If passed, HB 2872 would have created a mandatory third-grade retention policy for students who could not read effectively and established an enforcement mechanism to align Missouri’s teacher preparation programs with the science of reading.

One of the reasons cited by opponents of the bill was that we needed to wait and let Missouri’s 2022 early literacy reforms take “full effect.” The earlier legislation had some positive aspects, but HB 2872 would have filled important gaps that are clearly seen in a new 2026 report from the National Council on Teacher Quality (NCTQ).

The NCTQ report evaluates colleges and universities across the United States on how effectively their curriculum addresses the five core components of the science of reading: phonemic awareness, phonics, fluency, vocabulary, and comprehension. It also considers whether programs teach practices found to be ineffective, such as the three-cueing method.

Among the 50 states, Missouri ranks 44th in addressing the core components of the science of reading, with an average of just 2.3 out of 5.0 components. Half of all states scored 4.0 or higher, while often-praised Mississippi scored 4.7.

Even more alarming, Missouri ranks 2nd in the nation, behind only Maine, in teaching ineffective reading practices. Our participating programs taught almost four times more ineffective practices, on average, than the national average.

These results suggest Missouri cannot afford to simply wait for our prior literacy reforms to “take effect.” Today’s students in Missouri’s teacher preparation programs are the teachers of tomorrow’s children, and many are not learning how to teach reading correctly.

Nearly half of the universities in Missouri evaluated by NCTQ received an “F” in teaching the science of reading, including Northwest Missouri State University, Truman State University, and Missouri Southern State University. By comparison, 73% of Mississippi’s programs received an A and none earned an F.

It’s also concerning that 52 percent of Missouri’s programs either refused to participate, provided heavily redacted materials, or were otherwise unresponsive to the survey. These institutions partner with the state to prepare future teachers, and there should be transparency about how they train teachers.

The success stories of early literacy reforms are well known. Mississippi, Louisiana, Tennessee, and Indiana have posted meaningful gains in reading achievement after implementing reforms, while Missouri continues to slide in national rankings. We fell from 27th to 38th in fourth-grade reading on the National Assessment of Educational Progress between 2013 and 2024.

In 2023, Indiana required teacher preparation programs to be aligned with the science of reading and prohibited the use of the three-cueing method. Any unaligned program loses the right to be called “accredited.” In a previous NCTQ report from 2023 based on data from before Indiana implemented reforms, 33 percent of Indiana’s programs received an A+ or an A. In 2026, 96 percent received an A+ or A.

The reforms in HB 2872 were modeled on Indiana’s policy and would have helped ensure that future Missouri teachers are trained in the science of reading. Early literacy reform would have built on past successes and helped more students become confident, capable readers. All we can do now is try again next year.

The post Missouri Missed an Opportunity on Reading Reform appeared first on Show-Me Institute.

The upcoming release of the movie Supergirl got me thinking about another Superman-related film—one without laser vision or chiseled jawlines.

Waiting for Superman, released in 2010, follows families hoping to use lottery systems to get into a charter school. These families were stuck in failing public schools and desperate for a way out. Parents profiled in the film cried tears of joy when their children “won” the lottery and were so disheartened when they didn’t.

Its message was simple: droves of students are stuck in failing public schools and are waiting desperately for someone to help.

Missouri has been content allowing students to wait for Superman (or Supergirl now). My colleague, Susan Pendergrass, describes the problem well:

For years, the education establishment in Missouri has relied on a predictable playbook. Whenever state test scores drop or national rankings look bleak, we are told that the data don’t capture the whole picture, or that a new bureaucratic report card will soon show things are turning around. We are urged to wait, to invest more taxpayer money, and to trust the system.

But each year, more students move through the system either underprepared or unprepared. Thankfully, there are proven policies that can help.

Charter schools, open enrollment, and education savings accounts (ESAs) give parents choice, which in turn fosters more competition. With increased competition and accountability, schools are incentivized to innovate.

But Missouri parents have significant limits on choice.

Charter schools face a quasi-ban across the entire state, except in the St. Louis City School District, the Kansas City 33 School District, and all school districts in Boone County. (A charter school does operate in Normandy Schools Collaborative due to an accreditation provision). Missouri does not have open enrollment, and the ESA program reaches only a fraction of the state’s more than 900,000 students.

This needs to change.

