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Interview Transcript

Patrick Tuohey (00:00)
Good morning, Kansas City. This is Patrick Tuohey, Kansas City’s second favorite Patrick, sitting in on the Pete Mundo Show for the whole morning. If you have read anything in the Kansas City papers about either the Royals Stadium or the Chiefs Stadium, the chances are that you are familiar with my next guest. J.C. Bradbury, a professor of economics at Kennesaw State University, has been studying the economic impacts of building stadiums, tearing down stadiums, getting teams, and losing teams. He’s got a book coming out at the end of next month called This One Will Be Different. I’ll get to the book in a second, JC, but my first question is: why do you hate baseball?

J.C. Bradbury (00:43)
Hi Patrick, thanks for having me on. I get that question a lot because I bring a lot of bad news, or uncomfortable truths, let’s say, about baseball. But I study these things because I love baseball. I’m a huge fan. I grew up an Atlanta Braves fan, but I follow baseball generally and all sorts of sports. I was an Atlanta United season ticket holder for many years. That’s why I do this — because I enjoy it.

Patrick Tuohey (01:09)
It’s funny — years ago somebody recommended Moneyball. It’s a fantastic book. The movie is just as good. I rewatched it the other day, and if you haven’t seen it or haven’t seen it in years, it really holds up. I think of that because baseball claims to be so statistics driven that you’d think fans would be more amenable to the kind of economic analysis you’re doing. But maybe it’s just love of the game and fandom that clouds their reason.

J.C. Bradbury (01:44)
There’s some of that. There are many people who are baseball fans, sports fans, who understand what I’m arguing — and I’d argue it’s more than you’d realize. But most of the people vocally speaking out about stadium issues and public finance are largely blinded by their own fandom. I deal with people on social media all the time who respond to things I say about stadiums and tell me I don’t understand the public finance — and they’re just totally incorrect. They don’t even bother to check it. It’s religion to some people. I say most people would give up their religion before they’d give up their subsidies to their sports teams.

Patrick Tuohey (02:27)
If you don’t already follow J.C. Bradbury on Twitter, I recommend it — JC underscore Bradbury. If you’re a fan of baseball, economics, or The Simpsons, you’ll love his account. So JC, tell me about your book, This One Will Be Different, which comes out at the end of July.

J.C. Bradbury (02:44)
I’ve been studying stadium subsidies and publicly funded stadiums for a very long time. I fell into it accidentally because the Atlanta Braves Stadium opened in Cobb County, a few miles from where I live — just outside Atlanta, where my family has been for generations. I had a lot of interest in how the stadium was built and funded, with three hundred million dollars in subsidies. I was familiar with a lot of the economics behind stadiums, and when I tried to share this research with other people, I was heavily rebuffed. So I began to study the issue more, and before I knew it, I had a very long book about the economics of stadiums. My idea was to explain public finance issues in stadiums using simpler methods. I use sound research methods, but I try to explain it through the narrative story of the Braves coming to Cobb County — here’s what happened, here’s what people argued, here’s what actually happened, let’s look at some of the financial numbers, and let’s understand the general intuition of why stadiums get built even though economists say they’re a bad deal. I look at the politics of it too. And one of the things I find is that these stadiums are mostly built by insider coalitions — chamber of commerce types, folks who are going to sit in the owner’s box and enjoy cocktails, or people with season tickets. They’re the large beneficiaries of the subsidy. They push these advocacy campaigns and try to get them passed as quickly as possible without going to voters if they can. That’s why we get these deals.

Patrick Tuohey (04:35)
One of the things that frustrates me about this whole issue — and I’d be curious if you agree, though I hate when TV and radio hosts make a statement and then ask the guest if they agree, and here I am — is that when St. Louis was considering funding a Major League Soccer stadium, or here in Kansas City with the Royals or the Chiefs, what I wish they would do is just say, “Hey everybody, we are a sports town. We think it’s important to have a sports team here, so we’re going to spend hundreds of millions of dollars to build something.” And just leave it at that. It would be a defensible argument. You could argue whether it’s worth the expenditure, but at least everybody would be honest. But they don’t do that. They go the extra step and say, “And we’re going to make money doing it.” That’s where they mess everything up. That’s where they get the numbers wrong. Is it as simple as that, or am I missing something?

J.C. Bradbury (05:31)
Absolutely. I wish there was some honesty in these debates. The reality is that a lot of people who argue these things don’t actually believe the phony economic impact studies they put out. They do it for a couple of reasons. Number one, politically, it’s a winning issue — if you tell someone it’s good for them economically, they’re more likely to support it. But also, if you just argue it’s good for the community and we’re a sports town — okay, how much does it cost? A billion dollars. How much does that increase taxes? Three hundred dollars. Well, hold on, we’re not that much of a sports town. Think about how you make your own decisions. What kind of car do you want to drive? I want a Ferrari. Great. But to drive a Ferrari, you’d need to move into a two-bedroom apartment, never travel again, and eat ramen noodles. You know what — I’ll get the base model sedan. People make those kinds of decisions, and that’s one of the reasons they use false economic benefits — because once you start talking about social benefits, people look at the costs more closely, and it makes a lot less sense.

Patrick Tuohey (06:40)
I had your colleague Victor Matheson on a few weeks ago and we talked about this, specifically with the World Cup. I’ve also asked Neil Damas this question. In your experience, how good are journalists at reaching out to you and your colleagues to vet the numbers they’re being told by chambers of commerce or the city? Where are we now, and are we getting better?

J.C. Bradbury (07:14)
I think the situation is getting worse, and a lot of it is accidental. Newsrooms have gotten smaller and younger, so there’s less institutional knowledge. People don’t remember the last stadium being built, and they’re told to go cover this stadium story. They call a few local sources — who of course are members of the local chamber — and those people say it’s great. At best, they call a local economist who says it’s bad, and it ends up being a tie. But often they don’t even call the economist. That’s part of the nature of the news business, which is one of the reasons I think it’s so important to use social media and other mediums to get the word out. Even journalists trying to do their best often fall short. And journalists deserve some blame here — when I reach out to try to help them, they often get very defensive, and I think that needs to stop. I’m not just angry at journalists. Both my parents were journalists, and my first job was in a newsroom. I understand what’s going on.

