While no site has yet been selected for a TerraPower reactor, lessons from Wyoming and recent federal reforms offer clues about what might come next. As I have written before, the federal government has put extensive emphasis on converting retired coal plants into advanced nuclear reactors. These conversions, according to the U.S. Department of Energy, can save up to 35% on construction costs and retain much of the existing workforce. In Wyoming, TerraPower is currently building a reactor on a former coal site, and it would not be a surprise to see Kansas follow suit. This model could highlight a potential path forward for nuclear adoption in the historically coal-dominant Missouri.

Federal Reform and Cost Savings for Coal-to-Nuclear Transitions

The concept of coal-to-nuclear has drawn bipartisan attention in Washington, D.C., and has been codified in the recent ADVANCE Act, which directs the Nuclear Regulatory Commission to develop and implement strategies to enable more efficient licensing reviews for converting former coal plants and other former industry infrastructure into nuclear reactor sites.

A report prepared by experts at the Idaho, Oak Ridge, and Argonne National Laboratories found that these projects can achieve significant savings by repurposing existing infrastructure, such as steam-cycle components, since both nuclear and coal are thermal power plants that rely on generating steam to turn a turbine.

Missouri’s Long History with Coal and Transitioning Our Workforce

Coal has long been king in Missouri. Despite recent closures, Missouri remains the fourth most reliant state on coal, with coal supplying 57% of electricity generation in 2024. That legacy presents both a challenge and an opportunity.

Missouri has several coal plant sites that could be strong candidates for advanced nuclear conversion. A study from Oak Ridge National Laboratory identified three Missouri coal power plant sites (retired or slated for retirement between 2020 and 2040) as suitable for hosting a number of reactors.

Not only is there an opportunity to make use of our physical infrastructure, but Missouri can also use our existing workforce. The U.S. Department of Energy notes that many coal-plant and nuclear-plant jobs share identical or similar occupation codes, meaning a large portion of the existing workforce could transition with minimal retraining.

A Nuclear Advisory Council Could Help Identify Steps for Missouri

Another way to better identify potential nuclear sites is by creating a nuclear advisory council. If Missouri brought together the best and brightest minds in nuclear energy to discuss our unique opportunities, analyze trends in federal regulation, and address our state’s weaknesses, the Show-Me State could become a significant player in nuclear development.

Kansas is moving along in its process. Let’s hope the Show-Me State doesn’t let this same opportunity pass it by.

Interested in Nuclear Energy in Missouri?

Read my recent report, Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future, here.

The post Considering Coal-to-Nuclear Transitions in Missouri appeared first on Show-Me Institute.

I am not a lawyer, so I am going to keep this all very simple. As one legal blog explained it:

Under the Chevron doctrine, if Congress had not directly addressed the question at the center of a dispute, a court was required to uphold the agency’s interpretation of the statute as long as it was reasonable.

This obviously puts a great deal of power into the hands of regulatory agencies. All they had to do in interpreting federal rules for regulatory purposes was not be insanely crazy, and courts would be required to defer to the agency’s judgement. These were glorious days for regulators. Unlike, say, now.

If you believe, like I do, that regulatory powers have expanded too far, then overturning Chevron was a strong move for individual liberty and is something to be celebrated.

But it is a federal case. We have our own regulatory issues in Missouri. That is why legislation has been introduced to apply these same changes to Missouri laws. As the summary of Senate Bill (SB) 221 explains:

This act modifies the standard for review for a state agency’s interpretation of statutes, rules, regulations, and other subregulatory documents. Specifically, a court or administrative hearing officer shall interpret the meaning and effect of such statutes, rules, regulations, and documents de novo, rather than de novo upon motion by a party if the action only involves the agency’s application of the law to the facts and does not involve administrative discretion. Further, after applying customary tools of interpretation, the court or officer shall exercise any remaining doubt in favor of a reasonable interpretation that limits agency power and maximizes individual liberty. [emphasis mine]

Right now, a state agency is suing a woman in St. Louis for practicing dentistry without a license. The question is whether installing tooth jewelry should require a dental license (which is, obviously, not easy to get). If Missouri’s Chevron legislation passes, the regulators in this instance would have to act more strictly under the law as written by the legislature and rely less on various interpretations of that law by the Missouri Dental Board, which, believe it or not, may be a bit biased. If this case goes to court, the judges will no longer have to just assume the dental board is correct.

