Salaries, wages, commissions and other compensation earned by nonresidents of the city for  work done or services performed or rendered in the city.

It says, “in the city.” Not “near the city.” Not “connected to the city by a phone line.” Not “in the city unless the city’s budget really needs the money in which case outside the city is fine.” In the city. For the record, a judge also ruled that what the city is doing violates the law.

Both columns admit to this to various degrees. Tony Messenger describes the city’s legal argument in the court case as “. . . probably a specious argument.” Members of the editorial board admit in their piece that the city’s legal argument “isn’t strong.”

But both pieces conclude that the state legislature should not be doing what it is now doing—further clarifying the law—because the city needs the money. The city’s budget problems, however, do not justify the city breaking the law in its tax collections.

That leads me to another point. The evidence from Kansas City is clear that if you refund earnings taxes for remote work, the sky won’t fall. Kansas City officials have stated this in hearings that I have attended. The amount of money refunded was not as large as they had feared it would be. In 2019 (all of these are fiscal years), Kansas City collected $272 million in earnings taxes. That fell to $245 million during the pandemic. It quickly rose to $289 million in 2021. And this happened while Kansas City was still refunding earnings taxes for remote work when requested.

There is no evidence the legislation passed by the House would “have a devastating effect on the city” as Tony Messenger says in his column. Even if the bill did have that effect, that wouldn’t justify city government ignoring the law.

We can all agree that getting rid of the earnings tax is harder than ever in St. Louis, with skyscrapers that sold for $200 million just over 20 years ago now selling for $3 million. It’s hard to depend on property taxes—like most cities in America do—in this scenario.

Decades and decades of bad policies combined with new, fiscally irresponsible “progressive” changes are making St. Louis look more and more like the new Detroit. It’s probably time to revisit the optimistic work from Institute analysts a decade ago.

The post Collecting the Earnings Tax on Remote Work is Illegal. ‘Nuff Said appeared first on Show-Me Institute.

When the Spainhower Commission issued its final report in 1968, St. Louis County had 25 school districts (plus the Special School District). Those schools served 186,428 students. Asked to develop “a plan to provide equal access to educational opportunity for all children,” the commission recommended a consolidation of all St. Louis–area school districts into a single district. That call was taken up again in 2014 following the shooting of Michael Brown. Then, as in 1968, the solution proposed was to tear down those dividing district lines in the sake of unity. The St. Louis Post-Dispatch editorial board endorsed this plan in their piece, “One school district. One focus. One future: Unify St. Louis schools.”

Fifty-five years after the Spainhower report, the number of students enrolled in St. Louis County school districts has decreased by more than 53,000, but almost all district lines remain. Just three school districts have closed. At the time of their mergers, all three served mostly African American schoolchildren. In the 1970s, the Kinloch and Berkeley School Districts were forced by the courts to consolidate into the Ferguson-Florissant School District. In 2010, the Missouri State Board of Education consolidated the Wellston School District into the Normandy School District.

From then to now we have known that arbitrary boundaries drawn around school districts create haves and have-nots. We have known that assigning students to attend schools based on where they live has perpetuated inequities among students and limited access to quality educational options. And yet, the problem has been almost intractable. Why? According to James Spainhower, as reported by the Post-Dispatch’s Tony Messenger, “The only place where the report was weak, was in the thought that people could get over their biases.” I think this analysis is correct, but not in the way that Messenger implied.

According to Messenger, parents in predominantly white school districts did not want to merge with predominantly African American school districts. As we saw when students from the predominantly African American Normandy school district attempted to transfer to predominantly white school districts a few years ago, race can still be an issue. But race wasn’t the only obstacle for those Normandy students—remember, their own school district didn’t want them to leave, either—nor am I convinced that race is the primary motivating factor for those who oppose school district consolidation. People take pride in their local schools, and they do not want to see them changed. Moreover, people instinctively react when anyone attempts to force their school district to be consolidated. It is a loss of identity.

This is the problem. If we leave school districts to make this change themselves, nothing will get done. If we attempt to force consolidation on them, they will resist. This is why attempts at consolidation, except in those rare cases mentioned above, have failed in the St. Louis region. People are loathe to voluntarily consolidate their own school district unless they see a significant benefit, and they strongly resist top-down directives from the state to consolidate their schools.

It is time to change the strategy. Rather than rely on district leaders to take action or attempt to obliterate school district lines, we need to make those boundaries porous. We need to allow students to begin moving across those lines to attend schools in other school districts. We need school choice. We need open enrollment. The Post-Dispatch editorial board once championed this idea. In their call for unifying St. Louis schools they wrote, “The fastest way to move toward such unity would be for the school districts in the St. Louis region to adopt an open enrollment policy.”

Now there is an open enrollment proposal before the Missouri legislature. Yet, as Blythe Bernhard and Jack Suntrup have reported, “Missouri educators vow to fight as open enrollment plan gains steam.” This opposition was to be expected. What was not expected was the complete silence from those who previously advocated for unity among St. Louis schools.

If we continue to look for top-down solutions to this problem, in another 55 years we’ll likely be exactly where we are today—where a student’s educational opportunities are dictated by his or her zip code.

