Susan Pendergrass speaks with Tim Carney, senior fellow at the American Enterprise Institute, about why American culture may be making it harder to have and raise children. They discuss the long-term consequences of the declining U.S. birth rate, how intensive parenting culture may be driving childhood anxiety, the “travel team trap” and the arms race of youth sports, what cities and communities can do to become more family-friendly, and more.

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Episode Transcript

Susan Pendergrass (00:00): I’m really looking forward to this conversation with Tim Carney. Thank you for joining us. You’re a senior fellow at AEI? I listened to a podcast the other day with a demographer from the University of Pennsylvania, and it was really good. I think they have a pretty strong department. He said that the United States reached peak child in 2012 or 2013, and basically

Tim Carney (00:06): That’s about right.

Susan Pendergrass (00:24): numbers have been going down on babies ever since. We definitely see that in Missouri. That was our biggest kindergarten cohort, and numbers are going down. I have five grandchildren under the age of five, and it seems to me this is going to be the policy conundrum of their generation. What do you think?

Tim Carney (00:44): It is certainly the biggest story of the next thirty years, policy, cultural, economic, everything. Another way of putting it: the number of births in the US peaked in 2007. Those kids born in 2007 either graduated last year or are graduating this week. Colleges know this very well. They’re all bracing for it. What about ten years from now when the workforce starts significantly shrinking?

Susan Pendergrass (01:03): Yeah.

Tim Carney (01:11): What about the towns that are built around a public school, elementary school, middle school, high school, and those start shrinking? Particularly in rural places, they’re seeing consolidation, two different public schools or two different Catholic schools consolidating. Can schools adjust to being small? How much is this a self-reinforcing spiral? When there are fewer kids, people aren’t used to seeing kids around. Yes, absolutely. It’s the biggest story of the next thirty years.

Susan Pendergrass (01:37): In your new book, Family Unfriendly, I think it’s interesting to juxtapose these two things. At the same time, we’re making it so much harder to raise kids in our culture, and we’ve raised the expectations for each and every one of them so high that people who are considering having kids find it daunting. It used to be, when I was young, people had six or seven kids and just hoped for the best. Everyone did okay. But now every child has these insane expectations, and I sympathize. If your child doesn’t roll over by six months old, they need occupational therapy now. That did not used to be the case. Doesn’t that work against it?

Tim Carney (02:12): Yes. A lot of economists have been praising quality over quantity parenting for years. Isabel Sawhill is an economist I’ve worked with for years, but I think she’s dead wrong when she says this is good, that people are choosing fewer kids so they can invest more in each one. That sounds right, but then you realize

Susan Pendergrass (02:33): Okay.

Tim Carney (02:53): the American Pediatrics journal says the number one cause of the epidemic of childhood anxiety we’re facing right now is lack of unsupervised play. So parents who are giving their kids the best of everything, making sure they’re not just wandering around the neighborhood, making sure they’re safe and busy with violin lessons and enrichment activities and a special private pitching coach for softball, that’s supposedly high-quality parenting. But it comes with low-quality results, which is very anxious kids, as well as stressed-out parents. People ask how my wife and I do it with six kids. I like giving answers about the special cool systems I have, but the real answer is a lot of times we just don’t.

Susan Pendergrass (03:41): Yeah. I feel like I’m probably going to say a lot of unpopular opinions on this. I never liked elite sports or travel sports, but I see travel sports going nationwide now. People from Texas are going to Florida, going to California for travel sports, which I always thought was kind of insane because it didn’t work for my family. We would normally have tournaments at Fourth of July and Thanksgiving. I also see kids being absorbed into the adult world more. Craft breweries have children trying to find something to do there, which is not a very normal environment for them. High-end restaurants have little kids in them, and I just feel like that takes away from the time when they’re supposed to just be kids.

Tim Carney (04:28): I actually think mixed-age mingling is something we need more of. Sometimes when I need to get work done, I’ll go to the local craft brewery to get away from my kids, and then somebody else has all their kids there. But those kids aren’t asking me any favors, so I’m fine with it. I think it’s good that we’re building places for parents to bring kids. The way I put it, though, and again

Susan Pendergrass (04:35): Okay. Yeah. That’s right.

Tim Carney (04:58): my local brewpub allows for this, but we need places where parents can bring kids and ignore them. I brought my kids to the brewery on a cold winter day when they couldn’t be outside because it was ten degrees and forty-mile-an-hour winds. I start the book with a story, in contrast to

Susan Pendergrass (05:05): Yeah. Yeah.

Tim Carney (05:27): high-intensity travel sports, of a program that we saw and then emulated in the Catholic parishes when we lived in Maryland, which was called Friday Night on the Field. There was T-ball and coach-pitch baseball, so this was kindergarten, first grade, second graders. Maybe 10 percent of the dads were coaching. The rest of them, if they were there, were hanging out with other dads. And the kids who were older

Susan Pendergrass (05:53): Yeah.

Tim Carney (05:56): were running around or playing wall ball. The kids who were younger were on a playground. When my wife found out what was going on there, she said, you are bringing all six of the kids to this while I stay home and rest. So I brought the kids there. I maybe had a baby in my carrier, ignoring the other four while one of them played T-ball. And that was exactly what suburban parents needed. Not this high-intensity mom and

Susan Pendergrass (06:08): Yeah, sure.

Tim Carney (06:22): child attached at the hip, but the whole family is there, it’s mixed age, and the children have freedom. This is a really important part of it in so many ways. One, that childhood is expansive and not just intensive. Two, that raising kids isn’t this hyper-intensive, constant thing. There was a commercial I cite in the book about Mother’s Day and how we need to honor mothers more. But it goes way overboard. It says they pretend they’re hiring for a job, and the requirements include you’re never allowed to sit down and you don’t get to eat meals until all of your colleagues are out for the evening. Being a mom is exhausting, and there are days where you don’t sit down, but come on. This is just not true.

Susan Pendergrass (07:00): The hardest job in the world. Yeah. I have three kids that are pretty close together. It was rocky there for a while, but I wouldn’t trade it for anything. As a practical matter, how do you change culture? If the prescription is to back off on intensive parenting, it feels more like an arms race where people say, maybe I don’t even agree with it, but if every other kid is going to Kumon Math, my kid has to go to Kumon Math. What do you do?

Tim Carney (07:36): It’s a tragedy of the commons sort of thing. I discuss it particularly in sports. In chapter one I call it the travel team trap. The reason it’s a trap is you get stuck without wanting to. I know lots of people whose kid just wants to play JV baseball, but the coach says they have to play fall baseball too. But I’m a football player. If you’re saying I’ll miss some reps and the other guys might get ahead of me, well

Susan Pendergrass (07:57): Yeah.

Tim Carney (08:05): that’s one thing. But then the coach says you’re shirking if you’re not playing year round. We have sought out schools and programs that explicitly do not do that, but we had to seek them out. It’s harder to be a backup point guard on a varsity basketball team if you’re going to play three sports, so you might get cut from the team. To some extent the parent is just saying, I really just want them to make the team, and that’s why I’m doing this.

With the academics, there’s a similar dynamic. We put our daughter, who was struggling in math, in a remedial program, something like Kumon. When we showed up, we realized, this was in Northern Virginia, specifically McLean, which is a wealthy area. Nobody else there was remedial. Everyone else there was an A student whose parents wanted their third grader

Susan Pendergrass (08:52): I see. Okay.

Tim Carney (09:03): to be at the sixth-grade level so they could get into Thomas Jefferson, the special super-magnet high school.

Susan Pendergrass (09:08): Yeah. If kindergarten is the new second grade and preschool is the new kindergarten, where does it end? I just feel like we’re overwhelming parents. You said it’s raising anxiety in kids. It’s definitely raising anxiety in parents too. It’s making people not want to be parents. It feels very stressful right now. There are books and apps, and there’s even a book on how to be a more free-range parent, which is strange to me. Does somebody need to be told how to do this? You just let them go outside.

Tim Carney (09:46): No, it does take work. And another thing is, to quote what a wise woman once said, it takes a village to raise a child. Being free-range is easier when other people are doing it. We used to back up to a big playground, and nine times out of ten my kids were the only ones there unsupervised. I actually got an email from a neighboring parent. It wasn’t criticism. It was saying your kids are great and it’s great that you let them run free, and asking if I could talk to them about letting their own kids run free. If you’re in a neighborhood where there are kids but they don’t come out, you might have to build organized activities. We didn’t do that growing up. We just played stickball. My mom wouldn’t organize it. We did it on our own. But now parents might have to be more involved. It’s a little bit of labor, but you connect the families, connect the kids, build the trust.