Also concerning is Missouri’s reluctance to embrace comprehensive early literacy reform.

When Waiting for Superman was released in 2010, Mississippi ranked 48th in fourth-grade reading on the National Assessment of Educational Progress (NAEP). Louisiana ranked 47th, Tennessee ranked 38th, Indiana ranked 27th, and Missouri ranked 31st.

Since then, Mississippi, Louisiana, Tennessee, and Indiana have implemented serious early literacy reform. They all recognized teaching children to read is a serious undertaking that requires serious solutions.

Success has followed. By 2024, Mississippi had risen from 48th to 9th in fourth-grade reading. Louisiana climbed from 47th to 15th. Tennessee improved from 38th to 23rd. Indiana jumped from 27th to 6th. Do those states have more work to do? Of course.

But while they’ve shown improvement, Missouri has fallen from 31st to 38th, as 42% of our fourth graders scored below basic on the reading portion of NAEP.

There was a clear opportunity to pass early literacy reform to mimic the successes of these other states with House Bill 2872. But opponents in the Senate argued that Missouri should allow the state’s 2022 early literacy reforms (Senate Bills 681 and 682) to take full effect. In other words, keep waiting.

Superman does not exist, and neither does Supergirl.

But policymakers do.

Missouri students cannot afford to spend another year waiting. There are proven reforms that can expand educational opportunity and improve outcomes. This year, Missouri chose not to pursue them. For the sake of our students, that needs to change next year.

The post Waiting for Supergirl appeared first on Show-Me Institute.

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

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

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

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

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

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

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

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

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

#2. Accountability for Teacher Preparation Programs

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

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

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

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

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

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

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

Susan Pendergrass is joined by Cory Koedel, director of education policy at the Show-Me Institute, and Avery Frank, policy analyst at the Show-Me Institute, to discuss Missouri’s early literacy crisis. They walk through the need for a universal reading screener, the evidence behind third grade retention, why banning three cueing matters, how teacher preparation programs must change to align with the science of reading, what successful states like Mississippi have done, what Missouri’s current laws get wrong, and more.

Listen on Spotify

Listen on Apple Podcasts 

Listen on SoundCloud

Timestamps

00:00 The Literacy Crisis in Missouri
04:42 Strategies for Improvement
09:37 The Role of Testing and Accountability
14:21 Retention Policies and Their Impact
19:08 Legislative Solutions and Future Prospects

Produced by Show-Me Opportunity

The post Why Missouri Needs Early Literacy Reform with Cory Koedel and Avery Frank appeared first on Show-Me Institute.

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

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

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

Source: Missouri Department of Elementary and Secondary Education

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

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

Clearly, there is still work to be done.

Potential Solutions

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

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

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

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

North Side Grant Project Is a Disaster

The revelations about the North St. Louis Small Business & Non-Profit Grant Program being managed by the St. Louis Development Corporation (SLDC) keep coming. The entire grant program is rife with political favoritism, but at least the places connected to politicians actually exist! It turns out some of the other recipients of the grants are not, shall we say, real entities, like this “museum” just north of the Central West End:

The museum’s website advertises a facility, historical exhibits and a passion for illustrating the history of the Mississippi River and the people who have lived on its banks. But its address leads to a brick four-family structure in a neighborhood just north of the Central West End. No one answers the door, even during advertised business hours. And the building itself is surrounded by weeds and overgrowth.

“I’ve never heard anything about that place being a museum,” said Ray Sims, a longtime neighbor of the building. “How do I get the money?”

It’s almost like word got out that the SLDC was just giving away free money and, shockingly, people started making up reasons to get free money.

Recipients of Large Tax Subsidies Under Indictment

Does the SLDC make better decisions when dealing with big-time developers instead of ordinary people? Apparently not. Last week, the heads of a major St. Louis and Kansas City development firm were indicted in St. Louis for allegedly submitting false documents regarding minority-hiring rules. While this is the first indictment of these men (everyone is, of course, innocent until proven otherwise), their questionable business practices have been well known. Yet they have consistently received massive tax subsidies for work in St. Louis and Kansas City: particularly the latter in recent years.

Five Lux Living projects in Kansas City have been approved for incentives since 2021, including a $200 million apartment/hotel at 14th and Wyandotte streets.

