The Missouri Green Party announced that it has received enough signatures to trigger an audit of the St. Louis city government, in order to investigate lead paint removal budgeting. They question whether neighborhoods with the highest rates of childhood lead poisoning receive the most money to remove lead paint from their homes.

To me, that sounds like great issue to investigate. I’d like to know whether the money is being allocated equitably, and whether there is any “skimming” off the top from local legislators.

But this noble audit is not as rosy as it might first appear.

Apparently, the petition only requires a “general” audit of the city rather than a focus on lead paint removal specifically. And since the city claims that the audit will cost more than $1 million, and take nearly a year to complete, this could prove to be a pretty costly venture that doesn’t even address the problem.

Now, I don’t know who to blame more for this waste of money — the Missouri Green Party (who knew that the audit wouldn’t address the issue they were concerned with, but went ahead anyway), or the St. Louis City government (which clearly could have targeted the audit to the issue at hand if they wanted to). Either way, this is $1 million of taxpayer money down the drain.

I guess you might say that it’s a waste of "green."

P.S.: Missouri law allows citizens to request an audit of their local government if petitioners receive signatures from at least 5 percent of local voters who voted in the previous gubernatorial election.

There is a very cool graphic over at the National Taxpayers Union that maps out the ratio of deficient brigdes in a state in relation to amount of porkbarrell spending that state receives. Thanks go to Andrew Sullivan for giving us the link. Short story — states with lots of pork don’t have any better bridges. The good news here for Missouri is that we don’t rank so bad in the ratio. Pretty much in the middle. They do seem to use a very strict standard for "deficient" bridges, though, as we have a lot more than 392 bridges that need work. That won’t change the ratios, though, as they certainly use the same standard for every state.

Clayton and Richmond Heights (two St. Louis County municipalities, for those of you who read us from Kansas City or Lithuania) have seen their merger discussions go down to defeat by a vote of 20-5 at the final meeting of their Joint Study Committee. Both the West End Word and the Post-Dispatch have the details. The death of the discussions was long predicted, as indicated by the fact that only 25 of the 40 members of the JSC even showed up for the final vote. I wrote an op-ed supporting the merger earlier this year, but am not at all surprised by its defeat.

The proposal essentially failed because the committee was unable to come up with any hard evidence that merging the cities would lead to tax and cost savings. Why were they unable to come up with this seemingly easy evidence of economies of scale? I have a friend who served on one of the subcommittees. He or she supported the idea of a merger. However, every subcommittee had a representative from both Clayton and Richmond Heights government on it. For example, the Parks subcommittee had both cities’ parks directors, and so on.

Not surprisingly, as the two government employees had more information and knowledge then the other volunteers, their opinions carried a great deal of weight. Even less surprisingly, the two gov. reps were not at all interested in promoting any cuts to their departments, in any way. Amazingly, both cities run at a level of efficiency that would make Henry Ford proud, at least according to what the city employees on my friend’s subcommittee told them at their meetings. Seriously, both city reps stressed that their departments were running at 100% efficiency and that there were absolutely no economies of scale or cuts that could come out of a merger.

Well, of course, this is absurd, but the volunteer members of any committee don’t stand a chance arguing against full-time government employees. So it seems that the mayors of both cities and the city managers, all four of whom supported the idea of a merger (at least I think they all did; I am open to corrections), were cut off at their knees by other city employees "helping" out on the subcommittees.

The other problems with the discussions were the promise not to fire any employees (which still, apparently, did not satisfy the civil servants) and the "Harmonization of services," which guaranteed that in cases of different service levels, the combined city would always adopt the higher level of service. I am certain that the average resident of both cities would not have insisted on this "harmonization," although the ones who showed up to shout at the public meetings might have.

Let’s be really honest here. Clayton and Richmond Heights would benefit from a merger, but there are probably 70 cities in the county that need to do something like this more than they do. Both are very well-run cities in strong financial positions. Both have comparatively low taxes and great city services. That being said, the merger still would be beneficial for the cities by making the tax base more varied, which would have resulted in lower taxes for residents — mostly by eliminating redundant government jobs.

I know that the JSC tried to hire an outside expert back in 2005, but that effort failed. Looking back, when the Brookings Institution declined to do the study, it probably doomed the entire effort, as it forced officials to rely on city employees for expertise, with all the attendant turf-protection.

Even without a merger, the final report still recommends continuing efforts to work together and share services when possible. That is a very good thing and will greatly benefit residents of both cities.

"How did it get so late so soon?" This query from Dr. Seuss was echoed by the equally whimsical St. Louis native Yogi Berra: "It gets late early out there." Although 2007 is quickly winding down, we’ve finally released our 2006 Annual Report.

Most non-profit organizations release their annual reports much earlier in the year than this. Ours would have been out sooner, too, but we decided to commission a thorough independent audit — to make sure everything was fully on track and accounted for during our first full year of operations. We had most of the report ready to go several weeks ago, but we didn’t want to issue an incomplete profile. Some things are worth the wait.

The report details our 2006 accomplishments and finances, profiles our research areas, board of directors, staff, and scholars from that year, and provides a brief overview of what we’ve been up to in 2007 and where we’re headed next. We have an ambitious publishing schedule this fall, so be sure to keep checking our web site!

I wasn’t a Missourian in 2006 (although my best friend did take me to see Spamalot at the Fox when I visited St. Louis for my birthday last November), much less a Show-Me Institute staffer, so I don’t make an appearance in the annual report. It almost seems odd not to be included, since I’ve been here for several months now, and I spent so much time working on the annual report itself, but as Yogi Berra also (supposedly) said, "The future ain’t what it used to be."

