December 18, 2014

Students Need Choice, Not-Pie-in-the-Sky Solutions

got school choice

When the chairman of the Black Leadership Roundtable announced his plan for ensuring Saint Louis-area students have access to a quality education—a city-county school district—he was presenting an idea that has been recycled for decades. In his 1985 book, A Semblance of Justice, Saint Louis University sociology professor Daniel Monti wrote, “A review of St. Louis County Board of Education’s deliberations between the 1950s and 1970s reveals three overriding concerns among professional educators and the lay leadership: the merger of all county districts with the city district, the equalization of school tax rates in the area, and the consolidation of districts within St. Louis County.” The idea may have some merit. Unfortunately, it is simply too pie in the sky to ever make a difference for students who need better educational options today.

It is highly unlikely that citizens in high-achieving, wealthy school districts such as Clayton would agree to a merger with the low-performing, poor school district of Riverview Gardens. Yet, even if all the area districts merged, it would not dissolve the pockets of concentrated poverty. Though it’s true that school district boundaries would be erased, the boundary lines around individual school buildings simply would become starker; essentially transferring the problem of housing decisions based on district performance to housing decisions based on school performance.

No, simply consolidating school districts will not solve St. Louis’ educational problems. The editorial board of the St. Louis Post-Dispatch realizes as much. When they called for a city-county school district in April 2014, they wrote that their ideal school district would utilize “some form of open enrollment.” The editorial board implicitly recognized that school choice must be a part of any plan to improve educational outcomes for disadvantaged students in the Saint Louis area.

Though the city-county school district will likely never happen, there are ways in which we can expand options for students. For starters, it should be easier for students in low-performing schools to take the dollars allotted for their education to the school of their choice. Missouri has had a successful, voluntary inter-district choice program between the St. Louis Public Schools and county school districts since 1981. With some modifications, the law that allowed Normandy and Riverview Gardens students to transfer to higher-performing schools could be just as sustainable. Moreover, the law could be expanded to allow all students the opportunity to seek the best education possible.

Along those lines, Missouri should allow students to enroll in charter schools across district boundaries. There are many well-regarded charter schools in Saint Louis that would welcome students from Normandy, Riverview Gardens, or other school districts. Moreover, there are many charter schools that would like to open in struggling school districts. They are inhibited from doing so, however, because they can only enroll students from within district boundaries.

Finally, Missouri should create a tax-credit scholarship program to enable students to attend a private school of their choice. Fourteen states now have a tax-credit scholarship program. These programs expand opportunities for students whose needs are not being met, especially students who are disadvantaged or have special needs. What is more, tax-credit scholarships save states money.

We do not need to hold out hope for large-scale changes to area school district boundaries when these solutions are at our fingertips. If Saint Louis truly wants to dissolve the poverty cycle in urban communities, then it should support realistic solutions like charter school expansion, voluntary open enrollment, and a tax-credit scholarship program.

More On the Minimum Wage

To a lot of people, increasing the minimum wage makes sense. Honestly, who doesn’t want low-income workers to make more money? Yet, if you actually take a look at minimum wage laws, you’ll notice that they don’t really help people as much as advertised. In fact, these laws actually can hurt the people they are meant to help. A new study (H/T The Corner) by Jeffrey Clemens and Michael Wither further reinforces these points.

In their study, Clemens and Wither examined the impact of the federal minimum wage increases during the Great Recession (2007-2009). They found that not only would low-skilled workers be less likely to have jobs after the minimum wage hikes went into effect (a finding also supported by the CBO), but the hikes also would lead to an overall decline in these workers’ incomes even after accounting for the increased wages of those workers still employed.

This leads to another problem with increasing the minimum wage: decreased economic mobility. The study’s authors found that increasing the minimum wage reduced the chances of low-skilled workers eventually reaching salaries of $1,500 a month (they determined that $1,500 a month was the threshold for lower-middle-class salaries). Clemens and Wither believe that this reduction in mobility occurs because an increased minimum wage results in fewer jobs being available for poorer workers. According to the authors, this lack of job opportunities means that there are fewer chances for these people to accumulate the skills and experience necessary in order to earn higher wages in the future. This is conjecture on the authors’ part, but it makes sense if one thinks about it.

At a cursory glance, the minimum wage is a good thing. Unfortunately, there are two sides to the minimum wage, and when you take the other side into account you see that it hurts more than it helps. This study’s review of the academic literature finds that increasing the Earned Income Tax Credit (EITC) would be a better alternative for low-income families than raising the minimum wage, something that we have been saying for a while now.

 

December 17, 2014

ESEA: What Should Reauthorization Look Like?