Is it fair of me to blame the SLDC for an act  by private citizens or companies seeking subsidies? Perhaps not, but when politicians and bureaucrats choose who gets subsidies, don’t be surprised when unpleasant actors start circling. After all, political donations and tax subsidies have a strong connection:

For instance, around the country, politicians who make these deals are more likely to receive campaign donations, and they’re more likely to be re-elected. On the flip side, companies that make political donations to relevant officials are four times more likely to enjoy subsidy deals than those that don’t, and their deals are more than 60% bigger, to boot.

Again, it’s shocking, I know . . .

Maryland Heights Uses General Taxes to Make up for Failures

It isn’t just large cities that abuse economic development policy. Suburbs do it all the time, and they don’t always do it with misplaced tax subsidies. Sometimes, cities make the mistakes all on their own.

Several years ago, Maryland Heights decided to get into the ice arena business. Not a normal ice rink for its residents, mind you; that would have been understandable. City leaders apparently wanted to act like private developers and build a massive hockey and skating complex to make money for the city. This is, usually, a big mistake for cities.

It definitely was a big mistake for Maryland Heights. The city has announced that it has again been forced to tap into general tax revenues to fund the bond payments after its predicted ice complex revenues have continued to fall short. Part of the reason revenues fell short is that both Maryland Heights and the ice complex failed to collect a sales tax for several years that was implemented to pay for the bonds. I don’t know if that is funny, sad, or both.

Cities do not have to engage in economic development schemes to succeed. Unilateral disarmament is the best option all around. Until that happens, expect stories like these to be a regular occurrence.

The post It Has Been a Great Week for Economic Development Agencies in Missouri appeared first on Show-Me Institute.

In Mississippi, eyebrow threaders, eyelash technicians, and makeup artists can now operate without an esthetician license. Niche occupations such as these often get lumped into a license for which the training and education requirements are overly broad and don’t relate to the specific occupation. Missouri lawmakers fixed one example of this problem this year—a shampooer no longer needs to be a fully licensed cosmetologist or barber. In the future, lawmakers should review occupational licenses to make sure other niche occupations are unfairly burdened by license regulations and standards.

Ohio will enter the Interstate Medical Licensure Compact this year (and the Nursing Licensure Compact, of which Missouri is already a member), allowing workers to move and work more freely between states. Though Missouri has universal licensing reciprocity, compacts such as these would make it easier for Missouri licensed workers to work in other states that may not have universal reciprocity, but are in the same compact.

South Carolina will soon allow licensed barbers to apply for a license to operate out of a mobile unit and Nebraska repealed locksmith registration requirements after a licensing review found many problems with the current state of locksmith registration. Both measures increase opportunities for workers and consumers, which can ultimately promote economic freedom and growth in these states.

Missouri has another chance to do right by its workers next year. Though lawmakers have taken steps to curb the negative effects of occupational licensing, that forward momentum should continue. Missouri could create opportunities for workers and consumers and spur economic growth by ensuring niche occupations are free from broad licensing requirements, participating in interstate licensing compacts, and eliminating overly burdensome and ineffective licenses and restrictions. Using other states as a guide, we should pursue similar occupational licensing reforms next year.

The post Additional Opportunities in Occupational Licensing appeared first on Show-Me Institute.

THE SOLUTION: Right to work.

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

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

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

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

KEY POINTS

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

SHOW-ME INSTITUTE RESOURCES

Policy Study: A Primer on Government Labor Relations in Missouri

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

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

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

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

THE SOLUTION: Let the market set wages.

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

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

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

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

KEY POINTS

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

SHOW-ME INSTITUTE RESOURCES

Blog Post: Special Interests Inhibiting Joplin’s Recovery?

Blog Post: Playing Favorites on the Board of Aldermen?

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

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

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

To explore this question, we first need to look at traffic on the bridge. Before MoDOT placed weight restrictions, about 4,000 vehicles used the Champ Clark Bridge every day. That’s about as much as a lightly used urban street, and it’s low for a Mississippi River crossing. For example, bridges at Hannibal and Quincy each carry between 15,000 and 17,000 vehicles per day. Also, according to the Census Bureau, only four Missourians living in Pike County, Missouri (where the bridge is located) commuted to work in Pike County, Illinois. Actually, that estimate was within the margin of error, meaning it is possible that no one who lives in the county on the Missouri side of the Champ Clark Bridge works in the county on the Illinois side. About 500 residents of Pike County, Illinois, work in Pike County, Missouri. This low traffic makes sense when one notes that on the Missouri side there is only the small city of Louisiana (population 3,300) and the Illinois side of river is primarily farmland. Additionally, commodity flows are generally routed to the north or south of the Champ Clark Bridge.

