Susan Pendergrass is joined by Elias Tsapelas, director of state budget and fiscal policy at the Show-Me Institute, to explain what was actually at stake in the recent federal government shutdown. They break down the debate over extended Affordable Care Act subsidies, why health insurance costs keep rising, how COVID-era provisions distorted the marketplace, and what Congress may do next.

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Timestamps

00:00 Understanding the Government Shutdown
06:31 The Debate Over ACA Subsidies
09:10 Impact of the Affordable Care Act
13:24 Proposals for Health Care Reform
17:53 The Future of Health Care Costs

Transcript

Susan Pendergrass (00:00)
Well, this is going to be a very timely and interesting conversation with the Show-Me Institute’s own Elias Tsapelas. You are the Director of State Budget and Fiscal Policy, two things that are front and center right now, but I really wanted to just have you on to talk about a little bit of stuff around the recent government shutdown.

And I just want to say upfront, if I understand this correctly, the federal government can’t pay its bills unless it’s got an approved budget to pay the bills, right? And the fiscal year runs October 1st to September 30th. And if you don’t have a new budget for the next year, you can’t pay your bills. So it’s up to the Senate, the House, and the President to agree on a budget. And this past September, as has happened before, they could not agree, and Democrats were holding out, and that caused the government to shut down. What were Democrats saying they were holding out for?

Elias Tsapelas (00:52)
Well, I guess I should start with just a little caveat that some of what the Democrats were saying they were holding out for was not precisely what was on the table. So no matter what happens, health care premiums are going to be going up, that’s just a fact, because health care costs are up. Health care costs are going up everywhere. Hospitals, Medicaid, we see it everywhere.

Susan Pendergrass (00:56)
You know, fix it up for me. Why?

Elias Tsapelas (01:20)
What they were holding out for were these extended or expanded ACA subsidies, Affordable Care Act subsidies. We’re talking about the marketplace here. This is typically for people making between 100 percent and 400 percent of the federal poverty limit. For example, a couple of two: 100 percent of the federal poverty limit is about $21,000 per year, 400 percent is about $85,000 per year. That’s roughly the range you’re looking at.

Now, some small employers do purchase plans through the marketplace, but the big piece here is that the ACA provides subsidies for people. And the way it works, essentially, is that people pay a proportion of their income. If your income is 100 percent of the federal poverty limit, you’re going to pay roughly 2 percent of your income. Now, there are extended subsidies that change that calculation. But the point being, the law set out that if you make this amount of money, you’re only going to pay this much on health insurance, and the government is going to subsidize the rest. You are not sensitive to costs at all, because your costs are tied to your income.

Susan Pendergrass (02:54)
So, for example, if you earn $4,000 a month, theoretically, and I don’t know the numbers, the government would say you won’t pay any more than $300 in insurance premiums?

Elias Tsapelas (03:05)
Yep. And so that is a percentage that you pay scaled off how much income you have from that 100 to 400 percent. That is a core piece of how the Affordable Care Act worked, and everyone paid a portion based on the base subsidies.

Now, what the debate was about, or what Democrats were holding out for, was expanded subsidies, which came about during COVID as part of the American Rescue Plan, ARPA. And it did a couple things, but they were subsidies on top of regular subsidies. So this was not, “If this doesn’t happen, everyone is going to be paying unsubsidized plans.” This was an additional type of subsidy. These additional subsidies were set to expire at the end of the year, at the end of December. ARPA gave four years of subsidies.

Susan Pendergrass (04:04)
Because it was COVID related, temporary, and they said, “We’ll cover more of your premium through December 31, 2025.”

Elias Tsapelas (04:14)
Yes, I think part of the calculation was that people were going to like it so much that it would be hard to get rid of. And it’s certainly the case: if these subsidies go away, people will be paying more.

Susan Pendergrass (04:15)
Ahem.

Elias Tsapelas (04:27)
But that is not to say there would be no subsidies at all. These extended subsidies did a couple things. For people between 100 and 150 percent of the federal poverty limit, quick caveat: in Missouri, if you make under 138 percent, you’re on Medicaid, so you don’t pay anything, but in many states without Medicaid expansion, people go on the marketplace. What these expanded subsidies did is: if you made between 100 and 150 percent of the federal poverty limit, you paid zero percent of your income. You got a plan for free.

You would still have some cost sharing, and the sliding scale up to 400 percent that the normal subsidies used was lowered, so people under regular subsidies who made 400 percent of the federal poverty limit were paying about 10 percent of their income. With the expanded subsidies, you’d only pay 8.5 percent, and the subsidies no longer stopped at 400 percent. They would go all the way up. You would never pay more than 8.5 percent of your income.

Susan Pendergrass (05:30)
Okay.

Elias Tsapelas (05:42)
But typically, people above 400 percent of the federal poverty limit don’t want to buy ACA plans because 8.5 percent of income is expensive. Still, a decent number of people were impacted. It costs a decent amount of money. The Congressional Budget Office says extending these expanded subsidies costs about $350 billion over 10 years. Very expensive. But there are a lot of issues here, which Republicans are pushing back on as they negotiate whether to extend these by the end of the year.

Susan Pendergrass (06:31)
So now we’re in this argument of whether we extend COVID subsidies or not. And like you said, Republicans seemed willing to say maybe a year, or maybe we’ll vote on it in December. Essentially the Democrats didn’t get any of what they asked for, right?

Elias Tsapelas (06:48)
Yeah. A key piece is that when Democrats passed this in ARPA, no Republicans voted for it. There’s a variety of reasons, but a big one is that it exacerbates problems with the Affordable Care Act. People buying health insurance are seeing higher prices, high deductibles, high copays, so people don’t want to buy it. These additional subsidies got more people into the market, but at a very expensive cost. And because people are not cost sensitive, their share is tied to their income, the subsidies scale regardless of what insurance companies charge. That creates unintended effects. There were allegations of fraud. And a larger discussion: if we’re going to spend $350 billion per 10 years, is there not a better way to get healthier people to buy health insurance? Is there a better way to help people?

And the people most impacted are those around 400 percent of the federal poverty limit, not very low income people. Higher income people. And often near retirement folks who aren’t working anymore but aren’t yet on Medicare. They need health insurance, they have health needs, and insurance gets very expensive. That was something the Affordable Care Act tried to deal with. But doubling down on continuously funding this subsidy system is something Republicans didn’t want to do.

Susan Pendergrass (09:10)
Yeah. So we had Brian Blase of Paragon on the podcast, and he absolutely did not want those COVID related subsidies extended. He claimed that the Affordable Care Act caused health related expenses to go up. Do you know how that works?

Elias Tsapelas (09:45)
There are a couple things going on. One big thing Brian talks about is likely enormous fraud from the expanded subsidies. Bloomberg had a good article about what happened in Florida. As soon as the federal government offered zero premium plans for people between 100 and 150 percent of the federal poverty limit, background: Florida hasn’t expanded Medicaid, so people enroll on the marketplace. What happened is that it became a business for insurance brokers to get people enrolled. Brokers make money off enrollments, and people don’t care if they aren’t paying premiums.

