution, and factory soot. The problem with that analysis, which has been carried out by the federal government for decades, is that a lot of times poor and minority communities really, really wanted these factories. They were willing to accept the trade-offs of the environmental harms for the fiscal and monetary benefits in a way that wealthier communities were not. Precisely because they were poor, they usually put a lower value on the environmental concerns that exercised a lot of high-income people and put a much higher value on getting good jobs and all the rest. There’s a famous case from the 1990s where I believe the Clinton administration sued a Louisiana parish and a company that was trying to place a factory in a majority-minority district, claiming it was an example of environmental racism. It actually turned out that the largely Black politicians in the local area were saying this was insane, that they were being sued by the federal government for being racist against themselves when they wanted the factory. That’s a long segue into environmental racism, but I think it’s the sort of analysis we should apply to data centers. There are going to be some areas that put a higher value on the fiscal benefits of data centers than others. On the whole, I imagine those will be poorer areas that care a bit more about reducing property taxes and perhaps the fairly small but not insignificant job benefits of data centers. Estimates suggest a finished data center will create around 50 or so permanent jobs, though certainly hundreds during construction. Some of those communities will be more likely to accept them than maybe wealthy suburbs or other areas that don’t want them for various reasons. Now there are exceptions to that general framework, and I’ve written a bit about Loudoun County, which is a very strange case study.

Susan Pendergrass (06:02): Tell me about that, because I’m surprised that it’s the data center capital of the world given what I’ve seen in Loudoun County.

Judge Glock (06:08): I happen to live in Fairfax, Virginia, in part of the suburbs, and grew up in the general area. So it surprised me to learn not too long ago that Loudoun County, just a little further west from Fairfax, a county generally considered ex-urban and rural, and by one measure, median income, the richest county in America, with a median household income of around $170,000 a year. And yet despite this reputation as a wealthy Northern Virginia ex-urban community, what Loudoun has actually become is the global epicenter of data centers. By some measure, the amount of gigawatts used by data centers, the only place close is Beijing, and they’re not even close, at about half the level of what Loudoun and Northern Virginia have. As I showed in an article I wrote for City Journal that got some attention, that came from a particular confluence of events, a history of Defense Department buildup that left a lot of what’s called dark fiber in the area, which created what’s known as low latency, meaning data centers there could communicate with each other very quickly. That made it a good place to locate internet and communication-focused data centers, and today data centers focused on inference for AI, that is the answering of AI queries. That history made it a particular location. But the other side of the Loudoun story is that for decades, and especially in the last decade, the county just recognized the fiscal benefits. Right now data centers are paying for 45% of all taxes in the county, which is pretty remarkable.

Susan Pendergrass (08:12): How much are they taking in from data centers in person?

Judge Glock (08:15): For the next fiscal year, the estimate is that data centers will bring in $1.3 billion in county revenue. That’s about 45% of all local tax revenue. But maybe an even more startling way to frame it is that all local government uses and projects outside of schools are a little less than what Loudoun raises from data centers alone. So the local residents of Loudoun County effectively get free police, free firefighters, free animal control, free roads, and so on.

Susan Pendergrass (09:00): Have they lowered their property taxes?

Judge Glock (09:02): Yes. Thanks to this absolute boom in data center revenue, Loudoun not only has very well-appointed and well-funded schools, roads, and police departments, but they’ve also lowered their property tax rate pretty continuously for over a decade. It’s about 40% lower than it was in the early 2010s. Now that’s offset to some extent by increases in assessments and other rates, but it is much lower than what I pay over here in Fairfax, about a third lower. So data centers for Loudoun, which can kind of be seen as the first area to really embrace them, and home to one of the first significant data centers in America built by a now large firm called Equinox in the late 1990s, has worked really, really well for that county. I don’t think it’s necessarily going to work as well for every possible county that doesn’t have the same advantages Loudoun does, but it does show that for those that embrace them, there can be real benefits. It clearly hasn’t hampered the ability to attract high-income, well-funded residents with good jobs and a nice community. On the whole it seems to have been beneficial, even if you’ve seen growing opposition there as you’ve seen elsewhere.

Susan Pendergrass (10:46): Virginia horse country. But now it feels like the word is out and people are hearing that there could be health risks, that the buildings buzz, that they use all the water. I’ve seen some recently that have like some blue stripes and stuff on them, but the originals were pretty plain. The latest vote in Missouri was in St. Charles, and people cheered and wrote all these emails saying we don’t want them in our backyard because of health risks and noise. How valid are those concerns?

Judge Glock (11:22): Before I was celebrating the local diversity of responses to data centers relative to the alternative, but I don’t want to slight the classic concerns with local NIMBYism, the not-in-my-backyard movement, or the idea that local governments often try very hard to restrict new development of housing or other projects in their area, which can be a substantial burden for people looking for housing or hoping for jobs and fiscal revenue. On the whole, I think the competitiveness of local governments will help wash that out. If St. Charles or another county refuses to build a data center, it’s often not too difficult to find another county willing to accept one. But I do think a lot of this anti-data center hysteria is driven by people with not just local concerns, which can be legitimate though to my mind often vastly overblown, but with a general anger at technological civilization and AI writ large. A lot of that has been strangely channeled into specific local opposition to data centers. That old leftist slogan of think globally and act locally presents a problem here: a lot of local issues don’t really map well to global concerns about climate change or AI. If someone has an issue with AI and they ban a local data center, that is in no way going to stop AI. Stopping a data center nearby is not going to stop the revolution. It will barely even slow it down. There is a lot of generalized opposition to modernity and technology that gets channeled into opposition to local data center construction, which is totally irrelevant to that debate. As for the actual local concerns, when I was reporting on the story for Loudoun, I spent some time driving around and checking out these data centers. For those who have not seen one, or frankly a park of them, it’s a pretty amazing sight. These things can be huge, nearly approaching a hundred feet tall, very solid concrete boxes, not often the most beautiful structures you’ve ever seen. The trend now is placing blind windows in them randomly to make them look better, though depending on your preference that may or may not help. I think a lot could be done to address the aesthetic concerns. Those are real. If you look at some parts of Loudoun and elsewhere, there are data centers built right next to housing subdivisions, and it can feel uncomfortable to have a looming concrete block right next door. The other local concern I think is somewhat legitimate but again overblown is the noise. Data centers, mainly because of their cooling systems, emit a fairly regular hum. It’s a low frequency, low decibel hum, but at a low frequency it can go through walls and subtly shake things. It can be irritating. I personally would not like a low frequency hum right next door. But the solution, as with the visual impact, is simply to push them back a bit. This is not like a local school that needs to be right next to a subdivision. If you’re talking a few hundred yards down the road, you’ve pretty much solved most of the hum and visual impact issues, especially if you surround it with some trees or berms or other methods to both hide the structure and limit the noise. Those two issues, the noise and the visual impact, are real. I understand why people are concerned, but they can be and have been easily addressed. In most of the debates you see, that’s not really the issue. It’s these generalized concerns about AI or false concerns about water.