I don’t know whether the person in question is practicing dentistry or not. I do know that a Missouri where the courts don’t automatically assume the regulatory agency is always correct is a freer Missouri, and that is something I want.

The post The Chevron Debate Comes to Missouri appeared first on Show-Me Institute.

This same ambiguous outlook applies to the U.S. economy as a whole. On the one hand, data released by the Department of Commerce last week reveals that real gross domestic product (GDP)—the value of all goods and services produced by the US economy, adjusted for inflation—increased at a 2.4% pace in the second quarter, following 2% growth in the first quarter. If this pace continues—a big if—then the economy will have safely avoided recession territory, having rebounded modestly from the two quarters of negative GDP growth at the beginning of 2022.

But past is not prologue. The economy still faces multiple headwinds that leave the risk of recession—or at least a significant weakening of growth—very much on the table. For one thing, the effects of monetary policy (i.e., rate hikes) on the economy operate with a time lag. The primary mechanism through which rate hikes fight inflation is by making borrowing costlier, thereby discouraging the demand for spending and, with it, the pressure on prices. The medicine from earlier doses of rate hikes is already having an effect on the economy; headline CPI inflation fell to 3% year-over-year last month, down from a peak of over 9%. However, rate hikes from late spring have not yet fully reverberated throughout the U.S. economy. Even so, the recent GDP data indicate that consumer spending only grew by 1.6% in the second quarter, with durable goods spending only growing by 0.4%. This particular subset of spending is useful as a gauge because durable goods like washing machines and other expensive household items are often purchased using credit, which now commands higher interest rates because of the Fed’s actions.

Another headwind facing the economy is the impending resumption of student loan repayments this fall. Make no mistake: student loan repayments ought to resume. Bailing out student debt by transferring it from the people who are reaping the financial gains from their education to taxpayers is regressive, fiscally irresponsible, and inflationary. However, this reality does not take away from the fact that people will feel the sting of being required to pay debts that they have been shielded from during the past few years. Consequently, consumer spending growth is likely to slow further or even turn negative. Considering that consumer spending contributed 1%age point (out of the 2.4) to GDP growth in the second quarter, a hypothetical scenario where consumer spending growth flatlines would by itself reduce GDP growth to just 1.4%. Moreover, another important component of GDP—investment—is sensitive both to rates themselves as well as business expectations about future consumer demand. It is entirely plausible—maybe even likely—that investment growth will decline from its most recent rate of 5.7%, and if that happens, GDP growth could easily fall below 1%.

Still another important headwind is the fact that, for all the progress the Fed—and the Fed alone—has made in combatting inflation, it has not yet succeeded in achieving its 2% target. As shown in the figure below, headline inflation is down to 3%, but core inflation—a better measure of fundamental pricing pressures—is still nearly 5%. Moreover, because the inflation readings are year-over-year measures, and because the monthly numbers from July and August 2022 were very low, it is quite possible that the headline year-over-year inflation numbers may rise modestly over the next few months.

Lastly, and arguably most importantly, the U.S. economy has been facing a productivity crisis over the past two years. Productivity—that is, economic output per hour of labor—has decreased by nearly 2.5% since the second quarter of 2021, which is unprecedented. By comparison, productivity rose by nearly 5% from the first quarter of 2017 to the fourth quarter of 2019. Not coincidentally, that earlier period corresponded with household income rising by over $5,000 after inflation—meaning higher purchasing power—as compared with the recent decline in purchasing power of over $2,000. The figure below gives a stark visual reminder that prices have grown consistently faster than wages since the passage of the American Rescue Plan Act “stimulus” bill in early 2021, with price growth decreasing only in response to the Federal Reserve’s interest-rate-hiking campaign.