So you had an enormous increase in people supposedly making between 100 and 150 percent of the federal poverty limit. Census data suggests far fewer people actually make that income. Tons were getting health insurance for free, and many weren’t using it. You’d expect higher usage. There are reasons to think there was widespread fraud.

More broadly, ACA plans must cover many things people don’t need, which drives up costs. And the marketplace risk pool is heavily made up of sick people, fewer healthy people, which makes insurance expensive.

So the bigger discussion is: how do you get healthier people into the market? How do you offer plans people want? Republicans are taking a stand that doubling down on the ACA model, with subsidies disconnected from costs, won’t work long term.

Susan Pendergrass (13:24)
Correct me if I’m wrong on this, but didn’t Senator Thune or somebody suggest just sending people $5,000?

Elias Tsapelas (13:30)
I don’t know if it was exactly that amount, but yes, there have been proposals essentially saying: maybe there will need to be a one year extension of subsidies because new plans start soon and it would be hard to roll out big changes in a month. But some ideas, from Senator Cassidy, Senator Thune, and others, propose approving the same amount of money but sending it directly to people instead of insurance companies. For many people, subsidies are worth over $30,000 a year. If people got $30,000, they might not spend it all on an ACA plan costing that much. They might buy a cheaper plan, use out of pocket spending, or seek non ACA compliant plans. There are ideas: HSAs, short term plans, specialized plans. A key piece is giving the money to people, not insurance companies, so someone has an incentive to reduce costs.

Susan Pendergrass (15:47)
Yeah. Well, the shutdown ended. Nothing really changed, right?

Elias Tsapelas (15:52)
Yeah. Congress will have to work a lot in the last month of the year. I’m a little disappointed. There were almost some very interesting budget related court cases that could have come from the shutdown. One argument was whether the government must fund food stamps, or SNAP, during a shutdown, whether they must give out money not appropriated. Some judges said yes. That raises major questions: can courts tell the executive branch to spend money Congress didn’t appropriate?

Susan Pendergrass (16:54)
I think they were told that they don’t, right, in the end?

Elias Tsapelas (16:59)
The Supreme Court basically said courts needed to wrestle with the issue. It got resolved before a final answer. We don’t know for now. Judges were on different sides. Democrats pushed back noting that in previous budgets, they fought to fund things, but the executive branch simply didn’t spend the money. There’s a lot of interesting stuff: can courts force funding, can the executive disregard congressional appropriations? I’m upset that didn’t get resolved. But the ACA issue is big enough that Congress has its hands full.

Susan Pendergrass (17:53)
Some folks said that because of the SNAP benefit question, we were just getting to the point where Americans were paying attention to the shutdown and then it ended. And what’s interesting is the amount of misinformation and hard to follow information. I saw headlines about someone’s insurance premiums going from $300 to $2,600. I don’t know if any of that was right, but it got a lot of play.

Elias Tsapelas (18:28)
I don’t think it was covered especially well in terms of what was being argued, because the government shut down far before these subsidies expired. There was a lot of muddying of the waters. Some people thought if subsidies weren’t extended, no one would have subsidies, even though the people most impacted would just go from paying 8.5 percent of income to 10 percent. Not nothing, but not catastrophic.

Health care costs are going up broadly. Medicare enrollees are getting renewal notices. Everything is going up. ARPA was designed to be temporary. If it were supposed to be permanent, Congress could have made it permanent. Whether Democrats thought it would be continued forever or just help temporarily is unclear. But if Congress comes up with something that makes health insurance better, I’m all for it. There are tough decisions. Congress has struggled with ACA reform for a decade.

Susan Pendergrass (20:20)
I think we know the answer to that. At the federal level, when they want to do big splashy things, ARPA, the ACA, the Tax Cuts and Jobs Act, they make expenses short term to reduce the fiscal note, assuming someone will renew them later. Same thing with the Tax Cuts and Jobs Act. They assume future lawmakers will extend them. So it’s not unreasonable that ARPA had temporary provisions assuming they’d get extended. I guess not this time.

Elias Tsapelas (21:12)
People’s health care costs going up is a big issue. People won’t be happy regardless. But returning to issues that should have been addressed when the ACA passed is important. The marketplace is dysfunctional and too expensive. Hopefully Congress finds something better. And I don’t want to minimize issues for people close to retirement. That’s a big issue: people between 55 and 65, not on Medicare yet, often have significant health needs. If you tell a 60 year old who isn’t working that coverage is $40,000 a year, that won’t work.

Susan Pendergrass (21:53)
Yeah. That’s right.

Elias Tsapelas (22:23)
More options will be good. That is an important group that needs to be addressed.

Susan Pendergrass (23:07)
Well, thanks for explaining it so clearly and helping our listeners understand what was actually on the table. It’s a complicated topic, but we’ll watch it unfold over the next year, and hopefully you’ll come back and explain what’s happening as it unfolds.

Elias Tsapelas (23:23)
Hopefully something does happen, so there is something to explain. That would be the best case scenario.

Susan Pendergrass (23:25)
That’s right. All right, well, thanks so much, Elias. Really appreciate it.

Elias Tsapelas (23:31)
Thank you.

Produced by Show-Me Opportunity

The post What the Government Shutdown Was Really About with Elias Tsapelas appeared first on Show-Me Institute.

The Supreme Court unanimously ruled that the state’s funding system was, in fact, constitutional, and the decision, written by Chief Justice and twitter fiend Don Willet goes into great length explaining why. Giving the funding case pending in Kansas and the perpetual threats that are levied at Missouri’s funding system, Justice Willet’s opinion is well worth reading.

On page two, Chief Justice Willet writes (emphasis mine):

“But  our  judicial  responsibility  is  not  to  second-guess  or  micromanage  Texas  education  policy or  to  issue  edicts  from  on  high  increasing  financial  inputs  in  hopes  of  increasing  educational  outputs. There  doubtless  exist  innovative  reform  measures  to  make Texas  schools  more accountable  and efficient, both quantitatively and qualitatively. Judicial review, however, does not license second guessing the political branches’ policy choices, or substituting the wisdom of nine judges for that of 181 lawmakers. Our role is much more limited, as is our holding: Despite the imperfections of the current school funding regime, it meets minimum constitutional requirements.”

Advocates often want to replace the legislative process and the decisions of our duly elected representatives with the opinions of judges. They want the court to tell the legislature how much to spend and to force them to spend it. This is terribly problematic. If courts are going to tell the state how much money they have to spend per pupil, what is the point of even having a legislature?

Chief Justice Willet was just getting warmed up. He continues later (again, emphasis mine):

“Second,  the  trial  court’s  “fact”  findings  as  to  the  specific  amount  of  funding  needed  to achieve a general diffusion of knowledge are, we think, beyond the current state of science in this field. We have warned that in school finance cases where we must decide constitutional questions, the trial court’s findings play a “limited role.”   This case demonstrates why.  To determine as a matter of fact that specific funding levels are required to achieve the constitutional threshold of a general  diffusion  of  knowledge,  a  court  not  only  must find  that  a  cost-quality  relationship  exists,  but also must assign  specific  quantitative measures to  that  relationship…We have never sanctioned a trial court’s ordering the Legislature  to  spend  a  specific  amount of money  on the  schools  to  achieve  constitutional  adequacy, as  doing  so  would deprive  the  Legislature  of  the  broad  discretion  the  Constitution provides  for  such inherently political decisions.”

