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

You can find Aaron’s work here.

Listen on Spotify

Listen on Apple Podcasts 

Listen on SoundCloud

Episode Transcript

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Susan Pendergrass (09:53): Yeah.

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

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

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

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

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

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

David Stokes (13:33): Hopeful.

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

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

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

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

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

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

Susan Pendergrass (16:38): Hmm.

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

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

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

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

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

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

Susan Pendergrass (21:06): Yeah.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Aaron Renn (42:19): Thank you.

Produced by Show-Me Opportunity

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

The level of services provided and the types of taxes or fees collected to fund those services differ from city to city. My newest paper, “Breaking Down Expenses and Revenues: Kansas City and St. Louis Compared to Six Other Cities,” updates two previous Show-Me Institute case studies to shed light on the revenue collection and spending habits of St. Louis and Kansas City.

The six comparison cities are Tulsa, Oklahoma City, Omaha, Denver, Louisville, and Indianapolis. Compared to those cities, St. Louis and Kansas City are, respectively, the second and third highest spending cities overall, and the two highest spenders on debt service.

In terms of revenue collection, Kansas City ranks first among the comparison cities in fees per resident; in fact, it collects almost as much in fees per resident as all of the other cities combined. Indianapolis is the only other city with an earnings tax, yet both St. Louis and Kansas City nearly double Indianapolis in earnings tax collected per city resident.

For further discussion of the revenue and expenditure trends of these cities, click the link below to read the entire essay.

The post Breaking Down Expenses and Revenues: Kansas City and St. Louis appeared first on Show-Me Institute.

Kansas City’s and St. Louis’s debt service per person were the highest of the cities we studied a few years ago and remain the highest today, despite some dramatic increases in debt in Louisville and Denver. Tulsa and Indianapolis actually reduced their per capita debt payments!

For Kansas City, debt service spending rose from $296.24 per person in 2011 to $322.90 in 2017. St. Louis’s numbers rose from $328.15 to $369.33 in the same time period. Long-time readers of this blog shouldn’t be surprised; we pointed this out almost two years ago when Kansas City and St. Louis ranked 101st and 112th out of 166 cities in a study of financial health  by the California Policy Center. Nor should it surprise Kansas City’s leaders. As we wrote at the time,

The Mayor’s own Citizens Commission on Municipal Revenue 2012 report cites high debt as a problem and offers, “Because current debt levels are high compared to peer cities, the impact on the City’s credit rating from issuing additional and significant levels of debt must be of primary concern.”

As Kansas City approaches a mayoral election and St. Louis yet again ponders subsidizing a sports stadium for wealthy would-be owners, city leaders need to focus on long term financial sustainability and stop buying expensive municipal baubles on taxpayer credit.

The post Kansas City and St. Louis Increasingly in Debt appeared first on Show-Me Institute.

This new notoriety (from Google Fiber) and all the press and tweets that went with it gave us a new way to tell the Kansas City story, Tech entrepreneurs discovered that Kansas City was a great place to start up. They moved here just to plug in to Google Fiber and gigabit connectivity.

Well, maybe not. Google Fiber came to the Kansas City area in 2011, the same year Mayor James took office. Prior to that, information jobs in the region, according to the U.S. Census, had been sliding downward. The number of these jobs slipped from 52,000 in 2008 to 39,000 in 2011, a loss of one-quarter. Since then, the numbers through 2013 are pretty flat.

We don’t need to rely solely on Census data. The Show-Me Institute’s Joe Miller recently reviewed a study by the San Diego Economic Development Corporation that ranked cities based on the health of their tech scenes. Miller concluded that the tech industry in Saint Louis is “not a large player nationally, nor is it a terribly significant driver of,” the economy. The outlook for Kansas City is even worse. Of the country’s 50 largest metros, Kansas City ranked 34th, behind peer cities St. Louis (28th) and Oklahoma City (24th) but ahead of Louisville (39th).

Kansas City ranked even lower (42nd) for tech talent, a measure based on tech employee retention rates, percent of population with computer or math degrees, and the number of computer science degrees being awarded. The Mayor recognized as much in his remarks,

Our tech companies need more trained help—people who can manage the flow of information and data, write code, fix equipment and implement creative ideas. And lots of people in our city need jobs, or better-paying jobs to support their families.