Susan Pendergrass (10:19): Yeah. Yeah.

Tim Carney (10:44): The community, and we talked about policy. I’m in DC. Everybody wants it to be a federal bill, this or that. The fact is it’s a cultural thing, as I said, and the community is going to have to have these organic, or sometimes deliberate and intentional, structures to help parents raise kids. The more parents who are walking around the neighborhood, the safer the neighborhood is. The more parents making it clear that their kids are going out and should come home when the streetlights turn on, the more that’s known, the safer it is. Remember when you and I were young, other people’s parents would correct us when we were wrong? Now, I have close friends I know I can do that with, but a lot of parents say they’re terrified of correcting someone else’s kid because they’ve been screamed at by the other parents. Your kid was

Susan Pendergrass (11:25): Mad at us. Yes.

Tim Carney (11:41): about to shove gravel down the throat of her two-year-old sister at the playground. And that’s my job too, if I’m right there. That social trust and community takes work. There are people who say it takes a village, and they can’t find their village. You have to build your village. I’m one of those conservatives who really believes that.

Susan Pendergrass (11:54): Are we willing to do the work? Do you see people doing it?

Tim Carney (12:09): We’re too individualistic, and that’s part of all of this. But I’m also one who believes the burden is really on you. You can’t wait for somebody else to do it. You build the community, and then you can sit back and bear the fruits of your labor as a neighbor yells at your kid so you don’t have to.

Susan Pendergrass (12:25): You’ve also talked about building family-friendly communities. There’s a conundrum we face in Missouri: no one wants to live in downtown St. Louis. A lot of cities face that, and St. Louis is probably at the forefront. We’re in the top five for cities in decline, and St. Louis and Pittsburgh are going to serve as examples, because

Tim Carney (12:28): Yes. Mm-hmm.

Susan Pendergrass (12:53): we hit that death spiral with more deaths than births a while ago, and all of our demographic trends are going to be out ahead of everyone else. People are going to look to us. But parents don’t want to raise their kids in the city of St. Louis. And if you don’t have children, you just keep getting older. Tell me a little bit about what has happened to make cities unfriendly to families and what they could do to change it.

Tim Carney (13:19): I’m a believer that we need all of the above. I’m very pro-suburbs. That’s where I raised my kids, that’s where I went to high school. But before high school I grew up in Manhattan, and I’m very pro raising kids in cities if you can do it. The number one thing is crime, or crime and disorder. You saw this a lot during the 2020s when people would say, who cares if people are hopping over the turnstile, so what if people are smoking pot, that homeless guy sleeping on the corner isn’t going to do anything. All those little things that adults can, maybe they shouldn’t but can, turn a blind eye to are disturbing to kids and disturbing to parents. Crime and disorder needs to be put in its proper place.

But then also, this is something where liberals tend to be better than conservatives: walkability and public amenities. I don’t mean my ability to walk to work or to my favorite cocktail bar. What I really mean is my ability to walk my baby in a stroller somewhere nice, and my eight-year-old and ten-year-old’s ability to walk together to a cool park, and more importantly to walk together to their friend’s house. Cities can actually do that better than suburbs to some extent, because they can put in those amenities, which are playgrounds, parks, and other things. That means traffic. Cars have to slow down. This is something I’m really studying now at AEI. The federal government has a walkability index, and it’s laughably bad. It’s published by the EPA, so it doesn’t actually show you

Susan Pendergrass (14:45): It’s about car exhaust.

Tim Carney (15:10): whether your kids can walk somewhere without getting run over by a car. We’re trying to see if there’s a way to improve this. That’s part of the built environment. That’s explicitly a government duty. Are the roads too wide? Are the cars too fast? Are there crosswalks? Are there trails? Because once you can let your kids walk around without getting run over by cars and without running into meth heads, their childhood is so much better. And your family life is so much simpler.

Susan Pendergrass (15:41): What about safety? I think it was you mentioning something like setting up safety zones within which families could have some reasonable degree of comfort that police respond and that crime is being attended to.

Tim Carney (15:58): A big part of raising kids, in my view, is you want to give them a sort of walled garden and let them be free in that garden. Every year that garden gets bigger, and at some point you realize the walls are gone and they’re out in the world. For me, this was a back campus at St. Bernadette’s and St. Andrew’s, the parishes where we had these programs. The kids were running free, but unless there was a kid who was going to run into traffic, and there are those kids, and probably some of your viewers and listeners have one who they know is a flight risk, in general they were going to be safe. When I would leave my kids alone in a museum, I tell the story of my son Sean, who three times I’ve totally lost him, but it was always in a botanical garden or a museum or someplace similar,

Susan Pendergrass (16:33): Yeah.

Tim Carney (16:55): where someone would say, hey, who are you with, four-year-old? And then slowly expanding that realm of freedom. You can walk around the neighborhood but can’t cross over Route 50, and then slowly it gets bigger and bigger. Community norms are really what make that possible. That two-year-old shouldn’t be walking down the street alone. That six-year-old is fine.

Susan Pendergrass (16:57): Yeah. Who are you with? But haven’t we kind of ruined that with the twenty-four-hour news cycle where everybody believes their children are at risk of being abducted by a stranger at every moment?

Tim Carney (17:35): Yes, and this is part of the problem I run into. When I say we need to let kids be free to run around like we Gen Xers were, people say it’s so much more dangerous now. It’s not. Statistically, almost the whole country has gotten over the violent crime wave that came with the George Floyd unrest and COVID lockdowns. That caused a spike in all the cities, and every place in the country right now is much, much safer than it was in 1984 when I was six. By a long shot. Every parent’s worst nightmare is their child getting abducted by a stranger. These cases happen, they end up in the news, and so we all think they’re happening all the time and all around us. Evolutionarily, we don’t have a brain that can understand a country of 340 million people.

Susan Pendergrass (18:08): Yeah. Yeah.

Tim Carney (18:32): So if there are three major cases a year and people talk about it for a few weeks, it seems like there’s some kid who got kidnapped half the year. It happens fewer than a hundred times a year. If you see numbers saying children are abducted ten thousand or a hundred thousand times, those are bad situations, but they’re not stranger abductions. In almost every case, the boyfriend goes off with the kid without the mom’s permission, or the grandparents have custody and then the mom comes and takes the kid. These are not good situations, but they’re not a kid who was left alone at a playground and then shoved in the back of a white van.

Susan Pendergrass (19:20): To the extent that we could bring any of that back, and this is where I’m a little pessimistic, I think kids learn decision-making in a way that isn’t being taught now, so that we end up working with people who never made an independent decision in their life. I certainly was out and got hurt and had to figure out: am I hurt enough to go home? Am I hurt enough to keep going?

Tim Carney (19:37): Ask a boss who has hired somebody right out of college recently. Yes.

Susan Pendergrass (19:45): Got a flat tire or whatever, we had to make decisions on the fly. I just don’t think we’re building that type of independence and resilience into our kids, and it’s a loss at the global level.

Tim Carney (19:58): Absolutely. Employers should all really be getting behind what you and I are saying right now, because if they want to hire a kid out of high school or college who can make a decision. I always remember the time I used to mow lawns in high school. Once I showed up at a lawn across town, used his mower, and it just didn’t start.

Susan Pendergrass (20:05): Yes.

Tim Carney (20:21): He was not home. He had a number on the fridge. I called and said, Mr. Zellinger, your mower’s not starting. And he said, good news is I don’t come home until Monday. So you have between now and then to get the lawn mowed, and I’m confident you’ll figure out a way to do it. It wasn’t an assignment. It was a responsibility. The best way to give your kids a responsibility that’s not an assignment they can just beg out of is to let them be free. And all of a sudden they’re like, wait a second.

Susan Pendergrass (20:40): Yes. Right.

Tim Carney (20:51): I need to be there in twenty minutes. How do I make that happen? Or I’m lost, how do I get unlost? And again, the children suffer. It’s not just that they go through life happy and dumb. They end up more anxious because life will inevitably bring them these problems. There is an epidemic of childhood and adolescent anxiety, according to

Susan Pendergrass (20:56): Yeah.

