The Reason study finds that U.S. state and local governments held approximately $6.1 trillion in debt at the end of FY 2023. That figure breaks down roughly as $2.66 trillion at the state level, $1.4 trillion among municipalities, $1.27 trillion in school districts, and $757 billion in counties.

For state governments alone, Reason reports $2.7 trillion in debt as of end of 2023, which is about $8,000 per person nationally. The methodology includes near‑term liabilities (like unpaid bills and payroll) plus long‑term obligations (bonds, pensions, and retiree health).

Missouri ranked 25th in combined state and local debt at $53.34 billion. Broken down per capita, Missouri ranked 43rd at $8,829.

Truth in Accounting’s evaluation looked only at the state budget and divided the amount by taxpayer—while Reason considered state and local debts and divided by population. TIA concluded Missouri had a Taxpayer Surplus™ of approximately $200 per taxpayer. Lastly, Reason relied on 2023 data while TIA used 2024 numbers.

The TIA result is reassuring at first glance—but that’s because it looks only at the state obligations. Reason’s analysis reminds us that local governments carry significant obligations beyond what the state government balance sheet shows.

Missouri’s fiscal position is better than many states—but neither the TIA nor Reason analyses justify complacency. Policymakers at every level of government in Missouri should focus on liabilities, funding discipline, and structural reform. This includes being mindful of the long-term commitments we have made to fund government employee pensions and healthcare plans.

A lot of attention is focused on cutting taxes, and that is worthwhile. But fiscal restraint is not merely about cutting taxes—we must rein in our spending too, and that includes long-term commitments.

The post New National Debt Analysis Offers Fresh Lens for Missouri’s Fiscal Picture appeared first on Show-Me Institute.

For the past several years, the Missouri Legislature has considered letting parents choose a public school in another public school district than the one in which they live—also known as open enrollment. It seems that DESE and the BOE are preparing for the moment that the legislature takes another crack at this idea. And by preemptively adding the word “voluntary,”, they have signaled that they prefer a weak and less effective version of this policy.

Currently, there are sixteen states, including our neighbors Kansas, Iowa, Arkansas, Nebraska, and Oklahoma, that require all public school districts to accept transfer students, provided that there is an open seat available. According to the Reason Foundation, students using open enrollment accounted for about 7 percent of publicly funded students in those states. In other words, open enrollment doesn’t have a massive impact on the system, but it can be a game changer for the students who use it.

In states such as Ohio, which have limited open enrollment to only those districts that voluntarily agree to accept students, high-income suburban districts have declined to participate. Thus, kids in Ohio’s largest urban districts, such as Akron or Cincinnati, don’t have any feasible open enrollment options. They would have to leapfrog over the suburban rings that surround their cities.

Missouri was called out last year in a national study for having district lines that mimic old residential red lines. That legacy could be ameliorated by making those lines more porous and less exclusionary. Regardless of the executive branch’s stated priorities, let’s not start the conversation on open enrollment with an eye toward a weak policy.

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Susan Pendergrass speaks with Jude Schwalbach, policy analyst at the Reason Foundation, about his report Public Schools Without Boundaries: 2024. They discuss how open enrollment policies are reshaping K–12 education by allowing students to attend public schools outside of their assigned districts, examine why Missouri ranks poorly in supporting open enrollment, highlighting significant areas for improvement in the state, and more.

Read Jude’s full report here.

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In this episode, Susan Pendergrass speaks with Jude Schwalbach, a Senior Policy Analyst at the Reason Foundation, about his recent article on the urgent need for school districts to either reduce staffing or consolidate to survive. They discuss the financial pressures facing many districts due to declining enrollment, the tough decisions schools must make to remain viable, the potential benefits of consolidation, the resistance from various stakeholders, innovative solutions to navigate these challenging circumstances, and more.

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I have been writing about public broadband funding for several years now. My work at the Show-Me Institute has been less focused on the federal expenditures overall and more on how that money would be spent in Missouri. I never liked the idea of a massive federal internet expansion program, although I understand that in certain, very rural parts of the nation it could be beneficial. My aim has been to argue against new, local-government owned internet networks (GONs) in Missouri. GONs are, simply put, terrible.