Given the low traffic level on the Champ Clark Bridge, and the very few commuters who live in Missouri and commute to Illinois, a new Mississippi River bridge is likely to have limited positive impact for Missouri. The bridge’s replacement, therefore, is a perfect opportunity for Missouri to explore the option of tolling. Assuming the $60 million cost estimate is correct, a toll of around $2.50 per vehicle would be able to pay for bridge in 30 years, assuming existing drivers were willing to pay for the convenience of a Mississippi River bridge in that area. And if they are not, it calls into question the need for a bridge, with or without a toll. By placing a toll on the bridge, those who benefit greatly from the new bridge can fund its replacement without much, if any, additional strain on MoDOT’s or IDOT’s finances. It would be a fair way of funding a new bridge, and was in fact the method used to fund the construction of the Champ Clark Bridge in the first place.

The bottom line is that paying a new bridge on US Route 54 may not be worth it for Missouri, but it may be worth it for those who would actually use the bridge. The best way to find out whether that is the case is to explore the tolling option.

The post Is a New Mississippi River Bridge Worth $60 Million? appeared first on Show-Me Institute.

While organizations that release infrastructure report cards are almost universally pushing for greater investment (and therefore tend to be alarmist about current conditions), there is little doubt that Missouri’s waterway infrastructure is in a poor state of repair. Nearly every lock and dam on the upper Mississippi is well past its useful life. While many don’t think of the rivers as important carriers of freight, Missouri’s rivers carry almost 50 million tons of freight annually. Rivers are especially important for shipping agricultural products and commodities to international markets. And with the expansion of the Panama Canal nearly completed, the Mississippi River may become a more important conduit for Missouri’s exports in the future.

The federal government is primarily responsible for maintaining and improving waterway navigability, specifically through the Army Corps of Engineers. Theoretically, funding for the Corps’ projects should come from a 29 cent per gallon tax on barge fuel. When the Corps takes on a new project, it is also supposed to split the costs 50-50 with barge companies.

In reality, barge fuel tax revenue is insufficient for such a system to work. Even with a rate increase last year, the tax will bring in only about $100 million in revenue in 2015. Individual lock and dam projects usually cost hundreds of millions—if not billions—of dollars to complete. Thus, while dozens of projects require repairs, the Corps can only address a few projects at any given time. And even these require heavy taxpayer subsidies. In 2015, general funds accounted for 70% of federal spending on inland waterways. Worse yet, 50-50 cost splits with barge companies are honored more in the breach, because Corps projects regularly run over budget. Overruns are handled by taxpayers, not barge companies. The table below lists the two largest lock and dam projects and shows the division of costs for each.

A federal body notorious for cost overruns and funded with insufficient user taxes is unlikely to build and maintain an efficient, modern, inland waterway transport system. The shipping companies and exporters that would directly benefit from an improved system could, with federal coordination, make the necessary investments. But until they do, Missouri will not be in a position to see large economic gains from the Panama Canal expansion and can expect low marks for its waterways in the future. 

The post Missouri’s Waterways Receive Bad Marks for Transportation appeared first on Show-Me Institute.

At the same time, a $5.3 billion expansion of the Panama Canal, long delayed, is nearing completion. New locks that can handle much larger ships are expected to open in early 2016. The expansion will also increase the number of ships that can traverse the canal, decreasing congestion at this critical bottleneck.

While these developments are taking place more than a thousand miles away from Missouri, they may have a large impact on the state’s freight system. Currently, about 97 percent of the $1.2 trillion of freight that flows through Missouri does so by road and rail. That includes goods shipped to and from the West Coast as part of international trade movements. Despite Missouri’s access to the Missouri and Mississippi rivers, only 1 percent of freight by value move by barge in the state, and most public port authorities see little river freight.

But that could change. With the widening of the Panama Canal it may become cheaper freight to move large container ships directly to and from the Gulf and Atlantic Coast rather than rely on West Coast ports and cross-continent truck or rail networks. Labor unrest on the West Coast is reportedly incentivizing international freight companies to diversify their freight networks.

