In 1977, the Chicago Sun Times newspaper bought a bar. They didn’t just buy it to serve people drinks. They bought it—under a fake name—for the purpose of loading it up with video and audio recording equipment to expose the rampant political corruption in Chicago. For months, as the bar went through the standard process of getting permits, licenses, and so on, the operators recorded the unending stream of bribe requests, kickback demands, and more that were (and arguably still are) commonplace in Chicago.

Even though news of corruption in Chicago was hardly earth-shattering, the series of stories released in 1978 caused a sensation. Rarely had the political cancer been so clearly documented via media, and the constant brazenness of the corruption startled the people of Chicago, who until then may have thought they’d seen everything.

Which leads us to last week’s news about the federal indictments of three St. Louis City aldermen on corruption charges. I may work at a think tank, but I know a little about bribery attempts. Back in 2001, I got a first-hand look at an attempted bribe for then-County Councilman John Campisi. He had just finished a meeting with a taxicab operator who, as he departed, left a brown paper bag on the Councilman’s desk. Suspicious, Campisi asked me (at the time a council aide) to come to his office so that we would both be present when someone (me) opened the bag. Sure enough, the bag had a bribe in it. The next year, that taxicab operator, another councilman who had arranged the meeting, and a few other county employees involved in the racket were convicted of bribery. That was the biggest scandal Clayton had seen until Steve Stenger decided to turn the 9th floor of the county building into a live-action RICO performance.

A part of me is delighted with the bribery charges. I have spent years decrying (including in the pages of this newspaper) the abuse of precisely the two things that appear to be at the heart of the corruption charges: tax abatements and the city land bank. Rest assured, I am going to update my talking points on these two issues, and trust me when I say that audiences pay a lot more attention when the lead is “politicians take bribes” than when the lead is “studies show . . .”

But on a more serious note, a much larger part of me is angry and depressed over the allegations. While everyone is innocent until proven guilty, the main question I ask is not about the guilt or innocence of these three politicians, but whether we have a system that enables corruption in St. Louis and the rest of our state (paging Tom Pendergast, please). I have to think the answer is a very dispiriting “yes, we do.” The ease with which tax subsidies, abatements, and so on can be handed out has long made them susceptible to this risk.

The tax subsidy rot is not limited to the minnows. Never forget that, for all Governor Eric Greitens’s flaws and self-inflicted wounds, the tax-credit industry apparently mobilized a political hit squad for him after he had the audacity to kill their golden goose in the low-income housing tax credit program. And while large-scale developers around the state may be smart enough to ensure their payments to elected officials are done as perfectly legal political donations instead of unreported cash-in-a-bag, one strongly suspects that the abuse of tax-increment financing (TIF), special taxing districts, and other forms of corporate welfare is greased by the legal version of just what got the three aldermen indicted. I have no doubt that some of the people at St. Louis’s country club bars who are most appalled by bribery charges in the city are standing next in line to get their own special tax credits or floodplain TIF deals.

The stench of corruption, both now and in the past, carries with it very real harms for our region. So back to Chicago: Studies have shown (see, I can’t avoid that phrase) that corruption costs Illinois $550 million a year. That represents the cost of not only the direct bribery, but, much more so, the decreased economic growth and lost investment that result from the fear of corruption. Ask yourself: would you think twice about investing in Mexico now? Of course you would. The endemic violence and corruption would make any rational person think twice. The same thing is true for cities and states known for corruption in our own country. Under Steve Stenger, some bidders undoubtedly thought twice about bidding on St. Louis County projects, knowing as they did that a winning bid was not going to be finalized until the county executive received a large campaign donation. Accounts of corruption in the City of St. Louis give residents and investors one more reason to keep themselves and their money out of the city. That’s the last thing the city needs right now, but that’s what it has.

As is often said, when the business of buying and selling is controlled by the legislature, the first thing to be bought and sold will be the legislators. Good government types (of which I am one), must do more than simply call for “electing better people.” We need to remove the incentives and opportunities for corruption. In the latest instance in the city, we should respond by completely eliminating the ability of politicians to dole out tax subsidies, credits, and abatements. Gambling addicts shouldn’t hang out in casinos and hope they aren’t tempted. The problem of corruption in our community will continue until we reduce the involvement in government in our daily lives and shrink the number of things that can corrupt politicians in the first place.