Susan Pendergrass (16:03): What about the use of energy?

Judge Glock (16:19): Again, to some extent this is another local versus global problem where the local energy use of a data center is not really going to change the price people pay on their local residential energy bill. Most energy here in Virginia and elsewhere is part of a big interconnection, which is a market where different energy producers and power plants share electricity across large transmission lines. The price for electricity, besides state-level mandates, laws, or environmental regulations, is usually determined in that general market. Yes, a data center will drive up electricity costs somewhat in that general market, but it’s not necessarily a substantial driver of that. One new data center will have a very minimal impact on anybody’s bills across the whole region and will have no real effective impact on somebody’s local energy bills. To some extent, data center builders have also been doing a lot more work to construct what’s called off-the-grid or behind-the-grid energy production attached to the data centers. That can be problematic because of increased noise, even in Loudoun and elsewhere where a lot of places just have backup diesel generators that can produce a loud crack when the backup energy turns on, since data centers want to be running constantly. But in general, as before, you have very localized concerns about noise that you want to address with very localized attempts to limit those impacts, either through distancing the data center or finding ways to cover it and limit the noise it emits. The electricity issue is real in the sense that demand for electricity is going up because of data centers, and as economists like to say, supply is inelastic, meaning supply of energy is not going to ramp up as quickly as demand. That means prices are going to go up a little bit nationally because of that. But as long as the value of these data centers is there and people are going to build them, they’re not really going to have a meaningful impact on local electricity prices, and the data center builders are going to find other ways to get electricity and make sure that generation capacity comes online.

Susan Pendergrass (19:28): Missouri is building these two massive data centers not far from our one nuclear plant, and I know that’s something that has been discussed. When I hear that Loudoun County was the first to do this in such a massive way that they could bring in half of their income from data centers, it feels to me like when Colorado legalized cannabis and was the only state to do so. They took in so much money that residents got money back on their income taxes, and every other state said they were going to be just like Colorado. But Colorado was the one that did it first. Maybe Loudoun is the one that did it first with data centers. So now when a community brings in a data center, it’s not going to have the same impact it had in that first wild test case that was Loudoun County, right?

Judge Glock (20:18): I think that’s correct. I would note though that for some smaller communities, especially small rural communities with relatively small populations, such as some of these Texas counties, a single data center can become a third or more of the city’s or county’s budget overnight. So they can have a huge impact on smaller and poorer areas. But do most data centers as they’re built today have the huge fiscal impact that Loudoun got? Absolutely not. The other side of the fiscal story, though, and one that will apply more universally, is that data centers require very little in the way of services. When a city allows a new subdivision or apartment building, it gets more property taxes but also has to pay for schooling for the kids, roads, fire departments, and all the rest. When a city allows a new office park, there are similar property tax benefits but fewer service costs than residential development. According to one estimate I saw, for every dollar a typical office building or commercial retail project generates, a city spends about 25 cents on actual services to it. For data centers, because there’s basically no one in them, that number drops to about four or five cents. They basically need nothing. As I talked to some of the local officials in Loudoun, they said these things don’t send kids to school, they don’t even put cars on the road. There’s basically no impact on anything else. Once it’s built, it just sits there and throws off property tax revenues. No trash pickup, no breaking up fights at a local bar. It’s just money that keeps flowing in. So even if the property taxes aren’t as massive as they are in Loudoun, local communities still aren’t going to have to worry much about services, and they’re still likely going to see a big net benefit. Some people point out that data centers don’t offer many jobs over the long run, and a lot of industrial projects get approved because of job creation. But the flip side is that very few jobs also means low services and low impact. A big concern with local communities approving projects is traffic, and data centers just don’t create much of it for their size. So yes, other counties are not going to get the kind of deal Loudoun got and still is getting, because it remains the epicenter and data center builders want to build next to other data centers. But they are going to get a project that really doesn’t cost much of anything, still throws off at least some money, and doesn’t really burden local communities as long as it’s placed ever so slightly out of the way.

Susan Pendergrass (24:16): That brings me to another point. I’ve read that there are a lot of very smart engineers working on the problem of AI inference and how much energy and space it requires, and how to make it more productive. Eventually I think they’re going to solve this. We used to have server rooms that every business kept cool, and then everyone ended up with a laptop or even a phone. Eventually I think people are going to address this problem of requiring so much physical space to do what we need to do. I wonder if in a decade we’re just going to have empty white blocks sitting around because it’ll be too expensive to demo. What do you think?

Judge Glock (25:08): It could happen. You mean the data centers will be depopulated of their servers because they’ll be so miniaturized. That’s true, and it could be. To some extent, counties like Loudoun that have benefited massively from these data centers can and have set up rainy day funds, similar to counties that get a sudden oil influx, to say that if this ever starts to peter out, they’ll still have a long-term benefit they can continue placing into their budget and at the service of their residents. Right now I think we’re so far away from a potential data center bust that it really shouldn’t be a concern. As I’ve also pointed out, right now about one and a half percent of our whole economy is spent building data centers. This is just from basically zero just a few years back. This is a wild building boom, absolutely wild. We’re talking hundreds of billions of dollars a year. We need, if anything, to make sure that people can build out those data centers to do the other things that the AI revolution is going to require and demand, no matter what local opposition one county or another expresses. When you talk to people in the industry, the consensus is that we just can’t even build them fast enough. If very smart companies and very smart people are willing to invest hundreds of billions of dollars a year in data centers, and when I say data centers I mean mainly the servers and computers in them, I think they know it’s going to be a good return.

Susan Pendergrass (27:09): Well, it’s going to be interesting to see it play out in Missouri, because there’s definitely been backlash coming through the local town councils and the voters have been pretty loud in some areas. Have any Virginia counties banned them that you know of?