Although the Show-Me Institute typically focuses on state-level education policy issues, discussions regarding the controversial Elementary and Secondary Education Act (ESEA) have been popping up lately.

LBJ_ESEA-signing

The ESEA was created in 1965 as a part of Lyndon B. Johnson’s “War on Poverty.” The statute funds state primary and secondary education. Currently, Missouri school districts receive about 10 percent of revenue from the federal government.

The ESEA has been reauthorized every five years, and each presidential administration has left its mark on the original act. Most recently, it was reauthorized during the Bush Administration as No Child Left Behind (NCLB). Because Congress has not reauthorized the act during Obama’s presidency, there is concern the administration might be using the act as leverage to incite favored reforms.

The Department of Education has instituted “waivers” from NCLB. The adoption of the Common Core State Standards and tying teacher evaluations to student data are policies states must adopt to receive a waiver. Waivers have faced criticism, as, under similar conditions, some states have received them while others have not. Last month, Oklahoma was given its waiver back.

The question is: Assuming states continue to receive federal monies (and the act will be reauthorized), what should the ESEA’s reauthorization look like?

In an op-ed in the Washington Times, Heritage Foundation Fellow Lindsey Burke made the following recommendations:

  • Eliminate any federal mandates concerning NCLB;
  • Reduce the number of programs associated with NCLB; and
  • Allow states more portability with Title 1, the component of NCLB that allows students in failing schools the option of transferring to a higher-quality public school.

Burke’s recommendations don’t end federal intrusion into state education altogether, but this does seem to be a compromise between keeping the ESEA and giving power back to the states.

Should the federal government stay out of education completely, including federal funding? What do you think of Burke’s recommendations?

Map Series: II. The Loop Trolley and Existing Transit

Loop Trolley_Existing_Transit

The map above shows the Loop Trolley in relation to existing demographic characteristics. As the map shows, the Loop Trolley’s path is intersected by seven MetroBus routes and passes within a few meters of two MetroLink stations. The trolley, if it is built, will be redundant for nearly all conceivable transit trips. The map also shows the percentage of renters per census bloc around the proposed route. While multi-unit housing and a high renter population generally means more transit usage, it also means that most of the benefits from any gentrification will accrue to landlords, not residents. Renters as a percentage of total occupants are relatively high around the trolley route. Read more from the Show-Me Institute on the Loop Trolley here.

December 16, 2014

Support This Blog and the Show-Me Institute

As you consider your charitable contributions for the end of 2014, we truly hope that you will renew your support of the Show-Me Institute by making a tax-deductible donation this year. We could not perform our mission of advancing free-market solutions for Missouri public policy without the support of people like you. Your prior financial support has allowed the Show-Me Institute to become the primary source for free-market research and policy solutions in Missouri.
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With your help, we will continue to fight for limited government, individual liberty, reduced regulations, and entrepreneurial freedom.

If you enjoy reading this blog and agree with the ideas it presents for free-market based policies in Missouri, I hope that you will renew your support of our mission by making your tax-deductible contribution today!

December 15, 2014

Map Series: I. North Saint Louis Municipalities Fines per Resident

North_County_Munis

This map shows the amount of revenue from fines and fees the many small municipalities of North Saint Louis County collect per resident. While many collect amounts similar to Saint Louis City and larger municipalities in the county, some collect much more. As the map shows, Edmundson, Calverton Park, Normandy, Pine Lawn, Vinita Terrace, and Beverly Hills collect more than $300 in fines per resident annually. See more of our writings on municipality fines and fees here.

December 12, 2014

Why Saint Clair Wants Congress to Close Its Airport

In a previous post we detailed how one Missouri city, Saint Clair (located in Franklin County), has been trying (and failing) to close its small, money-losing local airport since 2006. The city government believes that the resources and land devoted to the airport would be better spent on commercial property development, not keeping a small general aviation airport with a handful of tenants up and running.

While there is some local support for keeping the airport open among politicians and a particularly vocal tenant, the principal protector of St. Clair Regional Airport is the Federal Aviation Administration (FAA). Because the airport has received federal grants to improve the airport in the past, the ability of the local government to operate (or close) its airport is tightly constrained by FAA grant assurances. As we wrote before:

Two of the more cumbersome assurances for a city like Saint Clair are Nos. 5 and 25. Assurance No. 5 obligates Saint Clair to maintain it as a public airport and not dispose or sell any part of the airport without FAA approval. The FAA will only give approval if Saint Clair can show that closing the airport improves aviation in the area. In addition, the dispensation to sell the airport does not free Saint Clair from reimbursing the federal government all recent federal grants. This will cost the city more than $750,000.