The post Corruption Allegations: Disappointing but Hardly Surprising appeared first on Show-Me Institute.

The study, published by ASU’s Center for the Study of Economic Liberty, ranks St. Louis 31 out of 115 cities in North America in regulatory competitiveness. That ranking doesn’t seem half bad, but 31 out of the 66 U.S. cities included in the study isn’t great. Among American cities, St. Louis is just middling.

The table below shows how St. Louis fares in the various categories. St. Louis ranks 12 overall in “Paying Taxes,” but sales taxes are not included in the scoring. Anyone who’s shopped in the city knows how steep the city’s sales taxes are; St. Louis’s ranking would likely be lower if they were included. In addition, “resolving insolvency” is a ranking where all American cities are tied for first place, so not much should be made of that stat in this context.

In two critically important categories, St. Louis is less than impressive, ranking 60 in “Starting a Business” and 47 in “Employing Workers.” These scores incorporate regulatory costs to business owners, including compliance fees for mandatory procedures and wage regulations like overtime requirements and probationary periods. As our low rankings indicate, starting and staffing a business is a costly and onerous process in St. Louis—and that’s not the inviting economic environment that we want.

Policymakers must recognize that all business regulations carry costs for business owners, and St. Louis’s costs are too high. 46 other major U.S. cities have found less costly ways to meet their public policy objectives for employing workers. And St. Louis was outranked by cities in the U.S., Canada, and Mexico when it came to ease of starting a business!

All this suggests that St. Louis has a lot of room for improvement when it comes to business regulations. Policy changes like lowering licensing requirements, taxes, or procedural costs are just a few things that may get St. Louis a better ranking. Without reform, St. Louis will continue to be mired in mediocrity.

The post St. Louis Ranks Poorly in Ease of Doing Business Study appeared first on Show-Me Institute.

First, it’s worth recalling that in 2018 the National Bureau of Economic Research (NBER) demonstrated how tax rates affect innovation. Looking at state-level taxation dating back to the early twentieth century, the NBER concluded, “A one percentage point higher tax rate at the individual level decreases the likelihood of having a patent in the next 3 years by 0.63 percentage points.” Specifically, they found that, “higher personal and corporate income taxes negatively affect the quantity, quality, and location of inventive activity at the macro and micro levels.” This should not surprise anyone; resources that might be put toward innovation can’t be used for that purpose if they are spent paying taxes.

The new study from Arizona State University, titled “Doing Business: North America“ looked at 115 cities in the United States, Canada, and Mexico and rated them in six different categories. Those were “starting a business,” “employing workers,” “getting electricity,” “registering property,” “paying taxes,” and “resolving insolvency.” (All U.S. cities tied for first place regarding insolvency.)

While St. Louis ranked 31st overall out of the 115 cities in Canada, the United States, and Mexico (no other Missouri cities were included in the study; Chicago scored 45th overall), the areas where it scored less impressively—starting a business and employing workers—feature significantly in attracting entrepreneurs and innovation.

St. Louis scored 60th on “starting a business” (46th among U.S. cities). This ranking resulted from a “study of laws, regulations, and publicly available information on business entry,” along with consideration of the time and cost of complying with applicable regulations.

Regarding “employing workers,” St. Louis ranked 47th both for the whole sample and among the 66 U.S. cities examined. This ranking was more involved and is described on page 177 of the report, but it reflects the cost of wages and wage regulations such as probationary periods, overtime requirements, and sick leave.

Policymakers can debate the value of local and state mandates and regulations associated with starting a maintaining a business, but all should acknowledge that each one imposes a cost on the employer. Forty-six other U.S. cities have formulated less costly ways to meet their public policy objectives when it comes to employing workers. And St. Louis was outranked by cities in in all three countries examined when it came to ease of starting a business!

All this suggests that when working toward the important goal of taking advantage of St. Louis’ “innovation districts” in the agri-tech, biomedical and technology fields, city government could do a lot more to help entrepreneurs take advantage of what the city may already offer.

The post St. Louis Ranked in the Middle in Ease-of-Doing-Business Study appeared first on Show-Me Institute.