Patrick Tuohey (08:19)
The previous segment, I talked about World Cup reporting. Local people put out outrageous economic development claims a year and a half ago, nobody questioned them, and journalists just repeated them — even though past experience hadn’t lived up to those claims. So what can we do to encourage journalists to reach out, or maybe just give them a primer on what economic impact studies look like and where the flaws are? Whether I’m looking in St. Louis, Kansas City, or around the country, they are all flawed in the same way.

J.C. Bradbury (08:56)
It’s important to always speak up. It’s easy to get tired and think you can’t keep doing it. When someone asks me to look through one of these studies, I tell them it’s not a real study — it’s a fake study. I try to spread that message. Part of the problem is that the big number is the story, and that’s what they want out there. The fact that it’s wrong later doesn’t matter. And sometimes people get mad at me because I’ll call out bad reporting. I do it not because I dislike journalists, but every time I’ve tried to be nice about it, I get told I don’t know what I’m talking about or that they don’t want to tell their boss they need a correction. I think it’s important for journalists to know that if they get it wrong, they’re going to get called on it — not to be mean, but to set the standard.

Patrick Tuohey (09:54)
And do a better job because policymakers and business owners are making decisions based on the numbers you’re putting out there. We see this with the World Cup — people were expecting much bigger crowds than they got. It’s not just a matter of being right. It’s a matter of being right so that people make decisions based on real information, not just projections. JC, I’m grateful for your time this morning. Thank you so much. We’ve been talking to J.C. Bradbury of Kennesaw State University. His book, This One Will Be Different, comes out at the end of July. We’ll be right back.

The post Why Stadium Deals Don’t Add Up with J.C. Bradbury appeared first on Show-Me Institute.

My post got a bit of attention on X (formerly Twitter),  where many took issue with my claim. For the most part, the objections failed to engage with my argument but instead proved my point. As one person wrote: “My fundamental objection is that you cannot take away funding from public schools. Do what you want with your own non tax related money.” That was my point. School choice opponents do not care about rich people receiving public dollars; they object to allowing people the freedom to control those dollars.

X, for all its good traits, is not the place for a substantive back and forth. Nevertheless, this claim that school choice takes money from public schools deserves some scrutiny. There are two issues to consider. First, it is not necessarily true that a school choice program will take any money from public schools. In a system that funds schools based on a formula, such as Missouri’s foundation formula, public schools will only lose money when a student leaves. This leads me to my second point—schools that lose students should lose money.

Missouri’s schools are funded by a combination of local, state, and federal dollars. If a school choice program funds students already in private schools, as is often claimed by opponents, this would not change funding for the local public schools at all. The school district would continue to receive the funds as determined by the funding formula. The only thing that could possibly be argued is that the additional cost of paying for private school students may lead to constraints on the expansion of funding for public schools in the future, but that is a downstream argument.

The only way school choice takes money away from public schools is when a student switches from a public school to a private school. This could actually lead to an increase in per student revenue for the public school as they lose only the state (and possibly federal) funding for the student but retain local dollars. Setting that aside, it is true that the switch could lead to lower total revenue for the public school. Once again, however, this is not the real objection. Schools always lose money when a student leaves. If the student moves out of state or to another public school, the district will lose money. The district will even lose money if the student leaves to attend a public school that his or her parents pay for. Indeed, the dollar amount lost by the district is no different in any of these scenarios than it would be with a private school choice program (unless the program was designed to take local education dollars).

Opponents of school choice do not argue public schools should not lose dollars when a student leaves. They only object when the student is equipped with public dollars (or tax-deductible contributions to a scholarship fund). The takeaway is clear. Opponents of school choice are fundamentally opposed to freedom of choice in education. They do not believe individuals should be allowed to spend education dollars on the school of their choice.

The post Do Private School Choice Programs “Take Money Away” from Public Schools? appeared first on Show-Me Institute.

This is a weak argument for several reasons. The first is that people rise out of adverse circumstances and attain success all the time. Human beings are resourceful and resilient. We’re all familiar with numerous stories of people who grew up in less-than-ideal situations and still achieved great things. The relevant question with public schools is whether kids are growing up and thriving because of their public schools, or in spite of them.

There’s also the question of how far isolated examples take you. The plural of anecdote is never data. And the data about Missouri public schools do not paint a rosy picture. Per the most recent Nation’s Report Card, 40 percent of Missouri 4th-graders scored Below Basic in reading, and 39 percent of 8th graders scored Below Basic in math. Below Basic indicates that a given student doesn’t even have a “partial mastery of the knowledge and skills that are fundamental for proficient work.”

The fact that vast swathes of Missouri students don’t even have partial understanding of the work at their grade level ought to be deeply concerning. Thousands of kids in Missouri are being left behind, and I don’t imagine that the families of those kids would be comforted to know that some kids in some other places around the state ended up doing alright. How many personal success stories does it take to make it okay that huge numbers of Missouri children can’t do math or read at grade level?

There are other holes to poke in this argument—the people who are success stories as adults today went to Missouri public schools decades ago in many cases, and our schools, per the numbers, are getting worse, not better. There’s also a perception that public schools in Missouri are only struggling in certain pockets of the state—particularly in our big cities. But even a cursory tour of the Institute’s school rankings website reveals that this isn’t true; there are underperforming schools in every corner of Missouri.

There’s nothing wrong with pointing out success stories from Missouri public schools. But one shouldn’t miss the forest for the trees and mistake these stories as an important indicator of the overall health of Missouri’s education system. Our standards simply need to be higher. Some kids doing okay isn’t anywhere close to good enough. We shouldn’t be content until all Missouri kids have a chance at a quality education. And I don’t see how you could argue that we’re anywhere close to that right now.

