As I wrote about a few weeks ago, Missouri is also facing a demographic decline. Recent college graduates or businesses looking to relocate will be more likely to choose a state with a promising economic outlook. When I wrote about demographic decline in St. Louis, I mentioned that Austin, Texas, and Orlando, Florida, have experienced substantial growth. One likely reason for these cities’ success in attracting new residents is their lack of a local or state income tax, which serves as an incentive for businesses and individuals to move to those cities.

So what can policymakers do? Show-Me Institute analysts have written extensively about the benefits that an income-tax cut could have for Missouri. States such as Texas, Florida, and Tennessee have cut their income tax to zero and also consistently fare well in ALEC’s economic outlook and performance rankings.

While Missouri has made incremental progress on cutting taxes, we still lag behind the true national leaders. This year’s legislative session is almost over, and so far we haven’t seen any significant tax reforms become law. Lowering taxes could help both our economic and demographic woes. But we need more urgency from our elected officials on this issue, or Missouri will only continue to fall further behind.

The post Two Birds, One Stone: Could an Income Tax Cut Help Missouri Reverse Two Declines? appeared first on Show-Me Institute.

For this reason, I was surprised when I found out that only a small number of my St. Louis high school friends planned to move back home after college. I experienced a similar shock when I heard the recent Show-Me Institute podcast episode with Susan Pendergrass and Dr. Ness Sandoval. In that episode, Dr. Sandoval lays out the bleak fact that there are more people dying than people being born in the St. Louis region right now. We could rationalize this as a reflection of the overall birth rate decrease in the United States, but the data show that many U.S. cities, such as Austin and Orlando, do not face the same demographic decline.

The natural question to ask is: what is St. Louis doing wrong? Or, perhaps, what are these other cities doing right?

For one, most cities do not face the safety issue that St. Louis does. Every year, St. Louis fiercely competes against New Orleans, Detroit, and Baltimore for the title of “the murder capital of America.” This fact almost certainly contributes to St. Louis’s demographic decline. Who would willingly choose to move to the murder capital of America?

What many outsiders don’t realize is that the City of St. Louis is an independent municipality separate from St. Louis County. In 2020, the City of St. Louis had 300,528 residents and 263 homicides. That is a murder rate of 87 per 100,000 people. Meanwhile, St. Louis County had 1,004,125 residents in 2020 and a murder rate of 12 per 100,000 people. When news sources dub St. Louis as the #1 (or as of September, #2) murder capital of America, they are referring to the City of St. Louis, not the St. Louis region. Unfortunately, many outsiders don’t know this and the whole region suffers as a result.

John Boyd, a business relocation specialist, recently spoke about the impact crime has on a company’s decision to move: “One of the big reasons you see migration from California, New York and Philadelphia is not just high taxes, but crime statistics. St. Louis hasn’t enjoyed the type of growth Kansas City has in recent years, and crime is a big reason why.” Boyd continues, saying that companies are “not merely looking at crime statistics but how crime is and isn’t being prosecuted.” This idea is particularly relevant to St. Louis. Kim Gardner, the circuit attorney for the City of St. Louis, has faced a lot of criticism recently for the way she has handled crime.

If companies choose to relocate from St. Louis or don’t view St. Louis as an attractive relocation destination, job opportunities will be more scarce and fewer college graduates will see St. Louis as an attractive job market. That’s why it’s hard to blame my friends for choosing another city over St. Louis for their first job out of college.

While St. Louis could do a better marketing job of clearing up the perception issue and highlighting all its attractive features for new college graduates, the safety issues need to be addressed and prioritized. All the marketing in the world cannot change the reality of St. Louis City’s worrisome crime patterns.

The post The St. Louis Demographic Decline: One Explanation Among Many appeared first on Show-Me Institute.

Special taxing districts are generally defined as public entities that are created to do one thing only, such as a street light district, as opposed to general districts such as cities or counties. Obviously, the latter get much more attention than the former. We discuss Kansas City far more than we discuss the Cape Girardeau–Bollinger County Joint Recreational Lake Authority.

What does this debate in Florida have to do with Missouri? Well, we actually have an enormous number of special taxing districts in Missouri, although none as large and all-encompassing as Reedy Creek in Orlando. Special taxing districts fall into two broad categories in Missouri: ones that perform a single public service, such as fire, ambulance, street light, and road districts, and ones that essentially funnel corporate welfare to various private entities under the guise of public improvements. The latter are primarily Community Improvement Districts (CIDs) and Transportation Development Districts (TDDs).