While more recent Census data may show an uptick in information jobs and employers in the Kansas City region, for all the spending and talk of momentum and people moving to Kansas City “just to plug in,” the data suggest otherwise. 

The post Kansas City’s Tech Inertia appeared first on Show-Me Institute.

Kansas City borrows a lot, too. We spend more per capita on servicing our debt than every peer city we examined except St. Louis (the other peer cities we looked at were Tulsa, Oklahoma City, Omaha, Indianapolis, Denver, and Louisville). Because cities with higher incomes are better able to handle debt, we also looked at the city income-to-debt ratio. The results weren’t flattering. Kansas Citians earn $5.28 in income for every $1 of debt the city carries. Louisville and Tulsa had much better ratios, ($35.92 and $17.66 for every $1 of city debt, respectively).

The City borrows money for lots of things. For example, a few years ago the city borrowed $10 million from the airport just to cover the costs of TIF commitments. Kansas City issued bonds to help pay down its debts for the Power & Light District; this reduced annual payments in the short term, but increased the total amount of the debt. As a result of existing debt, the city cannot pay for basic services such as tearing down dangerous homes—and so it must borrow again to generate the $10 million needed.

Despite lofty city rhetoric against payday loans, we seem to be managing city funds using a similar model. Even the Mayor’s own Citizen’s Commission on Municipal Revenue reported in 2012 that the city’s debt ratios, among other things, “raise red flags.” Their report found that Kansas City has debt levels higher than all the peer cities it considered.

Right before Detroit declared bankruptcy it was borrowing money to cover employee bonuses. Kansas City hasn’t gotten to that point yet, but things are not looking up. Is this any way to run a city?

The post Kansas City Deep in Debt appeared first on Show-Me Institute.

In his remarks, Cozad compared Kansas City to Indianapolis. According to a case study written by The Show-Me Institute’s Michael Rathbone, Indianapolis is similar to Kansas City in education, median household income and poverty levels. Indianapolis has about twice the population of Kansas City and is just a little larger than Kansas City in total city area. (The study also compared us to Tulsa, Denver, Oklahoma City, Omaha, St. Louis, and Louisville.)

Despite the larger population and larger geographical area than Kansas City, Indianapolis appears to be run much more efficiently. Their total government spending per capita is much lower than Kansas City’s, $1.411 to our $2,354. They spend much less on city administration per capita and less for about every other category the paper examined, including public safety, public services, culture and recreation and capital outlays. The Mayor’s own Citizen’s Commission on Municipal Revenue reported in 2012 that Kansas City has a higher number of employees per capita than most other cities it considered.

If Kansas City leaders were able to bring total spending per capita ($2,354.05) just halfway down to what Indianapolis pays ($1,411.64), it would save us $220 million each year, almost exactly the amount the earnings tax provides. They don’t have to match Indianapolis—or the even more efficiently run Tulsa, Oklahoma City, Omaha or Louisville—just get us hallway there.

Even if Kansas City just lowered its per capita city administration spending from its current $210.59 down to the level of Omaha ($109.57) the city would save $46 million per year. We’d save $78 million per year if we reduced it to what Indianapolis spends ($43.47).

Instead, our leaders prefer to dig in their heels and offer only scare tactics about cutting public safety spending. Don't taxpayers deserve better?

The post The Cost of Inefficiency in Kansas City appeared first on Show-Me Institute.

                Those who have followed our blogs on this topic will be unsurprised to learn that Missouri’s largest cities, St. Louis and Kansas City, rank well on these measures. In terms of overall smoothness, Kansas City and St. Louis rank 8th and 11th, respectively, among the nation’s 75 largest metro areas:

                The relative smoothness of Missouri’s urban highways means lower costs for drivers. According to TRIP, the average driver in St. Louis and Kansas City paid $398 and $438, respectively, in annual additional vehicle operating costs from bad roads. That is far less than the U.S. large metro median ($640 per vehicle). San Francisco’s road conditions cost drivers the most, at an average $1,044 per year.

                The latest TRIP report underscores the fact that Missouri’s major roads are in comparatively good condition, at least in urban areas. However, to maintain and improve road quality, Missouri’s highways need regular maintenance and an adequate user-funding base to back that maintenance, which they currently do not have. 

The post New Report Gives High Marks to Missouri’s Urban Highways appeared first on Show-Me Institute.