Even if we wanted to give judges the power to set spending levels, we do not know how much it costs to educate a child adequately—in Texas, in Missouri, or anywhere else.  There is absolutely no guarantee that spending X amount of dollars will yield Y level of student achievement.  As a result, we rely on our elected representatives to determine how much money we should spend on our schools, and how to spend it. They have to make the difficult tradeoffs between dollars going to schools and to healthcare, to roads and to prisons.

The Texas Supreme Court made the right decision. The legislature has the power to set funding levels where they think they should be and are empowered to make the difficult tradeoffs between the various causes that the state supports. Not everyone will agree with the decisions the legislature makes, but that’s why we have elections.

The post Some School Finance Common Sense from Deep in the Heart of Texas appeared first on Show-Me Institute.

Opponents of Amendment 3 like to portray the current lawyer-dominated court plan as immune to even minor improvements. As a lawyer, I strongly disagree.

Missouri’s current court system dates back to middle of the 20th Century. Tired of overly partisan courts, Missourians enacted a new court plan that moved the state from a substantively partisan judge selection process to one that tried to remove some of the overt political pressures that campaigns produce.

Unfortunately, the structure of Missouri’s judicial selection system biases strongly toward lawyers, entrusting great power to those who would practice before the Court to choose what the Court looks like. As the Wall Street Journal noted in 2007, “[a] democratic system of choosing judges requires a transparent process — and accountability for those who make the choice.” Unfortunately, the lawyer-selected representatives of the Missouri court plan simply are not accountable to the rest of the state.

Does a system where lawyers get to approve their judges sound like a good system for everyone else? Not to me. It is bad policy to delegate immense power to a few thousand lawyers and let them effectively build a court over time that renders justice on the other six million or so non-lawyer Missourians. Inmates do not get to vote on who runs the prison. Lawyers should not have preferential rights for who metes out Missouri justice.

Initiative opponents suggest the proposed amendment would inject politics into Missouri’s court system. Nonsense. Politics have controlled Missouri’s courts for decades, albeit behind closed doors. Instead of currying favor with several special interests, prospective judges need only to keep on good terms with the members of one interest — the Missouri Bar. There are many fine lawyers, but I do not agree that we as a profession are better equipped to choose our referees than regular Missourians.

This reform is important because a court which is more accountable to Missourians is less likely to be beholden to today’s ingrained special interests. A judicial selection process that returns power to Missourians through their representatives while removing the most salient and destructive aspects of judicial elections would add confidence to Missouri’s court system. Indeed, reforms that empower Missourians to reassert majority control in their judicial system over special interests should be lauded — by both non-lawyers and members of the Bar.

Missouri’s court plan is far from perfect and needs reform. This initiative is a step in the right direction.

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

The post Court Plan Reforms Are Good For Missouri appeared first on Show-Me Institute.

On the other hand, not having a cap can encourage too many lawsuits and add to medical cost inflation. However, it is important to keep the costs of excessive lawsuits in perspective. The Congressional Budget Office estimates that the savings for instituting a typical set of tort reforms (including but not limited to a cap on damages) saves 0.5 percent on total medical spending. This is not completely insignificant, but those savings would be totally swamped by a single year’s medical inflation.

There is a way to reform the tort system without giving anyone special privileges. Outside of the United States, most of the developed world uses what is usually referred to as the “loser pays” system, whereby whoever loses the lawsuit must pay both sides’ legal expenses. This system would have the salutary effect of eliminating frivolous lawsuits and lowering total lawsuit expenses. A 2008 Manhattan Institute study found that when compared to countries with the loser pays system (e.g. Britain, Australia, Germany), the United States spends at least twice as much on tort litigation as a percentage of GDP. If Missouri instituted loser pays, we could reap the benefits of lower litigation costs without creating a privileged legal class.

The post Real Tort Reform appeared first on Show-Me Institute.

Right now, having tort reform laws on the books puts us at a comparative advantage with other states and other nations when competing for new industries. The loss of these laws would put us at a disadvantage, discouraging companies from creating new jobs in Missouri which could be created more cheaply in other states.

I actually disagree with James on a related issue: that of judicial appointments in Missouri. However, I totally agree with every word he wrote in this piece. If the state Supreme Court strikes down the current tort laws that were enacted in 2005, it would be a disaster for Missouri in countless ways, especially economically. I won’t get too worked up, because I am optimistic that the court will agree that elected officials have a right to set limits on government actions, such as court verdicts.

If opponents of tort reform laws want to go back to the way it was in Missouri, they need to get people elected to office who run on rescinding the lower award limits and other reforms that were passed. After all, the officials elected in 2005 almost all ran on the issue of tort reform. The people of Missouri elected legislators who had proposed to limit awards, change venue laws, etc. If you want to change those laws, do it through the democratic process — not the courts.

The post Terrific Op-Ed About Tort Law in Missouri appeared first on Show-Me Institute.

A not-yet-approved $8.1 billion development of the city of Saint Louis’ north side is already facing legal action. Critics of the development have been very vocal regarding their concerns about blighting, the use of eminent domain, and whether the project has any financial backers. The development company, NorthSide Regeneration LLC, has asked the city for $390.6 million in tax increment financing (TIF).

On Oct. 8, some of those concerns were put into writing and submitted as a lawsuit filed on the behalf of a north side resident, Bonzella Smith. The attorney behind the case, D.B. Amon, is a known critic of the development project put forward by Paul Mckee, and of the development company.

The lawsuit, available here, includes a litany of claims. Of the largest, it alleges that NorthSide doesn’t have evidence of financial backing for the project, that the Saint Louis TIF Commission didn’t properly investigate the proposal before recommending it unanimously to the city’s Board of Aldermen, and that blighting will reduce property values, if not eventually leading to the use of eminent domain. The lawsuit’s wide range of allegations impact aldermen, the TIF commission, the mayor, and the development company. Aldermen Marlene Davis and April Ford-Griffin, who represent wards that lie mostly within the bounds of the proposed development’s 1,100-acre footprint, have claimed repeatedly that blighting has no negative consequence, and that eminent domain will not be used.

At a short Thursday hearing, 22nd circuit court judge Robert Dierker ruled that he has jurisdiction to hear the case. Dierker, known for writing the book The Tyranny of Tolerance, joked during the hearing about a recent Supreme Court verdict. “For all practical purposes, there is no substantial limitation to the jurisdiction of this court.” He also made another wry off-the-cuff remark about how agencies and commissions are created in order to take on roles not allocated to government within the Constitution.

The development company’s lawyer, Paul Puricelli, has already filed a motion to dismiss the case, on the grounds that the development has yet to be approved.

“Why are we worrying about this now?” he asked during the hearing. The case could be pursued, he said, if the Board of Aldermen voted to approve the development.