The post Anecdotes Are Not Data appeared first on Show-Me Institute.

To name just a few:

I’ll add another criticism here. The structure of DESE is such that the buck never seems to stop anywhere. The commissioner serves at the pleasure of the state board of education. The state board of education members serve staggered terms, so that a single governor may hold little sway over the board. As such, the governor, the board, and the commissioner escape being held accountable in any meaningful way.

Yet, it is one thing to criticize DESE for failing to perform the duties it should be performing. It is another thing entirely to suggest DESE should not exist at all.

There seems to be a growing chorus of voices on social media calling for the abolition of DESE. It is hard to tell if there is really a movement here or simply the continuous ramblings of a few active Twitter users. Nevertheless, it is a question that deserves consideration—should DESE exist?

Conservatives have long argued that the federal department of education should be abolished. The argument for this is easy to follow—there is no provision for education in the constitution. Thus, it is a state issue.

What is the argument at the state level? It must be that education is a local issue and not a state issue. Here is where the DESE destroyers are wrong. The Missouri Constitution makes it clear that the responsibility to provide an education lies with the state:

A general diffusion of knowledge and intelligence being essential to the preservation of the rights and liberties of the people, the general assembly shall establish and maintain free public schools for the gratuitous instruction of all persons in this state within ages not in excess of twenty-one years as prescribed by law. (IX Section 1(a))

Moreover, the constitution requires the state to spend 25 percent of general revenue on public education.

With clear constitutional authority and a sizeable budget dedicated to education, the state has need of an agency whose purpose is to distribute funds and assess the diffusion of knowledge. The state has need of an agency such as DESE.

While DESE could do so many things better than it does, there clearly is a role for DESE. Therefore, we should (1) do a better job of defining the proper role and responsibilities of DESE, (2) do a better job of holding DESE accountable for meeting those obligations, and (3) find ways to improve the overall structure of DESE so we can actually tell where the buck stops.

I welcome conversations that focus on these things.

The post Does Missouri Need DESE? appeared first on Show-Me Institute.

In that post where I corrected the record on Missouri’s actual starting teacher salary, I noted some additional facts related to Missouri’s staffing policies:

Missouri ranks 43rd in average salaries for instructional staff. Meanwhile, Missouri ranks 48th in student-to-teacher ratio, with 11.3 students per teacher. In comparison, Illinois’s ratio is 14.3 to 1, ranking the state 28th. In 2021, revenues for Missouri’s public schools were $15,809 per student, which is 31st overall nationwide. These data suggest that part of the reason Missouri’s teacher salaries are relatively low is due to staffing choices made by school districts themselves. It is funny when you question the narrative with facts how some people like to twist what you are saying. On Twitter, for example, one person responded by asking, “Are you upset the teacher/student ratio is so low, too?” That’s a strange interpretation. I’m just offering an explanation. It’s simple math really.

Missouri school districts could choose to hire fewer teachers and pay them more or hire more teachers and pay them less. They choose the latter.

Let’s work this out a bit more. Let’s assume everything remains constant (the number of students and the state’s payroll for teachers), but we change the student-to-teacher ratio. If Missouri were to match Illinois’ ratio of 14.3, Missouri teachers could realize a 26.5% increase in their salaries.

By choosing to hire fewer teachers, Missouri schools could choose to raise average teacher salaries from $51,557 to $65,244. This would push the Show-Me State’s ranking in average teacher salary up to 16^th in the nation.

If we moved the students enrolled per teacher figure up to match Florida’s 19.6 to 1 ratio, it would result in a 73.4% increase in teachers’ salaries. This would raise Missouri’s average teacher salary up to $89,426 and would put  Missouri second only behind New York.

All of the policy attention has been on Missouri’s minimum teacher salary of $25,000. According to the Missouri State Teacher’s Association, only one district in the entire state starts teachers at that rate (the Middle Grove School District, with 35 students).

Of course, raising a student-to-teacher ratio is not as simple as the mathematical exercise I’ve done here. Nevertheless, the point remains. School districts make staffing decisions and those decisions impact salaries as much, if not more, than the state-mandated minimum salary.

Note on the calculations used:

average salary = P/T = P/S x S/T, where S= students, P=payroll, T=teachers.

So if spending per student (P/S) is constant, salary varies proportionately with S/T. If MO had the same S/T ratio as Illinois then average teacher pay in Missouri could rise by 26.5% (100 x 14.3/11.3) with no change in spending.

The post Raising the Student/Teacher Ratio Would Increase Teacher Salaries appeared first on Show-Me Institute.

But six weeks of veto rumblings rolled into a veto thunderclap early this month when most Missourians were preparing for the July 4 holiday weekend. That Thursday, the governor not only vetoed the rebates but also declared his intent to reconvene the legislature in a special session to pass an even more extensive overhaul of Missouri’s income tax:

“We have managed our state resources responsibly and our consistent investment in workforce development and infrastructure is providing a strong foundation for Missouri. Now is the time to take additional steps to help alleviate the strain on Missouri families. Permanent tax cuts that provide real relief to families, senior citizens, the working class, and small businesses every year is a better answer to the inflationary pressures we face, and we look forward to getting it done,” Parson said in the statement.

Parson’s plan includes reducing the individual income tax rate, increasing deductions and allowances for taxpayers and further simplifying the tax code, to create the “largest tax cut in state history,” according to the release.

Under the proposal, the first $16,000 of income for single filers, or $36,000 for joint filers would not be taxed at all, according to a release about the proposal from the Missouri Republican Party.

Special sessions are not unusual but they aren’t terribly common, either; the time and extra cost of bringing legislators back to the capitol often compels elected officials to put off even important reforms until regular legislative business resumes in January. That the governor won’t wait until 2023 to institute tax reform is encouraging.