This case study examines government revenue, per person, of Saint Louis and Kansas City along with six other comparison cities (Denver, Indianapolis, Louisville, Oklahoma City, Omaha, and Tulsa). It examines tax burdens on residents (in total and as a percentage of personal income), the amount of fees collected, and other tidbits of information that the general public might find interesting. Please give it a look.

The post Show-Me Institute Presents: Breaking Down Revenue appeared first on Show-Me Institute.

Download and read the full case study below.

The post Breaking Down Revenue: How Kansas City And Saint Louis Compare To Six Other Cities appeared first on Show-Me Institute.

The proposed hotel deal not only will make conventions here more expensive, but it also will remove one of the few remaining charges conventions can keep down: open-bid catering.

Patric Mills works with Educational Testing Service (ETS), which brings over 5,000 people to Kansas City every year for between eight and 23 days—accounting for 26,000 room nights and 173,000 meals. She says that Kansas City is already more expensive than our peer cities. In a phone interview, she told me,

Kansas City is more expensive in general than some of our other site cities, such as Louisville and Cincinnati. Everything—travel, lodging, local transportation, IT support, decorators, security services, etc.—is less expensive in other cities. Being able to save on catering dollars makes Kansas City more attractive than it would otherwise be. 

The deal Kansas City is considering would give up the only cost advantage it has—catering—by giving Hyatt exclusive rights to it. As a result, convention planners like Mills will lose an opportunity to control costs. Mills said,

In most cities, the convention center has exclusive catering. Kansas City has open catering, and that is one of the biggest attractions, because it saves us money. . . . Exclusive caterers will have to bill for overtime and, with no competition, would have no incentive to offer low prices.

This will make Kansas City less attractive to ETS and probably many other conventions. Increasing costs and decreasing choice won't bring Kansas City new convention business. Mills concluded,

The College Board has a budget, and ETS, in managing their programs and events, has an incentive to keep costs low. If Kansas City moved to an exclusive caterer and prices rose as high as I am afraid they might, College Board could ask us to move the Kansas City AP Reading to a less expensive site.

The benefits of a new convention hotel are iffy, but the costs and the risks are real. Kansas City is already an expensive place for conventions—this effort to build a new hotel will make us more expensive and cost us an important competitive advantage: open-bid catering.

Taxpayers and the City Council need to understand these risks. If we're not careful, we may end up pricing ourselves out of contention.

The post The Risks of the New Convention Hotel appeared first on Show-Me Institute.

This case study focuses on the cost of services that a city provides. The goal of this paper is to describe spending patterns on government services compared to Kansas City and Saint Louis. By presenting Saint Louis’ and Kansas City’s total expenditures and breaking down the general categories in which these expenditures were made, it is possible to compare them, in some ways, to the expenditures of other, similarly sized cities. For the purposes of this paper, the comparison cities are Tulsa, Oklahoma City, Omaha, Denver, Louisville, and Indianapolis.

The post Kansas City and Saint Louis Expense Breakdown Compared To Six Other Cities appeared first on Show-Me Institute.

Dick Fleming, the group’s longtime head, is stepping down from the organization he has helmed since 1994, and his replacement will come from a city just a short drive east on I-64: Louisville, Ky., also known as the “Gateway to the South.” Joe Reagan moves to Saint Louis from Louisville’s equivalent of the RCGA, the Greater Louisville Inc., or GLI. Marketed during Reagan’s tenure as “Possibility City,” Louisville will have to find a new chamber head for the first time since 2005. Louisville is already writing the postscript to Reagan’s legacy.

But the fact of the matter is that no man, or government, or organization, or even coalition of organizations, can plan an economy, or at least plan it well. That is an incredibly important point to highlight and probably the fairest thing that can be said as Reagan joins the Saint Louis community; it also is probably one of the most damaging points one can raise about how the RCGA and organizations like it behave.

Our local chamber loves to get the pat on the back for positive economic news and to pump “public-private partnerships,” oftentimes fueled with tax credits, that fail to substantively move the economic needle in the region’s favor. Meddling in the economy, local or national, destroys wealth more often than it creates it, leaving taxpayers with the promise of prosperity but little else. And it is no secret that Saint Louis city has languished for decades under one failed economic plan after another, compounded by the exodus of residents into nearby counties and driven by the continued intransigence of the city’s political class to step away from its cronyistic tendencies. In short, the economic development status quo is not a blueprint for a prosperous future for this region, and has not been for some time.

