What about us in Kansas City? To judge by city leadership, our biggest need is to look like other places—we are constantly mimicking other cities with convention hotels, streetcars, and entertainment districts.

In a speech at the KC Library in July 2015, (video here) professor Heywood Sanders discussed the folly of convention hotels and fielded a question about promoting Kansas City. The question-and-answer begins at about 49:49 and is worth hearing in its entirety, but in short he says:

Don’t do what everybody else is doing. Okay? Period.

There is an old saying that goes along those lines, “don’t think if you’re doing exactly the same thing that everyone else is doing except not quite as big or good or well, that it’s going to be any different.”

Unfortunately, that seems to be exactly what Kansas City is doing: building the same things that everyone else is building, except perhaps not as ambitious. Proponents of the Jazz District, for all its many challenges, at least want to promote something that is unique to Kansas City. Let’s think about what we have that no one else has, and promote that.

In the coming months, the Show-Me Institute will be talking more about what Kansas City has to offer. It’s a worthy discussion, and it ought to be the first step in promoting ourselves rather than simply engaging in municipal me-tooism.

The post Let Kansas City Be Kansas City 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). 

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However, as hard as it may be for Saint Louisans to hear, the report had a lot of truth in it, especially regarding Saint Louis’s economic situation. The statement rightfully points out (as we at the Show-Me Institute have written) that, when it comes to population and jobs, Saint Louis really has fallen behind and has yet to turn things around. Saint Louis City has lost much of its population; the city had around 750,000 residents in 1960, and today it’s close to 300,000. From 2000 to 2010, Saint Louis City lost population and Saint Louis County essentially stagnated.

Most of the population growth during that time was in the far suburbs and downtown (which received significant subsidies), and overall, population was stagnant.

The story is equally depressing when it comes to job growth. Saint Louis had anemic employment growth before the recession, and the economy has limped along since then. Despite claims of becoming a tech center, Saint Louis (and especially Saint Louis City) has seen nearly all its employment growth in education and medical services. For these and other reasons, economists (and not just those cited in the statement) forecast continued slow growth in the future for Saint Louis.

The Rams’ statement also claims that the other teams trying to move to L.A. (the Oakland Raiders and San Diego Chargers) would leave healthier economic markets. In this, the team is not wrong. Income and GDP of both Oakland and San Diego are much greater than in Saint Louis. They have more money to spend on tickets, jerseys, and NFL cable packages:

In addition to how things stand today, one has to factor in growth. Even accounting for the deindustrialization of the late 20^th century, Saint Louis is growing much more slowly than San Diego and Oakland.

 While Saint Louis aspires toward building a tech industry, Oakland is a rapidly gentrifying part of the tech-dominated Bay Area economy, and San Diego has the one of nation’s most important bio-tech clusters.

There are many possible culprits for Saint Louis’s lackluster growth, and few easy answers. However, it’s time for Saint Louis to be honest and acknowledge that, yes, of the four markets in play, Saint Louis is the least attractive for the NFL. We also have to acknowledge that without significant public financial “support,” no existing NFL team would consider locating to Saint Louis. But the city’s economy— not Stan Kroenke—is  the real problem. It’s that problem, which affects so much more than sports, that policymakers need to address.  

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                The recent downgrade saw Saint Louis’s general obligation debt rating fall one notch, from Aa3 to A1. That still leaves the city with a rating denoting an upper-medium investment grade, even if the rating is well below prime. And as some news sources have pointed out, that means Saint Louis’s rating is higher than Chicago’s or Detroit’s. Unfortunately, if we don’t compare Saint Louis to cities exiting or very likely entering bankruptcy, its rating is relatively low, as the chart below demonstrates:

                A lower bond rating can lead to higher borrowing costs. In the same way that an individual with a low credit score might have to pay higher interest rates on a car loan or a mortgage than someone with a great credit score, a lower rating for a city can mean it has to pay more to borrow. As cities regularly borrow money to make civic improvements, the higher cost of borrowing means residents pay more for large projects like, say, a football stadium. Speaking of stadiums, the rating for nonessential debt (read: convention center and stadium) issued by the Saint Louis Municipal Finance Corporation was also downgraded, to A3. That corporation would responsible for issuing bonds for a new stadium.