Regardless of its merits, Puricelli’s point may soon be moot. On Friday, the Board of Aldermen will meet and is scheduled to perfect two board bills that would approve the redevelopment and the first half of TIF monies for the project. If the development continues to move quickly through city government, it could be approved as early as Nov. 6.

The next hearing for the north side suit has not yet been scheduled. In the next 25 days, Amon must file a response to Puricelli’s motion for dismissal. If Dierker does not dismiss the case, another hearing will be scheduled.

The post Court Hurdles Continue for NorthSide Project appeared first on Show-Me Institute.

Judge Wolff and the Post-Dispatch argue that property taxation is not a fair way to fund schools, because obviously the wealthier areas get more property taxes. The justice writes (quote via a Beacon article):

These unequal results pose a simple question that is hard to avoid and even harder to answer: What makes the children of one school district deserving of only about one-third of the education money available for the schools of the children in the highest-spending district?

Because the state constitution seems to authorize this absurdly unequal structure, the question is one of policy, not law.

The gross disparities created or tolerated in the system, however, ought to make courts especially attentive to particular constitutional requirements such as taxation of property tax wealth.

I disagree. The property tax is a fair way to fund schools, provided that the funds are supplemented by other taxes (currently state income taxes) to address a portion of the disparities that result. Judge Wolff clearly understands that property taxes are actually more equal than the other primary methods of taxation, as he writes in a footnote:

If one is disturbed by the inequalities of property taxes, one simply should imagine local taxation based, instead, on local incomes or on local retail sales. Property wealth, it seems to me, is far more evenly distributed throughout the state than income or retail sales even though the property tax wealth per pupil of the wealthiest districts is 15 to 20 times that of poor districts.

He is absolutely right here. The differences between sales tax collection in certain areas can dramatically large, as there are some school districts in the state that have little to no retail sales, while a district like Brentwood would be awash in sales tax dollars. The income taxation levels between Ladue school district and Hancock Place would also be enormous.

The fact is that part of the blame, for lack of a better term, for low funding levels in many school districts (especially in rural areas) lies with taxpayers who elect assessors that will keep official property values low, and then vote to keep taxes low on top of that. It’s fine with me if they do that — they may, or may not, be hurting their own children and communities. Some of that disparity is offset by income taxes that are paid statewide, but I don’t think general taxes should be raised to pay for eduction in areas where the local citizens have chosen to keep school funding low.

This leads us to what the Post-Dispatch got wrong in its editorial about the issue (link via Combest). They write:

Property-rich counties quickly become freeloaders when they employ assessment methods that dilute the market value of their real estate. They deprive poor counties who play by the rules and pay their fair share.

The author of this editorial clearly has no idea how assessments work in Missouri. It is the property-rich counties, like St. Louis, Jackson, and St. Charles, that use appointed assessors and value their property more aggressively close to market values. It is the poorer, more rural counties that use elected assessors and lack “certificates of value,” thereby undervaluing their property, keeping their school funding low, and receiving increased state aid because of that.

The wealthier school districts in St. Louis County — and presumably Jackson, too — have not seen any increases in state aid for years, precisely because they support their school locally with more accurate assessments and higher voter-approved taxing levels. The poor counties tend to take advantage of the system as “freeloaders,” not the rich counties. (It is possible that the Post has a different set of counties in mind as being “rich,” in which case I’ll amend my criticism. But I have to assume that their examples of wealthy counties in Missouri are the same ones everyone else would choose.)

I could go on and on, but I won’t. If we truly want to increase educational opportunities for all of Missouri’s children, it will take a lot more than adjustments to the school funding formula. For too many kids, that strategy is just rearranging deck chairs on the Lusitania (although that metaphor doesn’t quite work, because the Lusitania sank so quickly that its passengers didn’t really have time to engage in any ironic comedy before dying).

The post Education Reform, Property Taxes, and What the Post-Dispatch Got Totally Wrong appeared first on Show-Me Institute.

You may have heard there will be an election this November. Alongside trivial votes, such as who to choose for president, residents of Greene County will decide whether to adopt Missouri’s non-partisan court plan for their jurisdiction. Under the proposed change, Greene County judges would be selected by Missouri’s governor from a panel of three chosen by a judicial commission, rather than by popular election. The new commission would consist of the county’s chief judge, two citizens selected by the governor, and two lawyers elected by the county bar association.

This method of judicial selection is used for all of the state’s Supreme Court and appellate judges, as well as the judges for five circuits serving large cities and counties in Missouri. A recent study by the Show-Me Institute shows that adoption of this type of non-partisan court plan provides a better environment for economic performance and growth.

The “Missouri Plan,” as the system is known — because Missouri was the first state to adopt such a format — has been subsequently adopted, in various forms, by 25 other states. However, the plan has recently been the subject of much controversy here at home. In particular, some critics have accused the appellate commission — which selects the panels for openings to the state’s highest courts — of gaming the selection process by providing a panel consisting of one person that the commission supports and two others that they know would be unacceptable to the governor. There is much truth in these accusations, but the overall history of the plan, as well as its current operations in the local circuits, has been far less controversial. The Missouri Plan has served our state well by reducing the level of partisan politics in judicial selections.

In May, the Show-Me Institute released a study, “Is the ‘Missouri Plan’ Good for Missouri? The Economics of Judicial Selection,” by professors Joshua Hall and Russell Sobel. The study compared the various methods of judicial selection used in each state to that state’s legal quality ranking, as measured by the Institute for Legal Reform. The ILR ranks all 50 states every year according to results from a survey of attorneys representing large corporations. While the rankings are admittedly biased toward the interests of big business, this also serves as a formidable counterweight to the oft-heard charges that the Missouri Plan unfairly benefits trial lawyers.

The results of Hall’s and Sobel’s study are unambiguous: States that use some variant of the Missouri Plan’s merit-based system of judicial selection rank higher in terms of overall legal quality, according to the ILR survey, than states that elect their judges in either partisan or non-partisan races. Partisan elections, like those in Greene County, rank the lowest, by a significant margin.

The implications for Greene County are clear. The Hall and Sobel study presented economic findings that a legal system’s quality matters for economic growth, and although the paper focuses on statewide judicial selection plans, the hallmarks of a good statewide environment for business also apply at the county level. Respect for property rights, reliable enforcement of contracts, market-friendly laws, and fair juries are the foundations of a healthy business environment at any level of government. Positive efforts and statewide reforms, such as tort reform, can only go so far if the rulings of local elected judges are subject to electoral pressures.

The proposed judicial selection changes for Greene County should not be interpreted as an attack on the county’s current elected judges. In fact, eliminating the factor of partisan elections will relieve those judges of external pressures. If the non-partisan selection system is implemented, sitting judges will be maintained in office, subject to the people’s future retention votes.

The study by Hall and Sobel shows that selection systems with appointed judges correlates with generally improved environments for business and economic growth. In the long run, this change will benefit the people of Greene County by helping to ensure that the county remains a healthy environment for the free market to flourish.

David Stokes is a policy analyst at the Show-Me Institute.

The post Greene County Could Benefit From Non-Partisan Judicial Selection appeared first on Show-Me Institute.