Judge Glock (27:29): Virginia has not only been the epicenter of the growth of data centers, it has been the epicenter of the opposition to data center movement as well. There is a group, something like Data Center Reform Watch, that has been monitoring local opposition. You’ve seen a bunch of counties take pretty strong steps against new data center construction. I forget if they’ve gone all the way to a formal and complete ban, but you definitely have votes in major counties either to block individual sites or to ban them from large swaths of the county. My take is that some other county is going to want and find ways to get those data centers, and when some of these counties realize they may have gone a little too far, they’re going to look at ways to pare it back and focus more on where to place the data centers rather than banning them outright and everywhere. I really struggle to find the logic in a local community banning a data center that’s going to be two and a half miles from anybody else. Frankly, as weird and big as they are, are they that different from, say, a local warehouse? A warehouse has trucks coming in and out all day, spewing pollution. One of these fulfillment centers is a big concrete box just like a data center, but with all that traffic on top of it. Data centers just seem much less problematic in that regard. In some sense they’re like a warehouse without all the trucks. If not for this huge generalized concern with AI, which is a separate debate, there doesn’t seem to be a lot of logic to just banning them completely.

Susan Pendergrass (29:42): Well, it is early days. I would love to have you come back again to talk to us when the dust settles a little bit, especially in Missouri. One of the first places I remember reading about a ban was Festus, Missouri, and now there are more. I’m also hearing about some of the biggest data centers going in there. So we’d love to have you back.

Judge Glock (30:02): That’d be great. I look forward to it.

Produced by Show-Me Opportunity

The post Are Data Centers Good for Communities? with Judge Glock appeared first on Show-Me Institute.

During his State of the State address in January, Governor Mike Kehoe indicated Missouri is opting into the federal government’s new school choice tax credit program. The program resembles Missouri’s MOScholars program. Taxpayers can receive a dollar-for-dollar federal tax credit for donations up to $1,700 annually to a scholarship-granting organization, or SGO, in Missouri. The SGO then distributes scholarships to families in Missouri seeking alternatives to their residentially assigned public schools.

For many families, the scholarships will be used to pay private school tuition. But the potential is broader. At least two public school districts in Missouri already participate in MOScholars, allowing nonresident students to use scholarships to pay transfer tuition; a similar arrangement may be possible under the federal program. Funds could also support homeschooling expenses, tutoring, after-school programs, or enrollment in a microschool (the latter is a fast-growing but loosely defined sector and there is no clear consensus on what defines a microschool). The eligibility criteria are still unsettled.

Non-traditional providers are pushing for few guardrails and minimal regulation, while others argue for stronger oversight and quality controls.

I have mixed feelings. The real value of this program is its potential to expand Missouri’s education marketplace. Competition improves quality in virtually every sector of the economy, and education is no exception. But markets don’t work well when consumers have poor information, so I’d like quality controls and transparency so parents can make informed choices. Here’s the tension: expanding choice and imposing quality controls can work against each other. To illustrate, consider a heavily regulated system in which schools that accept the tax-credit payments must administer standardized tests, publicly report results, and disclose detailed information about their curricula and finances. This level of transparency would reassure policymakers, but the problem is that we cannot force private providers to participate.

And if we make it too difficult (and too costly) to participate, which schools are the most likely to opt out? The answer: the ones that already have plenty of customers without this new program—likely the best schools. And if the best schools opt out, it undermines the value of the education marketplace we’re trying to build in the first place. (This is a complicated problem. See here for a deeper discussion in the context of research that finds negative effects of a voucher program on student achievement in Louisiana.)

I don’t have all the answers, but I hope Missouri lawmakers think carefully about how to strike the right balance, particularly if the federal government gives states meaningful discretion in implementation, which I expect it will. I’d favor a middle-of-the-road approach that requires participating schools to provide straightforward, low-cost information, but without overly burdensome regulations or reporting requirements. I want the best education providers to open their doors to more Missouri students; I don’t want to scare them away.

The post The Dicey Details of the Federal Government’s New School Choice Tax Credit Program appeared first on Show-Me Institute.

Momentum for early literacy reform continues in Jefferson City, as House Bill (HB) 2872 recently passed out of committee.

While this version removed several provisions from the original bill, it retains the core components necessary to meaningfully improve early reading outcomes. As HB 2872 continues to move through the legislative process, it is critical to preserve two elements.

#1. A Clear, Firm, and Objective Third-Grade Retention Policy

Under HB 2872, a student who scores at the lowest level on a state-approved Missouri reading screener will be retained unless the student completes a summer reading program and scores above the lowest level on a retest opportunity, or qualifies for a good-cause exemption. Good-cause exemptions apply only to students with limited English proficiency, disabilities, or students who have already been retained.

Having a firm third-grade retention policy is important. An analysis of multiple states’ literacy policies found no consistent evidence that reading scores increase in states without a retention component. Critically, the value of the retention component is not just for students who are retained—it is also for all the students who are not retained because their reading scores improve. In most states with retention policies, the retention rate ends up being low; it is the threat of retention, more than retention itself, that spurs widespread literacy gains.

A number of states—Mississippi, Louisiana, Indiana, Florida, and Tennessee—use a rule-based retention policy. These states have seen significant gains in reading, and all have higher test scores than Missouri.

Without a rule-based policy, teachers and parents talk themselves into promotions that are ultimately to the detriment of children. It feels mean to hold a child back. But it is no kindness to promote a child from the third to fourth grade if the child cannot read. It is not setting the child up for success.

HB 2872 requires that parents be notified if their child is identified as having a reading deficiency at any time during grades 1–3. This level of transparency can help parents be part of the solution for their children.

Retention can be a difficult experience, but research shows it is much easier on young children; it is primarily students in later grades who are negatively impacted when retained. Younger students who are retained under these types of policies benefit tremendously in terms of on-grade academic achievement, even years after retention.

#2. Accountability for Teacher Preparation Programs

It is also critical to align the training in teacher-preparation programs with evidence-based reading instruction. In 2023, the National Council on Teacher Quality evaluated teacher-preparation programs nationwide and awarded nearly half of Missouri’s participating institutions with an “F” for their coverage of scientifically based reading instruction.

HB 2872 allows the Department of Elementary and Secondary Education (DESE) to bring teacher preparation programs into alignment with the science of reading for the benefit of our students. Specifically, it allows DESE to review teacher preparation programs for compliance with evidence-based reading instruction and prohibit noncompliant programs from certifying new teachers.

The new version of HB 2872 that emerged from committee has changed in the following ways. The new bill:

• Has no explicit ban of the use of three-cueing (a reading method relying more on cues, guessing, and memorization rather than systematic phonics) in K-12 classrooms.
• Eliminates the proposed $500 incentive to districts for students who remediate a substantial reading deficiency.
• Redefines the Missouri Reading Screener to include multiple DESE-approved assessments rather than a single (new) statewide test.

These changes weaken the bill, but are secondary to the structural pillars of reform: an objective, assessment-based retention rule and stronger accountability for teacher preparation programs. As long as these pillars are in place (especially retention), HB 2872 represents meaningful progress.