The hope among many Missouri transportation planners is that these changes to the international freight network will improve the competitiveness of Missouri’s freight network, and especially its inland waterways, by lowering costs and increasing reliability. For example, grain from Missouri could be put on barges down to the Gulf Coast where it could be directly shipped to Asia. MoDOT and other government bodies are looking at possible investments to take advantage of increased traffic.

However, the optimism should be paired with prudence. Freight experts at Missouri’s annual transportation conference have cautioned that the state lies in an area of the country where it is unclear whether the Panama Canal’s expansion will have great impact. Exporting internationally may become cheaper, but Missouri’s principle markets are likely to remain in neighboring states. Currently, only $12 billion of Missouri’s outbound freight is headed for international markets.

In terms of investment, Missourians should also remember that barge travel is inexpensive in Missouri partially because shippers pay very little of the cost of maintaining the navigable rivers on which they rely. If the Panama Canal expansion truly makes barge freight more competitive, barge companies should be able to afford new port investments without state funding.

The post Port Strikes, Panama, and the Future of Missouri Freight appeared first on Show-Me Institute.

Believe it or not, the same may be said of the sewers serving the 20,000-plus residents of Arnold, Missouri, located on the southern edge of the Saint Louis Metropolitan Area at the confluence of the Meramec and Mississippi rivers.

Missouri American Water has offered to purchase the Arnold sewer system for a total of $13.2 million. This is a win-win proposition for the city and its residents.

The deal not only would provide Arnold with the funds to pay off $8 million in sewer bonds, but it also would supply $5 million in additional revenue. At the same time, the arrangement with Missouri American Water would guarantee timely improvements to the sewer system and lower utility costs for residents.

Arnold currently operates its sewer system as a public utility and charges residents $24.33 per month for up to 5,000 gallons of wastewater. However, like many municipalities around the country, Arnold is not charging residents what it needs to keep the system up to date, especially with increasingly stringent EPA and Clean Water Act requirements coming into force. According to one report, by 2016 the city would need to charge $34.50 per month to provide the same services.

Facing very similar pressures, cities across the country have turned to partial or full privatization of their water and wastewater systems. Deals with private companies typically result in an upfront payment to the city, a commitment by the company to make investments in the water or sewer system, agreement on pricing, and often a stipulation that the private company must retain the existing utility staff. The vast majority of these privatizations have been successful, with more than 90 percent of cities renewing privatization contracts and 94 percent recommending privatization as a method of water and sewer system management.

To cite one example, the city of Florissant in Saint Louis County sold its municipal water utility to Missouri American Water for $14.5 million in 2002. The city spent part of the proceeds on immediate needs and put the rest in a reserve fund. More than a decade later, the privatization is still a success. The lesson from Florissant and other cities is clear: When governments set the standards and carefully manage the privatization process, private operators deliver better, cost-effective service.

If Arnold accepts the deal with Missouri American, it will reap other benefits as well. Public services, like the school district, will benefit from this proposal via the expansion of the property tax base when the assets of the sewer system go on the tax rolls after Missouri American takes control. Residents will benefit from low utility fees, as Missouri American Water has stated that they will not increase rates until 2016. Even after that date, they project they will only charge residents $30 a month, which is less than what the city is likely to charge absent privatization.

While privatization of the sewer system makes sense, Arnold must be cautious on how it crafts and implements a final deal. The city must hold Missouri American Water accountable for the quality of service and the implementation of agreed-upon improvements. Furthermore, Arnold would be wise to follow the example of Florissant by carefully spending its windfall profits.

As long as local officials perform their due diligence, Arnold has much to gain and little to lose from privatizing its sewer system. Come November, residents should not let this opportunity slip down the drain.

The post Arnold Wastewater Privatization: Don’t Waste the Opportunity appeared first on Show-Me Institute.

This week, the Show-Me Institute unveiled Show-Me Data. Show-Me Data is an interactive web tool that allows users to create custom charts that track a state or region’s economic or demographic information over time. It also allows users to compare this information to other states.

Not only can you create your own charts on Show-Me Data, the site also features a “Popular Charts” section that has already constructed charts containing information that we have deemed to have popular appeal. You can share these charts, along with any charts you create, with your friends on Facebook and on Twitter.