As speculation continues over the near-term trajectory of the U.S. economy, it is worth mentioning again the essential need to raise productivity—not just to avoid recession, but to lift the economy out of the doldrums of 1% to 2% growth and return to or exceed its historical norm of 3% growth. While these numbers may seem difficult to relate to, a rule-of-thumb may prove useful. The amount of time (in years) that it takes for the U.S. economy to double in size is roughly 70 divided by the growth rate. Thus, if an economy grows at 3% per year, it will take approximately 70/3 = 23.3 years to double in size. By contrast, if the economy grows at 2% per year, it will take 70/2 = 35 years to double, and it will take 70/1 = 70 years to double if growth is persistently only 1%. That would be a disaster for the U.S.’s potential to remain the leading economy in the world.

So how do we achieve growth liftoff? Answering this question is much too large for a single blog post, but the key is productivity, and one important point to remember is that raising productivity is not about squeezing more out of workers and making life at work more of an unpleasant grind. Quite to the contrary. The most effective way to increase productivity is to ensure that workers are equipped with the skills to succeed, unencumbered by regulations to find the best occupation and employer to realize their potential, and where both workers and employers are able to keep more of the fruits of their productive activity. That phrase—productive activity—is key to keep in mind. While public debate often focuses on spending, spending, spending, it’s time to shift our attention to producing.

The post Recession: To Be or Not To Be, That Is the Question appeared first on Show-Me Institute.

Use taxes in Missouri are simply sales taxes on goods delivered to your home from out-of-state sellers. Local governments have been authorized to collect use taxes for a long time—predating the internet, even—but they have not been widely adopted. Collecting sales taxes on a family’s Sears catalog purchases in St. Louis was a lot of work for little revenue. The internet has changed that. The Supreme Court decision in the “Wayfair” case, changes to state legislation in 2021, and, most obviously, the tremendous increase in e-commerce during the pandemic, have all combined to greatly increase the need or desire (depending on your point of view) for governments to tax online sales.

For purposes of comparison, e-commerce now makes up over 14% of total sales in the United States according to the U.S. Department of Commerce. For cities in St. Louis County, 14% is a lot of sales not to tax. To address that, several St. Louis County municipalities (Chesterfield, Town and County, Fenton, Maryland Heights, Velda City, Flordell Hills, and Northwoods) have placed a use tax on the April 4, 2023, ballot. In many of these municipalities, use taxes have been proposed and failed previously. However, a lot has changed in e-commerce in recent years, and it may be time for voters to revisit the issue. (Although for cities like Chesterfield and Fenton, where voters rejected the use tax less than a year ago, asking again in the manner of a spurned yet persistent suiter is unseemly.)

Expanding the tax base with a use tax, if done in conjunction with a reduction of other, more harmful taxes, could be a beneficial change for cities in St. Louis County. But let’s be clear: if there is no corresponding reduction in other taxes, this is a tax increase on residents.

Flordell Hills is a particularly intriguing decision. I’m curious to see if voters will trust city government with more tax money after two city officials were recently convicted of stealing over $600,000 in city funds—a substantial portion of the annual budget. Fool me once . . .

It is a central tenet of tax policy that a tax base should be as broad as possible. The more expansive the tax base, the lower the rate that must be imposed to fund the functions of government. Exact use-tax revenue amounts are hard to predict, but Maryland Heights, to give one example, previously estimated it would receive about $2 million per year if a use tax is enacted. The use tax could be approved by voters to responsibly expand the tax base and equalize the competition between online and physical stores, but it should not be approved simply to grow municipal government revenues. Imposing a use tax in a revenue-neutral manner is not new idea. It is exactly how the Missouri legislature addressed this issue with the state’s new use tax law in 2021.