We encourage our Missouri lawmakers to continue to take our literacy crisis seriously and to enact policies that help more Missouri students become confident, capable readers.

The post Early Literacy Reform Advances in the House appeared first on Show-Me Institute.

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

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

It is printed in full below.

———

Information Overload and Missouri School Report Cards

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

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

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

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

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

• Overall Rating: A

• Student Achievement: A

• School Progress: A
• Closing the Gap: A

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

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

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

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

The premise is simple: if you can effectively teach students to read in their early years, then they will be better at reading to learn for the rest of their years.

While there is of course need to continue reforming education practices at all grade-levels, the research literature and recent real-world examples show the positive outcomes that can result from focusing on helping students learn to read effectively at a young age.

This report explores the beneficial effects of a focus on early literacy. Drawing on the findings of a 2023 study by John Westall & Amy Cummings at Michigan State University, it provides a road map for Missouri: establishing a mandatory, academic-based third-grade retention policy, fully eliminating the three-cueing method for teaching word reading, and aligning teacher preparation programs with the science of reading.

Click here to read the full policy brief.

The post Third-Grade Retention and Early Literacy Policies appeared first on Show-Me Institute.

The premise is simple: if you can effectively teach students to read in their early years, then they will be better at reading to learn for the rest of their years.

While there is of course need to continue reforming education practices at all grade-levels, the research literature and recent real-world examples show the positive outcomes that can result from focusing on helping students learn to read effectively at a young age.

This report explores the beneficial effects of a focus on early literacy. Drawing on the findings of a 2023 study by John Westall & Amy Cummings at Michigan State University, it provides a road map for Missouri: establishing a mandatory, academic-based third-grade retention policy, fully eliminating the three-cueing method for teaching word reading, and aligning teacher preparation programs with the science of reading.

Click here to read the full policy brief.

The post Third-Grade Retention and Early Literacy Policies appeared first on Show-Me Institute.

The slow road to recovery is illustrated in the recently released preliminary results of the 2025 Missouri Assessment Program (MAP). The most recent data indicate modest improvements in mathematics, and average scores in at least some grades that are finally eclipsing pre-pandemic levels. However, the state’s stagnant reading scores continue to be a source of concern, as reading scores remain below their pre-pandemic levels in all tested grades.

Figure 1 summarizes MAP trends in the Show-Me State, including preliminary scores from the 2024–2025 school year:

Figure 1: Missouri Assessment Program (MAP) English/Language Arts Mean Scale Scores by Grade Level, 2018–2025

Source: Missouri Department of Elementary and Secondary Education

In Figure 1, the mean scale scores represent the student body’s performance as a whole. There are several important takeaways from this figure:

• Across all grades, Missouri’s reading scores have yet to return to pre-pandemic levels.
• Except for scores in the 3rd and 5th grades, reading scores are lower now than they were in 2020–21, when the pandemic was still strongly affecting in-person schooling.

Clearly, there is still work to be done.

Potential Solutions

This post is not meant to be doom and gloom—there is hope. States such as Indiana, Mississippi, Louisiana, and Tennessee have shown that student literacy can improve substantially with the right reforms.

These states have adopted early literacy policies that are effective, though sometimes unpopular: mandatory third-grade retention, eliminating three-cueing for teaching reading, and ensuring teacher preparation programs teach evidence-based reading practices.

Other states have proved that early literacy reforms can work. The 2026 legislative session is an opportunity to take meaningful steps toward improving educational outcomes in Missouri by taking reading reform more seriously.

The post Missouri’s Stagnant Reading Scores appeared first on Show-Me Institute.

Susan Pendergrass speaks with Dr. Jim Wyckoff, professor at the University of Virginia and director of the Education Policy Ph.D. program, about the long-term decline in student academic achievement. They discuss how national test scores, especially for the lowest-performing students, began falling well before the pandemic, why the usual explanations like COVID or Common Core miss the bigger picture, and what states can do to reverse the trend, and more.

Listen on Apple Podcasts 

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Timestamps

00:00 Understanding Declining Academic Achievement
02:47 Historical Context of Academic Performance
05:43 The Impact of Policy Changes
08:31 Exploring Causes of Decline
11:14 Success Stories and Lessons Learned
13:51 The Role of State Legislation
16:49 Future Directions and Solutions

Episode Transcript

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Susan Pendergrass (00:00)
Thanks so much for joining us on the podcast, Professor Wyckoff of the University of Virginia. So you have a recent paper that really caught my eye. I’m puzzling over declining academic achievement in this country. And it’s something that I’ve been thinking about a lot. And sort of as a companion issue, I work in Missouri and I’ve been talking for a long time that Missouri enrollment’s been declining and folks are like, well, yeah, the pandemic—the pandemic, kids left public schools, but they’ll probably come back. And I’m like, no, no, we had our largest kindergarten class in 2013. Any data forecaster, demographer would see this coming. This is not a pandemic problem. And I think it exacerbated it, but I think this has happened with basic student test scores in this country, where people are like, well, the pandemic caused it, and we’re gonna come back out of this.
You have a paper that’s out recently on the fact that maybe the pandemic didn’t cause it and it predated it. So I’d love it if you could just tell me a little bit about what you found looking back and why, in my opinion, it’s a bigger problem than many folks are thinking it is.

Jim Wyckoff (01:03)
Sure. So I’ve been following sort of NAEP trends, as a lot of people do, because NAEP is an incredibly reliable source of information about academic achievement at certainly the national and the state levels, and to some extent at certain large districts, the TUDA districts. And so I’ve been noticing this trend for several years now where NAEP scores have been declining—predating the pandemic by a number of years. And these declines have gotten large by almost any metric we might use to measure student achievement.
A lot of people saw the very large declines that occurred during the pandemic. And again, there was lots of discussion in both achievement and political terms about what this meant and how we were going to attribute these losses.
Last fall, I started to get more serious about wanting to understand these trends. Quite honestly, it came from a place of having some ideas, but really wanting to figure it out. The title of the article is “puzzling” because I spent a lot of time trying to better understand these trends—how large are they, when did they begin—and asking questions to help make sense of what’s going on.
One of the more surprising conclusions was that the losses that had been occurring prior to the pandemic were about half as large as the total loss that occurred by 2024. And that surprised me a little.

Susan Pendergrass (02:55)
Yeah, so we were on a bit of an upward trajectory during the era that a lot of people didn’t like, but No Child Left Behind caused a lot of anguish. I remember my oldest was in third grade the first year of No Child Left Behind testing in Virginia—SOLs—and it caused a lot of problems. But it did have results, right? No Child Left Behind, this high-accountability, high-stakes testing that people don’t like, actually improved test scores, right?