Which is why I hope that Reagan’s arrival in Saint Louis is not just more of the same. More precisely, I hope that Saint Louis — and Kansas City, and the state of Missouri — at least return to some sense of regional economic normalcy, if not runaway growth in the coming year. That is a Christmas wish of sorts, I suppose, but a wish that the RCGA, GLI, or any similar organization has limited or no power to bring to fruition.

Maybe a New Year’s resolution for the state and the city is in order instead: To simply let the market work. It does not matter if it is Saint Louis’ chamber hawking Aerotropolis, or Moberly’s chamber hawking Mamtek, or a political class increasingly disconnected from the electorate hawking Solyndra. There are no easy, centralized solutions to our economic woes. Acting like there is in Saint Louis only prolongs the municipal pain. Like all taxpayers, Saint Louisans cannot depend on a small group of decision-makers to make their lives better.

Free markets make genuine and sustainable economic growth possible, and if there is going to be a “Possibility City” in this region, let it be more than just another marketing slogan with another cartridge of development silver bullets as its driving force. Reduce taxes and regulation, get out of the way, and let the free market flourish. May RCGA’s new administration regain its faith in that formulation.

The post The Gateway City, The ‘Possibility City,’ And Hope For The Future appeared first on Show-Me Institute.

On the stump, candidates rail against corporate giveaways and crony capitalism. In town halls they opine about “backroom deals,” preferential treatment, and earmarks. But when it comes to a whole host of issues — sports teams, convention centers, hotels, and many other developments, too many politicians find their inner Nancy Pelosi and — Eureka! — discover that this latest project they’ve stumbled upon is about one thing, and one thing only: “Jobs, jobs, jobs, jobs.”

So, what’s the latest and greatest form of state-supported “economic development”? Introducing the “Aerotropolis,” the theoretical airport-centered city of the future.

The idea is that decades from now, the animating appendage to the most successful cities will be massive international transit hubs combining air, rail, and wheels that can get product from manufacturers in, say, China to buyers around the United States. It requires massive inventories of warehouses around the airport to store the product, massive improvements in the airport itself to handle the air carriers, and, predictably, massive, massive public subsidies, at least if you’re going to build the thing from scratch on the backs of taxpayers.

As you’d imagine, the promises made to hawk a project like this aren’t a far cry from the days of travelling salesmen and their talismanic tonics. Need your cattle flown overnight to China? Aerotropolis. Want your city to “seize the opportunity” and act on this “vision” before it “passes us by”? Aerotropolis. Want your hair darkened, your teeth whitened, your wife to love you, and your children to praise you in song?

Point being, there’s no shortage of promises made for a project like this, nor does there seem to be a shortage of willing elected officials prepared to throw money after those sweet, sweet nothings whispered in the name of government-created “markets.” This session the Missouri legislature took up an Aerotropolis bill that would have given millions in tax breaks to the private sector, primarily to warehouse developers in Saint Louis.

But for the fact that the chambers ran out of time on a compromise, a bill with a reduced price tag would have been signed into law, and still may be; a coalition of both Democrats and Republicans are lobbying hard to bring the legislature back into a special session and pass the bill once and for all.

The problem for Saint Louis and other cities is that the marketplace for freight has been making its decisions about transnational hubs for years, long before the word “Aerotropolis” was even imagined.

• To the north of Saint Louis, Chicago and Detroit are both well into the international passenger and shipping game.
• To the east of Saint Louis, Louisville hubs for super-carrier UPS.
• And only four hours to the south of Saint Louis, Memphis — the mother of all Aerotropoli — hosts mega-freighter and overnighter FedEx. And that’s to say nothing of Milwaukee, which is also looking to create yet another “Aerotropolis” of its own. Or DFW. Or ATL. And others.

Indeed, Saint Louis is only the latest proposed entrant into the “Aerotropolis” game in a region rife with competitiors. This, really, is the problem. Subsidizing projects whose market-crystallizing stages passed years and sometimes decades before is a not a recipe for sustainable economic growth, but it is absolutely the M.O. of typical, undisciplined Big Idea public spending, even here in the Show-Me State.