For the cities in St. Louis County proposing to impose their own use taxes, the simplest way for them to offset the revenue increases from the use tax would be to lower their property taxes in a revenue-neutral manner. That would lead to a wider tax base, fairer competition between businesses, and lower rates for taxpayers. Other options for various cities if the use tax is approved include eliminating more harmful taxes or fees. Reducing the local utility tax rate would be another good exchange for cities that do not levy property taxes, such as Chesterfield.

The imposition of a use tax in these St. Louis County cities could be a positive policy change. It could also be an easy way for politicians to just raise taxes one more time. By having various city officials pledge to enact offsetting revenue reductions that embrace the positive aspects of the use tax, these municipalities can amplify the public benefits while curtailing the tax impact on residents and businesses. That is a plan I think most taxpayers and voters could support. Without such a commitment, though, the use tax is just another tax increase.

The post St. Louis County Municipal Use Taxes Should Expand the Tax Base, Not the Size of Government appeared first on Show-Me Institute.

For purposes of comparison, e-commerce now makes up over 12% of total sales in the United States according to the U.S. Department of Commerce. For cities and counties in Missouri, 12% is a lot of sales not to tax. To address that, at least four counties and dozens of cities have placed use taxes on the April 5, 2022, ballot. Expanding the tax base with a use tax, if done in conjunction with a reduction of other, more harmful taxes, could be a beneficial change. But let’s be clear: if there is no corresponding reduction in other taxes, this is a tax increase on residents.

It is a central tenet of tax policy that a tax base should be as broad as possible. The more expansive the tax base, the lower the rate that must be imposed to fund the functions of government. Exact use tax revenue amounts are hard to predict, but the revenues for each city will not be insignificant. Local governments have received federal COVID-relief and stimulus funds, home values have risen substantially, and tax collections during the pandemic were not down as much as initially feared. As a result, many of these cities and counties do not need this new tax revenue to meet vital needs. The use tax could be approved by voters to responsibly expand the tax base and equalize the competition between online and physical stores, but it should not be approved simply to grow government revenues. Imposing a use tax in a revenue-neutral manner is not a new idea. It is exactly how the Missouri Legislature addressed this issue with the state’s new use tax law in 2021. St. Francois County officials have publicly stated they will lower their county property tax if the use tax is approved.

For cities and counties in Missouri proposing to impose their own use taxes, the simplest way for them to offset the revenue increases from the use tax would be to lower their property taxes in a revenue-neutral manner. Other options for various local governments if the use taxes are approved include eliminating more harmful taxes, such as the paradoxical local sales tax for economic development. Reducing the local utility tax rates would be another good exchange for cities that do not levy property taxes.

The imposition of a use tax for these Missouri cities and counties could be a positive policy change. It could also be an easy way for politicians to just raise taxes one more time. By having various city officials pledge to enact offsetting revenue reductions, local officials can amplify the public benefits while curtailing the tax impact on residents and businesses. That is a plan I think most taxpayers and voters could support. Without such a commitment, though, the use tax is just another tax increase.

The post Missouri Use Taxes Should Expand the Tax Base, Not the Size of Government appeared first on Show-Me Institute.

Thanks to recent changes in state and federal law, local use taxes have become topical in Missouri. Many Missouri cities and counties have them on the ballot on April 5.

With offsetting rate cuts, use taxes are a positive policy change for Missouri. Without them, they are just another tax increase.

Missouri Use Taxes Should Expand the Tax Base, Not the Size of Government

Use taxes in Missouri are simply sales taxes on goods delivered to your home from out-of-state sellers. Local governments have been authorized to collect use taxes for a long time—predating the internet, even—but they have not been widely adopted. Collecting sales taxes on Sears catalog purchases was a lot of work for little revenue. The internet has changed that. The recent Supreme Court decision in the “Wayfair” case, changes to state legislation, and, most obviously, the tremendous increase in e-commerce during the pandemic have all combined to greatly increase the need or desire for governments to tax online sales.