                The primary reason for Saint Louis’s weak credit rating is the city’s “weak socioeconomic profile,” which is admittedly difficult for city leaders to fix. However, there are ways city hall could work to increase the city’s bond rating. According to Moody’s, the city is too reliant on the earnings tax. In addition, the city could boost its rating by making an effort to reduce total debt. Unfortunately, with the city prepared to go even further into the red to build a billionaire a new football stadium, it may be a while before Saint Louis can brag about its credit rating to people who don’t live Chicago. 

The post Bad for Borrowing: Saint Louis Bond Ratings Slip 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.

The battle for the L.A. market is joined! According to NBCSanDiego, the Chargers are working with the Oakland Raiders. Their goal: a new stadium in the L.A. area (Carson, California, to be precise). Of course, their home cities can talk them out of it, for the right price.

It’s not shocking that teams other than the Rams might want to move to Los Angeles. L.A. is the country’s second largest media market, and with that comes a lot of TV money. However, still color me skeptical about the whole thing. I think (and I’m not alone) this is more of a ruse for the Chargers and the Raiders to extract sweetheart stadium deals from their home cities. The Chargers have been trying to get a workable proposal from San Diego for the past 14 years. They’ve even recently published some remarks to the San Diego stadium task force regarding what it wants in any new proposal. Needless to say, it’s quite a lot.

I think the Rams’ L.A. proposal is more serious. Why? Because of Stan Kroenke’s silence regarding the Rams’ latest proposal, or anything for that matter on what exactly he wants in order to stay in Saint Louis. The Chargers are giving San Diego an idea of what it is they’re looking for in a new stadium, Mr. Kroenke isn’t.

No matter the likelihood of the Chargers’ or the Rams’ proposals succeeding, I think that neither team should receive public subsidies. If billionaires want new stadiums, they should pay for them themselves. I don’t think taxpayers should get the bill, especially since there won’t be any economic return to them for doing so.

L.A. seems to be the place to go to for teams that can’t get a new stadium. Will policymakers be scared into throwing more money at teams in an attempt to prevent them from leaving? Maybe, but that doesn’t make it a good idea.

The post The Great L.A. Gambit appeared first on Show-Me Institute.

Like most people, NFL players have to pay taxes on their income. A team located where income tax rates are lower theoretically could offer contracts that are lower in nominal dollars but allow the players to receive higher take-home pay (for the purposes of this post, I am not taking into consideration deductions and tax loopholes, nor am I factoring in cost-of-living adjustments).  Which team’s players have the lowest income tax burden in the NFL? Well, there a couple of things to consider. First, what is the state and local income tax rate for where the players play their eight home games? Next, what is the state and local income tax rate for each of the team’s divisional foes (the players will travel for a road game against each of their divisional opponents)? The other games on a team’s schedule change from year to year, so the combined burden the players face will change somewhat from year to year.

So, for the 11 games (out of the 16 total) that a NFL team has on its schedule every year, is there a noticeable difference between the income tax burdens that the players on different teams face? From my calculations, there is (basic calculations —I only used the top marginal rate, so these numbers do not take into account the lower rates for the lower brackets and these numbers are slightly higher than they really would be). Take, for example, the Houston Texans. A team member who plays a game in Houston would pay no income taxes at either the state or local level. Therefore, for the eight games played in Houston, a Houston player will pay no income taxes. A Houston player will pay no income taxes for the road games in Jacksonville and Nashville, and $1,973.13 for the one game in Indianapolis. Therefore, the total income tax burden for a Houston Texans player making the median salary for these 11 games is $1,973.13. In contrast, a NFL player making the median salary would face a state and local income tax burden of close to $46,000 if he played for the Oakland Raiders (9.3 percent tax rate for eight games in Oakland and one game in San Diego plus the 4.63 percent and 7 percent rates for the games in Denver and Kansas City, respectively). Multiply that figure by 53 (the total number of players on the active roster) and the burden on a team’s players can increase substantially. If you used the mean salary ($1,900,000) instead of the median salary, the burden also increases.