Tim Carney (21:19): HHS, and it’s caused by the fact that kids don’t have enough freedom in childhood.

Susan Pendergrass (21:29): I want to circle back to actionable items. What can we do about it, realistically?

Tim Carney (21:33): On the parental freedom side, there’s not that much the government can do except build better sidewalks, crosswalks, and pathways. Housing reform is interesting here. I’m a big believer in suburbs, but that doesn’t mean they can’t be more dense. One thing that’s really freeing is when you can buy a house in the neighborhood you want to live in,

Susan Pendergrass (22:01): Yeah.

Tim Carney (22:01): because your mom lives there and you have grandma to babysit. That’s a huge predictor. So many people in Washington think everybody needs universal daycare paid for by the government. Most people want mom to work a little less and grandma and grandpa to chip in, with neighbors to fill the gaps. More housing is what enables that to happen. But for the most part, we need more robust community institutions and more robust community connections. And every parent out there has to think: maybe I’m going to be the one who does this. There’s a field across the street from your house. Start a soccer league, bring food, run a grill. This is exactly what we did with T-ball. Throw in some money to pay for it. Buy the burgers at Sam’s Club or Costco and feed everyone. Bring your six-year-old to play soccer. This is not his or her path to a college scholarship. It’s a fun thing for the families to do. But you have to start it. We started it because we saw somebody else had started it. A lot of this is going to be on an individual level. On the policy side of supporting families, there’s a lot of debate about a child tax credit, a baby bonus, universal child care, and requiring employers to give parents parental leave.

Susan Pendergrass (22:58): Yeah. A lot. Leave.

Tim Carney (23:22): I write about that a lot at AEI. AEI scholars disagree about it. In the book, what I argue is we need a child tax credit, and it needs to be a little bigger. A family of eight making a hundred thousand dollars should not be paying the same taxes as a family of two or three making a hundred thousand dollars. That should be reflected in the tax code, because this isn’t just some consumer thing. It’s not like saying, I bought a Tesla, I deserve a tax credit. It’s saying, we’re eight people, we need to eat eight people’s worth of food, and the tax code should reflect that. But on the other programs, forcing employers to offer certain benefits or creating government-run childcare, I don’t think any of that works.

Susan Pendergrass (24:02): I mean, the Nordic countries do all of it and they have population decline.

Tim Carney (24:05): They have worse population decline than we did. There was a slight uptick, and one of the arguments I make is that subsidized childcare is not really a family subsidy, it’s a work subsidy. Notice who’s lobbying for it as these things bubble up. It’s going to be the Chamber of Commerce. I’m fundamentally a family guy. I think we need work. Part of fulfilling our human dignity is doing work. But that doesn’t always have to be paid work. In the book I defend stay-at-home moms and dads. I really think our society should be oriented around families. Now that’s a little heretical these days because, well, what if you choose not to have a family? Fine. There have always been people who chose not to have families. But that doesn’t mean families can’t be the central organizing principle of our culture.

Susan Pendergrass (25:04): More people now are choosing not to have families. And a lot of cities are pursuing those people, the childless professionals with Top Golfs and loft apartments.

Tim Carney (25:10): I quote a local official in Family Unfriendly saying families are a cost and businesses are an asset. Families come in, they pay income taxes and property taxes, but then they require sewage, they require schools, they complain that the playgrounds and the sidewalks are in bad shape. Businesses are mostly revenue. Washington, DC has explicitly said they don’t just want anyone to move in. They want the college-educated 22-to-28-year-old, meaning a person who gets to spend every dime of disposable income in the restaurants and bars and shops in DC. And if you look at the housing being built in Falls Church, right near me, it’s all studio and one bedroom, because that’s what the local government wants: more singletons who go out and spend their money. Sometimes we do things that are really bad for the economy. My wife makes homemade dinner. We almost never go out. A lot of our activity doesn’t involve paying anyone. The kids are just playing wiffle ball. All of that is horrible for the economy.

Susan Pendergrass (26:19): Yeah. Falls Church used to be such a big attraction for young families because of the schools. I’ve seen the shiny buildings going up recently, and I’m shocked by it. That’s interesting to me.

Tim Carney (26:44): I think it’s good to build more housing. But if it helps boomers sell their single-family homes to move into apartments, then it frees up family housing. This is a really complicated thing. We need more housing, but so many of the YIMBYs just want massive apartment buildings with as many apartments as possible, and that’s family unfriendly. What we really need, in my opinion, is slightly more dense suburbs,

Susan Pendergrass (26:54): Yeah. Yeah. Yeah.

Tim Carney (27:14): a starter home that somebody can buy. That’s basically impossible to build, especially in a high-cost area like this, or in the nicer suburbs around St. Louis and Kansas City. You’re not going to build them because of the regulatory overhead. If I build a single-family house and sell it for two hundred thousand dollars, that’s not worth it. I’m either going to build a McMansion or an apartment building.

Susan Pendergrass (27:26): They’re not building them. No. They’re doing the six hundreds. Yeah.

Tim Carney (27:41): Getting rid of a lot of the regulations that make it impossible to build a starter home is one of the best things that states and counties can do.

Susan Pendergrass (27:49): I really appreciate you coming on to talk about it. It’s a thorny issue. Countries that have really tried their best to encourage people to have more children haven’t been successful. This is going to be one of the biggest policy conundrums of the next few decades. The earlier we start talking about it, the better. I’ve been talking about it for at least five years in Missouri. We just had our smallest high school graduating class two years ago. People ask, where did the people go? They didn’t go anywhere. The babies haven’t been born, and we need to get used to it so that we can start thinking about how to solve it. I love a lot of your ideas. We have to think about solutions to this because if it feels overwhelming to have children, then people won’t have them.

Tim Carney (28:41): That’s exactly right.

Susan Pendergrass (28:42): Family Unfriendly. And your other book was Alienated America.

Tim Carney (28:44): Family Unfriendly. And Alienated America, which is about the collapse of community, which is upstream from this problem.

Susan Pendergrass (28:53): Lack of social capital and all of that. I think these are going to be some of the most important issues we can think about going forward. I really appreciate you coming on to talk about it.

Tim Carney (29:00): Thank you, my pleasure.

Produced by Show-Me Opportunity

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These are all relevant questions, and at the Show-Me Institute, we’ve created a resource to answer such questions: MOSchoolRankings.org

As an example of what these data can be used for, Figure 1 shows how Missouri school districts are distributed across different levels of spending per student. It should be noted that these statistics include non-current spending items like interest and capital outlay (such as constructing a new gym, renovations, etc.).

For reference, in the 2023–24 school year, the average expenditure per student was around $19,500. Of that, about $15,900 were current expenditures and $3,600 were non-current expenditures.

Figure 1: Number of School Districts and Charter Schools Grouped By Average Expenditures Per Student, 2024–25

Source: MOSchoolRankings.org

Most Missouri school districts and charter schools spent between $13,000 and $22,000 per student in the 2024–25 school year, but there are numerous outliers in the data, as shown below.

Table 1: Public School Districts and Charter Schools with the Highest and Lowest Average Expenditures Per Student, 2024–25

Source: MOSchoolRankings.org

In Table 1, many of the highest-spending school districts in Missouri are rural, including several extremely small districts, such as Missouri City 56, which enrolls just 14 students. By contrast, many of the lowest-spending districts are also rural, though they tend to be larger and vary more in size.

Missouri’s mean total expenditure per student (weighting each district equally and including non-current expenditures) is $20,406, while the median is $18,934. Even so, there is a surprisingly wide spending range across the state, from roughly $12,000 per student to more than $60,000 per student.

These kinds of statistics are important when evaluating potential changes to the funding formula. To take one small example, Spickard R-II saw enrollment decline from 54 students in 2005–06 to 21 students in 2024–25: a 61% decrease. For state funding, Missouri’s hold-harmless policy guarantees that Spickard R-II receives no less than the state funding it received in 2005–06, even though the district has far fewer students. This likely contributes to why Spickard spent $41,224 per student in 2024–25.

Clear, accessible data are important. And of course, spending is only one aspect of this. MOSchoolRankings.org allows users to go further by comparing districts on academic performance, student demographics, growth, and much more.

The post Which School Districts Spent the Most Per Student? Which Spent the Least? appeared first on Show-Me Institute.