As to the substance of the proposal as I currently understand it, I am broadly excited by it. Show-Me Institute analysts have long supported eliminating the state income tax, and by increasing the standard deduction for all Missouri filers while simplifying the tax code and reducing the income tax rate, the governor’s current proposal sets out a straightforward framework for dumping the tax over time from both “the top” and “the bottom” of the tax code. My hope is that the legislature’s plan also includes at least a handful of triggers for further tax relief in future years.

I’d be remiss, of course, if I didn’t also suggest that income tax reform should be only one of perhaps a handful of special session topics that could be addressed in the session. Notably, one major regret the governor admitted to after the legislative session was that curriculum transparency legislation didn’t get done this year; this seems like an easy topic to address when the legislature gets back together.

It remains to be seen when exactly the special session will be called, but the odds are it will be called concurrently with the veto override session scheduled for September, when legislators will already be back at the capitol. Hopefully, the special session leads to good tax policies for the state at a minimum, and ideally an opportunity to call up additional topics. Fingers crossed.

The post Governor Parson Opens Door to (At Least) One Special Session appeared first on Show-Me Institute.

While the team appreciates its history with Arrowhead, Chiefs president Mark Donovan acknowledged on Tuesday that the franchise has considered other options for when their lease expires in 2031. Donovan said that the team has specifically considered options in Kansas, as it has been pitched stadium offers [by] developers in the state, via Kevin Clark of The Ringer.

Upon seeing what Donovan said, Kansas City mayor Quinton Lucas quickly issued a response via Twitter.

“Kansas City has proudly hosted the Chiefs since the early 1960s,” Lucas said. “We look forward to working with the Chiefs, our state of Missouri partners, and local officials to ensure the Chiefs remain home in Kansas City and Missouri for generations to come.”

As a Chiefs fan, the idea of the team leaving the place they’ve called home for 50 years is disappointing. While only Lambeau Field and Soldier Field are older, Arrowhead Stadium is nonetheless an updated and modern (publicly owned) facility that could easily serve fans and the region for many decades to come. But that may be my sentimentality speaking. I was also aghast when the New York Yankees tore down the House That Ruth Built in 2010 and replaced it with the new Yankee Stadium. Old habits die hard.

The good news for Chiefs fans is that the alternate site being discussed is also in the region, albeit across the state line in Kansas. And while public money and tax incentives didn’t come up in the original story, you can rest assured that if the Chiefs made such a move, the package from Kansas would be worth billions. Like I told Pete Mundo the other day, teams wouldn’t threaten to leave if threats didn’t get them more money from taxpayers. It’s certainly the Chiefs’ right to try to get as much money from the public as they can get.

But that doesn’t mean the Kansas City and Missouri governments need to acquiesce. Even if the Chiefs moved to Kansas, the team would continue to be a regional asset and, likely, would still be easily accessible by Interstate 70—in this case, 15 minutes west of downtown in Kansas rather than 15 minutes east of downtown in Missouri. Simultaneously, the Royals have also started talking about a stadium in downtown Kansas City—a good business idea and a bad tax incentive idea! If that’s coming and it gets taxpayer support, it’d put the city on the hook for potentially two new stadiums in the span of about a decade should it keep the Chiefs on Missouri soil, too.

If Kansas wants to spend money to help carry the cost of the region’s professional sports franchises, more power to them. It’s bad policy, of course, but my focus is on Missouri policy and decision making.

As far as Missouri policy is concerned, my perspective for the Chiefs is straightforward: if you want a new stadium in Missouri, build it yourself, as any other business would. I’ll be cheering the Chiefs on wherever they are in the region, and even for a traditionalist like me, I’ll admit that a new stadium may add some excitement to an already exciting team. But there’s no reason to force single moms paying the earnings tax, or frankly any city taxpayer paying any tax, to underwrite such an amenity.

Hail to the Chiefs . . . but with all due respect, pay for the stadium yourself.

The post Hail to the Chiefs! And Pay for Your Own Stadium appeared first on Show-Me Institute.

Anyway, when the average person reads that headline, what do you think they see? It is most likely that they would think that Missouri is second to last of all the 50 states in what it spends on education. That would be a perfectly reasonable reading of that particular arrangement of words. It would also be wrong.

The article covers a report released by the Missouri Auditor’s office that examined spending trends in Missouri and compared them to other states around the country. Did that report find that Missouri was second to last in the amount of money that it spends? It did not.

In fact, according to the U.S. Census Bureau, in 2020 Missouri was 27th in school spending in the United States, with $11,249 in current spending per pupil per year. Importantly, this is not adjusted for cost of living. Even without that, Missouri is right in the middle of the pack.

No, what the auditor’s report did was look at the percentage of student funding that comes from the state and then compared that to the percentage of funding that comes from the state in other systems around the country, using data from a report by the National Education Association (NEA), the nation’s largest teachers union.

Now, we can set aside for a moment relying on the NEA, which has an obvious vested interest in increasing school spending. But we can still ask what, if anything, we should do with this information. Show-Me Institute analysts have been arguing that Missouri’s funding formula is broken for years. Reforming the funding formula is part of the 2022 Missouri Blueprint. Updating the formula to accurately measure local property tax wealth and thus local effort would be a huge improvement, as would treating charter schools better and providing more flexibility to parents as to where their children can take their funding. That said, using contrived statistics packaged deceptively to make that point isn’t right.

How much we should spend on schools has become a terribly muddled question. When polled, 58 percent of Missourians say that we should be spending more on education. That is, until they are told how much we actually spend. Then it drops to 32 percent. (Interestingly, it drops to 31 percent among school parents.)

Reports like the one from the auditor’s office do not help educate Missourians as to how much we actually spend and how that money is being put to use. It makes the worthy cause of funding formula reform more difficult. And that is a shame.

The post Missouri Is 49th in a Meaningless Statistic! appeared first on Show-Me Institute.