In short, it finds that Missouri’s current method of selecting Supreme Court justices (and appellate judges, and some lower court judges) is the most favorable system for the state’s economic growth, as measured by the ILR rankings. (To be clear, it’s actually tied with the closely related system of gubernatorial appointment from nominating commission with legislative approval; Missouri does not have this last part.)

Now, how does this fit into the ongoing debate about reforming our system? It is very important to note that this study looks at the big picture, not the small parts. It places the 50 states into seven different categories based on their methods of judicial selection. However, the authors readily admit that there are minor differences between individual processes within each of those seven methods. The study concludes that the Missouri Plan is good for our state and for economic growth. It does not say that minor improvements or changes to the Plan are automatically bad things, although it does warn against going too far with minor changes. To that end, I think the study fits well with the Missouri Plan op-ed I wrote last year. (I should probably rephrase this, as the small op-ed fits with the major study — not the other way around.)

Nevertheless, I think this study provides an excellent framework for looking at this issue, and clearly warns against making significant changes to our plan. However, defenders of the current system (of which I am one) would be incorrect if they were to suggest that the study defends the current system exactly as it is.

The post Show-Me Institute Releases Judicial Selection Study appeared first on Show-Me Institute.

A 2007 change to state law granting more authority to county tax increment financing (TIF) commissions within the Saint Louis-area, at the expense of municipal TIF commissions, has led cities within Saint Louis County to initiate a lawsuit attempting to overturn the change. The suit was filed on Feb. 15 by six cities along with their umbrella organization, the Saint Louis County Municipal League. Municipalities within Saint Louis and Saint Charles counties have been enacting tax incentives, particularly TIF, with much greater frequency — and much less fiscal prudence — than the counties themselves. Unfortunately, if this lawsuit succeeds, the detrimental impact of these tax giveaways will continue unimpeded.

In fairness to the cities, the changes to the law are indeed unclear. An open reading makes one wonder whether any future TIF projects must be passed by both a municipal and county TIF commission, or just one of the two. According to lawyers familiar with the issue, bonds for upcoming projects will not be issued until these questions are settled. While I have no personal objection to seeing our area’s latest strip mall proposal face bonding problems, the General Assembly should nonetheless return to the statute language (RSMo 99.820) to rectify these issues. It should clarify the statute in the direction of more authority at the county level, though, and less at the municipal level.

Which level of government should really be making these decisions about tax increment financing or other types of tax incentives? The debate tends to weigh two sides: cities that presumably know what is best for their city and their residents, or higher levels of authority that can hopefully consider the larger picture — which generally affects much more than just the cities. I believe the county level works best here. After all, county government is local government by every measure. I trust that the powers that be in Saint Louis County are not so far removed in their Clayton skyscrapers that they have no idea what is best for the people of Saint Ann.

Counties are also large enough to put proposed tax incentives into perspective, making decisions outside of a municipal vacuum. If these incentive decisions were made at the county level, cities would no longer face the fear and pressure to “remain competitive” with surrounding cities by issuing generous incentives. Cities would certainly maintain a voice in the process, along with school districts, through rotating appointments on the county TIF commission that would be determined by the locations of future proposals.

In their lawsuit, the cities claim that the new statute is unconstitutional because it treats Saint Charles, Saint Louis, and Jefferson counties differently from the state’s other counties.  This claim strikes me as absurd. Our statutes contain numerous laws written especially for one county or another. Because the lawsuit involves six cities from Saint Louis County, I’ll give two — out of many — examples where Saint Louis County is treated differently from the rest of the state. The legal process for municipal annexations and incorporations is different, and more controlled, in Saint Louis County than elsewhere, and only taxing districts in Saint Louis County are allowed to declare varying tax rates for multiple property classifications. Are these laws, and the many others like them involving cities and counties throughout the state, all also unconstitutional?

If judges and elected officials ultimately determine the commission power rests at the county level, we could expect an end to TIFs and similar giveaways in Saint Charles, and a reduction in their use in Saint Louis and Jefferson counties. The tremendous fiscal discipline shown by Saint Charles, while still experiencing great economic growth, demonstrates why these decisions should be made at the county level. And while it has not been quite as sagacious as Saint Charles, Saint Louis County has been more discriminating in its use of incentives than have many of the municipalities within its borders.

All of the prominent abuses of TIF in Saint Louis County — most famously at the West County Mall — have occurred within municipalities, rather than in the unincorporated areas. Similarly, the ugly case of tax incentives and eminent domain abuse that was recently heard by the state Supreme Court occurred in the city of Arnold — not unincorporated Jefferson County. I believe the residents of all three counties would be better served by having countywide commissions and elected county officials responsible for tax incentive determinations.

David Stokes is a policy analyst at the Show-Me Institute, a Missouri-based think tank.

The post Counties, Not Cities, Should Determine TIFs appeared first on Show-Me Institute.

Here’s the story of how all this came to pass:

The 19th century saw the United States inundated with waves of immigrants, many of whom were members of the Roman Catholic Church. The nation had been, up to that point, almost uniformly Protestant in its religious composition. The influx of hundreds of thousands of new citizens who, it was feared, would challenge the religious orthodoxy and look to Rome for political instruction was more than many Americans were willing to tolerate. Nativist societies emerged whose purpose was to limit the volume of immigration and to regulate the nationality and class of persons allowed to enter the United States. The anti-immigrant attitudes eventually coalesced into support for the American Party, formed in 1843, also called the "Know-Nothings." By the middle of the century, the
Know-Nothings had realized significant political success, winning more than a hundred congressional seats and coming to dominate some state governments.

At the same time that these Nativist attitudes were fermenting, activists such as Horace Mann were pushing for the growth of "common schools" in which the youth of the nation could be taught in matters of faith, as well as in fundamental courses of study. These educators sought to find a sort of moral "common denominator" — a set of basic Christian principles to which all Protestant denominations could agree, and which would then be used as part of the curriculum. It was assumed that such a system should be considered "non-sectarian," because no one denomination could exert any special authority for its doctrines and, as a result (according to Mann himself), "[the] system earnestly inculcates all Christian morals; it founds its morals on the basis of religion; it welcomes the religion of the Bible; it allows it to do what it is allowed in no other system, to speak for itself."

To be sure, Mann’s schools required daily reading of the King James Bible, but he viewed this as no more than neutrally presenting the text and allowing the students to draw their own conclusions from it. In the minds of the Protestant majority, this distinguished the educational practice of the common schools from "sectarianism," in which a religious authority indoctrinated the students by exegeting the text for them.

The groundswell of Catholic students posed a serious problem for the common schools, however, because the religious convictions the immigrants brought with them from Europe were not easily compatible with the standardized Christianity advanced by the schools. The conflict is exemplified by the situation New York faced in 1842. As was the case in Mann’s Massachusetts, it was the policy of the New York Public School Society to have the King James version of the Bible — which was forbidden by the Catholic Church — read in their classrooms, and certain textbooks included historical characterizations that were repugnant to Catholics. The Catholics, under the guidance of Bishop "Dagger John" Hughes, demanded public support for their own schools. They initially won some concessions from the Public School Society, but ultimately the legislature created a City Board of Education to establish new public schools and acted to bar the public funding of "sectarian" schools.

