Missouri is considered one of the most “conservative” of the 50 states. Is that a good thing or a bad thing? It depends on how you define the word.

Over the past several decades, Missouri has been going downhill both economically and educationally—as one of the worst-performing states in GDP growth and educational achievement in K-12 public education. Why?

Too often, Show-Me State conservativism has been characterized by a lack of urgency and a satisfaction with the status quo.

As I would define it, conservatism does not begin and end with the preservation of existing institutions, and it most definitely is not about protecting the privileges of the rich by exploiting the poor or being indifferent to the problems of the needy. Where it begins is with the desire to protect and enlarge freedom for all members of society—enabling people to work and live lives of their own choosing so long as they do no harm to others in the pursuit of their own betterment.

Here, then, are five New Year’s Resolutions for leaders in local and state government:

#1: Improve Missouri’s competitiveness; turn the Show-Me State from an economic sluggard into a great place to live, work, and own or operate a business. That means lowering taxes—leaving more money in people’s pockets to spend or invest as they choose. It also means removing obstacles to commerce and opportunity posed by excessive licensing and regulatory requirements.

#2: End crony capitalism—stop providing subsidies and tax carve-outs for politically favored businesses that are not available to all other businesses. In 2019, Missouri reported 524 tax-increment financing (TIF) projects from 100 political subdivisions across the state. These projects are anticipated to have $10.1 billion in TIF-reimbursable project costs. Such subsidies drain money from public services and have a bad track record of failing to deliver promised job, investment, or economic growth. Reductions in tax incentives and spending can provide some of the budgetary space to lower or eliminate individual income and earnings taxes.

#3: Don’t treat small, owner-operated businesses as the designated fall-guys in government-ordered lockdowns—calling them “non-essential” businesses while allowing their big-box counterparts such as Wal-Mart and Target to continue to operate.

#4: Don’t be penny-wise and pound-foolish when it comes to taking care of essential infrastructure on a timely basis. Interstate 70, an economic and transportation lifeline, is falling apart. Numerous other major roads are badly in need of repair. Travel on Missouri’s roads has increased by 12 percent since 2008, but the state’s transportation budget has fallen by 15 percent. According to Missouri’s Department of Transportation, it now gets only enough revenue to cover a little more than half the state’s needed road and bridge repairs. One thing is certain: Postponing needed maintenance on long-lived assets such as roads and bridges is not a smart idea. It leads to escalating costs and catastrophic failure.

#5: Expand educational choice for students and families at all income levels throughout the Show-Me State. There is no worse example of blind allegiance to the status quo than Missouri’s K-12 public education system.

Supported by nominally conservative lawmakers, the state’s educational establishment—meaning school superintendents, teachers’ unions, and DESE (Missouri’s Department of Elementary and Secondary Education)—have blocked almost every initiative aimed at expanding school choice from vouchers and education savings accounts to expansion of charter schools. Despite a long record of poor results in the so-called “Nation’s Report Card,” members of the establishment continue to oppose all forms of competition and choice in public education.

And who is hurt the most by this self-serving obstinacy on the part of the providers of public education? It is of course the users: students and their parents and families, and most especially lower-income families trapped in non-performing schools who cannot afford to move to other school districts or to private schools.

As I see it, true conservatism is really about an allegiance to principles—and to enduring values such as freedom, hard work, and equality under the law—rather than an allegiance to the status quo.

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Opportunity beckons.  This is your chance to do something big. In breaking into your midnight slumbers, I hope only to point the way forward – with a few thoughts on how to accelerate growth and quicken prosperity in Missouri come the New Year.

One is to tell you plainly: Stop trying to pick winners and losers with taxpayer money. Let’s say (to use a real example) a group of businessmen tell you that they need $120 million in public support ($40 million from the state and another $80 million from the city) to build a new soccer stadium and bring a Major League Soccer franchise to downtown Saint Louis. While predicting that the project will create jobs and ancillary development, backers are asking for taxpayer money to pay for about two-thirds of the cost of building the stadium.