Missouri’s foundation formula for funding school districts is outdated. It allocates too much state aid to some property-rich districts because it relies on outdated information about property values. Because of hold-harmless provisions, it also sends money to some districts for students who aren’t there. Finally, the formula provides additional funding for some categories of high-need students but does so in an unnecessarily complex and arbitrary manner.

The Solution

Revise the Missouri foundation formula to reflect updated property values, phase out outdated hold-harmless provisions responsibly, and provide additional funding to high-need students in a simple and transparent way.

Key Facts

• The formula is designed to equalize funding between property-poor and property-rich districts, but it uses outdated property values to determine local communities’ wealth levels, distorting funding calculations.

• It includes multiple hold-harmless provisions that misallocate resources by providing funding for students who are not enrolled.

• The formula provides additional funding for certain high-need student groups, but does so in a complex and arbitrary manner.

The Formula Is Stuck in the Past

Missouri’s school funding formula is not designed for 2025 and beyond. It was enacted in 2005 and should be updated to reflect the modern context of public education in Missouri. The formula has three central problems.

First, as in other states, the Missouri formula aims to send more funding to poorer areas by adjusting for local revenue capacity. It does this through an expectation of local tax effort from all communities, with the idea being that at similar property tax rates, wealthier areas can raise more revenue locally. The problem is that the Missouri formula determines the expected local effort based on property values as of 2005. Changes in local wealth over the past two decades are not reflected, resulting in distorted estimates of local capacity and misallocated state aid.

Second, the formula has several hold-harmless provisions that have outlived their usefulness. Hold-harmless provisions are typically used to ease the transition from an old formula to a new one, but Missouri’s provisions have been in place for decades. Seventy-five percent of small districts receive the same amount of funding that they received in 2005, rather than the amount calculated by the formula based on actual enrollment today, because the 2005 amount is higher.

Third, while the formula includes extra funding for students with disabilities, low-income students, and English learners, the calculation mechanism is overly complicated. For example, when the number of students from a particular category exceeds a threshold level, the district receives additional funding for every student above the threshold. But if the percentage of students is below the threshold, the district receives no additional funding. A more tractable and modern approach is to simply provide additional funding for each high-need student in the formula.

An additional benefit of modernizing how we provide additional funding for high-need students is that each student’s funding level under the formula will be clearly identified. This will make it easier for state funding to follow students to schools of their choice as Missouri’s school choice landscape improves.

Policy Recommendations

• Draft a new foundation formula based on current student counts and updated local effort measures. The new formula should also include built-in mechanisms for regular updates to property values and student counts.

• Target additional funding to students based on their needs in a simple and transparent way.

The post Education Funding Formula appeared first on Show-Me Institute.

Brief Background of the Endangerment Finding

To oversimplify, the Endangerment Finding declares that a mix of six greenhouse gases pose a threat to public health and welfare, primarily because they contribute to climate change. These six gases are carbon dioxide (CO₂), methane, nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF₆). In the finding, the EPA observed that U.S. motor vehicles and engines emitted four of those greenhouse gases, which collectively amounted to 4.3 percent of global GHG emissions in 2005.

Thus, the agency concluded that vehicle GHG emissions also endanger public health and that “contributors must do their part even if their contributions to the global climate change problem, measured in terms of percentage, are smaller than typically encountered when tackling solely regional or local environmental issues.” Prior to this, the EPA did not regulate greenhouse gases.

As a result, the Endangerment Finding has been crucial for allowing the EPA to regulate vehicle GHG emissions and reduce them, which in part has paved the way for electric vehicles (EVs).

The EPA’s 2025 Proposal and Potential Impacts

The recent proposal to rescind the Endangerment Finding leans on a few key arguments:

(1) The authors of the proposal argue that the EPA exceeded its statutory authority under the Clean Air Act, which was designed to regulate “criteria pollutants” that include nitrogen oxides (NOₓ), sulfur oxides (SOₓ), particulate matter, carbon monoxide, ozone (O₃), and lead (Pb).

These criteria pollutants have direct effects on human health—eye, nose, throat irritation; aggravation of respiratory diseases such as asthma, coughing and difficulty breathing, cardiovascular disease, heart attacks, chest pain, and more. The proposal argues the effects of GHGs on human health through climate change are indirect, and should not be regulated under the same directive.

(2) The authors of the proposal claim that the Endangerment Finding’s measures of harm, such as more frequent heat waves and extreme weather events, have not borne out despite increases in GHG concentrations (driven primarily by increased emissions from foreign sources).

(3) The authors question whether federal mandates regulating vehicle GHG emissions can meaningfully address climate change as they claim there is no existing technology capable of making a “measurable” impact.

One excerpt from the EPA’s proposal conveys the potential impact on the automobile industry, if finalized:

“In connection with the proposed rescission of the Endangerment Finding, if finalized, this action would remove all existing regulations that require new motor vehicle and new motor vehicle engine manufacturers to measure, report, or comply with GHG emission standards . . .

. . . As a result of these proposed changes, motor vehicle and engine manufacturers would no longer have future or current obligations for the measurement, control, or reporting of GHG emissions for any vehicle or engine, including for previously manufactured [model years] MYs. However, we [EPA] are not proposing to reopen or modify any regulations necessary for criteria pollutant and air toxic measurement and standards, Corporate Average Fuel Economy (CAFE) testing, and associated fuel economy labeling requirements.”

In theory, if the finding is rescinded, we could see lower car prices. (However, this is not  guaranteed because car companies have priorities of their own). Repealing the Endangerment Finding, along with the One Big Beautiful Bill’s (OBBB) phase-out of EV tax credits, could bring significant shifts to the transportation sector.

The post The EPA Continues to Review Carbon Emissions Standards appeared first on Show-Me Institute.

Today, many Missourians receive electricity from state-approved monopoly utilities, which own and manage the generation, transmission, and distribution of electricity for their customers within exclusive service territories. Transitioning to a retail competition system would shift the ownership of generation from state-approved monopolies to private entities competing to sell power, while transmission and distribution would remain under utility control.

Responding to Change

The energy sector is in a state of flux, with several critical uncertainties lingering:

• How accurate are current energy demand forecasts?
• Will technological advancements from artificial intelligence significantly reduce energy consumption, and if so, how soon?
• What is the trajectory of electric vehicle adoption?
• How will the Trump administration’s regulatory reforms, such as recent changes at the Environment Protection Agency (EPA), impact the coal industry?
• Will the Nuclear Regulatory Commission (NRC) enact needed reform?

These unknowns highlight the challenges of relying on a regulated monopoly model, where long-term infrastructure planning is guided by government oversight rather than market signals. Competitive markets, on the other hand, offer greater adaptability. For example, the rise of hydraulic fracturing led to significantly lower natural gas prices over the last decade. Customers in competitive markets experienced the benefits of low gas prices sooner than customers in monopoly markets did.

Additionally, in a competitive market, private suppliers, not ratepayers, bear more financial risk of failed energy investments. If there is a significant cost overrun or if a project fails to come online, customers have less exposure as they can switch to another supplier or remain insulated through competitively priced default service (if they do not select a supplier).

Further Considerations

Despite the benefits of retail competition at the state level, other free-market reforms are needed. Energy regulation is complex, with overlapping layers of subsidies, taxes, and federal mandates distorting market forces. A truly free and competitive energy market would require broader regulatory reforms at the federal level to ensure private developers can better respond to market demand.

Another key consideration is the role of incumbent utilities in a competitive system. House Bill 417 requires utilities to divest their generation assets before retail choice begins, but it grants them discretion in how they do so. Utilities like Ameren could choose to sell their power plants to unaffiliated private developers or transfer them to a newly formed competitive affiliate, as long as the transaction occurs at fair market value and receives commission. As Missouri considers this transition, it will be important to define the appropriate role of former monopolies in a newly competitive market.

Retail competition is not a silver bullet, but it could introduce market forces to a historically insulated energy sector. Missouri policymakers ought to consider how implementing retail competition might work, and what potential barriers exist at both the state and federal levels.

The post Retail Competition in the Energy Market appeared first on Show-Me Institute.

There are two different questions on the ballot. One is whether to issue $750 million in bonds for sewer system improvements. The other is whether or not to increase property taxes on residential property and approve a charge on commercial properties based on the amount of impervious area a property has—for example, how much of the land is a parking lot.