Jim Wyckoff (03:28)
Yeah, I think there are, as you suggested, large increases in NAEP scores from the early 1990s to around 2009. These increases were large by almost anyone’s standards—over 50 percent of a standard deviation, which translates to nearly two years of learning. So these were consistent, large increases.
Around 2009, the scores leveled off and then began to decline. During that 1990 to 2009 period, a number of policies played a role. NCLB began in 2002 and ran its course until around 2013 before ESSA replaced it in 2015. The best evidence we have suggests that math scores improved as a result of NCLB. Not by as much as the broader achievement gains, but still meaningful increases.

Susan Pendergrass (04:50)
Yeah. And I think it should be pointed out that in the ’90s, governors all met—actually at the University of Virginia—and there was a broader push around academic achievement. For our listeners, Missouri tracks exactly with the national results. We peaked in 2009 and have been steadily declining ever since.
Last year in Missouri and nationally, four out of ten fourth graders were essentially not literate. They didn’t reach the “basic” level in reading. We don’t know where they are between zero and basic, but they didn’t register on the scale—they’re essentially illiterate. And that, to me, is a crisis. I don’t hear it being talked about like a crisis the way it was in the ’90s after a number of major government studies. But that’s where we are. We’re back to square one, essentially—long-term NAEP trends put us back to the 1970s.

Jim Wyckoff (05:51)
Yeah, certainly for the lowest-performing kids, the decline has wiped out gains made since 1990. As you’re suggesting, these results have important implications.
Since NCLB and other developments in the 2000s, I think there’s been less emphasis on academic achievement. Other issues have come forward. People have denigrated test scores to the point where we’ve missed opportunities to understand what’s going on.
And NAEP is a low-stakes, low-accountability test—nothing really rides on it. That’s why we believe it’s a strong signal of what kids are actually learning. And what they’re learning has declined significantly, as you’re pointing out.

Susan Pendergrass (06:52)
Let’s talk about your speculation as to what’s causing this. I’ve heard a lot about smartphones in classrooms, and states are starting to get active on that. You suggest it might be part of the problem. How so?

Jim Wyckoff (07:07)
Yeah, not just me—others have made this connection. Smartphones and social media really took off around 2009. Their use became much more widespread between 2009 and 2020. If you look at the data, smartphone and social media saturation grew rapidly in that period.
There’s evidence suggesting kids have become less engaged in school. That’s led to regulations about phone use in classrooms. But the problem extends beyond school—kids are less engaged with schoolwork outside the classroom too.
It’s hard to definitively link smartphone use to declining achievement, but there’s reason to believe it’s a contributing factor. Still, I don’t think any one issue—phones, NCLB, whatever—can account for the full decline. It’s likely a combination of multiple factors that vary by place and time.
And I think we’re not good at nuance in education. But we need a comprehensive, systematic approach to address this. There’s no single fix.

Susan Pendergrass (09:08)
We have some states—people are calling them “Southern miracles”—like Mississippi and Louisiana, that are doing much better in reading. But it’s not nationwide. We have broad declines, and then these little pockets of success. What does that mean going forward?

Jim Wyckoff (09:27)
I’m not sure we’ll ever come up with a good causal understanding of what caused these declines nationally. But I do think places like Mississippi give us reason for optimism.
In 2013, Mississippi got serious about the science of reading and implemented it rigorously, with supports to help teachers. If you look at their data, they improved reading scores during a period when national scores were declining. In math, they at least held steady.
Now, their scores haven’t continued rising as they did before 2009, but they’ve fared better than most. So while the science of reading isn’t a silver bullet, it’s part of the solution.
States have a real opportunity here. That includes focusing on accountability, proven policies like science of reading, and funding.
Many states cut education funding after the 2008 recession and didn’t return to pre-recession levels, inflation-adjusted, until recently. Teacher salaries fell and in some places still haven’t recovered.
Teacher quality, especially in low-performing schools, matters a lot. And demographics play a role too—we don’t measure poverty depth well, and English language learners are increasing in number.
We need state- and district-level analysis to understand what’s going on and invest in the things that work.

Susan Pendergrass (13:22)
My biggest concern is the fourth-grade scores. These kids are probably in sixth grade now, and one day they’ll go to high school unable to read their textbooks.
We’re creating an underclass that’s not going to catch up. While overall test scores are down, the steepest declines are among the lowest 10 percent of performers. I don’t know how we catch those kids up.
We’re seeing a smaller student population and a higher percentage of students who can’t read or do math. What kind of workforce will we have in ten years?
We’re dabbling in the science of reading, but accountability has dropped. Do you think Common Core contributed to this decline—or at least gave accountability a bad name?

Jim Wyckoff (14:35)
Yeah. Common Core got incredibly politicized—as a sort of top-down mandate—when in fact it came from organizations like the National Governors Association that were pushing for rigorous curriculum.
The underlying concept was good. Many states still use Common Core-style standards, even if they don’t call it that anymore.

Susan Pendergrass (15:05)
Missouri is one.

Jim Wyckoff (15:05)
Exactly. And the evidence linking Common Core to achievement declines is very thin. I don’t think it played a significant role. But like you said, these issues often get politicized and take on a life of their own.

Susan Pendergrass (15:32)
Your paper has great graphs showing projections of where we should be if we stayed on the pre-2009 trajectory. Have you done projections from 2009 forward? Because it doesn’t look good to me.

Jim Wyckoff (15:53)
If we continue the trajectory we’ve been on since 2009—or 2013—about half the decline we saw between 2019 and 2024 could’ve been predicted even without the pandemic.
So the pandemic worsened the problem, but it didn’t cause it. I see no reason to believe the decline would’ve stopped.
Unless we make serious changes, the downward trend is likely to continue. Especially for the lowest-performing group, there’s little evidence of any turnaround.
Among students at the median or higher levels, there is some evidence of recovery in math. But reading remains a problem across the board.

Susan Pendergrass (17:17)
So what should we do? I work at the state level a lot—what should state legislatures or education agencies do?

Jim Wyckoff (17:35)
This is a real opportunity for state leaders—governors and legislatures—to act.
We’re on the cusp of seeing real consequences in the workforce and higher ed outcomes. Governors could champion this issue. Academic achievement isn’t the only thing we care about in schools, but it’s a top priority.
We need to move past the cultural wars of the last decade. Most parents still care deeply about academic outcomes.
For kids from low-income families, education is their path to a better life—and we’re not serving them well right now.
This should be a bipartisan issue. Conservatives and progressives should be able to rally around this.
I know there are institutional barriers and some bureaucracies may not want the changes required, but I hope we see leadership from some states. And when we see success, others can follow.