You must say “No” to all such proposals. If professional investors demand major subsidies for a profit-seeking venture, then you know (or should know) it’s a bad deal for taxpayers. Governor-elect Eric Greitens has already signaled his opposition to the $40 million in state tax credits for the proposed stadium. You can go further – much further – by reducing annual spending on state tax credits for targeted economic development from more than $350 million per year down to zero. That would free up money for better purposes (see next point).

Two is to leave more after-tax money in the pockets of wage earners and business owners alike. People and businesses vote with their feet. They move out of states where the “tax price” of living, working, or running a business is too high and into states where it is lower. If you include the 1 percent earnings tax in our two biggest cities, Missouri has a top income tax rate of 7 percent, which is more than all but 11 states. You should slash state income taxes 50 percent over the next three years.

Three is to end compulsory unionism as a condition of employment. Six out of eight neighboring states have already passed right-to-work legislation. Missouri should join them in embracing greater freedom and competition in the workplace.

Four is to promote public sector union democracy and transparency. Public sector employees should have the right to say “yea” or “nay” to continued union representation at intervals of every two or three years. At the same time, Missouri should close the loophole that allows public officials and government unions to conduct collective bargaining in closed sessions.

Five is to allow charter schools – now limited to the Kansas City and Saint Louis areas – to expand statewide without limitation. Missouri should adopt innovative programs, such as education savings accounts and tax credit-funded scholarships, enabling public school students trapped in underperforming school districts to attend private schools.

Six is encourage greater competition and choice in another area ripe for reform – health care. You can begin by converting much of Missouri’s Medicaid program into health savings accounts (HSAs).   After purchasing catastrophic health care plans, beneficiaries would be free to tailor their spending to their needs and roll over unspent money from one year to the next.

Seven is to eliminate a major disincentive that keeps many poor people from looking for jobs – the loss of public welfare benefits that too often results from finding gainful employment. Earned income tax credits (EITCs) are one practical solution to this problem.

Arise and shine, Missouri legislators.  This is a once-in-a-lifetime opportunity to make exceptional progress across a broad range of important public policy issues.

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Certificate of Need: Missouri’s Certificate of Need (CON) law restricts health care competition by requiring health care providers to get state approval before entering new markets or expanding services offered in existing facilities. This restriction hampers innovative start-ups and market newcomers that would provide Missourians care and puts upward pressure on healthcare prices. Read more about certificate of need.

Charter Schools: Demand for charter schools in Missouri is at an all-time high. Unfortunately, charter schools are functionally limited to the Kansas City and Saint Louis School Districts. Tens of thousands of students are denied the opportunity for a better education. Read more about charter schools.

Course Access: All across Missouri, students do not have access to higher-level coursework such as AP courses, calculus, or physics. Read more about expanding course access.

Earned Income Tax Credit: State spending is on the rise in Missouri, led by a growth in public welfare dollars. Public welfare spending now accounts for more than 26% of total spending and 34% of spending growth. The growth in public welfare shares of total spending has eclipsed the growth of all other general expenditure functions. Read more about earned income tax credits.

Economic Development: Excessive use of economic development subsidies has hollowed out municipal tax bases and diverted tax revenue to specific developers. In the past 15 years, Saint Louis City alone has allocated $709 million away from municipal services through tax increment financing (TIF) and tax abatement. Studies from across the country indicate that these subsidies fail to generate promised jobs and growth. Read more about reforming economic development.

Education Savings Accounts (ESAs): Missouri students are underperforming. On the 2015 NAEP exam, only 31 percent of Missouri 8th-graders were found proficient in Math and only 36 percent were found proficient in English. For the Class of 2016, only 22 percent of Missouri ACT test-takers scored “college-ready” in all four tested subjects. Many students are trapped in failing schools via residential assignment and have no opportunity to pursue a better education. Read about introducing ESAs in Missouri.