For purposes of comparison, e-commerce now makes up over 12% of total sales in the United States according to the U.S. Department of Commerce. For cities and counties in Missouri, 12% is a lot of sales not to tax. To address that, at least four counties and dozens of cities have placed use taxes on the April 5, 2022, ballot. Expanding the tax base with a use tax, if done in conjunction with a reduction of other, more harmful taxes, could be a beneficial change. But let’s be clear: if there is no corresponding reduction in other taxes, this is a tax increase on residents.

It is a central tenet of tax policy that a tax base should be as broad as possible. The more expansive the tax base, the lower the rate that must be imposed to fund the functions of government. Exact use tax revenue amounts are hard to predict, but the revenues for each city will not be insignificant. Local governments have received federal COVID-relief and stimulus funds, home values have risen substantially, and tax collections during the pandemic were not down as much as initially feared. As a result, many of these cities and counties do not need this new tax revenue to meet vital needs. The use tax could be approved by voters to responsibly expand the tax base and equalize the competition between online and physical stores, but it should not be approved simply to grow government revenues. Imposing a use tax in a revenue-neutral manner is not a new idea. It is exactly how the Missouri Legislature addressed this issue with the state’s new use tax law in 2021. St. Francois County officials have publicly stated they will lower their county property tax if the use tax is approved.

For cities and counties in Missouri proposing to impose their own use taxes, the simplest way for them to offset the revenue increases from the use tax would be to lower their property taxes in a revenue-neutral manner. Other options for various local governments if the use taxes are approved include eliminating more harmful taxes, such as the paradoxical local sales tax for economic development. Reducing the local utility tax rates would be another good exchange for cities that do not levy property taxes.

The imposition of a use tax for these Missouri cities and counties could be a positive policy change. It could also be an easy way for politicians to just raise taxes one more time. By having various city officials pledge to enact offsetting revenue reductions, local officials can amplify the public benefits while curtailing the tax impact on residents and businesses. That is a plan I think most taxpayers and voters could support. Without such a commitment, though, the use tax is just another tax increase.

The post Missourians to Vote on New Use Taxes appeared first on Show-Me Institute.

So, what does the STEM education landscape look like in Missouri? The Education Commission of the States has a Vital Signs database that tracks whether states give students “equitable access to high-quality science, technology, engineering, and mathematics (STEM) educational experiences.” According to this database, STEM jobs will grow by nine percent in Missouri over the next ten years, including an expected growth of 14 percent in advanced manufacturing jobs. In Missouri, STEM jobs earn, on average, over $34 per hour, compared to $18 per hour for non-STEM jobs.

Unfortunately, in 2013-14, over 30 percent of high school students in Missouri did not have access to Calculus courses, about 20 percent had no access to Physics, and 10 percent couldn’t access Chemistry. In terms of college readiness for STEM, just 5 percent of Missouri high school students took an AP math exam in 2015 and 6 percent took an AP science exam. By comparison, 14 percent of high school students nationwide took an AP math or science exam that year. These data are from a federal data collection, and they match the results of research by Show-Me Institute staff. In the 2015-16 school year, of the school districts in Missouri that had high schools, 40 percent had no students enrolled in advanced Physics or Calculus and over 60 percent had none enrolled in AP courses.

Are these numbers we’re willing to live with? If not, what can be done? Given that just 17 percent of Missouri 8th-graders have math teachers who majored in math and 36 percent have science teachers who majored in science, it’s not likely that we will be able to staff our way out of this any time soon. The good news is that we have the Missouri Virtual Instruction Program (MoVIP)—an underused online course program that could be offered to all high school students in Missouri who don’t have full access to STEM or other courses. Districts can arrange for students to take a course through MoVIP and cover the tuition. Under this scenario, a district could be expected to pay about $450 for a course per semester, and they would be free to negotiate lower rates if, for example, they have several students in the same course. Picking up the tuition for students who successfully complete an online course is a much more cost-effective solution for districts, and it can have a big impact on students’ opportunities.