Susan Pendergrass (19:52)
Yeah, and I really appreciate your scholarly approach to something I’ve been speculating about. This goes way back before the pandemic.
If we blame it on COVID, we’ll keep talking about “pandemic learning loss” when the issue runs much deeper.
We need to acknowledge the path we’ve been on and chart a better course. Where can people find your article or get in touch with you?

Jim Wyckoff (20:23)
The article is forthcoming in the Journal of Policy Analysis and Management. My email is mikeoff@virginia.edu.
I appreciate your interest in this topic and would love to see more people dig into it. What I’ve done is just the beginning.

Susan Pendergrass (20:48)
I couldn’t agree more. We’ve got to keep puzzling through these issues. Jim, thank you so much. Take care.

Jim Wyckoff (20:57)
Okay, thank you, Susan.

Produced by Show-Me Opportunity

The post Understanding the Decline in Student Test Scores with Jim Wyckoff appeared first on Show-Me Institute.

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

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

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

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

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

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

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

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

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

The Big Easy has long struggled with economic hardship. Between hurricanes, crime, population loss, and a fragile tourism industry, the city has spent decades trying to regain its footing. Now, officials are using a familiar formula: host a major event, clean up the streets in high-visibility areas, woo corporate leaders, and hope business investment follows.

We’ve seen this before, and the results are almost always the same. These big events provide a temporary tourism boost, but they don’t drive long-term economic growth. The promised “boom” turns out to be a weekend blip, leaving taxpayers on the hook for security, infrastructure, and publicly funded subsidies that rarely pay off.

Take the 2016 Rio Olympics: billions spent, venues abandoned. Or Kansas City’s NFL draft, which filled bars for a weekend but left downtown empty as soon as the crowds dispersed. And New Orleans has been down this road before. The city has hosted 11 Super Bowls, yet its economic struggles persist. If the game were truly a catalyst for prosperity, wouldn’t we have seen the results by now?

New Orleans’ real challenges have nothing to do with hosting big events. The city struggles with high crime, crumbling infrastructure, and a reputation for red tape that drives businesses away.

Louisiana officials tout a $10 billion Meta AI center as a sign of a turnaround. But real economic success comes from stability, not one-off incentives and government handouts. Businesses thrive where there’s predictability—not just tax breaks to lure companies in temporarily.

Visitors saw an enhanced police presence, vehicle restrictions, and heightened security in the French Quarter. But that won’t change the fact that the city has one of the highest crime rates in the country—a problem that can’t be solved with temporary measures.

Some business leaders remain optimistic about the benefits of incentives, arguing that Louisiana can’t afford to keep losing talent and investment to Texas and Florida. But unless the city addresses its deeper systemic problems—crime, education, infrastructure and a business climate that discourages investment—it will continue to rely on big events as temporary Band-Aids.

New Orleans doesn’t need another Super Bowl. It needs leaders willing to fix real problems—not just hang banners and hope for the best.

The post The Super Bowl Is a Bad Bet for New Orleans appeared first on Show-Me Institute.

The single program started in Wisconsin in 1996 has grown to 75 school choice programs in 33 states, plus Washington, D.C., and Puerto Rico. And in just the last few years, 10 states have implemented universal school choice programs in which all or nearly all children in the state are eligible. These states are Arizona, Arkansas, Florida, Indiana, Iowa, North Carolina, Ohio, Oklahoma, Utah and West Virginia. Alabama and Louisiana will be joining the list next year.

When the one million private school choice students are added to the 3.7 million charter school students the result is that one in five children in the United States is receiving a publicly funded education outside of traditional public schools. What was once considered controversial has become mainstream.

The post A Milestone Reached appeared first on Show-Me Institute.

For those who don’t remember, last year, Missouri’s general assembly made the unfortunate decision to revive the state’s film tax credit program. After the program sat dormant for a decade due to prior poor performance, and despite the wealth of evidence from across the country showing that the program is a bad investment, our elected officials were somehow convinced that the program would work better this time.

While it’s still too early to evaluate the performance of Missouri’s revived film credit, a recently completed audit in the state of Georgia can offer some insight into what Missouri should expect. Unsurprisingly, the results show that the return on investment (ROI) for Georgia taxpayers is less than $0.20. This means that for each tax dollar devoted toward the program, at least 80 cents are lost.

If you have been following this issue for a while, these findings aren’t surprising, as they are in line with much of the past research on the topic. Study after study shows film tax credits are a ridiculously bad investment of state taxpayer dollars. Prior to our state shuttering the program, the Missouri Department of Economic Development found the program’s ROI to be a paltry $0.15. Previous Peach State audits found the ROI to be even lower—around $0.10. Louisiana’s program wasn’t much better, with an ROI of $0.15. And Pennsylvania (Missouri’s entertainment industry tax credit is modeled on the Pennsylvania program) found its film subsidies produced an ROI of only $0.13.

Of course, these aren’t the only metrics where the tax credit program fails to perform. In state after state, the film tax credit falls short of the jobs and economic activity promised. According to a 2019 study that compared film tax credit data from across the country, the author found the incentives have no meaningful effect on employment or wages and suggested the “incentives are generally ineffective at creating industry clusters or inspiring economic development.” Nevertheless, the majority of states keep giving out these subsidies.

At this point, I’m not sure how many more audits or studies need to be published before policymakers will be convinced that a film tax credit program isn’t worth having. But if there’s one thing Missouri lawmakers ought to learn from Georgia (besides that our state’s program should be ended again), it’s that frequent audits of these costly tax incentives are a good thing. Further efforts to improve transparency on Missouri’s numerous tax credit programs should be encouraged.

The post Another Opportunity to Learn appeared first on Show-Me Institute.

Occupational licensing adds educational requirements, fees, and other hurdles that make it harder to get a job. We see onerous requirements negatively affecting workers across the country, such as hair braiders in Louisiana (highlighted in the Journal article) who need 500 hours of training to receive a full cosmetologists license to exclusively braid hair. Lawmakers at the federal level have expressed a desire to increase competition in the workforce by reining in occupational licensing, but it is state lawmakers and licensing boards that set the standards and regulations.

Missouri lawmakers took a big step forward with occupational licensing reciprocity, but there is still more that could be done. One policy that I believe would prove beneficial for Missouri workers: Lawmakers should introduce a five-year sunset for all occupational licenses and licensing boards. With a sunset, all licenses and boards must be evaluated and approved by lawmakers every five years. The hope is that unnecessary regulations, and maybe even unnecessary licenses, will be identified and eliminated. Reducing the burden of occupational licensing will create opportunities for workers and consumers, lower prices, and increase economic growth.

