This argument rests on two assumptions. First, it assumes that the beneficiaries of private school scholarship programs (ESAs and vouchers) tend to be those already in private schools. Second, this argument assumes those in private schools are “the rich.” Thus, by creating programs that use direct government subsidies or are funded by tax credits, school choice programs are “welfare for the rich.”

This is an incredibly disingenuous argument. Indeed, the argument is nothing more than a red herring.

As everyone is aware, “the rich” are allowed to send their children to public schools. They can do so without facing any financial penalties. The United States Census Bureau calculates Small Area Income & Poverty Estimates (SAIPE) for each school district. This calculation estimates the number of students in each school district who fall below the poverty line. According to these SAIPE estimates, the Clayton, Kirkwood, Ladue, and Rockwood School Districts in Saint Louis County all have poverty estimates below three percent. Meanwhile, the nearby school districts of Riverview Gardens and Normandy have estimates above 35 percent. Yet, no one attempts to keep these wealthier school districts from receiving education funding because it is “welfare for the rich.”

A student from a rich family can attend any school district in Missouri and the district will receive funding for that student. But, if a parent, rich or poor, chooses to send their child to a private school, they lose that benefit. The issue is not that the family is rich, but that they have the audacity to choose a non-governmental school.

This is what makes the argument a red herring. It is a distraction from the real question—should families be denied educational benefits when they choose a non-public school?

Writing on this very issue in 1958, Father Virgil Blum lays the point out clearly: “It is fundamental that the state’s educational obligations are not to institutions and systems; its obligations are to children—the individual children of the state. Educational institutions and systems are but means to help the state carry out its educational obligations.”

Opponents of school choice will make any argument that seems to gain traction. Their fundamental objection, however, is against educational freedom. They simply do not believe individuals should be allowed to take their education dollars with them to the school of their choice.

The post Is School Choice “Welfare for the Rich”? appeared first on Show-Me Institute.

Sure, enrollment in many of our already small rural districts has declined so much that it raises the question of how the districts can continue to exist. But that’s not the whole story. Some of the “best” districts in St. Louis County have been experiencing steady enrollment declines. In 2017–18, the Clayton School District had almost 2,800 students. Last year, it had fewer than 2,400. A loss of four hundred students in a district of that size is significant. Similarly, Parkway C-2 has lost 1,000 students in the past few years, going from nearly 18,000 students in 2018–19 to fewer than 17,000. Rockwood, which had nearly 23,000 students a decade ago, now has just under 21,000, having lost 1,900 students from its high-water mark.

In fact, every district other than Ladue and Lindbergh has seen enrollment losses since 2010. But their gains of approximately 2,300 students don’t come close to offsetting the countywide loss of over 11,000. St. Louis County’s neighbor, St. Charles County, shows similar trends. The biggest districts are down by thousands of students.

So what does this mean? Even with no boundary changes, we will have excess capacity and too many teachers in most districts unless we make the region and the state more attractive to families. Districts can no longer rest on their laurels and assume their classrooms will be filled. Programs that allow parents to choose a school for each of their children and that allow districts to specialize in what they offer should be welcomed. Those hard district lines meant to keep students out may need to become more porous.

Public education in Missouri is no longer a system of more—more students, more teachers, more school buildings, more money. It’s a shrinking system, and that will bring difficult decisions. It’s time to start thinking about how we can design a smarter system to better serve our region.

The post The System We Have Is Not the System We’ve Had appeared first on Show-Me Institute.

In most instances, the timing of the TIF project would not matter. It would start when passed by the TIF commission and city council and last up to 23 years from that date. But apparently, it really matters here, as the special city council session indicates. Why?

Probably because the work on the project has already begun, and if the work has already begun, there is risk of the property being assessed at a higher value in the looming 2023 reassessment cycle. If it is assessed at a higher value, that limits the size of the tax subsidy available. Don’t get me wrong, it would still be an enormous TIF project, but hey, every few million dollars counts.