The post Open Enrollment in St. Louis Schools: 55 Years in the Making appeared first on Show-Me Institute.

The current St. Louis soccer stadium proposal is hands down better than the last one, in that the ownership group . . . are seeking significantly less from city taxpayers than the previous effort. [New York-based journalist Neil] DeMause agrees with that.

“The latest plan is arguably less onerous for the public than lots of other stadium projects out there — and certainly better than the previous soccer proposal for St. Louis,” deMause says. “But that’s damning with faint praise, because the median in stadium deals is ‘pretty awful.’”

St. Louisans were told last year that the deal before them was the best they could hope for. It wasn’t. There is no reason to believe this latest deal is the best, and every reason to think we can do better.

The post Tony Messenger on St. Louis Soccer Stadium appeared first on Show-Me Institute.

But is MetroLink underdeveloped? One way to answer that question is to ask whether the existing supply of light rail meets demand. Based on ridership trends, the existing supply of light rail may actually exceed demand. Ridership plummeted during and shortly after the recession in 2008 and has failed to pick back up even while economic conditions have improved in Saint Louis.

Another way of determining if MetroLink is underdeveloped is to compare it to other light rail systems. The table below lists light rail systems from across the country, and looks specifically at the length of each system, as well as the population and geographic size of the urbanized area (UZA) where the system is located.

Note: Track miles are compared to UZA and not ‘Service Area’ (SA) because SA includes modes besides light rail (e.g., buses) and is a direct correlate of track miles. Thus, SA is simply a function of track miles, and not a measure of the metropolitan area a system serves.  See National Transit Database Glossary for more.  
Source: Track miles from agency websites, and UZA data from National Transit Database.

Given this perspective, we can see that in terms of track miles, Saint Louis has a rather robust light rail system compared to other cities. While there is variation across systems, Saint Louis has more miles of track than the average and the median system. In fact, of these 18 systems, Saint Louis is the 7th-largest (and if we excluded systems with heavy rail, the 5th-largest). MetroLink is even larger than some heavy rail systems, such as Metrorail in Miami-Dade County (24.4 miles), and is just about as large as Atlanta’s system (47.6 miles).

However, what matters is not just the length of a system but also the length of a system relative to the size of the area it serves. To measure this, we divide the size of an area by the miles of track its system has—the figures in the fourth column. (For a more complete picture, I’ve also included population as the last column.) In short, the lower the number in the fourth column, the more miles of track per square mile of land, and so, the more developed a system is. By this measure, Saint Louis has one of the more developed systems in the country and compares well to many cities, with a system that is far more developed than the average. Saint Louis even compares favorably to Los Angeles!

Based on this analysis, Saint Louis’s light rail system does not appear underdeveloped. It may even be overdeveloped (or, perhaps, it developed too quickly or along poorly chosen routes). Before pushing for another expensive MetroLink extension, shouldn’t officials ask if we already have more than we need (and can afford)?

The post MetroLink Underperforms, but It Is Not Underdeveloped appeared first on Show-Me Institute.

Last Thursday, city officials advanced two bills full of questionable spending. One bill proposes that the city’s already high sales tax rate (10.054% on average) be increased by 0.5% to help fund a section of a planned North–South MetroLink route. (Read about MetroLink’s poor track record here and here.) The other bill would raise the city’s use tax by 0.5% to help fund the construction of a Major League Soccer stadium downtown. The use tax increase is supposed to raise some $60 million.

The widespread economic consensus is that public spending on stadiums is a terrible use of taxpayer dollars. But even more troubling is the way in which the bill advanced out of an Aldermanic committee in the first place.

When it was first considered, the bill abated an amusement tax that would have been levied on ticket purchases, diverting revenue from the city. It also would have given tens of millions of dollars to developer Paul McKee, no stranger to subsidies. Why? Well, that’s the troubling part: no public officials knew why the bill abated the amusement tax or gave funds to a developer unrelated to the stadium project. As the Post-Dispatch’s Tony Messenger aptly notes, “This is the story of development in St. Louis. Assets are given away and nobody even knows why.”

But even after one alderman proclaimed that he wasn’t elected to “rubber stamp bad proposals for a City that is already on the financial brink,” the board arguably rubber stamped a bad proposal for a city that is on the financial brink. After closed-door discussions between the board and the ownership group behind the stadium proposal (SC STL), the bill emerged with amendments that abated half the amusement tax and still gave Paul McKee several million dollars in tax-increment financing subsidies.

After passing a vote of the committee, the amended bill was heralded as a win for the city and for taxpayers. Compared to the original bill (which abated all of the amusement tax), the amended bill is estimated to bring in $17 million to the city over 30 years. But does this really constitute a win for taxpayers? For one, although it is described as “new revenue,” this $17 million (and more) is what the city should have been slated to collect if not for the abatement in the original bill that no one could explain. Also, the city will contribute $60 million over that same 30-year period. That makes the stadium deal a loss for the city. Some claim (without providing any financial evidence) that the proposal was originally revenue-neutral for the city, and now will turn a $17 million profit for municipal coffers. Assume, for argument’s sake, that these rosy projections are true. That means the city will net $17 million on a $60 million, 30-year investment. Even if those figures are presented in what’s known as net-present value (which takes inflation into account), that hardly makes this a lucrative investment.