Would this tax burden make much of a difference? I cannot say definitively (I am not an economist), but if one team had to pay a couple of million dollars, which counts against the cap, to just the income taxes, while another team only paid $100,000 or $200,000, I can tell you which team I would rather own.

The post Another Way To Keep Score? appeared first on Show-Me Institute.

I think the key issue here is the idea of competition. In a report for San Diego, the authors at Reason put it well (emphasis added):

“Taxpayers win whenever there is competition, even when the competition is won by public sector providers” said Adam B. Summers, policy analyst at Reason Foundation and co-author of the report. “They get more accountability, better results, and lower costs. […]”

Private screening companies are used at only 16 airports in the county. Springfield-Branson would have been no. 17. The very existence of competition brings a greater degree of efficiency to the TSA, even if it continues to do the screening in the vast majority of American airports. I know we aren’t used to thinking about the terms “government employees” and “complacency” together, but if the presence of competition in a small number of airports serves to reduce the TSA’s complacency, that benefits all of us.

One six-year-old report found that private screeners did a better job than government employees, but another report said that there are no cost savings because the TSA still overseees the private security companies, which operate according to the same requirements, rules, etc.

I believe the real reason for this denial of the private screening option has more to do with organized labor. From the KMOV Channel 4 report on this story:

The American Federation of Government Employees, the nation’s largest federal employee union, has praised [TSA Administrator John] Pistole’s decision.

TSA employees will be deciding on union representation shortly. Government unions are generally the most ardent opponents of any type of privatization.

Anytime I write anything about Branson, I always think, “What would Yakov say?” So, here is my best attempt at a Yakov Smirnoff–style joke about this situation:

In USA, people worry they the screeners will touch their junk as they board the plane. In Russia, people worry about the plane itself because the whole plane is made of junk!

Fire off better jokes in the comments, if you dare!

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Like any good journalist, the reporter got quotes from all sides of the debate. And, man, did he ever get some good quotes from the supporters of licensing (all emphasis below is added):

“The licensing process is a must,” said Detwiler, who along with fellow state-certified massage therapist Stephanie Lansdown run The Neuromuscular Clinic, which opened Nov. 15 in Springfield. “If you don’t know what you’re doing and say that you do, you could really do some harm to somebody.”

Clearly, this person has never tried to pick someone up at a bar.

“If we did the same work in San Diego, it would be a lot more expensive,” Detwiler said.

“I think it’s more about where you are. I don’t think the licensing would really have an effect on price.“

Believe it or not, we actually considered the issues of cost-of-living. The therapist is right that it matters, but wrong when he or she says that it explains the difference between Wichita and Springfield. The two cities have a very comparable cost-of-living, and Wichita’s is actually slightly higher. The main reason a massage session is $10 more in Springfield than Wichita is licensing, not costs of living.

I’ll finish with one quote that shows progress being made:

He added that the National Council of Architecture Review Boards has in recent years made it easier for architects licensed in one state to get licensed in others.

That is one way for the harmful effects of licensing to be reduced, and I applaud the architects for making it happen.

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The past week was an awesome experience. For those of you who don’t know, my fellow intern Dan Grana and I were Bastiat scholars at Cato University, which is a weeklong seminar organized by the Cato Institute that focuses on enhancing freedom and liberty through lectures and discussions. It is a great experience, and I recommend it to any libertarian — or anyone who is just generally interested in promoting freedom. Although the days were somewhat long (9 a.m. to 9 p.m.), it was completely worth it. The days were filled with incredible speakers, ranging from Tom G. Palmer of the Cato Institute to Rejoice Ngwenya, who is a leader against Zimbabwe’s corrupt president, Robert Mugabe. Even after the daily lectures were finished, the conversation continued. We spent most nights at the Veranda Grill discussing liberty and other issues with like-minded individuals.