The latter two are also the ones expanding most rapidly in Missouri. Right now, there is a debate in Jefferson County about the Bear Ridge Community Improvement District, which is essentially a taxing district that, according to my sources in Jefferson County, will fund infrastructure improvements for a new subdivision. What’s wrong with that? Well, until very recently developers would fund these improvements themselves and recoup their investment and profit upon sales of the homes, rental of the office buildings, etc. Now, developers have figured out that they can transfer many of these costs to taxing entities, based on either property or sales taxes, and use these public tax dollars for what are essentially private services.

Missouri Auditors from both parties have documented the abuses and mismanagement that inevitably come with so many tiny taxing districts with hardly any oversight. Show-Me Institute analysts have covered this issue for years. There is at least one bill before the legislature this session that has needed changes to many special taxing districts. Hopefully, the dispute at Disney World can help shine some light on special taxing districts in Missouri.

Why? Because we need reform, too.

The post Special Taxing District Don’t Stop Coming appeared first on Show-Me Institute.

This fact is important when we talk about the menu of health care reforms that policymakers should be pursuing. After the passage of Obamacare, much of the health care discussion has focused on demand—on the insurance that we buy for our health care and its cost. But another significant source of our health care problems is our limited and artificially restricted supply of physicians.

To make health care in this country better, we need to make the supply of doctors a priority— doctors who are physically present in a state, but also doctors who can reach patients through telemedicine.

Central to achieving this end is the liberalization of interstate licensing for American physicians. Medical licenses should be more like driver’s licenses; a doctor in good standing to practice in one state should be able to provide care to anyone in the country without unnecessary interference from the government.

But with only a few exceptions, American doctors are substantively constrained in their practice by our state lines. State medical boards set the rules for who can practice and how, even though most doctors are trained in exactly the same way. Geography has little to do with the type of training an MD receives, and differences among the requirements of various state licensing boards are usually minor. For underserved Missourians, expanding the number of physicians who can help them would be a significant improvement in their access to care.

Under this reform, physicians could physically come to the state and more freely provide care in person, not unlike the way out-of-state doctors can currently provide care for free under Missouri’s Volunteer Health Services Act. Under the VHSA, doctors whose licenses were issued in other states can give free medical services to Missouri's neediest patients.

Interstate licensing would also give patients more access to telemedicine services, since doctors would be able to cater to Missourians’ needs without having to go through the burdensome process of relicensing.

The need for true interstate licensing reforms has become more urgent as many medical boards are attempting to cement their power and ensure that doctors have to obtain licenses in every state where they might practice—restricting competition for patient services in favor of maintaining a near-cartel market environment for these boards.

This has to change. Missourians already use, with confidence, licensed doctors in other states; it's time our own laws reflect that reality. Our policymakers can put the state on the leading edge of free-market health care reform by pursuing substantive interstate licensing reforms that expand patients' treatment options.

The post For Better Health Care Access, Pursue Interstate Licensing appeared first on Show-Me Institute.

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

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

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

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

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

                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.

On Tuesday, Allegiant Air announced it will start nonstop service from Kansas City to Orlando, Southwest Florida and Tampa in mid-November. The Las Vegas–based low-cost airline is operated by Allegiant Travel Co.

In an interview on KMBZ radio, Bill Grady asked airport administrator Mark VanLoh if this new service announcement raised questions about the real need for a new terminal. Mr. VanLoh replied, “I don’t see how the two are connected.”  

In fact, the two are very much connected.

The news of Allegiant Air is not only good news in and of itself, but it demonstrates exactly why Kansas Citians ought to be skeptical of taking on an unnecessarily large expense at the airport. Allegiant Air is a “low-cost” airline. According the The Memphis Business Journal: 

Allegiant often serves smaller markets like Orlando-Sanford International Airport instead of Orlando International Airport to avoid pricey landing fees.

Advocates of spending a great deal of money at the airport tell us that only travelers and airlines will pay the price. That is largely true. They also tell us that the prices airlines pay to serve an airport have little to do with ticket price; that may also be true. But pricey landing fees of the type that would follow an expensive rebuild or remodel may chase away airlines like Allegiant. And they would be a disincentive for bigger airlines like Southwest, too. A Southwest vice president said as much to the airport advisory group, “Higher costs can lead to less service, not more.” They have left other airports over similar price increases.

If Southwest wants to pour hundreds of millions of dollars into a new KCI, that might be welcome. But if improvements require issuing bonds resulting in higher fees to airlines, city leaders should think twice. A shiny new airport is of no use if airlines choose not to service it.

The post How a Cheap Airport Helps Kansas City appeared first on Show-Me Institute.

The headline? The near future of all air service is looking grim. Airlines continue to consolidate service at their largest hubs, consolidate with each other, and will continue further reductions at small community airports.