A decade later, similar Catholic efforts in other states were labeled as attempts to "destroy public education" or "subvert basic American principles." These accusations coincided with the rise of the Know-Nothing Party during the election of 1854. Its action against Catholic interests was wide-ranging and swift where they had gained the necessary authority. After their sweeping victory in Massachusetts, the Know-Nothings proposed constitutional amendments that would have denied Roman Catholics the right to hold public office, and limited the franchise to males who had lived for at least 21 years in the United States. They dismissed Irish state-government workers, banned foreign-language instruction in the public schools, and established a special committee charged with the task of liberating women believed to be held captive in convents and nunneries, targeting as well "acts of villainy, injustice, and wrong […] perpetrated with impunity within the walls of said institutions."

The anti-Catholic sentiment carried on beyond the demise of the Know-Nothings, though it was not as prominent during the Civil War and Reconstruction eras. James G. Blaine arrived on the national political scene in 1863, having ridden a wave of anti-Catholic, Nativist support from his home in Maine to a seat in the House of Representatives. He served in the House for thirteen years, acting as the Speaker of the House from 1869-1875. True to his base of support, Congressman Blaine made it a personal quest to see that the doors of the public treasury were finally and unquestionably closed to Catholics who wanted money to establish tolerable alternatives to the Protestant-dominated public school system. When, in September 1875, President Ulysses S. Grant called for the passage of a constitutional amendment that would deny public funds to religious organizations, Blaine responded by proposing the constitutional amendment that would come to bear his name, and which he hoped would catapult him to the Republican Party’s presidential nomination in 1876. It read:

No state shall make any law respecting an establishment of religion, or prohibiting the exercise thereof; and no money raised by taxation in any State for the support of public schools, or derived from any public fund therefore, nor any public lands devoted thereto, shall ever be under the control of any religious sect; nor shall any money so raised or lands so devoted be divided between religious sects or denominations.

Despite Blaine’s failure to get his amendment added to the federal Constitution, the influence of his cause did not disappear; it simply changed form. While Blaine’s supporters could not command the votes necessary for a federal amendment, they
did have the requisite votes to set the terms for new states’ admission into the union. In some incoming states, popular sentiment alone led to the passage of a Blaine Amendment. For others, however, Congress utilized its continuing anti-Catholic sentiment by requiring territories applying for statehood to include a provision in their new state constitution that would echo the restrictions of the Blaine Amendment.

These constitutional provisions are relics of anti-Catholic bigotry. They reflect some of the worst impulses in the human character — exclusion and discrimination against those who may think or believe differently from the mainstream — and they are directly contrary to the ideals of the First Amendment, which guarantees a right to the free exercise of religion without exclusion from generally available governmental benefits.

The post Repealing a Constitutional Evil appeared first on Show-Me Institute.

To date, Columbia Public Schools has spent roughly $82,000 on the “adequacy” lawsuit, despite the fact it is a no-win venture for the community. Several other plaintiff schools have come to a similar conclusion and have declined to join the appeal. CPS should do the same.

The plaintiff school districts are spending tax dollars to hire private law firms to sue the Legislature — i.e., us — and the attorney general’s office has used tax dollars to hire a private law firm to defend the Legislature. The cost so far, just for private law firms, is more than $4.6 million, and that does not count the time of the attorney general’s staff lawyers or the court. I find it remarkable that some members of our school board think this is an appropriate way to spend education revenues. During the 10 years I spent as chairman of the University of Missouri–Columbia Economics Department, it never occurred to me it would be acceptable to use some of my department budget to sue the Legislature for more money, even though MU is also mentioned in the Missouri Constitution.

Issues of propriety aside, let us turn to some specific reasons I believe CPS is ill-advised to continue its participation in this lawsuit.

First, it would be difficult for the plaintiffs to have lost this case more completely. Judge Richard Callahan’s decision is clear, concise, and logical. The “adequacy” aspect of the lawsuit was based on the Missouri Constitution’s requirement for free public schools and the stipulation that the Legislature must devote at least 25 percent of revenues to that end. Judge Callahan ruled both requirements are being met easily. The plaintiffs asked the judge to read something into the state Constitution that is not there, and this he refused to do. Of course, the notion that a given level of spending can be reliably associated with a given level of MAP achievement — “adequacy” — was never established by the plaintiffs because it is statistically impossible to do so, a point made repeatedly by the three economists, including myself, who testified for the defense.

Second, as the magnitude of this defeat becomes more widely recognized, the “tax base” of paying plaintiff districts is shrinking. Some major districts have publicly dropped out of the case, including St. Joseph, Liberty, and Francis Howell. More are expected to follow. As the number of participating districts falls, Columbia Public Schools and Columbia taxpayers will be left to bear a larger share of the litigation bill. That might make narrow sense if there were reason to believe that, ultimately, there is something in this for Columbia, but that is the biggest folly of all.

Let’s begin with the “equity” issue. Under the current system, CPS fares well. We are a relatively wealthy district that enrolls 1.5 percent of Missouri public school students, yet receives 1.7 percent of state K-12 funding. Our per-pupil spending is higher than the state average. What can CPS hope to gain in an “equity” lawsuit? Is a Cole County judge likely to find Columbia schools relatively impoverished?

Now, let us consider “adequacy” — the argument that almost all districts are underfunded. The plaintiffs are asking for roughly $1 billion in additional state funds for K-12 education. If they are successful and the Supreme Court tells the Legislature it must spend $1 billion more on public education, that money must be found somewhere in the state budget. Given the Hancock limits on raising taxes, we must ask lawsuit proponents where they propose to obtain these additional funds for K-12 education.

With tax increases off the table, K-12 gains must come at the expense of the rest of the state budget. One billion dollars more for K-12 implies a 21-percent cut in spending for the non-K-12 budget. Assuming those cuts are across the board, the MU budget would be cut by 21 percent as well, in which case MU would lose more than the entire state funding of CPS. Whatever the size of the boost in K-12 spending, every dollar CPS would gain through this litigation implies at least a $2.25 cut in the MU budget. This assumes Medicaid is subjected to the 21-percent cut. If Medicaid escapes the across-the-board cut, the MU loss is even larger.

Along with making higher education even less affordable, a plaintiff victory must lead to cuts in a wide range of state-provided social services. The primary recipients of those programs, poor families and children, would end up worse off. We elect legislators to make these difficult spending decisions and to balance the complicated tradeoffs. That is not the job of our courts.

The most likely outcome of the appeal is that CPS simply will have wasted tax dollars on frivolous litigation. Our school board, however, is playing with fire. In the remote chance the plaintiffs win on appeal, the broader Columbia community might well be seriously harmed because of large cuts to the MU budget. It is time to stop participating in this nonsense and spend our education tax dollars on education — and not on $250-an-hour legal fees.

Michael Podgursky is a professor of economics at the University of Missouri–Columbia and a member of the Show-Me Institute board of directors.

The post Columbia School District Should Abandon Frivolous Lawsuit appeared first on Show-Me Institute.