For those who aren’t aware, PPP was created by Congress to give forgivable loans to businesses and nonprofits affected by the coronavirus. As governments across the country shut down schools and businesses, Congress realized that it needed to provide support or businesses would go under, costing millions of jobs and carving deep scars into the American economy.

The first part of the story is important. Government shut these businesses and schools down. PPP was not a “bailout,” rewarding businesses that had acted poorly or were floundering. Businesses and schools had little say in whether or not they would be able to serve customers and did not deserve to be harmed as a result.

Lots of schools took PPP loans. This shouldn’t surprise us. As Dean Johnson, leader of the Crossroad Academies charter schools in Kansas City told The Kansas City Star, “I understand the economic realities, but one way or another we need to be able to meet our expenses, and if we’re trying to provide a more complex learning model what we certainly can’t be doing is laying off staff.”

But here is where the Star’s PPP story went off the rails. Rather than examining the effects of the coronavirus on local schools and their budgets, the author decided to pit charter and private schools against the Kansas City Public Schools (KCPS), making the case that it was unfair that charter and private schools could get PPP support while KCPS couldn’t. The article PPP-shamed them. It includes the predictable jabs at Rockhurst High School’s tuition ($15,000 for the upcoming year), and a quote from the local teachers union leader taking a dig at Betsy DeVos.

Like great Kansas City jazz, it’s the notes that it didn’t play that are the most revealing.

First, it left out the fact that KCPS receives more public funding than local charter schools, and even more per pupil than most private schools. According to the state of Missouri, KCPS spent $15,137 per student in 2019. Seems like an important detail to put in the story. KCPS is hardly in penury. It is certainly not “underfunded.”

Second, as Mayor Quinton Lucas pointed out on Twitter, in Clay County, federal CARES Act dollars were allocated to support the North Kansas City and Liberty public school districts. Jackson county could do the same for KCPS but hasn’t. Maybe someone should ask them why not.

Third, the article fails to mention that if private and charter schools were to close due to the economic effects of the coronavirus (as more than 100 private schools already have), it would be terrible for KCPS. State and local governments are already reeling from decreased tax revenue due to depressed economic activity; flooding schools with hundreds or thousands of new students would put tremendous strain on KCPS or any other public school district. If public school advocates could see beyond their immediate, narrow interests they would understand that charter schools and private schools are doing them a favor.

The disappointing thing about the Star’s article is that if it were not framed as adversarial, but as a system of schools wrestling with a shared problem, we might be better able to find solutions. Judging from the social media reaction, most readers walked away from the story angry at private and charter schools, not interested in how to help all children in Kansas City get a good education in the time of the coronavirus. That’s a shame.

The post The Star PPP-Shames Kansas City Private and Charter Schools appeared first on Show-Me Institute.

Watch the full episode here: https://www.youtube.com/watch?v=eEuphouW5vU

The post Patrick Tuohey on KCPT’s Ruckus appeared first on Show-Me Institute.

DESE’s newest version of APR, the state’s school and district evaluation method, shows no improvement in presenting information to parents. It’s something I’ve written about before, and I’m not the only one to notice how confusing these report cards can be. When the new report cards came out last week, there were quite a few articles pointing out how opaque and cryptic the information is.

KCUR’s article title is pretty self-explanatory: “Missouri Parents Just Got More School Data But They Might Need A Textbook To Figure It Out.”

The Kansas City Star editorial board wrote about the new report cards, saying: “Sadly, the Department of Elementary and Secondary Education gets a D for its report this year — not because the results are good or bad, necessarily, but because the results are nearly indecipherable.”

When explaining how to read the report, the editorial board asks “Confused? Almost certainly. The system seems designed to befuddle even the most committed parents.”

Another Kansas City Star article shows that even districts are confused: “In fact, Kansas City Public Schools and Hickman Mills still don’t know if they scored well enough on the Annual Performance Report to regain full state accreditation.” The article also pointed out that “the new format comes with a guide, but it’s 77 pages long.”

KSHB wrote: “The Missouri Department of Elementary and Secondary Education (DESE) released its Annual Performance Report Thursday morning, though it may have left school districts with more questions than answers.”

St. Louis public radio had an article appropriately titled “Missouri Redesigned School Report Cards – And It’s A Lot To Digest.” One of the authors even posted a nine-step tutorial on her Twitter account explaining how to access the report page.

The new report cards shouldn’t leave this many people confused. The onslaught of disdain should cause DESE to rethink its design and build school report cards that are actually useful.  

The post Don’t Worry, We’re All Confused appeared first on Show-Me Institute.

One of those effects—severe real estate blight—is immediately obvious to any tourist. Abandoned warehouses line the riverfront and entire neighborhoods in north St. Louis are decaying.   

But two unlikely allies are trying to solve the problem by philanthropic means.

The St. Louis Post Dispatch reports on an effort by a new organization, the St. Louis Blight Authority, to address the blight crisis by demolishing vacant and abandoned homes:

Tech billionaire Jack Dorsey, a St. Louis native and co-founder and CEO of both Square Inc. and Twitter, along with Detroit native Bill Pulte, whose grandfather founded national homebuilder Pulte Homes, were paying for the demolitions — $500,000 for a pilot program to completely clear more than 130 lots in a four-block area of the northwest St. Louis neighborhood hard hit by abandonment and vacancy.

However, the Post-Dispatch article explains the initial pilot phase will only knock down 30 structures. It’s a good first step, but it will make trivial progress toward solving the problem. St. Louis has 7,000 vacant buildings and more than 12,000 vacant lots.

The blight crisis will not solve itself, and Missouri’s major cities already use economic development programs that haven’t been shown to improve the situation. Could private resources, invested in an ambitious project, successfully remove blight in St. Louis? And is the St. Louis Blight Authority the entity to usher in success?

From the Post-Dispatch: “Dorsey and Pulte hope to inspire other philanthropists to contribute to the effort and perhaps expand it to other city neighborhoods.”