That view is wrongheaded on both counts, and I certainly hope the Carrier "deal" doesn't presage future deals the President Elect will be cutting over the next four years. The reason is straightforward. In return for not following through on its threat to move, Carrier will receive $700,000 per year from the state of Indiana, for at least 10 years. If that kind of cronyistic deal sounds familiar to you, it should; the Carrier agreement is like many of the "deals" to "save or create jobs" that have been made, and that we have criticized for years, here in Missouri. As one economist observed after the Carrier deal was announced, "[e]very savvy CEO will now threaten to ship jobs to Mexico, and demand a payment to stay." Yup.

Even with the financial gift from Indiana, it doesn't sound like every job will be staying at the plant anyway, or at another nearby facility that was also slated to be closed. In return for the money, Carrier said it will keep about 1,000 jobs in Indiana, but that about 1,300 Indiana jobs were going to be sent to Mexico anyway, despite the public giveaway.

We have to reiterate: It is not the role of the government to pick winners and losers in the tax code, whether the tax code in question is at the local, state or federal level. More to the point, allowing powerful companies to issue threats as a way to compel public financial support for their private operations is a road policymakers should not go down. Most employers could never dream of getting such generous concessions, and if the tax burden needs to be reduced to make one big company profitable, policymakers, whatever their level of government, should instead work to reduce the tax burden for all companies—large and small, politically connected or not.

Indiana should not export its corporate welfare to Washington DC. If it does, it will be to the detriment of the American public and taxpayer interests.

The post The Indiana Carrier Deal: State Cronyism Shouldn’t Be Nationalized appeared first on Show-Me Institute.

Leasing airport property to a private company for aviation-related business makes good sense. Most airport land is virtually impossible to sell because of federal grant assurance restrictions. Allowing private companies that would benefit from access to the airport to lease adjacent property (rather than letting the land lie fallow) is a win for the private business, the airport, and the local economy. As things stand, far from spending money, the airport should receive about $13.5 million a year in lease payments. There are currently no plans to spend any airport money for the facility.

If the plan to use Lambert as a Mexico Hub succeeds, it could mean lower landing fees for commercial airlines, which can attract more flights. The public at large would benefit from more travel options, as well as from any jobs that a cargo hub would create. In the worst-case scenario—the private company fails—the airport would not be worse off financially. If anything, it would be better off, as the airport would have a new dual-customs facility and freight terminal to attract more business.

However, Saint Louis residents should keep an eye on the project, because all too often local governments will shift the risk of these investments from the private sector to taxpayers. The plan to make Lambert a “China Hub” just a couple years ago is a prime example of this tactic. There is no talk of local subsidies yet, but that could change.

Lambert-St. Louis International Airport, as Saint Louis’ only large airport, is vital to the local economy. Allowing the private sector, rather than local governments, to make the investments and take the risks of building a freight hub is a strategy that the airport, and the public at large, would benefit from.

The post Investment at Lambert Could Bring Mexico Hub to Saint Louis appeared first on Show-Me Institute.

One topic of discussion was pay for teachers. Flinders asserted that Kansas City teachers are paid lower than the state average. She is most likely correct, and there is something we can do to fix it. In previous posts we suggested reforming teacher pay schedules to increase the incentive for teachers to stay on.

But the district actually can pay teachers more if it cuts back on hiring non-teacher personnel. According to my colleague Brittany Wagner,

Over the past 60 years, schools have increased non-teaching personnel positions by 702 percent. [A report] also found the U.S. spends more than double what Korea, Mexico, Finland, Portugal, Ireland, Luxembourg, Austria, and Spain spend on non-teaching staff salaries and benefits.

Recall that upon arriving Superintendent John Covington asserted that the district was too big, and in 2010 KCPS closed 30 buildings and eliminated 1,247 full-time equivalent positions. Doing so freed up a great deal of money. According to Wagner,

One study showed that if non-teaching personnel grew at the same rate as the student population, American public schools would have an additional $24.3 billion annually.

This impacts pensions as well, which is far greater than the immediate cost of this educational bloat on salaries. Show-Me Researcher Michael Rathbone writes,

Non-teaching personnel also accrue pension benefits through the Public Education Employee Retirement System of Missouri (PEERS). According to the PEERS annual report, “PEERS is a mandatory cost-sharing multiple employer retirement system for all public school district employees (except the school districts of St. Louis and Kansas City), employees of the Missouri Association of School Administrators, and community college employees (except St. Louis Community College).” Members of the plan and their employers both contribute to the pension.