After the bill received approval, SC STL executive Dave Peacock said “The city drives a hard bargain, but they should.” It’s difficult to see how agreeing to this deal constitutes “driving a hard bargain.” But, Peacock is correct—that’s what the city should be doing, which is why recent developments with the stadium bill are so troubling.

The post No, the City Does Not “Drive a Hard Bargain” appeared first on Show-Me Institute.

But the AND approach isn’t a simple matter of uniting the region for a common goal. Where MetroLink is concerned, the AND approach will benefit some at the expense of others. In more concrete terms: the City needs the County’s tax revenue if MetroLink expansion—in any direction—is going to be feasible. But the County has made clear it isn’t enthusiastic about funding the city’s favored north–south expansion. (Note: the County’s transit sales tax revenue is triple that of the City’s. See p. 67)

So, should the County and City just take their toys and go home? Of course not—the AND approach isn’t the problem. The problem is the goal the AND approach is supposed to achieve: a costly $2.2 billion expansion of the inefficient and underused MetroLink, which would mostly lie within City limits.

Recognizing this fact lifts the shroud of mystery surrounding regional infighting. MetroLink expansion is so expensive it would force the County to fund the bulk of a project that will primarily benefit the City. It’s so expensive that it creates an either/or approach to regional transit planning.

But what if, instead of an immensely expensive light-rail expansion that would require every tax dollar it could get its hands on, regional leaders invested in a system of bus-rapid-transit lines that could be constructed and operated at a fraction of the cost. That is, imagine a project that wouldn’t gobble up every last dollar the region has to offer, would actually serve regional transportation needs, and didn’t pit County against City.

If the region’s transit priorities were more in line with its resources, there might not be an either/or approach to transit in St. Louis. Messenger got things backwards: MetroLink expansion isn’t the victim of regionalism—it’s the cause of it.

So long as a costly MetroLink expansion is the goal, it doesn’t matter how well the region’s leaders get along. With the north–south expansion in particular, the City can win only at the expense of the County. That is an either/or approach. If leaders are to unite behind a transit plan, that plan will need to effectively serve all of the region’s residents at a price they are all willing to pay. 

The post Unite the Region with a Sensible, Effective Transit Vision appeared first on Show-Me Institute.

Fallacy 3: State spending on education can easily be compared between states

In a brazen attempt to insult state policymakers, the St. Louis Post-Dispatch editorial board wrote: “No matter how you slice it, Missouri’s lawmakers value education less than their peers in 39 other states do.” In reality, it does matter how you slice it and you can get the numbers the Post-Dispatch reports ONLY the way they slice it.

As evidence of the legislature’s feeble funding of education, the Post-Dispatch points to a report by the U.S. Census Bureau, which ranks Missouri 40th for the amount of state funds spent on education (Tables 11 and 12).

There’s just one problem with this, the definition of “state” and “local” funds is not consistent across states.

In Missouri, for instance, the funding formula counts local property taxes, the statewide 1 percent sales tax, and various other sources as local dollars. Arkansas ranked eighth in state funding for education, but Arkansas has a mandatory statewide property tax rate. That means all property taxes collected at that rate are considered state dollars, not local dollars.

In a tweet to Missouri House Budget Committee Chairman Rick Stream, the Post-Dispatch’s Tony Messenger defends the paper’s reliance on the state figure. Stream stated that the Post-Dispatch did not consider local dollars in their opinion piece, to which Messenger replied:

@rickstream it is absolutely considered. That is the problem. State has shifted burden to local districts and in effect raised our taxes.

— Tony Messenger (@tonymess) June 6, 2013

This exclusive reliance on the state figure demonstrates a lack of understanding of school funding systems.

Funding schools is a complicated endeavor that is done 50 different ways in the 50 different states. Because of how funding formulas work, you simply cannot easily make a state spending to state spending comparison. Likewise, you should not make the types of claims the Post-Dispatch editorial board made in its piece or Tony Messenger made on Twitter.

The post Dismantling The Post-Dispatch’s Piece About Education (Part 3 of 4) appeared first on Show-Me Institute.

The post Editorial in Springfield News-Leader About Our Transportation Paper appeared first on Show-Me Institute.

We also did some great radio shows, and we’d like to thank Mark Kinsley and Kara Marxer at AM 1310 KZRG in Joplin for having me on his show along with Len Gilroy from Reason, and Dan Vaughn of KWTO 560 AM in Springfield for hosting us as well. We had an enjoyable, full-hour discussion with Mark and Kara on KZRG. To the many callers we had on KWTO with great questions: Thank you for your calls. To the couple of callers who accused us, more or less, of being part of a conspiracy to destroy our borders and create a North American Union: You are insane.

Finally, we were able to meet with some newspaper editors about the study, including Tony Messenger of the Springfield News-Leader, and we aprpeciated all of their time.

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