The city’s back-and-forth negotiations with the FAA have failed to produce results.

In an attempt to accelerate the process, Senator Claire McCaskill introduced a bill (S.2759) that would specifically close St. Clair Regional Airport. That bill passed the Senate on December 3, and if it passes the House and receives the president’s signature, the FAA would have to allow the airport’s closure.

You read that last paragraph right. Getting a bill through the U.S. Congress is considered a shortcut to closing a general aviation airport owned by a Missouri city with less than 5,000 residents. That is the kind of intransigence and red trap cities encounter when they, by taking what looks like free money, accept the oversight of federal bureaucracies over local infrastructure. If other local governments want to avoid Saint Clair’s headaches, they should support the development of private airports and local user-funding sources whenever possible.

December 11, 2014

What Is the Right Level of Regulation in Public Education?

Back in September the Show-Me Institute released my paper, “Decentralization Through Centralization,” in which I examined the development of the nation’s first all-charter school district in New Orleans. Though a mouthful, the title was my way of highlighting the tension that exists in the decentralized New Orleans system, which has been created with greater centralized control. In the paper, my co-authors and I highlight several potential pitfalls that might occur because of the power vested in a centralized entity. This week, Reason released a video highlighting another potential pitfall of the New Orleans Recovery School District model—regulatory creep.

As Rick Hess, director of education policy studies at the American Enterprise Institute, notes in the video:

People like autonomy in the abstract, but they get real nervous about it. If any one of a hundred or a thousand schools does something goofy, there’s always a natural temptation to say, “Well, we’re for autonomy, but let’s have a rule that doesn’t let you do X.”

Over time, Hess suggests that these regulations mount. If not checked, the decentralized charter market could become a bureaucratic morass. So what is the right level of regulation? And is it possible for a decentralized school system to resist what Neerav Kingsland, former CEO of New Schools for New Orleans, calls “death by a thousand regulatory cuts”?

If you have seven minutes, you should check out the video.

Obamacare’s Medicaid Expansion as “Job Creator”? Not So Fast

One of the Left’s favorite talking points for why states should expand Medicaid is that doing so will mean more jobs at Missouri’s hospitals. That argument is attractive, at least superficially; if the government spends more money on health care, the assumption could be that more people will be hired by hospitals. In other words, it’s “the stimulus” debate all over again: If you spend it, there will be jobs.

But is it true that Medicaid expansion actually leads to hospital job growth? So far, it sure doesn’t look like it (emphasis added).

U.S. healthcare employment began to accelerate after the first three months of the year and the uptick caught the attention of economists with the Altarum Institute, who conducted the analysis to determine whether hiring grew faster in Medicaid expansion states. It did not, they found. In fact, growth was faster in states that did not expand Medicaid, said Ani Turner, deputy director of Altarum’s Center for Sustainable Health Spending.

Proponents of expansion have touted the economic benefits of increased Medicaid enrollment, as they make their case to reluctant state governors and lawmakers. Indeed, hospitals in states that expanded eligibility are seeing less bad debt and fewer uninsured patients. But it might become harder to argue that Medicaid expansion is a jobs engine if the numbers don’t bear it out.

Healthcare averaged 14,271 new jobs a month from April to October in states that did not expand Medicaid, up 117% from the preceding 12 months. The healthcare employment increase in Medicaid expansion states over 2013, meanwhile, was 92%.

You can find one of Altarum’s briefings on the subject here. Missouri is fortunate that by rejecting the expansion it can carefully watch the experiences of other states who did expand their Medicaid programs—decisions oftentimes based on the specious promises of special interests and ambitious politicians. As the numbers come in and oft-cited expansion states like Arkansas consider reversing course, the Show-Me State’s hesitance to jump into the Medicaid expansion pool looks all the more appropriate.

December 10, 2014

When Public Schools Compete

slps

We Choose SLPS is the slogan for the Saint Louis Public Schools (SLPS) ad campaign, in which radio commercials, newspaper ads, and billboards highlight the strengths of the once-unaccredited school district. With the growing trend of open enrollment programs and charter schools around the country, it has become necessary for traditional public schools such as SLPS to compete for students.

The following is an excerpt from an article describing one Nashville principal’s experience canvassing for students:

It’s awkward. Someone peers out at her through the window. White looks away, pretending not to notice. After an uncomfortable few seconds, the door finally cracks open. White seizes her chance:

“My name is LaTonya White. I’m the principal at Rosebank Elementary School. How are you doing?” she asks, glancing at the clipboard in her hands. On it: a list of families in the area with soon-to-be kindergartners. “Yes, you should have a child ready to come to school soon.”