Higher Education: The University of Missouri system, and higher education in the United States in general, are at a crossroads. Tuition is rising, resulting in over $1 trillion in student loan debt nationwide. At the same time, students who fail to secure a high-income job face serious financial consequences. As schools struggle with this, a rising tide of anti–free speech policy is sweeping across the higher education landscape. Read about reforming higher education.

Individual Income Tax Reform: Missouri’s economy has been stalled for almost two decades, as startup growth has slowed and entrepreneurs and taxpayers are leaving the state. Missouri is shrinking relative to other states and economies, ranking 48th out of 50 states in real GDP growth between 1997 and 2015. Individual income taxes are destructive to the state’s economic growth, productivity, and income, encouraging taxpayers to move their work or investments out of Missouri. This not only lowers economic output for the state, but also destabilizes revenue for state and local governments. Read more about reforming the individual income tax.

Open Collective Bargaining: Under current Sunshine Law in Missouri, government bodies may close meetings, records, and votes relating to contract negotiations until the contract is executed or rejected. This lack of transparency in negotiations between government unions and government officials can lead to contractual agreements that aren’t in the public’s best interest. Read more about open collective bargaining.

Prevailing Wage and Project Labor Agreements: State law governs what many government contractors must pay workers to get a government project, and it can also govern what kinds of workers contractors can use on that job. These restrictions often mean that large union contractors from big cities get jobs, to the detriment of smaller companies, local laborers, minority laborers, and taxpayers. Read more about prevailing wage and project labor agreements.

Public Pension Reform: Defined benefit (DB) pension plans promise employees annual payments for life upon retirement, but if a public plan does not have enough money to make these payments, taxpayers are legally bound to fund the difference. Pension plans can come up short if they fail to make sufficient contributions or overestimate their investment returns. Nationwide, state and local public pension funds are underfunded by more than $1 trillion dollars. Read about public pension reform.

Public Union Recertification: Once a government union comes to power, it can stay in power indefinitely. No further elections are scheduled and no term limits are imposed. This means workers can do little to ensure their union truly represents their interests and is held accountable. Read about public union recertification.

Right to Work: Many workers in Missouri can be forced to join unions. That is unfair not only to the employees disempowered by the law, but also to employers who have to operate under it. Read more about introducing right to work in Missouri. Governor Eric Greitens signed right to work legislation into law on February 6, 2017.

Tax Credit Reform: The state of Missouri uses public money to subsidize the private projects of special interests, often in the name of “economic development.” Practically, that means less money for public needs and greater difficulty in later reducing taxes for all taxpayers. Read about reforming tax credits.

Transportation: The Missouri Department of Transportation (MoDOT) will likely face funding shortfalls in the near future. The state will need to generate new revenue in fair and economically sound ways. Read more about Missouri’s transportation infrastructure.

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Starting next year, the Missouri Republican Party will have veto-proof majorities in both the state House and Senate. The re-elected Democrat governor had been able to stifle legislation from the legislative majority with vetoes and veto threats during his first term — a united Republican caucus would make that impossible in his second.

Indeed, the state legislature will have more power next year to exert its will in state governance. What will it do with that responsibility? What will it fight for?

I know what I will fight for.

I will fight to put an end to a decade’s worth of tax credit shenanigans that produce proposals such as 2011’s Aerotropolis and instead re-focus the state on enacting tax reforms that benefit all companies rather than the favored few. I will fight to have the corporate income tax eliminated and to have Missouri credibly respond to Kansas’ massive tax reforms of 2012.

I will fight for a health care policy that focuses on empowering the patient and the doctor, not the government. I will fight to have burdensome licensing laws reformed, particularly laws preventing some health care professionals from providing free care to Missouri’s neediest.

Especially today, supporters of liberty must ask themselves: “What will I fight for?” The state will be moving next year. The question is, in what direction?