Columbia has felt this decline over the past several months, and the final Frontier Airlines flight from Columbia took off for Orlando, Fla., on Monday. Columbia is not alone. Data in the MIT study shows that Missouri airports, along with almost every other airport in the country, have lost service over the past five years.

This data shows us that the fate of air travel is not dependent on how shiny your airport is. Airlines have shifted away from capacity expansion because it was not a profitable strategy. They will continue to seek ways to maximize profits; unfortunately, small- and medium-sized airports are disproportionally affected in the process.

The post MIT Study Cautions Small Community Airport Expansion appeared first on Show-Me Institute.

But today we are talking about a different Branson. You may have heard that Saturday marked the beginning of Southwest Airlines service to Branson, Mo. There will now be daily flights to Chicago, Dallas, and Houston, and one flight a week to Orlando. This news comes on the heels of a decrease in flights to Columbia, Mo.

There is obviously a lot that contributes to the decision for an airline to begin or increase service. But it is worth noting two things. One, Branson is the only privately owned and operated commercial airport in the country. Many were skeptical that it would succeed. Industry expert Mike Boyd predicted when the airport opened that “the local population is too small, and the region’s attractions aren’t sufficient to consistently generate sufficient traffic for profitable air service.” Branson may be small, but the area has generated enough demand to keep air service over the past few years.

And, they have done it without major subsidization. This airport does not rely on taxpayers to operate (but it does receive $8 from the city for each arriving visitor). Nor does it rely on taxpayer money to attract business. Columbia ran into trouble when it offered subsidies to one airline but not the others; the others are now gone. Subsidies may help attract an airline in the short term. But Delta official Trebor Banstetter reinforced that subsidies such as revenue guarantees will not keep an airline around if the flight does not prove to be successful without that guarantee.

The post You Are Now Free To Move About The Country Without Subsidies appeared first on Show-Me Institute.

Frontier just began flights from Columbia to Orlando, Fla., last November. American Airlines now will be the only provider at the airport — and the company receives a revenue guarantee for two years to provide service. So if American does not make a profit from this market, they can still dip into funds that Columbia will provide to make up for any lost revenue.

Delta Senior Manager Trebor Banstetter commented that revenue guarantees “can be a tool to perhaps get things started, [but] . . . airlines really like to see a service that can sustain itself and be successful, without having a guarantee in place.” He added that the most important thing when considering what a community can offer an airline is “having the community and the travelers embrace  the service and use it on a regular basis because without that it’s hard to justify operating the route.”

Banstetter makes the point that revenue guarantees and other subsidies are not sustainable. The only way to keep service at the airport is if the flight itself is profitable. Prior to 2008, Delta served the Columbia airport with revenue assistance from the federal government, as part of the Essential Air Service program to provide air service to rural airports. Delta continued serving the airport for the next few years, until it was no longer profitable (Delta reported a $900,000 loss in 2011). During this time, Columbia had two airlines and no city subsidies — and now it has just one, plus subsidies.

Columbia officials would be better served if they give up on the “40 in 2020” goal to have 40 percent of mid-Missouri airline passengers using the Columbia airport by 2020. The loss of Frontier and Delta are real indications that flying to Columbia is not profitable for airlines. Yes, it would be convenient for Mizzou students and others in the area to have affordable flights closer than Saint Louis or Kansas City. It might be difficult to conceptualize because we live in a world where the federal government subsidizes almost everything, but there are costs to doing business. We all face constraints in resources. Airlines cannot provide services to a market that is not profitable. How long will it take for Columbia officials to understand this?

The post Now It’s Time To Say Goodbye appeared first on Show-Me Institute.

McDavid says the renovation is needed urgently — it is a “crisis.” Let me tell you why this is not a crisis. (At all. Not even a mini-crisis. Or an omigod they cancelled ‘Jersey Shore’ crisis.)

As of Sept. 5, 2012, Columbia Regional Airport has a daily flight schedule that on average includes three outbound commercial flights at different times throughout the day. Starting Nov. 20, 2012, there will be two additional outgoing flights added per week, meaning one more flight on Tuesdays, and one on Saturdays. These two flights to Orlando, Fla., are the reason for the so-called crisis to build a new terminal, according to the mayor.

Now, I am not an aviation expert, nor am I proclaiming that the airport is not in need of renovation or repair. Yet, I can easily disagree with Mayor McDavid when he cites Mizzou’s Southeastern Conference (SEC) membership as another reason for airport expansion, because Mizzou athletics became part of the SEC this year.