Dr. Tourkakis sums up his position succinctly:

According to Tourkakis, his dental patients and the city’s general population have continued to support him.

"They don’t feel that private property should be transferred to another for profit," Tourkakis said.

He added that property is not easy to obtain and that once it is acquired, it just doesn’t seem fair to have the property taken away.

Much, much more on this case, and others like it, to come from the Show-Me Institute.

The post Dentist Chains Self to Building to Resist Sirens of Arnold appeared first on Show-Me Institute.

Keeping judicial selection democratically accountable is the best insurance for choosing the best judges, and ensuring that they are serving the interests of the citizens.

I can’t tell whether that is calling for all judges to be elected, or just for increased transparency and more involvement by elected officials in the selection process. My guess is that they are calling for all judges to be elected, which would be an absolutely terrible idea statewide and in larger counties. If they are merely calling for more openness and input from elected officials, I agree with that, to a large extent.  As a reminder, my own op-ed on this issue is here. There are many good parts of the editorial, too, especially the none-too-kind comments on the current Supreme Court panel Governor Blunt gets to pick from.

The ending of the Wall Street Journal editorial isn’t its only weakness, though. It quotes a poll, as if that is some sort of evidence for anything:

In a Federalist Society poll done in March, 87% of state residents were unaware even of the make-up of the nominating commission.

An any point in time, about 30 percent of Americans can’t name the vice president. Should we get rid of that office? Any idea how many people can, right now, name their state representative? I am guessing 20 percent at most. Should we get rid of them? (Don’t answer that.)  I am actually surprised 13 percent of Missourians could correctly list the commission’s make-up. Just because people watch "Entertainment Tonight" instead of reading The Economist does not mean the Missouri Plan is flawed.

I was going to post today on additional feedback my op-ed has received, but the Journal seemed more topical. I’ll do that tomorrow. Can’t you just feel the excitement? 

P.S. — You wanted more Spike Lee references, you got ’em!

The post Wall Street Journal and Mo’ Better Judges appeared first on Show-Me Institute.

Anybody paying attention to Missouri news recently will know about the recent controversy over judicial selection, with each side claiming that the other wants the process politicized in its favor. Some have called the legitimacy of the Missouri Plan into question, but David thinks the system has a great deal of value that a few important tweaks would enhance:

Missourians amended our state constitution in 1940 to change the ways judges were selected for the Supreme Court, the Court of Appeals and the circuit courts of Jackson County and Saint Louis City. This was done in response to public concerns about the power of political machines in electing judges under the previous system. Dubbed “The Missouri Plan,” it has been expanded to include circuit judges in Saint Louis, Clay, and Platte Counties. The amendment’s provisions replaced elections with a judicial commission, which reviews applicants for open positions and narrows the list down to three choices. The governor then selects a new judge from that panel. The system has worked very well for Missourians, taking some of the politics out of judgeships and efficiently filling vacancies. However, a few important changes could make the plan work even better.

Read more about David’s proposed changes on the Show-Me Institute website.

The post Tweaking the Judicial Selection Process appeared first on Show-Me Institute.

Missourians amended our state constitution in 1940 to change the ways judges were selected for the Supreme Court, the Court of Appeals and the circuit courts of Jackson County and Saint Louis City. This was done in response to public concerns about the power of political machines in electing judges under the previous system. Dubbed “The Missouri Plan,” it has been expanded to include circuit judges in Saint Louis, Clay, and Platte Counties. The amendment’s provisions replaced elections with a judicial commission, which reviews applicants for open positions and narrows the list down to three choices. The governor then selects a new judge from that panel. The system has worked very well for Missourians, taking some of the politics out of judgeships and efficiently filling vacancies. However, a few important changes could make the plan work even better.

The recent Supreme Court opening has raised to new prominence the simmering dispute over the true non-partisanship of the Missouri Plan. Allies of Governor Matt Blunt feel that the current appellate judicial commission has not fairly recognized the fact that he, not the commission, is the elected leader of Missouri. The current make-up of both the commission and its recently selected panel, which many conservatives feel is tilted toward the left, seem to substantiate this charge. This has led to calls from some legislators to do away with the Missouri Plan. While changes need to be made, doing away with the plan entirely would be going too far.

The most important change for the Missouri Plan is the elimination of six-year, staggered terms for governor-appointed positions. In theory, staggered terms might allow for more independence and less partisanship, but in reality they have served to allow outgoing governors to load up commissions with their supporters beyond their terms in office. For example, former governor Bob Holden made six appointments to various judicial commissions during the time between when Governor Blunt was elected and took office two months later. Stacking the deck with supporters of your own party is, I am confident to say, not what the framers of the Missouri Plan had in mind. Making the appointed positions’ term coincide with the governor’s own term would serve to respect the wishes of voters and whatever candidate they choose to elect.

The second change I recommend is to add one appointed position to each commission, making the number of appointments equal to the number of judges and attorneys on the commission. Currently, the appellate commission is made up of the chief justice of the Supreme Court, three lawyers elected by the bar association, and three gubernatorial appointments. Each of the county commissions is made up of that circuit’s chief judge, two elected lawyers, and two gubernatorial appointments. Adding an additional appointment to each commission would make the landscape for selection more balanced. Let us not delude ourselves about the goals of the lawyers who run for judicial commissions via bar association elections. They, particularly the activists within the Missouri Association of Trial Attorneys, are not always looking for the most qualified people to elevate to judgeships. Many of them are looking to support candidates who agree with their legal opinions.

Supporters of the Missouri Plan can point out that the retention votes appointed judges will face in the future act as a check and balance for the system. The retention vote is a good practice, but electoral history has shown it is almost impossible to get enough people to focus on the issue. Last year in Saint Louis County, a judge was handily retained by voters when an overwhelming number of lawyers, in a bar association survey, had advised against retaining her — a recommendation echoed by area newspapers. Perhaps we could improve the retention vote system by taking a page from Illinois and mandating a 60-percent vote in favor of retention in order for a judge to remain in office. I believe that is an idea worth debating.

Finally, the Legislature should take steps to make it clear to all that the various judicial commissions’ actions are covered by the state’s sunshine law. It astounds me that an appointed commission thinks it does not have to comply with Missouri citizens’ basic right to know what their government officials are doing. With these changes, I believe we can reach a fair compromise and retain the best parts of the Missouri Plan for judicial selections, without returning to the electoral problems that led us to create the plan in the first place.

David Stokes is a policy analyst for the Show-Me Institute.

The post The Missouri Plan, or: How I Learned to Stop Worrying and Love the Lawyers appeared first on Show-Me Institute.

The Jefferson County case is a victory for the good Doctor Tourkakis.  We have been following his case closely here at the Show-Me Institute and are delighted that his decidedly-not-blighted dental practice will still be serving the people of Arnold.  Reading this story made me wonder if the elected judges in the far-suburban and rural areas of Missouri might be just a little more sensitive to the public’s anger over eminent domain abuse than the appointed (usually for life) judges in St. Louis and Kansas City?  That is not to say that the ruling in favor of Dr. T was not entirely based on the law, but it is an interesting question.