The post Let’s Sunset Occupational Licenses appeared first on Show-Me Institute.

Longtime United States Senator and Chairman of the Senate Finance Committee Russell Long of Louisiana used to say, “Don’t tax you, don’t tax me, tax that man behind the tree.” Long knew that everyone’s favorite tax was the tax that forced someone else to pay for something. We all want services from the government. The problem there (actually, there are many problems there, but let’s focus on the tax issue) is that we have to pay for those services with taxes. Like many other politicians, Long realized that what we really want is to have other people, the “outsiders,” pay for our public services.

Local governments in Missouri have excelled at this practice for many years. It was here in Missouri that local governments took it to its most extreme form in Mack’s Creek, St. George, and many other places by funding their city governments with reprehensible fine and ticketing practices. Ferguson got much of the attention for these actions after the riots, but, in fact, they were a fairly normal Missouri city when it came to using fines and tickets to fund their city’s operations. After the violence in Ferguson, the state passed beneficial legislation that finally limited this practice, and our entire state is better off for that change.

But local governments still focus on raising revenues by taxing outsiders. Voters in Kansas City and St. Louis just approved keeping the earnings tax, which includes taxing people who don’t live in those cities and can’t vote on the issue. Who wouldn’t want to tax someone else who is only in the city for limited periods, uses fewer public services, and has no say in the matter? Branson did the exact same thing earlier this month when voters passed proposals to pay for important infrastructure improvements entirely with new hotel and restaurant sales taxes.

Welcome, stranger, thanks for visiting.

A more common practice is the use of special taxing districts such as transportation development districts (TDDs) and community improvement districts (CIDs) to fund local services. Such districts have exploded in recent years, going from a combined 86 in 2004 to 732 in 2020. Special taxing districts can use property taxes, sales taxes, or direct user fees like tolls for their projects. While a couple of the most well-regarded of these tax districts do use property taxes or tolls to fund their operations, I’ll let you guess which tax most of them use. That’s right, the sales tax.

In a 2017 audit, Missouri state auditor Nicole Galloway cited numerous TDDs and CIDs for financial and management abuses. In Springfield, she detailed how the College Station TDD failed to notify shoppers of the tax and failed to include area residents on the TDD board. In Waldo (in Kansas City) multiple CIDs are layered on top of each other, creating high taxes for shoppers that benefit business owners, not the general public. In Southeast Missouri, the Black Mountain CID in Van Buren was caught using the CID’s tax money to make private loans, pay private debts, and fund private expenditures. In Mid-Missouri, the Stoneridge TDD in Jefferson City granted a no-bid contract submitted after the supposed deadline to a board member’s company, while the Rock Bridge TDD in Columbia collected sales taxes from businesses outside the district. Missouri needs tighter limitations on the use of TDDs and CIDs, or they will continue to be abused around the state.

There are benefits to funding government with consumption taxes. This is not an anti-sales tax piece, generally speaking. What I want to argue against is the exploitation of the idea that those shoppers, workers, or visitors who briefly appear in your city need to pay their “fair share” of the local tax burden. “Free rider” is a term for people who use public services without paying the costs. Good public policy should work to limit free riding where possible. But is a person who shops in your city really a free rider who must, in the interest of fairness, pay another half-cent sales tax on the goods that they buy? I don’t think they are, even in tourist havens like Branson or Lake of the Ozarks.

Those shoppers are already paying gas taxes, and a portion of the gas tax gets sent straight to cities for their local roads. Beyond the gas taxes, shoppers and other visitors will generally travel major state and county roads to get to their local shopping destinations. Those malls, shopping centers, grocery stores, etc., are rarely located on streets maintained by city governments.

Those businesses that employees work for or shoppers patronize are already paying commercial property taxes (which are assessed at higher rates than homes) to the city. They pay business license fees to the city, so I might ask what the purpose of a business license is if not to allow employees and customers to come to your place of business? Arguments for raising new taxes, including through measures like TDDs and CIDs, frequently leave out any discussion of all of the other taxes and fees that are currently being paid.

Another issue with funding as much of your local government as you can with a sales tax directed at outsiders is that doing so makes things the government wants look like things the government needs. Do you think that Missouri’s nascent and inexplicable enthusiasm for new trolleys and streetcars would be happening if property owners and trolley users (the few there are) were paying the entire cost? Of course not. The Loop Trolley is entirely funded by outsiders via local sales taxes and federal tax dollars. The Kansas City Streetcar is significantly funded by federal tax dollars and a local TDD, although—to give credit where due—some of the operating funds come from local property taxes. The ability to export most or all of the cost of a new government project onto people who don’t vote on it makes it much more likely that government will engage in activities with questionable benefits. Using property taxes instead as the primary basis for local government funding results in better decision-making by voters—who must decide if the benefits of the government activity are worth what the voters themselves will have to pay for them.

The local leaders who push these efforts to tax outsiders or alleged free riders often feel they are being clever by doing so, as if they have discovered some new trick. The recent ads in favor of the earnings tax in Kansas City proudly claim that half of the money comes from people who don’t live in Kansas City. Supporters of almost every new TDD, CID, or other sales tax proposal consistently tout how this will make those outside shoppers finally pay their fair share. What is lost here is the fact that while your city is being clever in getting that revenue from those outsiders, all of the other cities are doing the same thing to your residents. This whole endless endeavor just creates a circular firing squad of higher taxes used to fund government expenses of questionable necessity. At its worst, it led to long lines at night courts throughout Missouri as town after town was funding itself with tickets and fines targeted toward making payroll rather than public safety.

If Russell Long had been from Missouri, he probably would have changed the final line of his doggerel. “Tax that tourist in the CID” and “Tax that driver in the SUV” come quickly to mind as localized final verses. But his main point stands the test of time and geography. Long understood the desire to tax someone else to fund your public services; a desire that is alive and well in Missouri. Who knows, perhaps Senator Long once got a speeding ticket in Mack’s Creek?

The post Here’s A Crazy Idea: Tax Yourself. appeared first on Show-Me Institute.

On August 4, Missouri voters will decide whether the state should become the 38th to expand Medicaid. Proponents of the measure suggest expanding the program would “save” the state money, but a closer analysis suggests the opposite is true: Not only will the program cost the state money, but it will come at the expense of other important budget priorities.

How do proponents create the illusion of savings? Let’s take a look at the numbers.

Today, Missouri’s Medicaid program covers nearly 940,000 people and costs around $11 billion per year. The federal government pays about two dollars for every dollar the state spends, yet the program still consumes nearly 40% of the state’s budget.