As we celebrate National School Choice Week, we need to recognize that too many of our high school students have no choice when it comes to STEM classes. The structure to give them access is already in place, and this could be an easy way to meet a vital need.

The post MoVIP Program Could Bring Advanced Coursework to Missouri Students appeared first on Show-Me Institute.

In 2014, Missouri saw record dollars in exports of goods. In addition, the state has enjoyed high levels of exports since 2012. Growth like this shows a strengthening ability of Missouri businesses to provide goods to consumers outside of the state. In return, it brings new money and investment to Missouri that can foster more private sector growth. On the net, Missouri saw a trade deficit of goods to the tune of 4.2 billion dollars. However, this is also a positive, because if Missourians buy more goods and services than they sell, then Missourians are promoting more outside investment in Missouri.

OK, so have you had time to reflect? Missouri’s most valuable export is . . . people. According to the IRS, Missouri is also seeing near-record exports of people. In 2014, nearly 65,000 tax filers left Missouri to live somewhere else. In fact, Missouri has been exporting more than 60,000 persons a year since 2011. Moreover, unlike exporting goods, exporting people could restrict Missouri’s economic performance.

If exports of people were counted and ranked among Missouri’s total exports, it would be the largest-valued loss in the state. This is because when people leave, they take their income with them.

(Source: Internal Revenue Service and U.S. Department of Commerce International Trade Administration).

In 2014, exports of people took a potential 3.4 billion dollars out of the economy. That amounts to about 24% of the benefit Missouri gets from exporting goods. In terms of net migration, the number and income of those fleeing residents is strong enough to eclipse what we get from incoming residents by around 4,700 returns, or 309 million dollars of income.

Missouri’s economic environment, whether it’s tied to taxes or regulations, is costing us the very thing that their growing goods exports are supposed to reel in: people and their income. While strong exports of goods is a positive sign, Missouri exporting too many people can become a drag on the economy if not addressed.

The post Missouri’s Most Valuable Export Continues to Grow. . . . and That’s Not a Good Thing appeared first on Show-Me Institute.

A new study from the Cato Institute shows that average federal compensation is nearly double average private sector compensation. Do you think AFGE took this study in stride?

“Bogus!” cries AFGE in a recent release. Rather than acknowledging the fact that, yes, federal employees are very well compensated and enjoy generous health and pension benefits, AFGE resorts to name-calling,  describing the study as “a shameful piece of propaganda.” Ouch.

AFGE argues that it can be misleading to compare the entire private sector to federal employees because there’s so much diversity across job classifications. True, you need to be careful about the conclusions you draw from an average that lumps physicians in with custodians. Especially if the private sector employs many more unskilled workers than the federal government.

AFGE makes this argument, but you have to get through a lot of angry rhetoric and name calling to get to it. And the Cato authors deal with this objection in the study:

Some people argue that the government has a unique high-end workforce that deserves to be paid handsomely. But you can flip through the federal budget and find mundane bureaus where workers are paid highly for normal bureaucratic jobs. For example, average compensation in the Department of Commerce's Economic Development Administration—an agency that hands out business subsidies—is about $140,000. And average compensation in the Department of Agriculture's Office of Chief Economist is about $174,000. So it is not just rocket scientists that earn high wages and benefits, it is also federal workers in regular white-collar jobs.

The bottom line here is that we’ve got to bust this myth of the underpaid government worker. Yes, we want government employees to be well paid, but compensation should be reasonable. The government does not need to be the highest paid industry in our economy.

The post Cato Study Shows that Federal Employees Make More than Private Sector; Government Unions Furious appeared first on Show-Me Institute.

“We really need above-typical growth to get where we used to be,” Luebbering said.