Canvassing for potential students—and honing this kind of front-porch pitch—are standard for charter schools. But for traditional public school leaders like White, it’s unfamiliar territory.

Competing for students may be unfamiliar territory for public schools, but for students it makes all the difference. When students have educational options other than the public school that corresponds to their zip code, public schools are held accountable for their performance.

This year, SLPS made improvements on their annual state report, an 18.6 percentage point gain, increasing attendance, graduation rate, and college and career readiness. As charter schools expand throughout the state and other choice options become available, I hope to see more public schools exhibiting the same behaviors as SLPS, turning schools into places students choose to be, instead of places they are obligated to attend.

December 9, 2014

Gruber on Arkansas Private Option: “Mathematically Impossible” to Be Budget Neutral

November was a bad month for Obamacare. Over just a few weeks, voters not only handed a series of punishing defeats to Obamacare at the ballot box, but the Supreme Court unexpectedly granted a hearing to the lawsuit King v. Burwell, which poses a serious threat to the future of the law.

Those setbacks haven’t quite kept Missouri’s Obamacare supporters from pushing ahead with their Medicaid expansion plans. In fact, some Missouri politicians have tried to use Arkansas’ Medicaid “transformation” as a reason to expand Medicaid in Missouri. But recent video revelations confirm that the state’s decision not to follow Arkansas’ lead was the right call.

In April 2013, Arkansas passed a Medicaid expansion more commonly known as the “Private Option.” The expansion uses federal Medicaid dollars to pay for Obamacare exchange health care plans for newly eligible Medicaid beneficiaries. Supporters claimed that the plan would save Arkansas money, but as it turns out, that was likely never going to be the case. Indeed, Obamacare architect Jonathan Gruber, who hailed his law’s lack of transparency, said as much . . . in October 2013, in a video only now coming to light:

The video is only the latest setback for Arkansas Obamacare supporters. After losing his State Senate primary, Arkansas’ chief Obamacare Medicaid architect won’t be returning next year to the legislature, largely due to his support of the expansion. And after last month’s general election, Arkansas might actually roll back its Obamacare expansion.

Missourians are being sold a bill of goods on Obamacare’s Medicaid expansion, just like Arkansas was before them. We deserve better than tired, old political strategies, and rather than look at Arkansas as an example to be followed, Missouri should look at it as a cautionary tale to be avoided.

December 8, 2014

Iowa, Nebraska, and Arkansas Legislators Gear Up for Income Tax Cuts

In 2014 the Missouri Legislature passed a modest income tax reduction which, given its size, by no means solved the state’s tax competitiveness problems. That fact is reaffirmed by the news we’re now hearing from some of Missouri’s neighbors. For instance, in Iowa—where state lawmakers cut taxes as recently as 2013—the income tax reform movement is getting bipartisan support.

State Rep. Tom Sands, R-Wapello, chairman of the tax-writing House Ways and Means Committee, said his preference would be to examine corporate and individual income taxes while exploring ways to simplify the tax system. Senate Majority Leader Michael Gronstal, D-Council Bluffs, said any tax cuts should be focused on helping middle-class Iowans.

“We will most definitely be looking at income tax reform, making the tax code flatter and simpler,” Sands said.

Sands added he hopes lawmakers will offer “substantial and meaningful tax cuts,” although he explained it’s too early to provide a specific dollar estimate because of uncertainties over state revenue.

Iowa is not the only border state looking to make income tax changes. In neighboring Nebraska, legislators (with the help of the Platte Institute) are exploring a round of tax cuts of their own that would also chop the state’s tax on incomes. On Missouri’s southern border, Arkansas is looking to cut its income taxes too, in part by getting the state’s tax exemption culture under control.

“They’re important to you; therefore, they’re important to me,” [Governor-elect Asa] Hutchinson told the [farming] group. “But we are now reaching a point in Arkansas that we need to look beyond more and more exemptions to our tax structure, and we need to look at an across-the-board reduction of our state income tax.”

Missouri lawmakers deserved applause for finally getting a tax cut across the finish line in 2014, but as we said at the time, that small cut alone is not enough to get the state on a firm, competitive footing for the years ahead—precisely because other states in the region weren’t going to stand still on tax relief. News out of Iowa, Nebraska, and Arkansas confirm this.

And make no mistake: The support for tax cuts has never been greater in the Missouri Legislature than it will be in 2015. Legislative leaders should not sit on their hands and let the opportunity pass them by. Our neighbors certainly aren’t.

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