Over the last five years, the unfunded liabilities (liabilities minus assets) of this plan have increased by more than $64 million. Pension benefits like PEERS benefits are guaranteed and must be paid out. If PEERS can’t make those payments, taxpayers (i.e., you) will have to.

By spending too much on non-teacher personnel, KCPS is draining resources from both funds to pay teachers in the short term and teacher pension funds in the long term. Cutting back on non-teacher staff—or perhaps just restricting growth—would allow school districts to better meet their financial responsibilities to teachers and to demonstrate a real commitment to the children in the classroom.

The post Ideas for Kansas City Schools: Focus on Teachers appeared first on Show-Me Institute.

Sparkly, purple, and lined with a shiny metal band, my retainer was wrapped in a napkin while I ate my school lunch throughout elementary school. “Don’t you lose that retainer,” I can still hear my mother saying. Inevitably, I lost it at lunch, and I knew there was only one place it could be.

Inside the trash can, remnants of sloppy joes and sour milk splattered the edges of the bag. A cafeteria worker, realizing what had happened, pulled the trash out and began to dig. “Here you go,” he said and returned the retainer to me.

I recalled the cafeteria worker who helped me find my retainer after I read Fordham Institute Research Analyst Matt Richmond’s report, The Hidden Half: School Employees Who Don’t Teach.

The report’s findings are startling. Over the past 60 years, schools have increased non-teaching personnel positions by 702 percent. It also found the U.S. spends more than double what Korea, Mexico, Finland, Portugal, Ireland, Luxembourg, Austria, and Spain spend on non-teaching staff salaries and benefits.

As the study’s title, and my own personal vignette, suggests, these workers are both seemingly underappreciated and overlooked. We know little about the non-teaching part of the education industry, except that it has grown at a much faster rate than students. One study showed that if non-teaching personnel grew at the same rate as the student population, American public schools would have an additional $24.3 billion annually.

This is not to say that schools would be better off with less non-teaching personnel, but if Missouri schools want to get serious about spending efficiently, then collecting specific data on non-teaching staff is a good place to start.

The post New Study Looks at Growth of Non-Teaching Personnel appeared first on Show-Me Institute.

The sliver that has come back to life this time is “freight forwarding tax credits.” These tax credits are available to airlines or air freight companies that transport cargo on a direct international flight. Missouri House Bill 1500 (HB 1500) proposes a 40-cent/kg. cargo tax credit for any of those flights leaving a Missouri airport. The proposal calls for eventually allocating $60 million, with a yearly cap of $8 million. The purported purpose of the bill is to encourage foreign trade, presumably by making it cheaper for Missouri products to reach international markets.

However, as of this year, no direct international cargo flights leave Lambert. In addition, the only international passenger flights from Lambert go to resort destinations in Latin America. Whatever demand there is for Missouri exports in Latin America generally, it is unlikely that this demand is in seasonal resort towns such as Cancun and Montego Bay. As HB 1500 only allows tax credits for cargo on direct international flights, there may be few or no companies to take advantage of the proposed tax credit.

So who benefits? One possibility is that this bill is designed to subsidize Brownsville International Air Cargo Inc., which was in negotiations with Lambert for cargo space that could involve freight forwarding to Mexico. Another possibility is that the tax credit will act as another carrot to attract direct international flights to Lambert. Passenger airlines make 5-10 percent of their revenue from “belly cargo” on passenger flights. Making that cargo more profitable could make Lambert more competitive.

While these might seem like enticing goals to some, they are far from promoting Missouri’s foreign trade. The fact is, most cargo hubs in the United States are at either the major air passenger hubs (Los Angeles International Airport, JFK International in New York, etc.) or centers for major shipping companies (Memphis International Airport). Export tax credit or not, Lambert will not become a major air traffic hub when its landing fees are three to four times those of competing airports. Subsidizing a direct flight to Europe or Latin America may bring benefits to a few, but there is little reason the whole state should pay for this.

Like the original Aerotroplis plan, HB 1500 gives tax credits to select industries with only long-shot hopes for significant increases in Missouri exports. Saint Louis could be better off by making the airport, the city, and the state more competitive and economically vibrant, not pinning hopes on tax credit magic.

The post Aerotropolis Revisited appeared first on Show-Me Institute.