MSD is going to spend the money. It has to according to a lawsuit settlement with the EPA from years ago. If the bonds are approved, monthly prices for property owners will go up less rapidly in the short term, but more in the long run as the cost of bond financing will be added to the total cost. If the bonds are rejected, monthly prices will go up dramatically in the short run but will come down somewhat over time. The total cost will be lower due to no bond financing charges, but the immediate sticker shock will be substantial.

The impervious area charge for commercial property is the most interesting change. MSD tried to do something similar several years ago for more types of properties, but had to change after fierce resistance and lawsuits. I think basing part of your stormwater charges on how much of your property is grass and how much is asphalt (or other substances) is a great idea. Properties with more impervious areas like asphalt or concrete absorb less stormwater and create more stress on the overall stormwater management system. In a sense, this is a user fee. I would like to see MSD do that, in part, for residential property too.

The most troubling part of the proposal is how MSD intends to spend the money if the tax increase and impervious land fee are approved. Instead of spending the revenues based entirely on need, ten percent of the money will be used to create an “environmental justice fund.” It seems fair to wonder if money in an “environmental justice fund” will be spent based on engineering and science instead of social justice priorities. The justice fund is enough to make me hope the whole proposal fails. Another ten percent of the money will be spent based on decisions from a “regional advisory committee.”  Given that these sorts of committees are often based on political power and influence trading instead of engineering needs, you could wonder if this is another example of other priorities superseding engineering needs.

As Homer wrote and The Police sang, voters’ choices here are caught between Scylla and Charybdis. Sewer and stormwater rates are increasing no matter what. The vote feels like you are voting for General Secretary of the Politburo and there is only one choice on the ballot. Either way, your best hope is that the new pick dies quickly.

The post Caught Between a Rock and a Wet Place appeared first on Show-Me Institute.

Well, buried at the end of an uneventful year for U.S. Supreme Court Rulings is a little case called West Virginia v. EPA. In 2015, the Environmental Protection Agency (EPA) under the Obama administration wanted to comprehensively regulate “greenhouse gases” at American power plants under the Clean Air Act, so it adopted what it called the “Clean Power Plan rule.” The rule put pressure on dirtier coal power plants to shutter and promoted alternative energy plants. The problem with that is the Clean Air Act had only ever been used to enable the regulation and oversight of individual power-generating facilities; Congress had not authorized the EPA to unilaterally reorganize all power-generating capacity of the United States at the grid level.

After seven years of legislative wrangling, constant litigation, and a couple of presidential administrations, the Supreme Court affirmed that the EPA had indeed exceeded its mandate under the Clean Air Act. The court found that when a “major question” like nationwide energy generation is to be decided, Congress must render its decision directly or clearly authorize an agency to act on its behalf, consistent with the law. Here, Congress had not spoken directly or made such a clear delegation to the EPA to give it such expansive powers, and because it had not, the EPA’s dramatic rulemaking was invalid.

To be clear, the court’s ruling doesn’t suggest that the federal government can’t regulate “greenhouse gases,” but it does make clear that if the federal government is going to regulate them, Congress needs to clearly authorize it. That’s a win for small and accountable government; this ruling preserves the constitutional norms of our republican form of government. Each of the three branches is constrained by the Constitution; new laws must be passed through Congress, not by bureaucratic fiat.

How do you stop out-of-control regulations like this? Ideally, by requiring some form of legislative action for them to continue. Regulatory reform is a dense and oftentimes boring policy area, but if I were to suggest one change consistent with state and federal constitutional divisions of power, I think it’d be appropriate for every regulation enacted by an agency to come with a sunset date. The sunset provision would wipe the regulation clean if not adopted and passed into law by Congress or a legislature. That way, every regulation would eventually have to get an up or down vote by the people’s representatives, or else disappear.

Regardless, the Supreme Court’s finding in West Virginia is an important one that hopefully will remind lawmakers that they alone should be making “the law”—and that they can, and should, be held accountable for both the laws they pass directly and any regulations that descend from the statutes they enact.

The post Supreme Court Reins in Federal Bureaucracy in EPA Case appeared first on Show-Me Institute.

The usual problems with water in St. Joseph, Missouri relate to having too much of it all at once. But properly getting rid of the water you have used—through your sewer system—is also a complex issue. More stringent water quality requirements from state and federal regulators have made it more difficult for many municipal utilities to operate. Often, they simply do not have the resources to meet the higher water-quality and sewage-control standards. Even large cities have had trouble dealing with revised Environmental Protection Agency (EPA) sewage guidelines. For instance, Kansas City reached an agreement with the EPA in 2010 to upgrade its sewer system at a cost of $2.5 billion over 25 years, and cities like Kansas City have more resources to deal with sewer infrastructure than communities like St. Joseph.

Sewer rates in St. Joseph are already a matter of complaint. A June 2019 article in the News-Press detailed concerns among the area’s business community that high municipal sewer rates were harming the region’s economic environment. Whatever the price, St. Joseph’s sewer issues aren’t going away anytime soon. The city reached an agreement with the EPA to improve the sewer system years ago. During the Trump administration, the EPA gave St. Joseph additional time and flexibility to complete those required system improvements. Under that revised agreement, the city will be upgrading the system until at least 2036, and during that period will continue to periodically release untreated sewage into the Missouri River during major storm events. While the agreement and time extension with the EPA may be justified, the fact is that St. Joseph has another option to consider: privatization. Water in St. Joseph has long been provided by private utilities, and the city should once again—as it has previously—carefully consider privatizing its sewer system.

Indianapolis outsourced its sewer systems to private operators in 1994, and the cost savings were even greater than had been estimated. The city saved $72 million over the first five years of the contract, and those savings allowed the region to invest in major repairs to its aging sewer system. On a smaller scale, communities across Missouri have realized that the best thing for their residents is to privatize their water and sewer systems. Within just the past two years, voters in Bolivar, Eureka, Taos, Trimble, Purcell, Hallsville, and Garden City have approved privatization of their municipal water and/or sewer systems to either Missouri-American Water or Liberty Utilities. Those communities—mostly small towns spread around the state—realized that maintaining these systems was going to be an enormous burden on city governments not properly equipped to manage them. Privatizing them—for amounts ranging from $200,000 to $28 million—was a way for each city to guarantee proper operation of their water and sewer services by a regulated, privately-operated utility. The cities can use (and have used) the money to pay down debts, invest in other municipal needs, or do whatever the city wants to prioritize.

Arnold, Missouri, is probably the best guide for St. Joseph. Arnold, a suburb of St. Louis with approximately 21,000 residents, was having trouble keeping up its sewer system as it grew in population. In 2015, city voters approved a plan to sell its sewer system to Missouri-American Water for $13.2 million. Since that sale, Missouri-American has completed several promised system upgrades, while Arnold used the money to pay down municipal debt and expand its park system. As a larger city than Arnold, St. Joseph could expect substantially more money in any privatization effort.

Private utilities in Missouri are regulated. Just as Missouri-American Water cannot raise water rates in St. Joseph without approval from the public service commission, no private company could take over the sewers and raise rates further without going through the same approval process. The fact is that running a sewer system under current rules and regulations is expensive and beyond the capacity of many communities. However, it is well within the capacity of larger, private utilities like Missouri-American Water, Veolia, and Liberty Utilities. As the Indianapolis public works director said about the private contractors they hired to operate the sewer system, “It’s just a different league. These guys have resources our guys could only dream of.”

St. Joseph should take advantage of that expertise and seek bids from several private utilities to either outsource the management and operations of their sewer system or—better yet—purchase and operate it. That is the best way that city officials can address the sewer system needs of St. Joseph for the benefit of everyone in the community.

The post St. Joseph Should Privatize Its Sewer System appeared first on Show-Me Institute.

Missouri American Water, naturally, is supportive of the plan and is confident it can deliver the same services to Peculiar residents they receive now and at a lower rate. A webpage in support of the proposal shows the recent rates in Peculiar compared to other American Water customers across Missouri, including Kansas City neighbors Platte County, Lawson, and St. Joseph. (Incidentally, the Environmental Protection Agency (EPA) claims, “the average American family uses more than 300 gallons of water per day at home” or around  9,000 gallons per month.) 