What makes the situation in Missouri particularly strange and disheartening, though, is that substantial conservative (and arguably tea party) majorities exist in both legislative chambers, and yet … $360 million in special tax breaks is still on the table for the project, a high stakes experiment based on highly dubious economics. It’s hard to shake the disturbing reality that in even one of the most tea party–friendly states in the country, this sort of legislation could get “aye” votes from more than 94 percent of a legislative chamber.

This is, of course, to say nothing about the legislation itself, which ultimately has little to do with encouraging international trade and everything to do with awarding taxpayer money to the politically connected business elite. The Show-Me Institute found that there was more than 18 million square feet in vacant warehouse space available around the airport already, yet the Aerotropolis tax credits would go to subsidize construction of even more. That hurts business owners who took on the risk of building without the lure of Aerotropolis’ lucrative tax breaks.

But whether you’re talking about hurting existing local businesses through preferential tax credits or about chasing after yet another “economic development” comet, the list of reasons not to put public money behind a project like an Aerotropolis are wide and dispositive. We all want our cities to grow, but to do that, governments should be relying on the free market to make those decisions and not the wrong-headed and expensive big ideas of its politicians, however well-meaning those politicians may be.

The post The Next Big Handout: An “Aerotropolis” Near You? appeared first on Show-Me Institute.

It appears that the company figured out how to secure tax credits from the state government without increasing the level of employment. Ford is sending one line to Kentucky, but it is starting a new line in Kansas City. Although the number of jobs will remain constant, the company will continue to receive financial assistance from the state. Failing to deliver on promises, in terms of job creation and economic activity, is unfortunately a pervasive problem in Missouri. From an article in the Kansas City Business Journal:

The automobile side of the Kansas City Assembly Plant will cease production sometime during the fourth quarter of 2011, soon after the Louisville Assembly Plant in Kentucky begins production of the next-generation Ford Escape.

The effect on the 3,700 hourly employees in Kansas City remains unclear. However, Missouri state officials seem to expect some downtime at the Kansas City Assembly Plant in Claycomo, Mo., creating an opportunity for a big retooling in preparation for a new product.

Ford has a long history of pitting states against each other, so this news is not particularly surprising. The company has a pattern of securing millions in incentives from state governments, then shutting down operations and leaving the state unless it can secure additional incentives. Taxpayers, of course, are left to pick up the tab.

Don’t forget that the state of Michigan issued $909 million in incentives to Ford in October.

I find it disconcerting that the state government has a working relationship with the company in its operations. According to a statement from Gov. Jay Nixon’s office:

We have been working closely with senior Ford officials for months to make sure the vehicles of the future are manufactured at the Claycomo plant, and it’s clear that our hard work will pay real dividends for Kansas City and suppliers in communities across Missouri. We look forward to putting the finishing touches on this agreement in the coming weeks. Automotive manufacturing has a bright future in the Show-Me State.

Government officials can attempt to anticipate what the most efficient solution to a given problem will be — but, in all likelihood, they will get it wrong. This is because no individual has access to perfect information. As the Show-Me Institute’s editor Eric Dixon explained in the comment section of a recent post, the likelihood that an individual is wrong increases as he becomes further removed from the decentralized feedback loops that markets provide. Nixon and state policymakers are too far removed from the business of manufacturing vehicles to know the optimal state of the market. Missourians would be better off if the state government stayed out of this particular market, and instead allowed market forces to work.

This reminds me of the following concept that Henry Hazlitt describes in Economics in One Lesson. I cite this classic work frequently because it relates to many public policy issues in Missouri. I referenced this passage in a recent post in which I argued that government non-intervention is the optimal job creation strategy. Hazlitt wrote:

When providing employment becomes the end, need becomes a subordinate consideration. “Projects” have to be invented. Instead of thinking only where bridges must be built, the government spenders begin to ask themselves where bridges can be built.

Would the Claycomo plant stay open in the absence of the subsidy from the state of Missouri? If it would not, then the plant is, essentially, an invented project that is maintained because it can be, rather than because it satisfies a market demand. The fact that the new line has yet to be determined makes me wonder whether the project is in the process of being invented.

The post Encouraging Job Creation in Claycomo, Mo. Louisville, Ky. appeared first on Show-Me Institute.