Of course, the fact that the work has begun before the TIF proposal is finalized is important, because the justification for this abomination of a TIF project is that the area is “blighted” and that the project would not happen at all “but for” the tax subsidy. It is hard to claim that it would not happen “but for” the subsidy when construction has already started before the subsidy is approved, but this appears to mean nothing to Chesterfield, the St. Louis County TIF Commission, and the various planners and lawyers who are all in on the tax subsidy largesse. (See appendix C of this document for the relevant affidavits.)

There’s another way to interpret construction starting on this project before the money was even approved. The developers were so confident that the TIF commission and the Chesterfield City Council would approve the money that there was simply no need to wait. This attitude, if true, would conform with the broader subsidy culture in our state, where local governments often just rubber stamp tax subsidy requests.

Will the city further contort itself to do the bidding of the developer and get this all approved before 2023 when the reassessment clock will strike midnight? Or will the city protect taxpayers and the other affected taxing jurisdictions, such as the Parkway and Rockwood school districts, by dealing with the reality that the developers used the system to extract taxpayer money for a project that never needed subsidies to begin with?

The post What’s the Rush, Chesterfield? appeared first on Show-Me Institute.

But now it wants to both subsidize and fund a major redevelopment of and around the Chesterfield Mall, and it wants to use property taxes to do so. How do you do that when you don’t have a property tax? Solution: you just take the property taxes from other governments. While that type of stealing would be illegal in many other situations, it is, unfortunately, perfectly legal under the tax-increment financing (TIF) laws of Missouri.

How much tax money is Chesterfield planning to take from other taxing districts should the development be approved and built (no guarantees on either of those)? $300 million. That’s right, $300 million.

The development proposal includes over 3,000 new residential units. Those residential units are going to have families with children. That is obviously wonderful, but what is not wonderful is that the school property taxes from those 3,000 units for the life of the TIF (around 30 years due to the phased in nature of it in this instance) will not go to the school districts (mostly Parkway, some in Rockwood). That tax money will go to Chesterfield and to the developer. The plan includes giving millions of dollars voluntarily to Parkway in an effort to buy the school district’s support, but the school districts have added up the money and concluded it will be short. How far short?

$220 million short. That’s right, $220 million. The school districts have calculated the probable number of extra children who will join the district because of the development, the need for an entirely new school building to educate them, the cost to educate those children on top of the new building, the length of the TIF project, and more, and concluded that they are short $220 million tax dollars in this deal. How are Parkway and Rockwood going to make up that estimated $220 million? They have only a few choices: cut school services in various ways or—more likely, in my opinion—request a tax increase on taxpayers outside of the TIF district.

So let’s be clear: in order for taxpayers to fund the demolition of Chesterfield Mall (instead of having the group that actually owns the mall take care of it) and hundreds of millions of dollars’ worth of other amenities—including $23 million to pay the cost of lawyers, planners, and financiers—the residents of Parkway school district can almost certainly look forward to a tax increase on everyone who is not inside the TIF district. (To be clear, residents inside the TIF district will also pay the higher tax, it just won’t go to Parkway schools.)

Something is deeply wrong with how we fund local government in Missouri.

The post Chesterfield and the Terrible, Horrible, No Good, Very Large TIF appeared first on Show-Me Institute.

School choice legislation is under consideration in the Missouri legislature, which means it is time for the same misleading argument against the effort to be trotted out—school choice programs “defund” public education.  If the voices of the educational establishment are to be believed, allowing even a small number of students to find an educational option other than the traditional public school that they are residentially assigned to will lead to larger class sizes, decreased offerings for students, and lower teacher pay.

None of that is true. In fact, it is a veritable pinata of falsehood and unclear thinking that can be whacked from many different angles. Here are four ways in which this argument is wrongheaded.

First, it is important to think about how schools are funded. A large portion of funding comes via local property taxes. This funding stream flows into schools regardless of the number of students that attend them. A levy is instituted against the value of homes and property in an area and sent to local school districts. If 10 or 100 or 1,000 students leave, local funding is untouched. Don’t believe us? Check your property tax bill.