I believe the main reason for this disparity is that foreign languages are treated by our public education system as less important than math, science and English. In contrast, E.U. governments expect their citizens to become fluent in at least two languages plus their native tongue.

Another panelist laments the fact that “unlike Europe, the U.S. has no coherent strategy for making our society bilingual.”

I suspect European countries’ policies are a reflection of their citizens’ interest in languages, rather than the cause. Europeans have ample reason to study languages; they all live within a short distance of other countries where different languages are spoken. As Norman Matloff notes in his response to the Room for Debate question, Americans who live close to the border with Mexico show more enthusiasm for learning Spanish than do their fellow citizens to the north.

Could it be that although proximity to foreign language speakers can spark people’s interest, policies are what really make them use other languages? If that’s the case, I’d be hard pressed to explain what happened in Ontario, Canada, where a ceremony was conducted in English a few weeks ago. That was despite French’s status as an official language of Canada, and despite the French-language public school boards and community colleges that are established throughout the province. When a language isn’t useful to people, policymakers who promote it are wasting their time.

The United States shouldn’t order everyone to learn languages, but the education system should give opportunities to become bilingual to people who are interested. Magnet schools and charter schools are good environments for language specialization, as are the optional language-immersion programs offered by some traditional districts. (Examples in Missouri are Academie Lafayette, the St. Louis Language Immersion Schools, and the Kansas City School District’s Foreign Language Academy.) Parents who want their children to have a lot of foreign language exposure can enroll them in these schools.

If Chinese language education is to continue growing, more people must be free to choose schools that teach it. Policymakers who are worried about American students learning English only ought to try to make it easier to open new language-immersion choice schools.

The post “No Coherent Strategy” for Teaching Foreign Languages appeared first on Show-Me Institute.

My first Show-Me Daily post, appropriately enough, deals with my hometown, Poplar Bluff, and its never-ending quest to banish that devil methamphetamine. From Poplar Bluff’s Daily American Republic:

A request by police chief Danny Whiteley to adopt an ordinance requiring the sale of products containing pseudoephedrine by prescription only was moved by the Poplar Bluff City Council to its Dec. 21 voting session.

Whiteley told council members Monday night the proposed ordinance is based on one enacted July 6 in Washington, Mo.

“This will give our city another tool to fight the ongoing battle against methamphetamine in Poplar Bluff and Butler County. We are all aware of the destructive nature it has on society, families and our children,” Whiteley said. “Adopting this ordinance would be a significant step in thwarting the individuals who manufacture methamphetamine in our area.”

Back in October, my co-blogger Chaya Kristen Chopra pointed out that a similar ban in Union, Mo., would force people with nasal problems to seek out expensive prescriptions for what is for most people a very common problem. I would add that given the expense — both in time and money — of a doctor’s visit, most people would simply be inclined to drive to a neighboring town to purchase pseudoephedrine. Obviously, this will create a huge inconvenience for anyone suffering from a routine cold.

But, more to the point, the ban will not succeed in its goal of reducing methamphetamine use. If someone wants to cook meth badly enough, they will also drive to the next town (and the next, and the next) to purchase enough pseudoephedrine to cook their batch. But suppose the law were extended to cover all of Missouri, or even the country. Would that stop people from getting meth? It seems unlikely. There are no coca or poppy fields in this country, yet the supplies of cocaine and heroin never seem to disappear. The more likely scenario would be for production to get pushed into Mexico, where methamphetamine could be mass produced. In fact, that is what has already happened, to a large degree.

Where there is demand, there will be a supply. Poplar Bluff’s efforts to control methamphetamine are Sisyphean, and have been ever since I can remember. The police department constantly claims victory is around the corner, but they seem no closer to eradicating it than when I was in high school and people did lines in the back of shop class. All this law will succeed in doing is making one of the most common and effective forms of health care available, pesudoephedrine, vastly more expensive for honest citizens.

The post Keep on Pushing That Boulder, Sisyphus appeared first on Show-Me Institute.

Illinois produces corn for the rest of the world, and Illinoisans buy vegetables and fruit from places like California and Mexico. That arrangement creates wealth for all sides — producers make the highest possible profits, and consumers buy at the lowest possible prices. Reversing the arrangement, therefore – growing more vegetables in Illinois and making Californians grow their own corn – would make all sides worse off.