With the price tag for total blight removal estimated at $70 million, inspiration won’t cover the bill. But it’s a place to start.   

The post St. Louis Blight Authority: Philanthropy Might Provide What Markets Cannot appeared first on Show-Me Institute.

I read with interest a story in The Kansas City Business Journal that your company may be considering a move (back) to the City of Fountains. This is exciting, and the people of Kansas City would welcome you with open arms. According to the Journal,

A move could allow the company to consolidate its employees in a single location. A move to Missouri also could allow Waddell & Reed to receive sizable development incentives from the state and city agencies.

While this may be an opportunity for your company, it may affect not only your commuting time, but also your wallet. If you aren’t familiar with local economic development policies, let me bring you up to speed. In order to benefit from having more and bigger employers, cities often offer them incentives to relocate within their boundaries. They may include simple property tax abatements or more complicated programs like tax-increment financing (TIF). Cities may offer assistance in issuing bonds to pay for construction or forgo the sales taxes your company would otherwise pay on construction equipment. Heck, if you’re building a hotel, we might just give you a fat check!

Kansas City believes that these short-term costs are worth it over the long term. The economic research literature on the matter says otherwise, but certainly the company and its development partners see a great boon.

Given that Kansas City levies a flat tax on all earnings of people who either work or live within the city boundaries, you may experience a 1 percent reduction in income if Waddell & Reed does relocate. However, if your executives get the same incentive package that Burns & McDonnell did for its recent campus expansion at Bannister and Wornall Roads, you’ll be happy to know that half of your 1 percent earnings tax will be returned to your employer to offset the cost of development. Don’t think of it as a tax increase—think of it as a reduction in salary.

As the Twitter hashtag reads, that’s @howwedokc. City leaders tax workers so they can offer subsidies to their employers. (We also divert funds away from schools in which 90 percent of students are in the free and reduced-price lunch program to pay for successful companies’ headquarters buildings, but that probably won’t affect you.)

And if you find after a while the Kansas City just isn’t for you, remember that once these incentives expire, your company will likely start looking to move back to Kansas to take advantage of whatever incentives it may offer. If that turns out to be the case, as it was in 1990, we’ll certainly miss you. But just like Applebee’s before you, we know you’ll likely be back.

Regards,

Patrick Tuohey

The post An Open Letter to Waddell & Reed Employees appeared first on Show-Me Institute.

She was right to be skeptical of that claim. But it’s not the only claim that deserves scrutiny. The plan also claims it will create 12,600 new jobs. Economics professor Howard Wall responded on Twitter:

They find 12600 jobs through 2050 measured in “job years”. So 420 jobs. Their invented measure of jobs is buried in the impact study, but they tout the number as if they didn’t create a new use of the phrase.

The summary of findings upon which the Bike KC Master Plan claims are based states on page 6: “This increase in economic activity leads to 12,600 additional jobs (measured in job years) over the period.” The period is 30 years, 2020 through 2050. So dividing 12,600 “job years” by 30 years gets 420 actual jobs.

One can still be skeptical of that much smaller claim, but it is not the claim made by the Bike KC Master Plan, which prominently and repeatedly states 12,600 “new jobs.” This number is at best misleading.

Incidentally, the authors of the report upon which this is all based would not release the paper to the Show-Me Institute as they are not finished with it. Yet, the summary of the findings is available. How one can summarize findings before the paper itself is finished is a mystery. Perhaps that explains the questionable claims of 12,600 new jobs and 36 lives saved each year.

Anyone who is serious about public policy should be very skeptical about these claims.

The post Bike Lanes Won’t Create 12,600 Jobs, Either appeared first on Show-Me Institute.

We are in danger as a society of creating a self-fulfilling prophecy. We tell everyone that teaching is a thankless, underpaid job and then we wonder why we see declining rates of people going into teaching. 

It is time for us to engage in a little positivity. Teaching is a great profession.

Take for evidence the results of a recent working paper by Alberto Jacinto and Seth Gershenson. Using survey data from the National Longitudinal Survey of Youth 1979 (NLSY) and the attached Child and Young Adults Supplement (CYA), they examine whether children pursue a career in the same field as their mothers. Their data include jobs of 4,572 children and 2,488 mothers.

Interestingly, they find that children of teachers are significantly more likely to go into teaching than children of nonteachers. They write, “19% of the children of teachers go on to become teachers, compared to only 8% of the children of nonteachers.” While they see some similar trends in other comparable jobs, such as nursing, the relationship between mothers and their children’s jobs is not as strong anywhere as it is in teaching. As Jacinto and Gershenson note, “there is something unique about teaching, as there is relatively strong inter-generational transmission of the profession, even when compared to “similar” professions.”

Jacinto and Gershenson don’t have an explanation for why this is so. They wonder, “Does the transmission of teaching occur because of parental pressure, network membership, information and choice set, or a combination of factors?”

I have a hypothesis: teaching is a great job and the kids of teachers know it!

Sure, there are challenges; it’s work and all work has its thorns and thistles. Nevertheless, teaching as a profession has many redeeming qualities.

Teaching is a job with purpose. As Justin Tarte, the executive director of human resources in the Union R-XI School District wrote on Twitter: “What most adults will never experience in their jobs: A student visiting them years later to say thanks for being there when nobody else was. A parent writing an email saying you changed their child’s life & they can’t thank you enough. That’s why being a teacher is awesome.”  

Teaching provides a stable middle class income. People think teachers make much less than they actually do, typically underestimating the average amount by nearly $19,000. Plus, benefits for teachers are nearly twice as generous as they are for workers in the private sector.

Teaching provides a family-friendly schedule. There are few other jobs where you get winter break, spring break, summers off, plus an additional allotment of “sick” or “personal” days throughout the year.

I could go on, but I think you are getting the point—teaching is a great profession. It’s time we said so.