Schools also receive funding from the state on a weighted, per-student basis. This is where the second bit of slippery thinking comes in. Rather than being punished for students leaving, there are multiple provisions in both the current formula and in several of the proposed pieces of school choice legislation that hold districts harmless. This means school districts may continue receiving funding for students they are no longer educating. For instance, if 100 students decided to move from the Rockwood School District to the Wentzville School District, the state would still send funding to Rockwood for those students for two years while also sending money to Wentzville. That’s under normal circumstances in the current state law. The school choice bill that passed through the Missouri House of Representatives goes even further, allowing school districts to receive funding for five years after a student leaves one of its schools.

But beyond that, the third bit of slippery thinking is based on the premise that students leaving schools is akin to “defunding” them. This way of looking at the issue ignores several key facts. When students leave, yes, some portion of the money allocated for them leaves as well (after a period of time), but the district no longer has the obligation to educate them. Both the revenue and the expense leaves. Critics are only looking at one side of the ledger. By this logic, parents choosing to homeschool their own children “defunds” education; so does the student who moves. Do we think that a student “defunds” the Blue Springs school district when they move to Lee’s Summit? Should we bar families from moving? Taking that logic to its conclusion leads to absurdity.

Some people will acknowledge all that we have pointed out and yet still claim tax credit scholarships “defund” public education by reducing the amount of general revenue. This brings us to our fourth point. And we have to be clear here: the state does not spend any state tax money on a tax credit scholarship program. These programs are funded by charitable donations which receive tax credits. Tax credits, whether for development or for charitable endeavors, can lead to a reduction in general revenue for the state. That part is true, but when is the last time you’ve heard the complaints that low-income housing tax credits “defund” public education? This argument suggests that any program which could potentially impact education funding is actually “defunding” education. Money that goes to roads could instead be going to schools. Was the expansion of Medicaid a massive $9 billion effort to defund public education? Again, this is absurd.

Particularly in the wake of the coronavirus pandemic, there are important debates to be had about the shape and nature of our public school system in Missouri. These debates will benefit from clear thinking and facts, not misleading and tired rhetoric.

The post No, School Choice Does Not Defund Public Schools appeared first on Show-Me Institute.

Unhappy parents everywhere are pulling their children out of public schools. In Nebraska, requests to homeschool are up 21 percent. With textbook Toquevillian can-do attitudes, parents across the country are getting together with friends and neighbors and creating micro-schools. Parent unions are forming and some are calling for a “break up” with traditional education.

What could, or should, Missouri be doing during this upheaval? Number one, we need leadership. The Missouri Department of Elementary and Secondary Education (DESE) has only released reopening health guidelines. Should we expect that all 520 school districts simply figure out a great plan on their own? Meanwhile, Nebraska has created a website (Launch Nebraska) with comprehensive planning guides and toolkits.

Number two, we should be making several easily accessed choices available to parents. At least one district, Maplewood-Richmond Heights, is allowing parents who want a virtual education to enroll their students with one of the state-approved virtual providers under the Missouri Course Access Program (MOCAP). Other districts should follow its lead. This is not a year for inventing things from scratch. Parents should also be able to easily choose in-person enrollment at a private school. There are a number of apps, such as Classroom Wallet, that the state could use to provide parents with funds to purchase tuition. This is not a good year to settle the public versus private debate. This is a year to get kids back to learning.

Third, accountability and transparency must not be allowed to fall to the wayside. For the past six months, public school districts have been held harmless from consequences. If this continues much longer, children will be the ones to suffer and achievement gaps will grow.

Parents were put in the driver’s seat last spring whether they liked it or not. And now they’re supposed to give the wheel back to public school districts that seem to not even know how to start the car. It’s not at all surprising that they’re fed up.

The post Not So Fast, Public School Districts appeared first on Show-Me Institute.

When it became clear that the governor was attempting to remove Vandeven, public educators rallied to her cause. Some defended Vandeven as a competent and well-regarded public servant. Others, however, sought to attack charter schools. They presumed that the whole ordeal wasn’t about Vandeven, but about putting someone in place who would work to expand school choice in Missouri. Several public school administrators tweeted the below graphic. One wrote, “More tax dollars could soon be siphoned to these ineffective schools if @GovGreitensMO gets his way.”