In 2021, the federal government appropriated $42 billion for broadband expansion. Three years later, how many homes have been connected to the internet with that tax money? According to Brendan Carr, an appointed member of the Federal Communications Commission, zero. That’s right, zero. Three years into the program, and they aren’t even close to doing the actual work to connect people to the internet. Carr writes that the administration has been far more concerned with other things instead of actually connecting people to broadband. The internet expansion focus in on: “Climate change mandates, tech biases, DEI requirements, favoring government-run networks + more.”

The original bill to fund broadband expansion was passed with bipartisan support. But, as often happens, bureaucrats appear to have bent the policy to their own agenda (and possibly the administration’s agenda). In this case, as Carr and others have explained, that means progressive policy aims enacted under cover of program rules instead of legislation that both sides of the aisle were willing to support. The Reason Foundation highlighted one of many examples here:

Among several examples, the senators noted that National Telecommunications and Information Administration’s Broadband Equity, Access, and Deployment proposal “requires subgrantees to prioritize certain segments of the workforce, such as ‘individuals with past criminal records’ and ‘justice-impacted […] participants.'” The infrastructure law that authorized the program merely required contractors to be “in compliance with Federal labor and employment laws.”

In May, I published an article in the St. Louis Post-Dispatch highlighting some astounding examples of government waste. It looks like I can add broadband expansion to this list.

The post Federal Broadband Funds Are Just Being Wasted appeared first on Show-Me Institute.

On May 8, 2024, Show-Me Institute hosted a virtual event where EdChoice’s Marty Lueken and Reason Foundation’s Christian Barnard discussed and demoed their K-12 School Choice Calculator.

The calculator was built to provide legislators, legislative staff, and stakeholders with an easy way to learn about the potential fiscal effects of funding educational opportunities in their state.

You can access the K-12 School Choice Calculator here: https://www.schoolchoicecalculator.com/

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Recently, the Reason Foundation released a report on K-12 resources and outcomes. Not to minimize the comprehensiveness of this report, but it aligns nicely with what my fingers would describe about public education in Missouri over the last fifteen years. So let’s take a look at data from the U.S. Department of Education and the Missouri Department of Elementary and Secondary Education (DESE) and see where we are.

Public school enrollment in Missouri is down.

Why? Nationally, birth rates have been going down since the Great Recession. In addition, Missouri has done little to make itself attractive to families with school-aged children. In several of our neighboring states families can pick any public or private school for their children. Meanwhile, more than 95% of Missouri families can still only choose between their assigned public school and virtual learning.

The number of teachers is up.

Why? This one is hard to figure out. There is little evidence that reducing classroom size improves achievement, but it continues to be a popular approach for Missouri districts.

Spending on public education is up.

Why? Spending on public education rarely goes down. Much of education spending is driven by the graph above and teacher contracts can be hard to terminate. In fact, due in part to the fact that district budgets are largely fixed, the DESE 2024 budget requests that the state raise the amount appropriated per student because enrollment is down.

Achievement has been declining.

Why? My speculation is that Missouri districts face no competition and are not held accountable. States like Florida with robust choice programs and letter grades for schools and districts have leapfrogged over Missouri in national rankings. Even as test scores decline, nearly every district in the state (514 out of 520) is considered “fully accredited” by DESE and the state Board of Education.

So, to recap—enrollment down, teachers up, spending way up, and achievement slowly tanking. Next year, Missouri will have a new governor and a new commissioner of education. Let’s keep this context in mind as we hold them accountable for changing the outcomes.

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The Reason report identified five best practices for open enrollment policy. Numbers one and two are that students should be able to choose any school within their district or in a different district. Number three is requiring the state education agency to maintain and report all open enrollment-related data. Number four is requiring districts to transparently report how many open seats they have for transfer students. And number five is ensuring the program is free to all participating families.

Missouri has struggled to pass even a watered-down version of open enrollment. In the 2023 legislative session, an open enrollment bill made it through the House and through the Senate committee level, but never made it to the governor’s desk. This bill would have created an open enrollment program that districts could opt out of, limited student movement, and allowed districts to deny transfers to students with disabilities. It was not an ideal bill, but it was still too controversial to pass.