If Medicaid were expanded, Missouri’s Department of Social Services projects that more than 285,000 able-bodied adults would enter the program within the first year at a cost of around $2.7 billion. For these new recipients, the federal government’s match would be more generous, at $9 for every dollar Missouri spends instead of the usual $2. But even at that higher match rate, Missouri’s share of the expansion cost would be significant.

To find “savings,” then, expansion advocates rely on several dubious assumptions.

First, federal funding for Medicaid is treated as “free money.” Although Missouri taxpayers are also federal taxpayers, the cost to the federal government is discounted in the “savings” analysis. And with the federal government in a period of historic deficit spending, new Medicaid spending will be debt for our kids and grandkids to pay off.

Second, proponents’ models assume an increase in expansion enrollment that is much lower than what Missouri’s own Medicaid agency expects. We don’t have to look far to see states that have been burned by their pre-expansion estimates of enrollment and associated costs. Illinois, Arkansas, and Louisiana saw initial expansion enrollment dramatically exceed their estimates. If Missouri sees enrollment slightly above the current estimates from the state’s Medicaid agency, the savings vanish even in the pro-expansion models.

Third, advocates forecast the cost for each new enrollee to be less than similar individuals who are already enrolled in the state’s Medicaid program. By underestimating the cost per beneficiary, expansion supporters shave even more costs from their estimates—even though the state knows they’ll cost more.

And fourth, the most dubious of all, expansion advocates assume the number of disabled Missourians on the program will drop by more than 20 percent over the next four years. By enrolling more individuals under the expansion guidelines (where the federal government pays a higher share), supporters assume they can shift some of the state’s existing Medicaid costs to the federal government. The problem is, this type of maneuver is not allowed. Missouri cannot enroll people who are already eligible for Medicaid into the expansion population, so the idea that the number of disabled Missourians in the program could drop by more than 20 percent is simply unrealistic.

We should also keep in mind that when supporters of the proposal say Medicaid Expansion will save Missourians money, they don’t literally mean the program will cost less. The cost of the program grows year after year, even now. What supporters are saying is that they think it will be less expensive to the state than if the state didn’t expand at all.

There are other important unknowns that must be taken into account, including the risk that taking more federal dollars today may put our state in an even worse budgetary bind tomorrow. For instance, if the federal government finally decides to rein in the deficit by reducing its match on the Medicaid expansion population, state taxpayers may be left holding the bag.

Balancing Missouri’s budget around Medicaid is already an incredibly difficult task, especially amidst an economic downturn. Balancing the budget after expansion would be even more painful, because state legislators will have to come up with hundreds of millions of dollars annually to address both traditional Medicaid and the expansion’s costs. These tough decisions are sure to put priorities like education, roads, and public safety funding at serious risk. Suggesting that the state could save money by spending more on Medicaid was always a dubious proposition, but at some point forecasting gimmicks have to give way to common sense.

The post Debunking the Myth of a Costless Medicaid Expansion appeared first on Show-Me Institute.

Missouri’s governor and other state officials attributed the decrease in enrollment to the state’s improving economy. It makes sense that an improving economy would reduce the need for government-funded health benefits, as more people are employed today than were a year and a half ago. But as Missouri’s enrollment is declining faster than the national average, and the state’s economic growth remains lackluster compared to the rest of the nation, it is unlikely the economy alone can fully explain the drop in enrollment. I think the following point from the Medicaid director’s statement highlights an important yet under-discussed driver of the enrollment change:

From 2014 to 2018, a previous administration did not robustly verify eligibility requirements of individuals on an annual basis and therefore automatically renewed a significant number of enrollees, many of whom did not qualify for assistance . . .

In other words, the drop in Missouri’s Medicaid enrollment is not surprising because the program has been providing health coverage to individuals who did not meet eligibility requirements. This is a shocking admission from our state’s government, considering the federal government requires states to annually verify each participant’s Medicaid eligibility.

The extent of the wasteful spending remains unclear, but the fact it occurred is sadly unsurprising. A recent audit of the Medicaid program in Louisiana found that 82% of enrollees were ineligible at some point during the year they were enrolled. My colleagues and I have written about the state’s potential for wasteful Medicaid spending, and this report confirms our worst suspicions.

As Medicaid costs consume more and more of our state’s budget, limiting improper spending on ineligible individuals is essential. Policymakers should consider a new investigation into how much taxpayer money was wasted while wrongfully propping up the program’s enrollment in the first place.

The post Why is Missouri’s Medicaid Enrollment Falling? appeared first on Show-Me Institute.

THE SOLUTION: Right to work.

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

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

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

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

KEY POINTS

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

SHOW-ME INSTITUTE RESOURCES

Policy Study: A Primer on Government Labor Relations in Missouri

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

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

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

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

THE SOLUTION: Let the market set wages.

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

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

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

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

KEY POINTS

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

SHOW-ME INSTITUTE RESOURCES

Blog Post: Special Interests Inhibiting Joplin’s Recovery?

Blog Post: Playing Favorites on the Board of Aldermen?

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

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

The post 2018 Blueprint: Prevailing Wage appeared first on Show-Me Institute.

New research confirms, however, that school choice gives parents an incentive to become more knowledgeable about different schooling options. A study by Michael F. Lovenheim and Patrick Walsh found “clear evidence that the availability of public school-choice options under NCLB [No Child Left Behind] increased demand for information on school quality.” When parents had the option to transfer their child to another school, internet searches about the schools in their area increased; conversely, when there was no longer a transfer option, searches dropped.

When people say that parents are not informed enough decide among school options, they fail to recognize that school choice can actually encourage parents to gather information and shop around for the best school.

Moreover, state agencies and third-party organizations can help make information on school quality more accessible. Louisiana’s Department of Education launched a website that allows families to compare schools and child care centers via customizable searches.

Show Me KC Schools is a nonprofit organization that helps parents navigate all of their options—public, charter, and private schools—in Kansas City and provides them with the information they need. In an article for US News & World Report last month, Mike McShane described what the organization does to assist parents:

They have an online school finder that allows users to compare and contrast the offerings and performance of different schools. They host a school fair that had over 700 attendees last year. They offer guided school tours that begin with a discussion of what parents are looking for and end with a debrief and conversation with other parents whose children attend the various schools they have visited.

Sure, there will be a learning curve if new school choice programs are introduced, but organizations like Show Me KC Schools can help with the transition.

The bottom line is that school choice empowers parents—it creates an incentive to find out which school will meet their child’s needs and it provides parents with an opportunity to send their child to that school. We should not underestimate parents’ desire to give their kids a better education or the time they are willing to devote to that effort if given the opportunity. 

The post Think Parents Won’t Get the Information They Need To Choose Between Schools? Think Again. appeared first on Show-Me Institute.