Pitting states against each other is one of the more significant negative consequences of offering generous incentive packages to single companies. It encourages states to offer incentive packages in ever-increasing amounts, in a desperate attempt to entice these companies to locate within the state. Then, the company tells each state government that other states are offering huge incentives for it to invest there, and that they must meet or exceed these offers in order for the company to stay.

In the case of Ford, it’s a confusing mess. After Ohio gave Ford $83 million in incentives during 2002 to expand in the state, Ford moved its production to Missouri. Because Illinois gave Ford an undisclosed amount of incentives in January 2010 to open an assembly plant in Chicago, the company moved its production of Explorers from Kentucky to Illinois. Just last month, the state government in Michigan awarded $10 million in Brownfield tax credits to Ford to redevelop a section of the Michigan Assembly Plant complex in Wayne. Meanwhile, Ford told the Missouri state government that it needs $150 million over 10 years to keep its Claycomo plant open, or else it would move production of its Ford Escape and Mercury Mariner to Louisville. At the same time, Ford seeks tax incentives from the Kentucky state government. They say that, in order to remain in Kentucky, they need financial assistance. Ford secured up to $180 million in incentives from Kentucky in 2008, and $66 million in 2007.

Now that Ford has secured $150 million from the Missouri state government, will the company ask for still more, or will it pack up and leave the state? How do we know that Ford won’t demonstrate the same behavior in Missouri?

When a large company like Ford pits states against each other, other groups are negatively affected. For example, it causes taxpayers to face a higher tax burden because the state has to pay for these incentive packages. It also forces small businesses that lack lobbying power to compete at a competitive disadvantage.

It’s a very expensive game, and taxpayers everywhere would be better off if their state governments stopped playing.

The post Pitting States Against Each Other: Ford’s Expensive Game appeared first on Show-Me Institute.

In the state of Indiana, where the economy is primarily based on agricultural pursuits (much like in Missouri), daylight saving time only came into existence in April 2005. Prior to that date, rural counties generally chose to rebuke the practice of changing clocks, while the more urban regions surrounding Chicago, Louisville, and Cincinnati chose to adopt the practice. The reason? Daylight saving isn’t that great for agricultural communities.

Despite the fact that a large majority of the public seems to think that daylight saving time exists "to help farmers," shifting clocks back an hour actually has the opposite effect. Farmers do most of their work in the morning, to avoid as much direct, burning sunlight in the middle of the day as possible. If nothing else, the practice hurts them more than the rest of the population. In actuality, daylight saving time was adopted in order to help cut energy costs by reducing electricity use in the evening hours. But again, with the rise of modern technology, this isn’t the case either.

The Wall Street Journal recently reported that, as a result of Indiana’s switch to the system, researchers at the University of California?Santa Barbara were able to determine that an additional $8.6 million was spent on electricity in those Indiana counties which switched over to daylight saving time. The reason? Air conditioning costs. People are home when the sun is still out during the summer, and they crank up the AC to stay cool — whereas before, they would just enjoy the sunset.

The federal government passed a law in 2005 that standardized the start and end times for daylight saving time, but as seen by Indiana’s recent shift, said law is not a mandate for state observance. Missouri, a state that depends on agriculture, is desperately trying (like every other state) to keep energy costs down. Why not end daylight saving time? While I’m not advocating some ridiculous Indiana-like system that would keep St. Louis and Kansas City on daylight time while letting the rural counties ignore it, I think that avoiding the issue entirely is something worth a bit of thought. Sunlight is something our bodies are naturally attuned to. Shouldn’t we listen to it when we make our schedules?

Or maybe I’m just angry about losing that hour of sleep.

The post The Stupidity of Springing Forward appeared first on Show-Me Institute.

"The way to stop discrimination on the basis of race is to stop discrimination on the basis of race."

During the past 50 years, desegregation has worked well to a point, but instead of trying to force people  from different backgrounds to go to the same school, we should give parents options to send their kids to the schools of their choice. Through methods of school choice, from the Voluntary Inter-district Transfer Program that is used in St. Louis to send city students to the county and vice-versa, to school vouchers that allow people the freedom to choose where to send their kids, we can accomplish the goal of desegregation without the controversy. People of all backgrounds, no matter what race they are, want to choose good schools for their children, and at the end of the day, government does not need to force desegregation on people — they will choose it.

The post Forced Desegregation Isn’t the Answer, School Choice Is! appeared first on Show-Me Institute.