The Reason report graded each state on a scale of one to five depending on how well the state had implemented each best practice. Not surprisingly, Missouri got a whopping zero out of five on the Reason scale. The only real cross-district option for Missouri parents is to pay tuition to another district. Last year, Missouri families spent $1.6 million of their own money to do just that. If parents try to lie or falsify their address—for example, claiming that their child lives with a grandparent—they face up to one year in jail and a $10,000 fine. Not exactly family friendly.

Our neighbor, Kansas, does much better. In fact, the Reason report calls Kansas “an outstanding example of robust open enrollment.” District participation is mandatory and districts must report their open seats by June 1 of each year. The Kansas Department of Education must report the number of transfer applications accepted or rejected on its website and must annually audit school capacity and non-resident student enrollment and report findings to the legislature.

I wonder if a parent in the Kansas City metro area would prefer to live on the west side, where their right to choose a public school that fits their child is protected by the law, or on the east side, where they could be incarcerated sending their child to a school in a different district?

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Jude Schwalbach is a policy analyst at Reason Foundation. He previously worked at The Heritage Foundation’s Center for Education Policy where his research focused on expanding educational opportunities for K-12 students and reducing the federal footprint in education. Before joining Heritage Foundation, Schwalbach taught high school in Phoenix, Arizona.

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Not according to a new study from the Reason Foundation. The study highlights how residents can benefit from their state leasing a toll road and addresses many common concerns. As tolling is a potential solution to Missouri’s transportation funding woes, it is worth exploring this report.

How could Missourians benefit from a privately operated toll road? States usually sell toll road leases for several billions of dollars, and that money can be reinvested in other transportation projects. For instance, Indiana received $3.85 billion for its toll road lease, which was more than enough to fully fund a 10-year transportation improvement program to improve road quality. For a state like Missouri, with hundreds of millions of dollars in unfunded transportation priorities each year, granting a company a lease to operate a toll road could provide some of the revenue needed to maintain Missouri’s roads.

While this may be good for state revenues, individual drivers may have some concerns. For instance, couldn’t a private toll road company just keep raising rates? And who will guarantee that the road will stay in good condition? Both concerns are addressed during contract negotiations.

Lease agreements typically tie rate increases to an inflation index, and terms of potential increases are agreed to in the contract. Similarly, lease agreements usually include performance indicators that the operating company must achieve, such as meeting pavement quality and bridge condition standards, with a financial penalty for non-compliance. Many contracts also specify minimum levels of maintenance expenditures the leasing company must meet. There is typically a clause for the state to terminate the agreement and resume operations if such provisions are not met.

And what happens if the company operating the toll road goes bankrupt? This has happened before, with non-dramatic results. The road does not close, as the state still owns the road. For instance, the company operating the aforementioned Indiana toll road went bankrupt, and it simply sold the lease to another company that took over operations. A toll road company going bankrupt is hardly a foregone conclusion, though, as many toll roads have been privately operated by the same company for years.

While tolling is not yet a reality in Missouri, several bills have been introduced in the past few years to allow private companies to operate toll roads. The Reason Foundation study should help Missourians see the upsides of such a possibility.

The post Should Drivers Fear Privately Operated Toll Roads? appeared first on Show-Me Institute.

We celebrated National School Choice Week on the SMI podcast with Corey DeAngelis. In this episode, Corey and Dr. Susan Pendergrass discuss the moral case for school choice, educational freedom in rural areas, and more.

Corey DeAngelis is the director of school choice at the Reason Foundation. He is also an adjunct scholar at the Cato Institute.

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According to the study, the assessment is based upon:

. . . data that states submitted to the federal government, [and] ranks each state’s highway system in 13 categories, including traffic fatalities, pavement condition, congestion, spending per mile, administrative costs and more. This edition of the Annual Highway Report uses state-submitted highway data from 2016, the most recent year with complete figures currently available, along with traffic congestion and bridge data from 2017.

The write up specific to Missouri is here, and it is worth reading in its entirety. While some states spent in excess of $200,000 per mile, Missouri maintained a high rating while just spending under $24,000 per mile. This did not come at a cost to pavement condition, where Missouri ranked higher than some of the states that greatly outspent us.

It’s also worth noting that Missouri scored the worst on bridges (40 out of 50). Some good news is that the governor just announced a federal grant of $20 million to address exactly that.