Unfortunately, Missouri’s growth is far below what is typical. Last week, my colleague, Show-Me Institute Policy Analyst Patrick Ishmael, blogged about how Missouri is lagging behind other states in terms of economic growth. According to the U.S. Commerce Department, Missouri ranked 43rd in economic growth last year. In fact, Missouri grew by just .04 percent. Forget about getting above-typical growth; that is barely any growth.

Missouri can do better. For instance, Missouri can eliminate its corporate income tax to make the state more attractive for business. As taxes go, taxes on corporate income are among the most economically harmful. The corporate income tax only makes up 4 percent of general revenues, yet its removal would have a positive impact on the economy. Eliminating economic development tax credits, which should be done anyway, can offset all of that lost tax money for the state. This change would, in the short term,  be revenue-neutral at worst, but its long-term benefits for our state would be tremendous.

If Missouri wants to get going again, it cannot keep doing what it has been doing. Eliminating the corporate income tax would be a positive step toward increased economic growth and as a side effect, revenues will grow as well.

The post A Smaller And Smaller Piece Of The (Tax) Pie appeared first on Show-Me Institute.

Empty. Definitely empty.

The Commerce Department says Missouri’s economy grew much more slowly last year than the rest of the nation. Department figures rank Missouri 43rd in economic growth last year with an economy that grew by less than one percent. The National average was 1.5 percent. The department studies show almost every sector of the state’s economy grew more slowly than the average or shrank.

New reports today paint a clearer picture of how “less than 1 percent” Missouri’s growth really was .04 percent. Not .4 percent, but .04 percent. For all intents and purposes, that is zero. Throw in Missouri Journal’s report that the state’s new jobless claims increased to the third highest level in the country last month and it is clear Missouri is headed in the wrong direction, at about 80 mph.

Last month, I talked at length about how poorly Missouri has done economically over the last five years, and according to Rich States, Poor States, the state has been stuck around 40th in economic performance for basically the entirety of that period. Not much has changed legislatively in those intervening years to change Missouri’s fate – tax credits are still running amok, income taxes still dominate as sources of revenue, and local “economic development” plans are still off kilter – so the Commerce Department’s findings are not surprising (which is frustrating on its own terms.)

Missouri can do better, and the Show-Me Institute has offered a number of proposals in the last year that would make the state more competitive. Extinguish failing economic development tax credit programs. Eliminate the growth-dampening corporate income tax with the savings gained through tax credit elimination. Fix Tax Increment Financing (TIF). Cut wasteful spending.

It is time for a change.

The post Good News: Missouri Behind Only 42 Other States in Economic Growth Last Year appeared first on Show-Me Institute.

They (filmmakers) spent a lot of money, had about a $50-$60 million dollar economic impact on the St. Louis area.

Hold on — $50–$60 million? Where is he getting this figure? Allow me to crunch some numbers and demonstrate that an impact of this magnitude is unrealistic.

In the comment section of my recent post about film tax credits in Missouri, Econdiva provided an estimate that the producers of Up in the Air spent “just shy of $12 million” in the state. I will grant her estimate for the sake of argument, because she worked on the film and is more likely to know this information.

For an economic multiplier, I’ll reference a fiscal note from Louisiana regarding the estimated economic and fiscal impacts of film and video tax incentives (emphasis added):

[T]he current statewide economic multipliers, supplied by the Bureau of Economic Analysis of the U.S. Department of Commerce, for the motion picture and sound recording industries estimate that each dollar of expenditures in those industries generates about 40¢ of earnings throughout the entire economy (a final demand earnings multiplier of 0.3982).

Using this figure, an expenditure of $12 million for Up in the Air would generate only $4.8 million for Missouri’s economy.

Even if Mayor Slay used the January 2009 prediction of $30 million in the Saint Louis Business Journal, the amount generated for the state’s economy would only be $12 million.

Both numbers fall pretty far short of $50–$60 million. This is just wishful thinking.

The post Mayor Slay Overestimates Economic Impact of Up in the Air appeared first on Show-Me Institute.