We will have more posts soon about how to use Show-Me Data. For now, feel free to look around and start using the site. Also, please let us know your reactions to the site and any tips on how to make things better. You can contact us here. Thanks for taking a look. We hope you enjoy it.

The post Introducing Show-Me Data appeared first on Show-Me Institute.

Is there anything the Missouri Legislature could do to both reduce the abuse of tax subsidies in Missouri AND improve the environment? Well, yes, there is. The legislature needs to strongly consider expanding RSMo 99.847, a state statute that prohibits the use of Tax Increment Financing (TIF) in floodplains in Saint Charles County. That law needs to be expanded to the entire state.

Many Missourians recall the flooding in the summer of 1993. (I don’t; I was 5 years old and lived in Chicago.) Enormous floods led to extensive levee failures along the Mississippi and Missouri Rivers, especially in eastern Saint Charles County. Homes and businesses were quickly inundated, leading to millions of dollars in damage. Continued development in flood plains and inadequate levees mean there is a threat of a repeat of 1993. That is a problem, but the fact that we subsidize the development with poorly designed national flood insurance policy and local TIF is even worse.

According to federal law, all construction within flood plains must buy flood insurance through the National Flood Insurance Program (NFIP). However, developments built behind a “100-year flood levee” are not required to own flood insurance, so most do not. (A “100-year flood levee” is designed to withstand flood levels with a 1 percent — or once in 100 years — chance of occurring in a given year.)

As everyone learned in 1993 in Chesterfield, Saint Charles, Jefferson City, and many more parts of Missouri, even levees we think are solid may be no match for nature’s power. To make matters worse, thanks to local TIF-supported development in proven floodways, there are now even more developments in areas that were flooded in 1993. Many do not have flood insurance.

Rather than waiting for a disaster to wipe out millions in investments and property, Missouri and localities should consider disincentivizing further construction in inadequately protected floodways. One good way to do that is to expand the prohibition against TIF in floodplains. If you want to build in a floodplain, fine, but you are going to pay for it, not taxpayers.

Otherwise, Missouri taxpayers will inevitably bear even higher future costs in disaster relief.

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The U.S. Army Corps of Engineers (USACE) is looking to move forward with a costly levee system to protect a floodway in southern Missouri. The project is at the expense of much-needed maintenance to existing systems across the state.

In July, the USACE released its latest draft environmental impact statement for the St. Johns Bayou and New Madrid Floodway project. A major component of this $164 million project is to close a 1,500-foot gap at the southern edge of the New Madrid Floodway with a new levee. USACE claims that this project will protect agricultural land in the New Madrid Floodway from yearly back-flooding with a benefit-to-cost ratio of 2:1.

However, experts and other government departments claim that the environmental impact statement, the seventh proposing this levee since Congress approved the project in 1954, underestimates both construction expenses and other externalities. The USACE is well-known for construction cost overruns, exemplified by a lock and dam project on the Ohio River. Although the money already spent on that project is almost five times the original budget, it remains incomplete.

The Corps is also likely underestimating ecological damage to the Mississippi River. As it closes off the last area in Missouri where the Mississippi has access to flooding areas, the proposed levee is likely to damage the Mississippi River’s ecology, including its fish stock and bird species. The U.S. Department of the Interior states that USACE’s plans for mitigation:

…lack scientific validation, are logistically infeasible, and inadequate both in kind…and amount.

A new levee endangers not only fish and fowl, but also Missouri residents. As the U.S. General Accounting Office (GAO) stated in 1995, “That levees increase flood levels is subject to little disagreement.” The back-flooding into the New Madrid Floodway relieves pressure from levees upstream in Missouri. Shutting off this escape route increases the danger of levee failure at other places along the river.

While the Corps plans a new levee system with ominous consequences, Missouri’s existing levees remain in a state of disrepair. Of the 133 rated levees in USACE’s registered system for Missouri, only 5 percent are fully acceptable for a 100-year flood (1 percent chance in any given year). Ninety percent are “minimally acceptable” (have one or more areas that endanger the structure) and an additional 5 percent are “unacceptable” (not rated to perform up to standard in the next flood). That $164 million might be better spent maintaining the system that already exists rather than protecting a floodway.