At a time of increasing water rates in Kansas City, it might be worth considering such a deal here. Kansas Citians already look to private—albeit heavily regulated—companies for their electrical power and natural gas. Why not water too? And if such a sale here would include an upfront payment to the city as well as potentially improved management and lower rates over the long run, city leaders have a responsibility to consider the offer.

All of this hinges on a serious and substantive audit of the Water Department, as Kansas City Mayor Quinton Lucas has called for previously. That is a necessary first step so that taxpayers and any interested buyers know exactly what is at stake. Even without a looming financial crisis, Kansas Citians should be looking to shed costly burdens that can be better and more cheaply provided by others.

The post A Peculiar Solution for Ever-Increasing Water Rates appeared first on Show-Me Institute.

A 2017 KCPT documentary detailed the effect of the increases in water rates—240 percent since 2000—on many Kansas Citians, and the apparent inability—or unwillingness—of local leadership to do anything about it. All of this is due to a settlement with the EPA, which cited Kansas City for multiple violations of the Clean Water Act and forced the city to agree to extensive upgrades to its water and sewer system.

Taking the violations and the need to address them at face value, it is still fair to ask what is going on with the water department. How is it spending its money and are there opportunities to be more efficient? Here there might be an opportunity. In its 2019 endorsement of Quinton Lucas’s mayoral effort, The Kansas City Star editorial board quoted Lucas as saying at a prior candidate debate, “I’m not just open to a conversation on a state audit; I think we need a state audit of the water department.” This is welcome, especially since the previous mayor denied requests by the Missouri State Auditor to conduct an audit of the water department.

It may very well be that the city-run water department is a model of efficiency and that these frequent increases are necessary. If that is the case, there may be other opportunities to address rising costs in a way that does not so burden those among us who are at the most risk of losing service. Mayor Lucas, the city council, and indeed those at the water department should all welcome an audit, be it by the Missouri State Auditor, a private and completely independent firm, or both.

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With Super Sunday just around corner, we will cite the Apple commercial that introduced the Apple Macintosh personal computer in January 1984. It had the punch line: “You’ll see why 1984 won’t be like Nineteen Eighty-Four.”

That was an allusion to the dystopian future described in George Orwell’s book, 1984. The ad opens with a lone woman on the run. She bursts into an auditorium, where Big Brother—speaking not in person, but from a towering television screen—is haranguing a frightened mass of people. Then, spinning like a top, she hurls a sledgehammer at the figure on the screen. It flies high and right. Big Brother is silenced. The voice-over followed.

In this 60-second spot that aired during Super Bowl XVIII, the first Macintosh ad captured the one thing that an all-powerful or monolithic state cannot easily afford to tolerate. That is, any real expression of individual freedom and initiative.

We believe that is a timely message not just on the eve of another Super Bowl, but still more in the context of the current debate over economic and public policies.

Following a long period of stagnation, the U.S. economy has come roaring back to life. We now have full employment, a booming stock market, and rising wages for most workers, including the lowest paid.

How did that happen? Fast answer: Over the past three years, the free market became a whole lot freer.

In its first year in office, the current administration delivered on its promise of sweeping regulatory relief. Suddenly, the regulatory state, which had expanded by leaps and bounds during the previous administration, began to contract . . . and that has continued, as a result of major changes in policy and direction at the Environmental Protection Agency, the Labor Department, the Department of Health and Human Services, and other arms of government.

Then came the biggest tax cuts and tax reforms since the Reagan era. With the passage of the Tax Cuts and Jobs Act of 2017, the administration lowered income taxes across the board and left more money in the pockets of individuals and business entities alike.

So, we are now living in the best of times economically. How could anyone argue otherwise? But they can—and are. Never mind what the numbers say.

Among leaders on the Left, there is a broad consensus that we are living not in the best of times, but in the most desperate of times—almost as if we were back in the early years of the Great Depression, when industrial production plunged, unemployment soared, and more than a quarter of the population was without any income at all.

In the badly mistaken belief that capitalism and free enterprise have run amok, they are promoting economic policies and ideas that are diametrically opposed to those that got us where we are today.

With little disagreement between them, these same leaders want free college, free health care for all, universal child care, and the banning of fossil fuels as part of a many-splendored Green New Deal—and they don’t appear to care what anything costs or what the adverse impact may be on ordinary people.

Apart from the astronomically high price tags associated with all of these programs—which would quickly bring the economy to a shuddering halt if any serious attempt were made to implement them—it is worth thinking about the underlying message that the leaders who are espousing this great agglomeration of multi-trillion-dollar programs want to send to the American people.

The real take-away message comes down to this:

·         “If you or any of your children want to go to college, don’t worry about being able to afford the college tuition. We’ll take care of the problem for you.”

·         “If you’re worried about health care, don’t think you have to buy health insurance or do anything else. We’ll take care of you.”

·         “Got young children at home and want to go to work? We’ll take care of the kids, too.”

If all that sounds too good to be true, it’s because it is too good to be true. Someone has to pay for college tuition—and all the other freebies—and that can only mean higher taxes on working people at all levels of income.

As George Orwell, the author of 1984, understood very well, a free people who stop taking care of themselves and rely on the state to do everything for them make a very bad bargain. It is one of the insights you find on almost every page of his book.

When people cease to make their own plans—and trust government to make decisions for them in more and more areas of their lives—they commit the error of failing to make full use of their capacities as individual human beings. In failing to make the most of their own gifts and talents, and their own dreams and aspirations, they sell themselves short . . . and lead less-fulfilling lives.

How prophetic was Orwell’s book? Not that this was the author’s intention, but how well did the book foretell the future of socialism in his native country—this being Britain in the first few years after World War II?

The British elections in mid-1945 marked a major turning point—not only sweeping Winston Churchill and a Tory-led government out of office, but also standing as an unquestioned affirmation of the desire of most of the British electorate to bring a new government to power that was fully committed to socialism.

So how did things work out in Britain during the three and a half decades when socialism, as opposed to free-market capitalism, was the prevailing mode of government—a period lasting from 1945 to 1979, when Margaret Thatcher came to power?

Socialist Britain did not become a police state. But it did undergo a metamorphosis. It changed from a powerful and dynamic country into the perennial “sick man of Europe,” reeling from one financial crisis to another in a sustained period of economic stagnation and decline. It became a country obsessed with issues of job security and income redistribution as different groups competed with one another in trying to wring more favors out of an increasingly improvident state. There was little or no new business formation—none of the spark provided by people like Steve Jobs and products like the first Macintosh computer.

Even the Labor Party could see the futility of its centralized, interventionist approach. Jim Callaghan, the last Labor prime minister before Thatcher, admitted in Parliament: “Let me say that of course there has been a fall in peoples’ standard of life. It has fallen this year and will fall again next year.”

Fortunately, Thatcher supplied the leadership that was necessary to pull Britain out of the decades-long decline that began with the wrong turn that it took at the end of World War II.

Is there any possibility that we as a country could make the same mistake that Britain made in 1945?

The danger is there. It is time to throw another hammer—or sledge-hammer—into the works of another historic wrong turn—this time involving the United States.

This does not require heroic action on the part of a solitary individual. But it does require a willingness on the part of many people to play the same kind of role within their own group of friends and relatives that Thatcher played in Britain—in stressing the paramount importance of individual freedom and initiative in securing the future we want for ourselves and future generations.

The post Is There a 1984 in Our Future? A Super Bowl Reflection appeared first on Show-Me Institute.

It should be noted that members of the City Council did not appear to be welcoming of public input since the very beginning. Recall that back in late 2011, then-City Councilman Ed Ford said that Kansas City was going to get a new terminal regardless of what voters think. Then, after calling it a “wasted effort,” Mayor James and the City Council yielded to a petition requiring a public vote on the airport regardless of funding. More recently, Mayor James sought non-disclosure agreements from other Council members to avoid information becoming public.

Former Aviation Director Mark VanLoh has accepted much of the blame for the new terminal mess. As the Star’s Steve Vockrodt wrote, he simply did not know about Missouri’s requirement that a vote be held in order for airport bonds to be issued. Recall too, that:

• While developing plans for a new single terminal, the Aviation Department  did not consult with the airlines.
• The new terminal campaign was so disorganized that former Star editorialist Yael Abouhalkah called for VanLoh to be removed, writing that he did not “have the public credibility to lead on this extremely crucial project.” It was more than two years before VanLoh was finally forced out.
•  A year before being replaced, VanLoh made a startling admission to a northland chamber of commerce, saying he just wanted a new terminal regardless of facts.