Nicklaus sounds exasperated that this economic fallacy is being dressed up by advocates as a “stimulus.” But it’s not surprising, because the run-of-the-mill stimulus plans operate on much the same principle. They encourage production that wouldn’t have happened without a directive from the state, ignoring comparative advantage and the market’s precise timing. And when stimulus advocates predict huge gains in wealth, they leave out the loss of what all those resources would have been used for if the stimulus hadn’t interfered.

Some of the typical stimulus plans are better than the locavores’ schemes because they don’t take resources so far away from their ideal uses in a free market. Building a bridge may be expensive, but some people can use the bridge for its intended purpose. Building a greenhouse to grow bananas in Illinois is like planting dollars in the ground and hoping they’ll grow into tropical fruit. It’s waste without any redeeming qualities.

The post David Nicklaus on “Buy Local” appeared first on Show-Me Institute.

The author of the Times piece dislikes the VP office for several reasons, but primarily because presidential candidates select running mates based largely on political benefits instead of leadership qualities, so the nation is damaged when one of those people moves up to be the president after a death or impeachment. The author cites several examples in which, because of a death, the voters ended up with someone very different than the person they had elected. (The author does, however, make one blatant factual error that the Times corrected.) Because governors and lieutenant governors in Missouri do not run on the same ticket, part of that objection is made moot. The author also cites Mexico and France as countries with system similar to ours, that do not have VPs.

I do not agree with the author about the VP position — nor the lieutenant governor position, for that matter. Just because voters usually don’t put much weight into the quality of a VP candidate when they make their choices for president does not mean they can’t at least consider it. For each position, there are essentially two main jobs: cast tie-breaking votes in the Senate, and be available in the case of a death or impeachment (which we have come close to twice during the past 35 years). In years past, presiding over the Senate was also a large part of the job. That changed a long time ago in DC, and a few decades ago in Jeff City, as well, after a lawsuit between the majority Democrat senate and the new Republican lieutenant governor (Bill Phelps) was won by the senators.

As for France and Mexico, I love comparative politics, so I’ll dive in. As you may or may not know, most nations have a head of state and a head of government. For example, Britain has a queen and a prime minister. Nations without kings, no matter how little power they hold, generally choose to elect another official to hold a post — that might be called president — to serve as head of state. Germany and Israel are two examples of this. That post tends to have very little power, is mostly ceremonial, and usually goes to popular elected officials later in their careers. The United States is one of the only countries that combines both positions into one office.

Most nations also have bicameral legislatures, like ours. However, generally one house dominates the other. Historically, the House of Lords had a great deal more power than the House of Commons, but now the reverse is usually true. So, the leader of the House of Commons, or whatever it may be called, is the Prime Minister, and by far the most powerful politician. In the United States, both of our houses of Congress are comparable in power, so we don’t have a singular dominant politician. (Don’t even get me started on the Federal Reserve.) In short, because we don’t have a clearly marked other person to take over in case of a death (head of state for head of government, or vice versa), it behooves us to elect someone to be designated to fill that role, if required. The same goes for governors in the states.

France is interesting in comparison, because it is one of the few western democracies to maintain more power in its president than in the prime minister, although it does a have a prime minister who is very influential. If the president of France were to expire, the prime minister would be there to manage things in a way that the Speaker of the House and the Majority Leader of the Senate might not agree with each other on. As for Mexico, its system comes out of a long period of one-party rule, and it has a strict one-term limit, anyway. Historically, if its president died, you could count on another member of the one party to be quickly chosen to replace him. With a two-party system, this is different — but I’m no expert on Mexican politics, so I don’t know what to recommend.

This post is getting too long, but I want to correct one inconsistency in the Times author’s logic. He says we should abolish the VP post and designate the secretary of state to serve until we can elect a new president. But, without a VP, what does he think would happen to the office of secretary of state? That office would quickly become politicized, with pressure on candidates to name who they would select for it during the campaign, so that voters could judge them just as they do the VP. The idea that qualified diplomats and generals would continue to be chosen for secretary of state if it was designated to succeed the president is crazy. Same goes for any other position that could be made second in line. We are much better off keeping the VP, and the lieutenant governor, and allowing voters to consider it is much or as little as they want in their votes.

The post Vice Presidents and Lieutenant Governors: Should They Be Abolished? appeared first on Show-Me Institute.