The claim that this chart shows anything meaningful about charter school effectiveness would be amusing if it wasn’t being vigorously advanced by numerous individuals who should know better. Take a look to see what I mean. The table shows a comparison of public school districts performance on the Annual Performance Review with individual charter schools. There are two huge problems with this. First, we are comparing whole school districts with individual schools. Second, it compares districts with schools that serve entirely different types of students. Charter schools in Missouri are only in Saint Louis and Kansas City. It is hardly fair to compare their performance to the Rockwood or Nixa School Districts that serve much more affluent students. 

A better comparison would be to compare charter school performance to the performance of individual schools in Saint Louis and Kansas City. I’ve done that below. As expected, the comparison is much more favorable for charter schools. In total, 58% of Missouri charter schools scored above 70% on the APR. Meanwhile, just 45% of public schools in Saint Louis and Kansas City scored in that range. Interestingly, 13 of the 16 traditional public schools in the top category were magnet schools, as were 6 of the 11 in the next category. These are hardly traditional schools. Neither traditional schools nor charter schools are allowed to have admissions requirements, but magnets can. Some magnet schools require students to take admissions tests and score at a certain level before they can be admitted. 

Given this more accurate context, charter schools appear to be outperforming their traditional public school counterparts. Yet, even this comparison tells us little about the effectiveness of the schools themselves. For that, we’d need a more sophisticated analysis. Fortunately for us, the Center for Research on Educational Outcomes (CREDO) at Stanford University conducted such a comparison. Using a matching design, in which they compare charter students to similar students in district schools, they found Missouri’s charter schools outperformed the district schools in reading and math.

It is understandable for public school officials to defend Margie Vandeven or even for them to oppose charter schools. However, it is not acceptable for them to build their case on misleading data. Let’s have a productive dialogue about public education and school choice in Missouri, and let’s have that conversation by looking at what the evidence actually says. 

The post I Don’t Think the Data Say What You Think They Say appeared first on Show-Me Institute.

My op-ed has received some pushback from individuals, typically PSRS retirees, who believe it was an unwarranted attack on the “good work” of PSRS. Most recently, a retired teacher wrote in Mid Rivers Newsmagazine that “we should all be working to support the [PSRS retirement] plan.”

The example I provided illustrates how pension systems can be gamed. The response in Mid Rivers Newsmagazine correctly mentions that measures have been put in place to prevent salary spiking. Within the three years used to calculate a PSRS member’s final average salary, the retirement plan places a 10 percent “cap or limits on increases in salary during the period that is used to calculate your Final Average Salary.”

This cap is like putting a Band-Aid on a mortal wound. The cap does little to help the situation for one obvious reason — it does not apply when an individual changes jobs. For instance, when Adams switched from one district to another, the cap did not apply. Similarly, when a teacher switches to a principal job within a district, the cap will not apply. The cap only applies for an individual staying in the same job. Moreover, it does not prevent spikes occurring in the year before the three final years. It simply does not fix the fundamental problem that Missouri’s defined benefit pension plans are not directly tied to an employee’s contributions.

I’m sorry, but it makes little sense to support a plan that is fundamentally broken and needs reform. Missourians should not simply ignore these problems and “support the plan.” Missourians should improve the plan.

The post Why Support A Broken Pension System? appeared first on Show-Me Institute.

A 2009 study by the Center on Reinventing Public Education estimated that Missouri is spending an extra $146,603,923 to fund the bump received when a teacher earns a master’s degree. The problem is that there is no evidence that earning a master’s degree actually makes a teacher better in the classroom. I can say this as someone who has studied the issue thoroughly and as someone who earned a master’s degree while teaching. Moreover, many teachers are receiving bumps for degrees, like administration, that will simply take them out of the classroom.

The master’s degree bump draws money away from other worthy endeavors that might improve educational outcomes for students. The editorial board of the Des Moines Register gets this. They recently wrote, “If Iowa truly wants to spend education money wisely, such automatic pay increases for teachers should be rethought.”

North Carolina recently moved to eliminate the master’s bump. Maybe Missouri school districts should follow that lead.

The post The Master’s Degree Bump Boondoggle appeared first on Show-Me Institute.

The crux of the piece is this: Imagine you are nearing retirement. You have a good pension, but if you work one more year, you could earn an additional $15,000 every year for the rest of your life. The rational decision would be to stick around for one more year. That is exactly what former Wentzville School District Superintendent Terry Adams did when he accepted the interim superintendent job in the Rockwood School District.