During all of this, Mayor James appointed an Airport Terminal Advisory Group (ATAG) which itself became a source of mistrust and unnecessary secrecy:

• In appointing the co-chairmen, Mayor James made it clear the conclusion he wanted them to reach, saying that anyone who opposed a new terminal was “uninformed.” [July 9 Kansas City Star, story taken down.]
•  Many of the members of the advisory group had contracts with the city, and at least one may have had a conflict of interest in that she worked for the Aviation Department director.
• The advisory group began its series of meetings by removing skeptics at the very moment its leaders were saying the meetings were open to the public.
• In presentations to the advisory committee, the Aviation Department appeared to be inflating repair costs. The estimated costs of building a new terminal were all over the place.
• Despite shifting cost claims, the advisory group appeared uninterested in engaging with anyone skeptical of the Aviation Department’s information regarding the necessity and cost of a new terminal.
• Advisory group members and even Mayor Sly James asserted incorrectly that Kansas City may not use airport funds for city purposes.
• Advisory group leaders secretly met with the Aviation Department’s public relations team.
• Shockingly, one of the co-chairmen of the advisory group—who led an accounting firm in Kansas City—said, “any dollar amount placed on any alternative is almost pretty random.”
• After suggesting they may not make a recommendation because, “the group didn’t have enough information,” advisory group leaders reversed course and indicated they would make a recommendation anyway.
• The advisory committee recommended a new terminal, subject to cost—only after a renovation of the existing terminals was removed as an option.

In addition, many of the arguments used to support the need for a new terminal just collapsed under examination,

• Despite initial claims made by the Aviation Department, there were no EPA or energy needs for a new terminal. In fact, the initial claim about the EPA was bogus.
• Likewise, security concerns about the existing terminals were overhyped. More recent claims that KCI has a long security wait proved to be just as baseless.
• VanLoh once asserted that “KCI now has more airport screeners than all three New York airports combined.” That statement was clearly and unambiguously untrue.
• Suggestions that the airlines won’t expand services with the current configuration have been shown to be unfounded. During the debate over a new terminal, new airlines have come to the airport and existing airlines have expanded service.
• We were told the airlines agreed to pay for a new terminal. This claim was never true and thankfully has been abandoned.
• Despite being strapped for cash, it was even suggested that Kansas may build an airport if Kansas City does not.
• Advocates for a new terminal still claim that if we build a new terminal we will get more traffic, more direct flights to Europe, and new business in Kansas City. They even say we cannot win a bid for Amazon without a new single terminal. This is all speculative, and none of it is founded in any commitments from businesses or airlines.
• In the last few months, we were told that a secretive, no-bid deal was the best option for a new terminal in Kansas City. This was demonstrably untrue, as the Council chose a different vendor once other bids were considered.

Throughout this debate, the conversation shifted from whether or not we need a new terminal to who was going to pay for it, and then again to who was going to build it. We’ve never satisfactorily answered the initial question, which is probably why voters remain skeptical.

Process is important in public policy, and while the Star editorial board and others may be relieved that Kansas City finally has a vendor and we’re cleared for a November vote, ultimately it appears voters are left choosing fruit from a poisoned tree. While it may be true that this proposal is better than what City leaders originally advocated, that is not saying much. We can only guess what other companies would have bid on the project if the bidding process had not appeared to be fixed, if the project did not require private financing, or if the project had not been limited to a single terminal rather than a mere renovation. To advocate for this plan simply because the process is over amounts to letting policymakers off the hook for years of bad behavior. Kansas City deserves much, much better. 

The post A Linked Summary of the KCI Terminal Saga appeared first on Show-Me Institute.

Could the airport just be a legacy project? Two years ago, then–Aviation Department Director Mark VanLoh made it seem that way when he told the Northland Regional Chamber of Commerce, “You don’t have [all the information] yet. We don’t even have it yet. I know what I want because I want a new airport.” He just wanted it.

VanLoh is gone, but the strange enthusiasm for a single terminal continues. The new plan is just as over-the-top as the old one. The justifications for the spending come and go—claims of EPA mandates, TSA concerns, and airlines’ refusal to expand services—but the project itself remains the same: a $1.2-billion single terminal that is actually a downsizing of what we have now.

What is new in this round of the discussion is the financing and no-bid contracting. But regardless of who finances and builds the airport, the risk to Kansas City comes from the possibility of increased fees to airlines and passengers. Right now, Kansas City’s airport is very cheap for airlines, and travelers benefit with lots of flights from here. Increase the costs to airlines, and we risk losing that competitive advantage. Other airports have suffered after building new terminals for just that reason (Consider Cincinnati, Sacramento, or San Jose.).

The good news is that the city is no longer claiming that the airlines agreed to finance the project. This was never the case, despite incorrect claims from the Kansas City Star and the Kansas City Business Journal. In truth, the airlines merely agreed to pay higher rent for a new terminal while reserving their right to renegotiate once the terminal is built. They did not issue or back any debt; they accepted no risk.

Proponents of a new terminal are fond of telling us that the new terminal idea is not a Taj Mahal. In fact, they’ve been using that curious term over and over again for years (see the Google search here). The Taj Mahal, of course, is a 400-year-old elaborate mausoleum in India built to house an emperor’s wife. Such determination to settle for nothing less than a new terminal, however, combined with the candor of Mark VanLoh and the out-of-hand dismissal of cheaper alternatives, suggests that this is exactly what the new terminal is: a modern monument to political ego—not what is best for Kansas City.

The post Kansas City’s Airport: A Monument to Political Ego appeared first on Show-Me Institute.

The fact that Saint Louis must make such costly repairs to its sewer system is the result of decades of putting capital improvements off into the future. Many of the pipes in Saint Louis City and County have long needed replacement, creating a safety hazard. For example, in 2014, a city street collapsed under the weight of fire truck due to aging sewer pipes. The region has been unwilling to raise water or sewer fees to the necessary level to make needed repairs, and too often there has been resistance to implementing pricing practices to better align the use of sewer services with what properties pay. For instance, MSD does not require water metering, and the region has been unable to implement an impervious surface tax.

While MSD’s policies may be questionable, the department must go forward with costly sewer upgrades, much of which is EPA mandated. Some critics of Proposition Y argue that Saint Louis should simply pay all the costs up front, instead of allowing MSD to take out bonds to make improvements. This, they argue, would eliminate any future financing costs. MSD claims that a pay-as-you-go model would require significant up-front sewer fee increases, while bonding would allow rates to slowly go up over time. That would allow those on a tight budget to adjust to the increased property taxes. In addition, interest rates are now at historic lows, meaning the cost of borrowing is at a minimum.

Whatever way residents vote on April 5, the region is going to pay more in return for long-overdue sewer upgrades.            

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According to a report issued by MDNR, upgrading the state’s wastewater treatment plants to meet strict federal standards will cost between $430 million on the low end and $1.2 billion on the high end. However, most municipalities did not set high enough utility fees to cover the cost of regular improvement projects when regulation was more lenient. With the cost of needed upgrades now looming, localities will be forced to find more funds, which means wastewater utility rates, or other forms of local taxation, are likely to increase statewide in the near future.

Conforming to higher water quality standards in the most economical manner possible has pushed many municipalities across the nation and in Missouri to privatize their water utilities. Cities usually receive an upfront payment for leasing these systems, and while the private owners often raise rates, the increase is usually less than what the public utilities planned to do absent of privatization.

The city of Arnold in Jefferson County is considering just such a privatization plan partially in response to these types of costs. We have written before how this deal can benefit Arnold financially, and should it succeed, the privatization plan could become a model for other municipalities as they decide how to deal with increasing regulatory burdens for water treatment.

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Believe it or not, the same may be said of the sewers serving the 20,000-plus residents of Arnold, Missouri, located on the southern edge of the Saint Louis Metropolitan Area at the confluence of the Meramec and Mississippi rivers.

Missouri American Water has offered to purchase the Arnold sewer system for a total of $13.2 million. This is a win-win proposition for the city and its residents.

The deal not only would provide Arnold with the funds to pay off $8 million in sewer bonds, but it also would supply $5 million in additional revenue. At the same time, the arrangement with Missouri American Water would guarantee timely improvements to the sewer system and lower utility costs for residents.