Like Kansas, Missouri is significantly short of meeting all it’s transportation needs. Both states combined have about $60 billion in needs over the next 20 years.

At a recent transportation summit in Mexico, Mo., where MoDOT released a booklet (warning: PDF) detailing the challenges facing Missouri’s transportation system. Included was a list of projects that MoDOT deemed essential.

After detailing some of these projects for the KC Metro area, Cooper remarked:

Just how we fund any of these project no one knows for sure. But expect voters to be asked sometime in the next couple years for some kind of tax increase to fund roads.

Over here at the Show-Me Institute, we always have a few suggestions. David Stokes presented a policy study at the Mexico transportation summit detailing many of them. One is tolling. If the infrastructure improvements are really all that necessary, then people would be willing to pay fees for them when they actually use them, rather than only up front in the form of taxes.

In conjunction with this, public-private partnerships can help as well. Governments aren’t good at much more than actual governing, so instead of having the government take on the financial risk building a new toll bridge, for example, let the private sector do it. If the bridge is likely to be profitable in the long term, firms would be willing to pay for the right to build and operate government-owned infrastructure. This provides another source of revenue that can be used for projects that aren’t as easy to contract out to the private sector.

The best thing is, no new taxes are needed to fund projects this way. With tolling, the only people who have to pay for the projects are the people who use them. I can’t imagine anything that would be more fair.

The post On the Road Again … appeared first on Show-Me Institute.

We realize there are workers willing to do work and businesses who need those workers. Those workers stimulate our economy by buying goods and services from local sellers.

But there is no reason for that work, and the economic side effects, to occur outside the law.

Agreed. Forcing immigrants to operate outside of the law has several undesirable consequences. First, and foremost, in my opinion, it hurts the illegal immigrants, who tend to be extremely poor people looking for a better life. By being forced to operate outside of the law, illegal immigrants can’t expect the same degree of police protection and contract enforcement as legal citizens. As a result, they are more likely to be subject to violence.

Second, it increases the likelihood that an immigrant will commit a crime in two ways. Immigrants who would rather obey the law are less likely to immigrate if it means they have to break the law, while law breakers see immigration as potentially more attractive. So, their illegal status changes the composition of immigrants to include more law breakers. Also, once immigrants arrive in the United States, they are more likely to break other laws, because they are already here illegally. Violence may even be used as a contract enforcement mechanism, because recourse to the courts is out of the question.

Finally, the illegal status for most immigrants decreases the overall amount of immigration, because preventative measures increase the costs of migration. This means the U.S. will have less of the most valuable resource on the planet: the human mind. Not only does an increase in population through immigration help our economy for the reasons the Globe lists, but more minds leads to a better chance for technological innovation.

So, it seems natural to conclude that the governor made a mistake, and should instead petition federal legislators for an easing of immigration restrictions. Instead, the Globe concludes:

[The bill is] a big improvement over current state law, which simply takes away tax credits and abatements as a penalty. Combine those with federal punishments, and employers now have severe consequences to fear.

Wait … what? The Globe seemed to agree that immigration benefits the U.S. economy, which includes Missouri. And an increase in legal immigration would entail more open borders. Here is the author’s rationale:

People who work in the United States should be paid a fair wage and granted certain workplace rights. Employers should not be able to take advantage of a worker’s legal status by paying substandard wages and offering no benefits.

Apparently, the author has never been to Mexico. There is a reason so many Mexicans migrate here illegally in order to work for employers “paying substandard wages and offering no benefits.” In Mexico, the wages are even lower and the benefits are worse. Simply by moving here, they improve their lot. If the issue is a concern for the welfare of the illegal immigrants, letting them come here illegally is much better than not letting them come at all.

The post Helping Immigrants by Hurting Immigrants appeared first on Show-Me Institute.

Authorities say, by law, money collected for pre-arranged funeral plans has to go into a trust. […] Other homes should gladly accept the business.

A trust, you say? By law? Because of my infatuation with a certain HBO series (with the best ending you’ll ever see on television) I was already vaguely familiar with the concept of pre-need funerals, and was sure that the law cited in the report probably had some form of corruption that would make the lives of Mr. Foster’s customer’s worse.

And guess what? There is!