My colleagues and I have written a great deal about the need to increase MODoT revenue and have suggested some possibilities. Advocates of restrained government are right to demand that government spend existing money wisely before seeking more revenue. This report from Reason suggests that MoDOT is being more responsible with taxpayer money than other states.

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Bob Poole of the Reason Foundation, a libertarian free-market organization, wrote of the study in a recent newsletter and addressed two concerns likely to be raised in Missouri:

One of the most important is the idea that a system using GPS would “track” everywhere the vehicle goes. He [the author of the study] points out, correctly, that GPS is a one-way system: it enables the car to know where it is at all times, but the GPS satellite and its operators do not know. The basic concept is that an on-board unit on the vehicle would total up the miles driven (and which states those miles occurred in) and transmit the totals to the relevant jurisdictions (e.g., New York and New Jersey) so each can levy per-mile charges.

Another oft-heard concern is that because rural residents drive longer distances, they would be made worse off by a miles-charged system. Drawing on research from Rand Corporation and others, Rob’s report explains that rural residents tend to own older, gas-guzzling vehicles compared with urban residents, so most of them would be better off paying by the mile rather than by the gallon. Detailed TRB research papers bear this out. Similar data call into question the equity argument; Rob reminds us that lower-income households tend to drive older, less fuel-efficient vehicles compared with wealthier people. Like rural residents, most low-income urban-area residents would be better off paying by miles driven than by gallons used.

Former Show-Me Institute analyst Joe Miller addressed the issues facing the Missouri Department of Transportation in a 2016 paper, which included consideration of user fees such as mileage-based fees. As Poole points out, the ITIF policy paper is too heavy on top-down federal and state mandates. Instead, he urges states to experiment with ways for drivers to track their mileage and report it to private-sector service providers rather than state or federal agencies—as drivers will likely view it a violation of privacy.

Advances in technology such as more fuel-efficient cars pose a challenge to the old ways of raising infrastructure funds. Technology also permits us many more ways of addressing policy needs. It should be no surprise that there are likely more efficient ways for governments to collect the revenue necessary to provide for basic services. Policymakers should be open to considering those opportunities.

The post Are Mileage-Based User Fees Good For Missourians? appeared first on Show-Me Institute.

• Proponent Argument: Missouri’s Roads and Bridges are Crumbling

The Missouri Department of Transportation (MoDOT) will not have enough money to maintain the current highway system by 2017, and the infrastructure is in immediate need of repair. Many of the state’s roads and bridges are currently in poor condition.

o   Opponent Argument: Missouri’s state highway system has specific needs, such as improving I-70 or replacing deficient bridges. However, the system is not crumbling. In fact, the Reason Foundation and the Chamber of Commerce Foundation have ranked Missouri’s highway system among the best in the nation. Missouri just completed a decade of unprecedented spending on the highway system, adding lanes, repairing bridges, and smoothing roads. The highway system is in better shape than it has been in decades and MoDOT’s funding problems are not evidence that the system is about to collapse.

• Proponent Argument: A 0.75 percent statewide sales tax is a reasonable method of paying for roads and bridges.

We all benefit from transportation, so we should all pay. Many products are exempt from the sales tax, shielding the poor. In addition, gas taxes and tolling either cannot or are too unpopular to implement.

o   Opponent Argument: A statewide sales tax is an unfair, economically unsound way to pay for highways. Those who drive little will pay as much or more for new roads as truckers and people with long commutes. Using sales taxes to pay for roads subsidizes driving, which increase congestion and pollution. All Missouri consumers, even the poor, can expect to pay much higher taxes from this 17.75 percent state sales tax increase. Furthermore, user fees, such as higher gasoline taxes or tolls, can continue to provide adequate funding for MoDOT, as they have already done for decades. Spending more time educating Missourians about the best way to fund highways, and less time heralding the imminent collapse of Missouri’s roads and bridges, might demonstrate that gasoline taxes and tolls are more popular solutions.

Sales tax proponents essentially argue that Missouri’s transportation is in crisis and that a .75 percent statewide tax increase is the only reasonable and available solution to that crisis. However, skeptics of the proposed amendment counter that Missouri’s highway system is not in a crisis situation and there is time to select fair and economically sound policy solutions to MoDOT’s funding problem.

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