The St. Louis County case is, of course, about the Centene Project dispute, which is being heard today by the State Supreme Court.  With my luck, the court will announce its decision exactly one second after my editor reviews and posts this – making this post irrelevent, but so it goes.  I wish I knew enough about the Supreme Court to offer a prediction, but I don’t.  I know that I want the Centene Project to move forward – but I don’t want other businesses in a wonderful area such as Clayton to be closed (or at least forcibly moved) just so another company can expand. It is too bad it had to come to this point, perhaps more negotiating and less threats of eminent domain by Centene in the early stages of the project could have prevented this.  Now it is a matter of principle for the opponents to stand and fight and all costs, which is their right.  Hopefully they will win their case, prove their point, make solid case law for the rights of property owners throughout Missouri, Centene will up its offer, the opponents will accept the new offer, the project will move forward, and everyone can declare victory and go home.       

The post All Eminent Domain at the Post Today… appeared first on Show-Me Institute.

My correspondent further wrote that in his opinion, "Social liability is purposely created by local city councils."  I don’t know if he meant that as a general statement or specific to Clayton and Centene, but as a general statement about how governments get what they want I agree with him completely.   

The post Centene Questions Continue appeared first on Show-Me Institute.

The proposal is premised on the seemingly obvious idea that we’re a democracy, and in a democracy, the majority rules, right?

Well, not really. In fact, the United States is a constitutional republic, not a democracy. And “majority rules” is not, and never has been, the basis of our system of government.

Consider the United States Senate. In the Senate, Wyoming’s half-million voters have the same amount of power as California’s 30 million voters. “Undemocratic?” Probably. A violation of “one man, one vote?” absolutely.

And there are lots of other examples. We have a Bill of Rights that prohibits the government from engaging in censorship, unreasonable searches, or torture, even if the majority of Congress wants to do these things. Those rules are enforced by the Supreme Court, about as undemocratic an institution as one can imagine. Even within the Senate, a minority of 41 Senators can bring legislation to a halt using a technique called the filibuster.

And if you want to change any of these requirements, you have to pass a constitutional amendment, a thoroughly undemocratic process that involves a 2/3 vote in each House of Congress and the approval of 3/4 of the states. In a more democratic nation, all you’d have to do to change the constitution would be to get a majority of Congress, or perhaps a majority of the popular vote in a referendum.

Why did the Founders set up such a crazy, undemocratic system? They could have set up a process more like the mother country. The British have a parliamentary system in which the House of Commons appoints the prime minister. They also have an unwritten constitution, which means that in theory, at least, a majority in parliament can change the law any time it likes. The House of Commons is not only more democratic than the American Congress, it’s arguably more efficient and more accountable, too.

The founders designed our federal system the way they did for an important reason: they believed a system of checks and balances was essential to preserving liberty. They wanted a system in which different branches of government represented different interests and responded to different political incentives. This purpose would be defeated if all three branches of government were elected by a majority vote, because then all three would be likely to reflect the short-term passions of the majority.

The electoral college also symbolizes another extremely important principle of our republic: federalism. Unlike many other nations, our states are not simply administrative districts of the federal government. They are sovereign entities that voluntarily joined together to form a nation. Just as the Bill of Rights prevents a majority of voters from using their power to the detriment of minorities, the structure of the Senate and the Electoral College ensures that the distinct concerns of each of the 50 states has a voice in the national decision-making process.

If Missouri adopted legislation that helped to effectively emasculate the electoral college, it would be encouraging future presidents to ignore the particular concerns of Missouri voters and and undermine the sovereignty of our state. The United States is not a democracy, it’s a federal constitutional republic. I think that’s an important principle, and I hope our elected officials don’t do anything to undermine it.

The post The Case for the Electoral College appeared first on Show-Me Institute.

Is it right for the government to take your property for the benefit of another private party? Voters across the nation were outraged last summer when the Supreme Court said “yes” to that question in its infamous Kelo decision. Missouri’s elected officials reacted by pledging to change Missouri law to ensure that Show-Me state residents’ property would be secure.

But judging from the legislation passed last week and expected to be signed by the governor, they didn’t mean it. True, the legislation does impose some new requirements on cities seeking to take peoples’ homes, but it does almost nothing to prevent the use of eminent domain to benefit one private party at the expense of another. If the governor signs the legislation this week, property rights in Missouri will still be in danger.

Our legislators seem to think that private property is an issue of money and paperwork. Municipalities exercising eminent domain must pay an extra 25 percent if they take your primary residence, and an extra 50 percent if the home has been in your family for 50 years or more. And the law requires more public input, more negotiations, and more court oversight before a taking can occur.

Such tweaks miss the point. Fundamentally, property rights are about equal rights before the law. Private property places the smallest homeowner on an equal footing with the largest corporation. If the company wants the homeowner’s land, he must pay a price the homeowner is willing to accept or look for land elsewhere.

In contrast, when the law permits eminent domain for private profit, ordinary property owners become subject to the whim of the powerful and well-connected. We recently saw a clear example of the dangers of eminent domain abuse in Clayton, where the Board of Aldermen is in the process of condemning five small downtown retail establishments to make room for the expansion of Centene Corp’s corporate headquarters. The city justifies the taking on the basis that the retail establishments are “blighted,” despite the fact that downtown Clayton is one of the most prosperous neighborhoods in the St. Louis metro area.

“Blight” has become a catch-all term that allows municipal leaders to condemn anyone’s land. It was the pretext under which the city of Sunset Hills condemned properties in its doomed re-development plan, which collapsed last fall when it was discovered the developer couldn’t finance the project. And it was the justification given by St. Louis alderman Tom Bauer when he sought to condemn several homes and businesses to make room for a QuikTrip gas station—a plan that led his constituents to recall him.

Yet the legislation being sent to the governor this week wouldn’t have done a thing to stop any of those three abuses. “Blight” takings are still permitted, and no change has been made to the current “anything goes” rules for defining blight. Under the current rules, cities commission blight studies by friendly consulting companies that invariably give cities the answers they’re looking for. Such studies often cite trivial problems such as broken drain spouts, declining tax revenues, or windows that are too small for the latest fire code. Amazingly, some studies even cite poor upkeep of public streets and sidewalks as evidence of blight, even though those are the responsibility of the city government that sought the blight designation in the first place.

Even worse, the new legislation continues to allow land to be taken if a “preponderance” of a proposed redevelopment area is blighted. That means that the city can take your home even if it’s in perfect condition, as long as some of your neighbors haven’t been maintaining their properties. In Sunset Hills, several meticulously maintained homes were condemned because their owners happened to live in a neighborhood the city government considered “blighted.”

Missouri’s elected officials have failed to keep the promises they made last summer to pass meaningful restrictions on eminent domain abuse. Instead, they passed legislation that is little more than window dressing, in the hopes that that would satisfy voters’ demands for stronger property rights. Show-Me state voters shouldn’t be fooled by that kind of legislative sleight of hand.

Timothy B. Lee is a policy analyst at the Show-Me Institute.

The post Legislation Fails to Protect Property Rights appeared first on Show-Me Institute.