He says that they do not “want to be known as the SEC school that has black-and-gold double wides welcoming you to Columbia.”

Does he think that every other SEC school’s city even has a commercial airport? (They do not. Tuscaloosa, Ala., for example, attempted to expand its airport and restore commercial service in the early 2000s, but discontinued all passenger service operations shortly thereafter.) Does being a member of the SEC count as a reason to spend $17 million on an airport? (My gut tells me no, but Texas A&M Coach Kevin Sumlin says “the SEC took over America,” so I assume he would say yes.)

You know, it is extremely important to keep up with those other SEC cities. I do not know if Columbia could survive being the only SEC city without a brand new performing arts center, a top poultry science program, or a national top 40 rodeo facility. Next time, I would like to see city officials provide researched and well thought out justifications for a multi-million dollar project — like studies on demand for air travel to and from Columbia, for example. Is that so much to ask?

The post Columbia’s Mayor Provides Flimsy Justification For Airport Expansion appeared first on Show-Me Institute.

On June 17, the Federal Railroad Administration (FRA) asked states for proposals for spending the $8 billion of stimulus money that Congress allocated to high-speed rail. Which raises a question: Would you pay $1,000 so that someone — probably not you — can ride high-speed trains less than 60 miles per year? That’s what the FRA’s high-speed rail plan is going to cost: at least $90 billion, or $1,000 for every federal income taxpayer in the country.

That’s only the beginning. Count on adding $400 for cost overruns. Taxpayers will also have to cover operating losses: Amtrak currently loses $28 to $84 per passenger in most of its short-distance corridors.

The FRA plan also has huge gaps, such as Dallas to Houston, Jacksonville to Orlando, and the entire Rocky Mountains. Once states start building high-speed rail, expect local politicians to demand these gaps be filled at your expense. And don’t be surprised when the government asks for billions more in 30 years to rebuild what will then be a worn-out system.

What would we get for all this money? Unless you live in California or Florida, don’t expect superfast bullet trains. In Missouri and most of the rest of the country, the FRA is merely proposing to boost the top speeds of Amtrak trains from 79 miles per hour to 110 mph. A top speed of 110 mph means average speeds of only 60–70 mph, which is hardly revolutionary. Many American railroads were running trains that fast 70 years ago.

The pro-rail Center for Clean Air Policy predicts that, if the FRA’s system is completely built, it will carry Americans 20.6 billion passenger miles per year in 2025. That sounds like a lot, but, given predicted population growth, it is just 58 miles per person.

Missouri’s portion of the plan will cost at least $875 million, or nearly $150 for every Missouri resident, plus tens of millions more per year in operating subsidies. For that, the average Missourian will take a round trip on the train only once every six years. Most of the rest of your $1,000 will go to California, which wants to you to help pay for a costly bullet train. Even this train will do little to relieve congestion or save energy; mainly, it will just fatten the wallets of rail contractors.

Who will ride these trains? We can get an idea by comparing fares between New York and Washington, D.C. As of this writing, $99 will get you from Washington to New York in two hours and 50 minutes on Amtrak’s high-speed train, while $49 pays for a moderate-speed train ride that takes three hours and 15 minutes. Meanwhile, relatively unsubsidized and energy-efficient buses cost $20 for a four-hour-and-15-minute trip with leather seats and free Wi-Fi. Airfares start at $119 for a one-hour flight.

Who would pay five times the price to save less than 90 minutes? Those wealthy enough to value their time that highly would pay the extra $20 to take the plane. The train’s only advantage is for people going from downtown to downtown. Who works downtown? Bankers, lawyers, government officials, and other high-income people who hardly need subsidized transportation. Not only will you pay $1,000 for someone else to ride the train, but that someone probably earns more than you.

Nor is high-speed rail good for the environment. The Department of Energy says that, in intercity travel, automobiles are as energy-efficient as Amtrak, and that boosting Amtrak trains to higher speeds will make them less energy efficient and more polluting than driving.

An expensive rail system used mainly by a wealthy elite is not change we can believe in. Missouri should use its share of rail stimulus funds for safety improvements such as grade crossings, not for new trains that will obligate taxpayers to pay billions of dollars in additional subsidies.

Randal O’Toole is a senior fellow at the Cato Institute, and author of the Show-Me Institute study “Review of Kansas City Transit Plans.”

[Editor’s note: A portion of the sixth paragraph of this op-ed originally read, “the average Missourian will take a round trip on the train only once every 12 years.” The correct figure for Missouri is “once every six years.” We have corrected this in the interest of accuracy, and apologize for the oversight.]

The post Interstate Rail Project Would Bring High-Speed Spending appeared first on Show-Me Institute.