Missouri school superintendents are part of the Public School Retirement System of Missouri (PSRS). Like many public employee pension systems, PSRS is a defined benefit plan. This means employees are guaranteed benefits. These benefits are not tied to their contributions. In the PSRS system, benefits are paid on an individual’s final average salary of the last three years worked. By taking the Rockwood gig, Adams boosts his final average and his pension.

Let me be clear: Adams is not the problem. Nor are the countless other teachers and school leaders who make similar decisions. The problem is that we have established a system that encourages this type of behavior. The result is a growing unfunded liability problem for Missouri taxpayers.

It is time we address our pension problem by moving away from defined benefit plans. The only other options are to continually raise taxes or pray for a stock market miracle.

The post Education News: Salary Spiking Boosts Pensions, But Cripples Taxpayers appeared first on Show-Me Institute.

Adams earned $221,769 from Wentzville in the 2012-13 school year. He signed with Rockwood for $250,000. This move will not only earn him more money this year, he will reap the rewards for the rest of his life. Wentzville and Rockwood are part of the Public School Retirement System of Missouri (PSRS). This pension system is a defined benefit pension system. That means retirees are guaranteed benefits based on their final average salary.

Final average salary in PSRS is based on the last three years of employment. By working one additional year at a higher salary, Adams boosts his final average from $213,877 to $228,200.

I visited the PSRS benefit estimate calculator and plugged in these figures along with Adams’ years of service and his approximate birthdate (I had to guess). By my calculations, Adams would have received more than $207,000 a year in retirement benefits. By working one extra year, he will earn an extra $15,000 per year for the rest of his life. Over the course of 20 years, this will add up to more than $300,000 in extra retirement benefits. Not bad for an extra year’s work.

I certainly do not blame Adams for his decision. He was doing what was best for him and his family. Moreover, Adams is not alone. The final average salary rule is well known among teachers, principals, and superintendents, making switches like this quite common. The problem is not the individual, but rather a poorly designed system that rewards this type of behavior.

Spiking of final average salary is one factor among many that contributes to the underfunding of defined benefit pension systems. According to a recent policy study by Andrew Biggs for the Show-Me Institute, the total amount of unfunded liabilities for PSRS is more than $5 billion. That is assuming an 8 percent return on current investments — an ambitious assumption. If we assume a more moderate 4 percent rate of return, the unfunded liabilities of PSRS swell to more than $31 billion.

So who pays for Adams and the countless other individuals who spike their pay in their final years? Who pays for the mounting unfunded liabilities? The taxpayers do.

James V. Shuls, Ph.D., is the education policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Adams Had A Lot Of Reasons To Accept Rockwood Interim Superintendent Position appeared first on Show-Me Institute.

Last Tuesday, the St. Louis Post Dispatch reported that the Rockwood School District (of which I am a graduate) received an A+ rating for “transparency” among the 10 largest school districts in Missouri. According to the Sunshine Review, a non-profit group that concentrates on state and local government accountability, Rockwood’s website met all of their criteria and provides information regarding taxes, budgets, meetings, elected officials, administrative officials, contracts, audits, public records, academics, and background checks.

Some may see Rockwood’s website as a model for school districts to follow, but taking a closer look at the site, it is not perfect. For example, if you want to review the superintendent’s or other personnel contracts, benefits, pensions, or records of communication (like e-mails between the superintendent, the president of the teachers’ union, school board members, and the board secretary), you will not find it on Rockwood’s website. Instead, you have to make a specific request for public records, and depending on the information, it could cost you more than $18,005.

Is this worthy of an A+?

No, and taxpayers deserve more. Former Show-Me Institute Policy Analyst Audrey Spalding is exactly right, “It Is Time To Increase Public School Transparency.” We have the technology to share information online. Now it is time for school districts to step up and provide us with detailed information on how they spend our money.

The post Grading Public School Transparency: Does Rockwood Deserve An A+? appeared first on Show-Me Institute.