The worst place you can be in the next few years is on the sidelines. Fight on.

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Lobbyist detente on tax credits is not a sustainable status quo, and continuing to carry old tax credits forward while instituting new ones is a failure of leadership. That state officials would try to re-brand a failed system and grow the development tax credit leviathan beyond its current confines is hugely disappointing. It is just more of the same, and Missourians deserve better than that.

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So with this hope, skepticism. It remains to be seen whether the governor will risk much political capital for the agenda he has outlined, particularly if his ideas are greeted with opposition in the Missouri General Assembly. And the governor appeared to concede as much last night when he talked about tax credits.

While we’re talking about government efficiency, let me make a related point. For the past three years, I have called for comprehensive tax credit reform. Some of you in this room stood with me on this issue. Others did not.

The consequences of this inaction are clear. Over the past four years, more than $2 billion in state tax credits have been redeemed. Effective tax credits are used to create jobs and grow our economy. But tax credits that aren’t delivering for Missourians must be retooled and reformed. We all know that dollars spent on tax credits are dollars we cannot invest in other critical priorities.

Once again, I ask you to pass comprehensive tax credit reform to get this spending under control.

One hundred and twenty three — that is how many words of the governor’s 5,814-word speech were devoted to the state’s budgetary equivalent of a billion dollar bunker buster. It is good that the governor even talked about tax credits, but the subject constituted just 2 percent of a speech that often detailed how the state is tightening its belt. That such a tiny amount of time was spent on highlighting such a huge problem is baffling and disappointing. But more frustrating, the content of those 123 words revealed nothing new, nor did they suggest any greater commitment to “getting it done” when it comes to tax credit reform. Says the governor, just do it. Or, you know, not.

That is despite the fact that ideas are bursting out from across the ideological spectrum on how to combat the tax credit problem. But whether the idea is blocking tax credit issuances (that is, the distribution of tax credits) or even going as far as the desperate step of unilaterally blocking tax credit redemptions altogether — as the left-leaning St. Louis Post-Dispatch suggests — there is growing interest to get a tax credit system that has spun out of control back in line so that our constitutionally-mandated priorities remain in order.

It is concerning that in the same speech where the governor paid brief homage to tax credit reform, he simultaneously, and at length, talked about new industry-targeted incentives under his “Missouri Works” program. Unless an appetite for legitimate reform develops in Jefferson City, Missourians are looking at not only “same old, same old” in the Capitol, but much “more of the same,” as the tax credit fiefdoms that have developed in the last decade fight off legislative incursions and new duchies get created for the next “big idea(s),” Aerotropolis included. (Yes, legislators may try to resurrect it.)

If state officials cannot get serious about a budgetary problem measurable not only in millions, but in billions of dollars, I am not sure they can get serious about much of anything. Gov. Nixon struck the right optimistic tone, as is required of these events, but when it came to the substance, the speech last night was woefully lacking. The state of the state could be worse, but if the governor’s speech is any indicator, Missourians should not expect it to get much better anytime soon.

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Last week, Jefferson City voters passed a hotel tax increase. This is one tax increase for a city that will be paid by all the people of Missouri, because so much hotel business in Jeff City is state-related. I guess, from the perspective of a Jeffersonian (or is it Jeff Citian?), it makes sense to raise this tax. But that does not mean it is good policy to raise taxes on other people to pay for something (a conference center) that is not a core responsibility of government. So that one counts as an out. …

Nuclear power is being hotly debated in the state capitol, as well. It would be excellent for our state to increase our use of nuclear power, and that depends on changes to existing CWIP financing regulations currently being debating in the legislature. This would be a home run (and this post is quickly running the risk of analogy overuse).

A bill to decrease the number of state representatives is being discussed in a House hearing tomorrow. This is a terrific idea that we have discussed before, and I hope it gets a fair hearing and due consideration. This would be about a double. …

Just because it (almost) fits with the title.

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