Arnold currently operates its sewer system as a public utility and charges residents $24.33 per month for up to 5,000 gallons of wastewater. However, like many municipalities around the country, Arnold is not charging residents what it needs to keep the system up to date, especially with increasingly stringent EPA and Clean Water Act requirements coming into force. According to one report, by 2016 the city would need to charge $34.50 per month to provide the same services.

Facing very similar pressures, cities across the country have turned to partial or full privatization of their water and wastewater systems. Deals with private companies typically result in an upfront payment to the city, a commitment by the company to make investments in the water or sewer system, agreement on pricing, and often a stipulation that the private company must retain the existing utility staff. The vast majority of these privatizations have been successful, with more than 90 percent of cities renewing privatization contracts and 94 percent recommending privatization as a method of water and sewer system management.

To cite one example, the city of Florissant in Saint Louis County sold its municipal water utility to Missouri American Water for $14.5 million in 2002. The city spent part of the proceeds on immediate needs and put the rest in a reserve fund. More than a decade later, the privatization is still a success. The lesson from Florissant and other cities is clear: When governments set the standards and carefully manage the privatization process, private operators deliver better, cost-effective service.

If Arnold accepts the deal with Missouri American, it will reap other benefits as well. Public services, like the school district, will benefit from this proposal via the expansion of the property tax base when the assets of the sewer system go on the tax rolls after Missouri American takes control. Residents will benefit from low utility fees, as Missouri American Water has stated that they will not increase rates until 2016. Even after that date, they project they will only charge residents $30 a month, which is less than what the city is likely to charge absent privatization.

While privatization of the sewer system makes sense, Arnold must be cautious on how it crafts and implements a final deal. The city must hold Missouri American Water accountable for the quality of service and the implementation of agreed-upon improvements. Furthermore, Arnold would be wise to follow the example of Florissant by carefully spending its windfall profits.

As long as local officials perform their due diligence, Arnold has much to gain and little to lose from privatizing its sewer system. Come November, residents should not let this opportunity slip down the drain.

The post Arnold Wastewater Privatization: Don’t Waste the Opportunity appeared first on Show-Me Institute.

On Monday, Mayor Sly James said the work being performed by Kansas City’s Parson & Associates LLC and Scott Hall & Associates will help the city fulfill a federal requirement to incorporate an environmental assessment into the expansion routes so the city is eligible to receive federal funding.

“If this assessment is not completed, then the city will have no opportunity to receive federal funding,” James said in the statement.

The effort is the subject of an ethics complaint that opponents to the streetcar sales and property taxes have filed, claiming it is electioneering. Alonzo followed up with the federal agency awarding the grants and found there is no such requirement.

No federal mandate requires Kansas City or its contractors to hold door-to-door meetings before part of the city votes on a proposed extension of the streetcar project, according to the Federal Transit Administration.

This is not the first time the mayor and Kansas City officials have been caught trying to blame federal regulators for forcing the city to adopt questionable policies. Steve Vockrodt, at The Pitch, just penned a piece pointing out that the EPA has never cited the Kansas City airport for environmental shortcomings:

City officials distributed a fact sheet in April 2013 that said KCI couldn’t meet U.S. Environmental Protection Agency guidelines for capturing de-icing runoff.

“The current terminal infrastructure does not allow the airport to meet the EPA’s new standards for capturing deicing fluids, which require capturing about 30 percent of the run-off,” the fact sheet reads. “The new single terminal will capture nearly 100 percent of the runoff and resolve Environmental Protection Agency issues the airport is currently facing.”

But there is no such EPA guideline.

Two EPA officials contacted by The Pitch could not identify any published guidelines that call for the capture of 30 percent of de-icing fluids.

And let us not forget the recently ended bid for the GOP convention, in which Mayor James argued that it was necessary to spend hundreds of thousands of dollars, in secret, just to keep up.

The Show-Me State’s Harry Truman once famously quipped, “The buck stops here.” But in Kansas City, Mayor James and Kansas City government officials point the finger elsewhere and the bucks don’t stop at all.

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The current terminal infrastructure does not allow the airport to meet the EPA’s new standards for capturing deicing fluids, which require capturing about 30% of run-off. The new single terminal will capture nearly 100% of the run-off and resolve Environmental Protection Agency (EPA) issues the airport is currently facing. The single terminal will also require less [sic] bus trips to and from the consolidated rental car facilities than the current three terminals significantly reducing carbon emissions.

This is misleading, as it suggests that MCI is under some sort of EPA requirement to improve its ability to capture deicing fluids. The EPA is fine with how MCI performs this task now. While MCI could do a better job of collecting these fluids, the EPA allows for several much cheaper ways to do it than the one method called for in the proposed $1.2 billion new terminal plan.

For example, MCI could attempt either greater efficiency in use of deicing or greater collection of runoff. Ways of reducing runoff include using highly concentrated type IV fluids, anti-icing fluids before inclement weather, hot-air deicing, and infrared deicing. As for capturing more runoff, the EPA considers using collection trucks, improvements in drainage systems, and mobile deicing pads as viable options. These options are certainly cheaper than building a new terminal, aprons, roadways, and parking structures.

The airport’s fact-checking goes on to include:

The new single terminal, built as a replacement facility on the reclaimed Terminal A site, will be built to LEED standards. The  New Terminal’s enhanced daylighting concepts , thermally designed building envelope, and new high-efficiency systems will maximize energy performance to achieve sustainability goals.

Yet we learned from a recent study of LEED-certified buildings in Washington, D.C., that the rating is apparently meaningless (emphasis added):

The free-market group analyzed the first round of energy usage data released by city officials Friday and found that large, privately-owned buildings that received the green energy certification Leadership in Energy Design (LEED) actually use more energy than buildings that didn’t receive this green stamp of approval.

The Show-Me Institute has argued that it is unlikely that a new terminal will increase revenue or provide sufficient savings to make it a viable alternative. Now we know there is no environmental or energy necessity for it either.

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If you like paying more for your water, wait until you learn about what the EPA wants to do to energy costs. According to the Associated Industries of Missouri, the impact of new regulations on coal “will require the reduction of emissions of toxic air pollutants from power plants in the U.S. The cost, estimated by the EPA, is expected to be $9.6 billion in 2015, and nearly that amount in 2016 and beyond.” For those of us in Kansas City, the news is especially bad [emphasis added]:

The EPA estimates rates will rise by an average of 3.1% nationally as a result of this rule alone.  Because Missouri generates a major portion of its electricity from plants that will be affected by the rule, the impact to your rates are estimated to rise by 6.3% in the far western part of Missouri, 2.8% in Eastern and Central Missouri, and 3.1% in Southeast Missouri.

The city is already struggling to pay the hundreds of millions of dollars  for the construction of a streetcar system that was adopted with a vote of about 300 people.  Now we learn that once built, thanks to the EPA, the costs of operating it are apparently going to be about 6 percent higher.

The EPA is conducting “Clean Air Act listening sessions” across the country, and one of them is scheduled for Nov. 4 just across the border in Lenexa, Kan. In order to attend and tell them what you think, you have to register in advance (no surprise there). Proponents of the streetcar are already wringing their hands about a proposed Jackson County tax — they may want to take a good look at an EPA rule that effectively taxes their pet project and would make non-electric transit even more attractive.

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However, Ameren Missouri officials may have found a solution to the dilemma: the U.S. Department of Energy’s competitive federal cost-share investment funds. Ameren Missouri and Westinghouse Electric Company recently announced that they are seeking competitive federal cost-share investment funds from the Department of Energy, which would be used to manufacture Small Modular Nuclear Reactors. If Ameren receives the funds, Ameren would then expand the nuclear power plant in Callaway County without the need for reforms to Missouri’s CWIP law. This would help Missouri generate more alternative energy without unnecessary mandates. Making this deal even sweeter is the potential for the partnership between Ameren Missouri and Westinghouse Electric Company to create thousands of jobs for the engineering, manufacturing, and operation of the Small Modular Nuclear Reactors. Finally, because portions of the electricity produced in Missouri will be shared around the nation via the electric grid, some level of federal investment is legitimate here. It makes sense that Missouri customers will not pay every penny for something that benefits more than just Missouri.

This is an exciting project that has potentially great benefits for Missourians.

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