Tax increment financing (TIF) is the Rasputin of Saint Louis County – the bad idea that keeps coming back and refuses to die. Despite TIF’s documented failures, Ellisville and interested developers are considering the establishment of a new TIF district in the southwest quadrant of Clarkson and Manchester Roads. The TIF district would take the tax dollars generated by the development and divert them back to the developer. County leaders from both parties, including Steve Ehlmann in Saint Charles and Charlie Dooley in Saint Louis, have seen the harm that TIF is causing our region. The TIF commission and the city council should reject this proposal.

TIF has had numerous negative economic effects in Saint Louis County. TIF has increased government involvement in the economy, sparked abuse of eminent domain, and made subsidies a permanent fixture of development. Furthermore, TIF has failed at its main purpose: economic growth. The East-West Gateway Council of Governments concluded that TIFs and other incentives have created jobs at the rate of one retail job for every $370,000 in taxpayer subsidies. That is not a road to growth – it is a road to ruin.

An Iowa study of TIF usage concluded that, “On net (…) there is no evidence of economy-wide benefits, fiscal benefits, or population gains.” Another study from Illinois found that economic growth in cities that did not use TIF was stronger than in cities that did, because TIF subsidies caused an inefficient allocation of resources.

Consistent with those findings, cities’ heavy use of TIF has distorted economic growth and subsidized less efficient, politically-favored developments in Saint Louis County. Citizens are free to choose between shopping at Walmart or mom-and-pop stores, but cities should not give Walmart an advantage over their competition through subsidies.

Everyone wants a “do-something” leader. So, even though the evidence says TIF is bad for the region’s economy, municipal leaders support TIFs within their city. They can claim political credit for the “new” businesses, while playing kick-the-can with the adverse consequences for the other taxing districts, like the schools. Most residents of the Rockwood School District do not live in Ellisville; they have no way of voicing their opposition.

I urge this TIF commission and Ellisville to recognize that the constant quest for retail tax incentives is harming the region’s economic base. By passing this TIF, Ellisville might gain in the short term, but at the expense of other taxing districts that also serve its citizens. More importantly, it will continue the downward spiral of incentive-based retail developments that shrinks our region’s tax base to benefit private developers.

Ellisville can address long-term revenue issues by switching to pool sales tax status. The city, its residents, and its taxpayers would then benefit from development throughout the county. I hope the TIF commission and Ellisville can lead the way to a new realization for our region, where economic development works for everyone when governments do not play favorites and businesses succeed or fail on their own merits.

David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

Related Links

‘Sometimes Nothing Can Be A Real Cool Hand’ Saint Louis County TIF Policy, Punting, And Cool Hand Luke

The post TIF Is A Bad Idea That Refuses To Die appeared first on Show-Me Institute.

The event is open to the public, so come out and join the conversation.

The post Education Panel Tonight! appeared first on Show-Me Institute.

[T]eenagers’ body clocks are set to a schedule that is different from that of younger children or adults. … The result is that the first class of the morning is often a waste,
with as many as 28 percent of students falling asleep, according to a
National Sleep Foundation poll. Some are so sleepy they don’t even show
up, contributing to failure and dropout rates.

Considering the state of the American education system, any bit of help goes a long way, and the circadian rhythms of the average American teenager cry out for relief every weekday from the grind of the early rise. Rested students perform better in class, are more competitive in athletics, and — according to one district in Kentucky — are involved in fewer early-morning automobile accidents.

According to the article, the National Sleep Foundation suggests that teenagers don’t reach their most functional state until after 8:00 a.m. However, only one major Missouri school district begins classes after this point. The Rockwood School District (which, in the interest of full disclosure, this author is an alumnus of) shifted its start time for high schools back to 8:28 A.M. at the beginning of the 2007-2008 school year.

Could such a shift help disadvantaged schools in Missouri? If nothing else, the opportunity certainly seems to exist. St. Louis and Kansas City public high schools currently begin at 7:20, while the Wellston School District’s Eskridge High School starts classes at 7:45.

While such a shift will not cure everything that ails these districts, later classes could mean better attendance and more productivity from students. As I said before, every little bit counts.

The post Not Early to Bed, Not Likely to Rise appeared first on Show-Me Institute.