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But the problem, Lynch says, is the lack of financial incentives available for movie production in Missouri. Though the state still offers the film production tax credit, Missouri Gov. Jay Nixon shut down the Missouri Film Commission in 2011, and the Missouri Accountability Portal shows that no film tax credits have been issued for 2012.

From KSDK:

Missouri actually has $4.5 million to use for tax breaks, but the Department of Economic Development doesn’t have anyone to recruit out-of-state productions.

“It hurts the city, it hurts the state and it ultimately hurts us because we’re forced to go elsewhere for monetary reasons,” said Lynch.

One way to answer the question of whether a lack of film tax credits hurts the state is to look at what film tax credit money has subsidized in the past.

The 2009 film “Up in the Air,” which starred George Clooney, was filmed in Saint Louis, and was issued $4.1 million in tax credits from the state. Under Missouri’s Film Production Tax Credit program, movie productions are reimbursed for a portion of their expenses.

In 2010, the Show-Me Institute requested documentation from the state Department of Economic Development (DED) that showed what expenses associated with the film tax credit program were deemed eligible for partial reimbursement. The documents we received are now posted online.

Below are some expenses that the production of “Up in the Air” incurred and the DED deemed eligible for the Film Tax Credit program:

* More than $11,000 in living allowance money for Director Jason Reitman.

* $5,600 for George Clooney to stay at the Chase Park Plaza.

* More than $8,500 in living allowance money for Vera Farmiga.

* More than $11,000 in living allowance money for Executive Producer Michael Beugg.

If having state taxpayers fund living expenses for high-paid actors and directors while working on “Up in the Air” is not concerning enough, recent reports have found state film tax credit programs lacking.

If Lynch really thinks Saint Louis is the best place to film her movie, then make it here. But if tax credits are necessary, I would prefer she stay in East Saint Louis.

P.S. Lynch is not the first person to think that using film tax credits to subsidize a movie about a serial killer is a good idea. Jack Donaghy ran with that in 2011.

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It does not appear from the article that the owner is considering a relocation to Missouri. Perhaps if we did not have an income tax, he would think about hopping across the Mississippi River for his new corporate HQ. Who knows?

I didn’t like this line in the article:

Liautaud said he has been contacted by “multiple pro-business states” that made him feel “wanted and important.”

“I enjoy being courted and the process,” he said.

It is not the role of government to court select individuals. Government should set the tax rate as low as possible, let markets operate as freely as possible, and regulate as little as possible. Then economic opportunities will arise that people actually want, although those opportunities might not be what some economic development officials want. A charming, mixed-use condominium complex and upscale shopping district is not superior to a factory, a strip mall, or a nightclub if these other types of developments better satisfy people’s actual needs and wants.

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Of course, if you want clean and remewable baseload power generation for Missouri, there is really only one way to go. …

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The report includes two examples in Missouri. Really, though, one should have been counted for Illinois rather than Missouri, which leaves us with only one citation for the Show-Me State. The expenditure that I dispute should be classified for Missouri — but without any dispute over its uselessness and absurdity — is the $430,000 given to the Army Corps of Engineers to enhance a museum about the Army Corps of Engineers. It’s no. 27 on p. 24 of the report. The museum, which I sheepishly admit I had never heard of (I go to the East Side Metro East for one thing and one thing only), is dedicated to the Mississippi River and the Army Corps of Engineers, and is in East Alton, Ill. So, that’s $430,00 more in spending so that the Army Corp of Engineers can tell the public what a good job they do.

This is not to say that the Army Corps of Engineers doesn’t do a good job. Rather, they should just do a good job without feeling the need to tell us about it. If I lived in Louisiana in 1927 or 2005, though, I might feel differently.

The Missouri example is $180,000 for scientists at the University of Missouri to deal with the pressing problem of why rat sperm becomes less useful when it is thawed after freezing. (This is example no. 95 on p. 45.) Apparently, this is exactly the type of project for which the stimulus was designed.

All in all, it could have been worse for Missouri. Many of the projects in other states cost millions of dollars more, and most closely resemble a project akin to: dig hole; fill in hole; repeat. Example no. 10 is one of my favorites: $100,000 for “Town replaces new sidewalks with newer sidewalks that lead to ditch.”

No matter where this spending occurs, though, we all pay taxes for projects like this, and elected officials all (or almost all — there are a few exceptions) fight for local spending and spoils.

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