The entire week was a first-class experience. The food and hotel were awesome, and the speakers were even better. Before I arrived in San Diego, I was a little apprehensive about the trip. I was worried that the speakers would not be entertaining, or the days would be too long, but it turned out that my notions were unwarranted. Again, if anyone ever has the opportunity to go to Cato University, I highly recommend it. I’m even thinking about going again next year.

The post Cato U appeared first on Show-Me Institute.

Shifting political alliances and personality conflicts have produced six superintendents in the last five years. This has made it difficult for superintendents to set long-term goals, and made it impossible for the fractious school board to hold anyone accountable for their results. It is simply naïve to imagine Saint Louis schools will improve amidst this kind of discord and leadership turnover. What the district needs is decisive, consistent leadership. 

As I argue in a forthcoming study for the Show-Me Institute, mayoral control of urban school districts can help bring to cities like Saint Louis the focus and consistency that is lacking. Boston is a model of how this can work when done well. Boston’s mayor was given control of the school board in 1991 and a few years later tapped Thomas Payzant, an official in the Clinton administration’s Department of Education and former San Diego superintendent, to run the system. In 2006, Payzant concluded a heralded 11-year run, as the district claimed the Broad Prize for Urban Education. Consistent mayoral support from the stolid Tom Menino throughout Payzant’s tenure gave him the time he needed to right a troubled district. 

A similar success story may be unfolding in New York City. Mayor Michael Bloomberg was given control of the New York City school board in 2002. While they have not proceeded without controversy, Bloomberg’s policies have generally received high marks. U.S. Secretary of Education Margaret Spellings has singled out the gains by minority students in New York and Chancellor Joel Klein has become a national voice for aggressive, focused urban reform. It is too early to judge the success of the Bloomberg-Klein reforms, but it is clear that they have moved New York past the confusion and petty turmoil that currently bedevils Saint Louis.

On the other hand, Washington, DC, offers a cautionary tale. In 2000, the D.C. school board was amended to include four mayoral appointees and five members elected by the public. This “hybrid” model was hailed as a superior alternative to straight mayoral control, and its backers included Mayor Anthony Williams, the Washington Post, the Greater Washington Board of Trade, and the Federal City Council. Six years later, the hybrid design is widely regarded as ineffectual, especially with a mayor whose attention to schools was flitting and whose energies were concentrated elsewhere. Williams himself has described his partial authority over the D.C. school board as “trying to drive a car with one pedal.”

There is reason to believe that mayoral control of large urban districts offers a better chance for disciplined oversight, real accountability, and sustained focus than does continued control by an elected school board. But in order for mayoral control to work as intended, careful attention must be paid to how the reform is executed. In particular, it is absolutely critical that Mayor Slay demonstrate a willingness to mobilize support and expend political capital on behalf of a coherent reform agenda. Such action will require the backing of business and civic leaders in Saint Louis. Those leaders, in turn, must be willing to hold the mayor’s feet to the fire, insisting that he set clear goals for the district, establish meaningful benchmarks, and do what is necessary to see that district officials are getting the job done.

Absent this commitment, a takeover will do little more than increase confusion. Meanwhile, a poorly-executed transfer of authority could yield new problems by reducing transparency, making it harder for local voices to get a hearing, and further insulating district leaders from at least rudimentary democratic oversight.

Mayoral control is no quick fix or panacea. But as Boston and New York show, if pursued thoughtfully, it can invigorate school improvement. If Mayor Slay is willing to make school improvement the centerpiece of his administration, and if business and civic leaders are willing to throw their weight behind the mayor’s agenda, it could offer new hope to the nearly 40,000 kids in Saint Louis schools.

Frederick M. Hess is director of education policy studies at the American Enterprise Institute and the author of a forthcoming study from the Show-Me Institute on mayoral control of urban school districts. He holds a Ph.D. in government from Harvard University.

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