The post Despite What You’ve Heard, Teaching Is a Great Profession appeared first on Show-Me Institute.

The immediate aftermath of Amazon’s announcement featured the kind of Democratic recriminations that are the thing of Republican fever dreams. On one side were establishment Democrats like Andrew Cuomo and Bill de Blasio, who like many politicians are conventional when it comes to tax incentive–laden economic development strategies; on the other side were Democrats like Alexandria Ocasio-Cortez, who viewed the tax incentives as denying revenue to state and local government services.

At first, conservatives on Twitter were “rooting for injuries” and joking about the Left’s internecine conflicts. But eventually the conventional wisdom on the Right seemed to coalesce around the Cuomo and de Blasio perspective on tax incentives. It’s crazy, they said, that AOC would have come out against a tax incentive package that would have brought (more) Amazon jobs to New York! Think of the jobs!

But while conservatives delighted in the aftermath of Amazon’s exit as an opportunity to proclaim Ocasio-Cortez’s economic ignorance, Ocasio-Cortez is more correct about the Amazon deal than she is wrong, and far closer to the path of good tax policy than many conservatives.

In fact, there is a larger seen vs. unseen consideration in the Amazon debate that centers not only on whether the average “economic development” project would go forward even without a tax incentive, but also on the overall impact of profligate tax incentive policies on governance objectives generally.

First, we cannot know for sure whether Amazon would have come to New York without, or with reduced, tax incentives, but we do know that the bookies who handicapped Amazon’s search always had Virginia and New York among the favorites for the HQ2s, in no small part because both already had highly skilled workforces, to say nothing of their preexisting proximities to power. In fact, many tax incentive offers to Amazon from other states far exceeded the value of New York’s. Amazon’s statement on its HQ2 withdrawal from New York can easily be read not as one ultimately about the cash, but about the public relations fiasco Amazon was about to endure at the hands of New York’s activist class.

The question of whether, or to what extent, incentives are necessary isn’t just an issue in the case of Amazon, either, and research into the incentives that include or imply “but for” language— “but for the incentive, the project won’t happen” —are helpful here. For example, a study by the W.E. Upjohn Institute published last year reveals that the vast majority of businesses that receive tax incentives under a “but-for” rubric likely would have pursued their projects even without the incentive: that many of these projects are getting tax incentives not because the project wouldn’t happen without them, but because business interests have become accustomed to receiving them and know how to work the system to get them. The result? As local tax incentives proliferate, fewer and fewer taxpayers become responsible for greater and greater portions of local government funding.

This failure of stewardship on the part of governments across the country costs state and local taxpayers billions of dollars annually. That impacts not only government services, including roads and education, but also the ability of a government to reduce taxes for everyone, if it so desired. The city of Kansas City, Missouri, where I’m from, redirects $90 million annually from its budget through tax incentives, but that doesn’t include the additional $45 million that those decisions also redirect from the city’s public schools and other taxing districts, who rely on these tax streams but have relatively little say in their diversions.

Joining this concern with Upjohn’s findings, it’s clear in the case of Kansas City that tens of millions of dollars every year aren’t going to kids, to roads, or to other necessary projects simply because some connected businesses want special taxing treatment for projects they would undertake even if they did not receive the incentives.

In some respects these revenue diversions are only now coming into sharper focus with the promulgation of new GASB accounting standards requiring greater transparency about the money that governments across the country are forgoing in the name of “development.” If you haven’t looked up how much your local and state government is giving away, you probably should; it will reframe the financial picture the next time those governments come to you claiming to be cash poor and looking for tax hikes.

Would some tax incentivized projects be withdrawn if there was no tax incentive? Certainly. Would most others proceed as planned? Evidence suggests that they would.

I’m not arguing that Amazon specifically would have come to New York with no, or fewer, tax incentives, as no one really knows the answer to that question; I’m also not arguing that New York government “deserves” to be funded at a higher level and that Amazon’s HQ2 departure will allow that.

What I’m arguing is that Amazon and other private companies play state and local governments against each other for their own financial benefit, and that politicians are usually more than happy to be played for the sake of donning their hard hats and planting a spade in the ground in front of a bunch of cameras.

What’s mystifying to me is that while national conservative pundits (rightfully) guffaw at the idea of ethanol and sugar cane subsidies and all the rest, that they may not view state and local tax policy failures as similarly deserving of unambiguous and pointed criticism. Perhaps in the context of the players involved – Amazon, Jeff Bezos, Alexandria Ocasio-Cortez, Bill de Blasio and Andrew Cuomo – it is simply too delicious to watch the conflagration of cultural and economic trainwrecks, and comparatively disadvantageous to say, however plainly, that both Amazon and New York will be just fine, and that these tax incentive deals are rarely in the interest of the taxpayers who subsidize them.

More to the point, conservatives would do themselves a favor by recognizing clearly, and repeating loudly, that tax incentives are not indicative of healthy “tax competition,” and that deals like the one struck between Amazon and New York are instead a showcase of a national policy disease that rides the paychecks of individuals and small businesses across the country, to dole out money to the enterprises of the well-connected.

Milton Friedman was right:

You talk about preserving the free market system. Who has been destroying it? The business community must take a large share of the responsibility. … You must separate out being pro-free enterprise from being pro-business.

New York was pro-Amazon; it wasn’t pro-market. And conservatives would do well to focus on the latter approach as their guiding principle on these and similar matters of local tax policy in the future, regardless of the state, and regardless of the players involved.

The post New York Shouldn’t Have Offered Amazon $3 Billion. No One Should Have. appeared first on Show-Me Institute.

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There certainly is a problem, but it isn’t what you may think. The problem is misunderstanding.

Katnik was relying on a DESE report to the Missouri General Assembly in December 2018.  The report lists turnover figures which could easily be mistaken for statewide turnover numbers.  Check out the table below.