According to RSMO section 436-021, funds accepted from the sale of a pre-need funeral service must be placed into a trust, which (in the event of the closure of the original establishment of sale) can be transferred elsewhere, as stated in the report.

What wasn’t mentioned, though, was that funeral directors in Missouri, according to section 436-027, can retain up to 20 percent of the initial payment for the ceremony, regardless of circumstances. Thus, for every $5,000 funeral that Mr. Foster sold before he went out of business, he can legally keep $1,000 — no questions asked. This provision was likely included in order to assist funeral homes in maintaining facilities for a rush of business that they cannot  reasonably plan for, but it also allows the proprietors of failed businesses to run away to Mexico with the funds that families set aside to make a terrible time less difficult for their loved ones.

Surprisingly enough, the General Assembly has a pair of bills that have already been proposed this session, attempting to correct this problem. However, as described quite well in this analysis, certain consumer advocates feel that the bills themselves are still not doing enough to protect the final wishes of many funeral home customers.

The pre-need funeral is an aberration in the marketplace, as it is the one product that you know you’ll need, but also (presumably) the one that you can in no way predict the timing of. As such, it differs from insurance and other preventative investments not only because of the associated emotional weight, but also because of its unusual economic certainty. Because pre-need funerals are so unique, they require a unique amount of consumer protection to be provided by the state government itself.

While we advocate free-market solutions here at the Show-Me Institute that shy away from extensive government interference, I don’t think anyone can reasonably claim that a market with a definite and defined end is truly free, and I hope stronger legislation can be put in place to protect consumers of these unique services.

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From the article, here are the basics of the plan:

The plan envisions a 4,000-mile network of new toll roads, with car and truck lanes, rail lines, and pipeline and utilities zones, to bypass congested cities and speed freight to and from Mexico.

The reasons behind the new ideas are also pretty clear:

Critics abound, but experts say Texas is addressing a problem certain to worsen nationally in coming decades: the price of gasoline may be rising but revenue from gasoline taxes is not, and with the rise of more fuel-efficient vehicles, less money is being raised for highway projects, even as traffic grows.

So transportation planners are increasingly looking to the private sector to put up construction money for toll roads in return for revenue from motorists.

“We’re relying on 1993 income for 2008 output,” said Robert Harrison, deputy director of the Center for Transportation Research at the University of Texas in Austin. “It’s unsustainable.”

The obvious question here is whether Missouri should consider similar ideas. Please note that Texas may be thinking bigger than other states, but California, Virginia, Florida, and other states are embracing public-private partnerships for transportation projects, too. In my opinion, Missouri should give very strong consideration to these ideas — although on a smaller scale — for the near future, at least.

For one thing, Missouri is not growing nearly as fast as the states listed above, so our needs are not as great as Texas’. However, we do have major transportation needs that we may be best able to address through PPPs. The success of the only toll remaining in our state, at the Lake Ozark bridge, demonstrates the opportunities available in PPPs. (I should be clear that the Lake Ozark bridge was not built as a PPP, but as it’s a toll it is comparable.)

The Show-Me Institute, along with the Reason Foundation, will be releasing a major study on this topic around the end of this month. Much more to come from us on this issue then!

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Since many of the foreign-born workers in Missouri are Hispanic, it’s understandable why the Post-Dispatch wanted a profile of someone from an Hispanic background. But on another level, it doesn’t make sense why they singled out Flook. According to the article, his mother’s family left Mexico in the beginning of the 20th century. The article doesn’t mention the ethnicity of Flook’s father, nor does it say when his family immigrated.

If having "ancestors who came here about 100 years ago" means you have a special perspective on immigration policy, probably most of our lawmakers meet that criterion. It’s also interesting to note that Flook’s family learned English long ago, and Flook didn’t learn Spanish until well after he had graduated college.

Flook’s story doesn’t point out any sensitive issues or potential conflicts of interest in accepting immigrants. Instead, it highlights the fact that immigrants do learn English and assimilate, and that most of us have ancestors who were immigrants if you look back far enough.

Although I don’t agree with the premise that Flook’s family background is unique, it’s fun to read about him and his very reasonable stances on state immigration policy:

Flook opposed a bill that would have penalized employers for hiring illegal immigrants. The plan "was turning every employer into a junior varsity investigator on all his employees," he said.

Hear, hear. The federal government should be enforcing federal laws, not micromanaging every small business owner in Missouri.

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