In the report, DESE claims that the three-year teacher retention rate for teachers starting in 2015-16 was just 63.4%. This number drops to a shocking 34.6% for the five-year retention rate of teachers starting in 2014-15. To the casual observer, the takeaway is that only roughly a third of our teachers are staying in the profession. What’s worse, these numbers seem to be going down over time. In other words, teacher retention appears to be going from bad to worse.

But, that is not what this table is actually showing. The figures presented here are not retention in the field, but retention at the school/district level. In other words, if a teacher were to leave one district for another they would be counted as not being retained.   

In this post, I use data provided by DESE to show the state retention rate of educators in Missouri. I limited the data to only individuals who appeared to be full-time employees in their start year.

In the figure below, I look at the cohort survival for new teachers beginning in 2000 and 2009. The teachers are tracked for nine years, all that was possible given the data. As you can see, retention rates for new teachers in 2000 and 2009 are almost identical. After nine years, nearly 45% are still in the education profession in Missouri. This is well-above DESE’s five-year estimate of retention.

These number more closely fit the percentage of teachers leaving the field in the U.S. Department of Education’s Teacher Attrition and Mobility study, which found roughly 7-8% of teachers leave the profession each year.

Looking at a shorter period of five years, I compare the retention rates for new teachers in 2000, 2009, and 2013 below.  As this chart shows, the five-year cohort survival is getting better, not worse. For new teachers in 2013, over 65% were still in the profession after five years. 

The numbers presented here are different than DESE’s numbers because we are measuring different things. They look at building level turnover. That is not the best way to measure a state’s health in teacher retention. We have over 500 school districts, and we should expect some movement of teachers among the districts. People move, their spouses get jobs elsewhere, and they seek higher pay or job advancement. For all sorts of reasons, teachers change schools. That is not an indictment of the field and does not require state intervention.   

Before the State Board of Education begins a massive collaborative effort to address the non-issue of a fictitious teacher retention crisis, they should look at all the facts. Whether you look at new teachers starting in 2000, 2009, or 2013, sixty percent or more are still in the profession in the state after five years.

We do not have a statewide epidemic, but many individual school districts may have teacher retention problems. And, just as these problems are local, they will in most cases require local solutions, not broad statewide policies.

The post There Is Not a Teacher Retention Crisis in Missouri appeared first on Show-Me Institute.

Pulling from the influencers’ responses, the Star concluded that Missouri needs to pay teachers more. That’s all fine and dandy, but simply paying teachers more is not the solution. As the editorial board points out, schools need to do a better job of paying the best teachers more. The board writes: “Deciding which teachers are “best” is complicated, of course. Test scores? Graduation rates? Classroom grades? Peer reviews? Yet the broad concept of rewarding quality teachers is sound.” I couldn’t agree more, and here’s why.

Most school districts pay teachers on a single salary schedule. This means if you are a rock-star physics teacher with dozens of other lucrative job prospects, you will be paid the same amount as a less-motivated and less-capable teacher who couldn’t find another job if he tried. This pay system is attractive to low-skilled workers, but pushes individuals with a lot of potential into other fields.

This was effectively illustrated by economist Kirabo Jackson on Twitter. I have recreated his graph (which he posted on May 31) below. The solid red line represents the single salary schedule. The blue line represents the ability of a teacher to earn more outside of teaching. As you can see, individuals with low ability (those to the left of point A) are likely to find a teaching career attractive. Meanwhile, higher-ability individuals have an incentive (better pay) to pursue another job. Now look what happens when we simply raise teacher pay (red dotted line). We shift the number of those who would like teaching from point A to point B—a marginal improvement at best.

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Now consider what would happen if we had a pay system that actually paid teachers based on their ability. This is represented by the green line. While the current system is designed to attract the lowest-skilled individuals into the profession, changing the pay structure to reward high performing individuals could make teaching desirable for the best and the brightest.

The Kansas City Star’s editorial board is right: We should pay great teachers more. And we should do it by changing how we pay teachers.

The post Want More Great Teachers? Then Pay Great Teachers More appeared first on Show-Me Institute.

The St. Louis Post Dispatch reports “Missouri mulling pension payouts for some former state workers.” Meanwhile, the Springfield News-Leader writes “Troubled Missouri pension system offers buyouts to former state employees.” In the PD piece, State Treasurer Eric Schmitt, who is also on the MOSERS board of directors, is quoted as saying, “Now is the time to start taking our pension troubles seriously. If we don’t, it will mean less resources for our schools, roads, and health services down the line.”

The buyout for MOSERS employees would provide a lump sum payment, rather than collect pension benefits down the road. The buyout is worth less than the actuarially assumed pension benefits the workers would stand to receive; thus it would generate a savings for MOSERS and it could potentially help some workers.

The treasurer is right. We cannot keep kicking pension problems down the road and this buyout is a smart, common sense strategy for reducing pension obligations. Smart, that is, for the state. Whether it is smart for the workers to take it is another story. Andrew Biggs doesn’t think so. Check out this Twitter interaction between, Biggs, Mizzou economics professor Cory Koedel, and me. 

Biggs suggests MOSERS pensioners shouldn’t take the deal. Koedel and I offer responses in jest, as Missouri taxpayers we stand to benefit from MOSERS shoring up its bottom line. Then Biggs offers a startling calculation. He suggests the buyout is worth approximately 39% of the value of the worker’s benefits. I doubt that’s actually worse than the odds on a lottery ticket, but it is certainly not a good payout.

Does this mean no one should take the buyout? Not necessarily. There may be circumstances in which some workers might be interested in having a lump sum of money rather than a pension that pays out over a course of 30 plus years. For instance, if you don’t expect to live that long!

The most important thing here is for workers to be educated on this option. With that said, I commend the MOSERS board for exploring this option and encourage MOSERS workers to fully understand their options before making any decisions. 

The post MOSERS Pension Buyout Good for Taxpayers, Probably Not for All Workers appeared first on Show-Me Institute.