Last night I participated in a panel discussion (hosted by Metropolis St. Louis, FOCUS St. Louis, and the League of Women Voters) about the future of St. Louis Public Schools — my first official event as the Show-Me Institute’s new education policy analyst. The panel included Dr. John Martin (deputy superintendent of SLPS), Melanie Adams (member of the appointed Special Administrative Board overseeing SLPS), Evan Lewis (vice-president of Urban Prep Academy, an all-boys’ charter school in inner-city Chicago), State Senator Jeff Smith, and myself. Each of the panelists had a few minutes to make a statement about their vision for the future of public education in St. Louis before the floor was opened up to questions from the 40 people in attendance.

I would encapsulate the essential views of the participants as follows*:

Dr. Martin: SLPS has fallen on hard times because of rapid leadership turnover, and because it has to assume the responsibility of parenting kids who live in poverty and transience. The state government isn’t treating the system respectfully in this whole process. The best way to improve education in St. Louis is to seek our input before the administrative board takes any unusual action because there is a wealth of institutional wisdom within SLPS that can help right the ship if people will just keep administrators involved in the decision-making process. By the way, charter schools are dangerously unaccountable, and allowing financially disadvantaged families the opportunity to leave the public schools would be deadly for public education. Long live traditional public schools!

Ms. Adams: The system is broken, but we can fix it by introducing accountability and flexibility for the administrators. The administrative board hasn’t yet charted the path out of this mess, but we will work to move beyond the petty squabbling that has defined and degraded SLPS. Our focus will be doing what is best for the kids.

Mr. Lewis: Urban Prep Charter Academy demonstrates that educational success is attainable in impoverished urban areas. We have the flexibility to hire a staff and shape a curriculum that connects with young black men in unique ways. We set high expectations for our students and we take pride in knowing that, despite the fact that many of these students were not performing well in their traditional public schools, they almost always rise to the occasion with the proper support and encouragement. Even children in difficult circumstances are capable of academic achievement when schools are freed from bureaucratic constraints and allowed to pursue the best educational practices for each school’s particular setting and student body.

Sen. Smith: As an educator, I have seen both the good and bad aspects of SLPS, and I know that the system must be reformed in some way if it is to meet the needs of this city’s children. As a charter school administrator, I’ve seen the advantages that have resulted from the relative lack of constraints in seeking out the best educational practices. As a legislator, I’ve met almost absurd resistance from the teachers’ union when my education proposals would offer financial incentives to increase the number of quality teachers in Missouri classrooms. It’s time to set aside the interests in institutional turf and fiefdoms, and pursue any policy that will improve education for our children. Getting those children educated is a matter far more important than the sort of political, institutional, or personal concerns that have derailed reform in the past.

Mr. Roland: The key to resolving educational woes in St. Louis and elsewhere is to empower parents to seek out the best available education for their children. Almost without exception, parents are more invested in the success of their children than any bureaucrat will ever be, and therefore are more inclined to hold schools accountable for giving their children quality educations. A good school choice program will open the doors of opportunity for families who would otherwise never be able to send their children to schools that have the academic and disciplinary flexibility that is not available in traditional public schools.

Taken as a whole, I believe the evening resulted in a basic consensus that the reclamation of public education in St. Louis hinges on three central concepts: school accountability, educational flexibility, and the availability of some form of parental choice among schools. I won’t pretend that, despite my efforts, everyone was persuaded that we need full-blown school choice immediately. But my sense of the discussion was that most people recognize allowing even a restricted form of choice (open enrollment in traditional public schools, expansion of charter school options, etc.) would be an improvement over the status quo.

* Please note that these statements reflect my own impressions from listening to the other speakers, and should not be taken as direct quotes. The impressions of others present at the event may differ from my own.

The Show-Me Institute is expanding, bringing aboard new policy analysts and a research assistant to help us conduct the best in Missouri public policy research.

Dave Roland joins us as an education policy analyst, bringing with him three years of experience as an attorney with the Institute for Justice, litigating school choice, economic liberty, and property rights cases in state and federal courts. He has undergraduate degrees in political science and Biblical studies from Abilene Christian University, and both a law degree and a master’s in theology from Vanderbilt University. Dave’s wife, Jennifer, will also be joining us as a policy analyst in a couple of weeks. She’s the former legislative affairs attorney for IJ’s Castle Coalition — but more about her later.

Also joining us as a research assistant is Justin Hauke, a graduate student at Washington University’s Olin Business School who until recently worked as a senior research associate for the St. Louis Federal Reserve. He has an undergraduate degree in economics and math from the University of Texas at Austin. Justin has been blogging here for a few days now, and we’ve already released his first op-ed. (Actually, he co-wrote an op-ed for us almost a year ago, so technically that would be his first.)

We hope to hear much more from our new staff members as they get settled in!

Today’s Post-Dispatch has an article about the continuing education pre-teen girls are receiving about the basic laws of economics. If large numbers of people want an item (a concert ticket) that has a limited supply (number of seats), that price will go up. Sometimes substantially. Add into the mix the strange rules of modern parenting and our entertainment-obsessed culture, and you have the perfect recipe for an extremely weird situation:

She gave in and bought six tickets from an online broker for a total of $900 for a Dec. 11 concert in Columbus, Ohio. Edelstein paid $150 for each $56 ticket. She bought two extra to sell, to help finance the family’s road trip.

Traveling to Ohio for a concert by a teenage girl. At $100 more than face value per ticket. Buying extra tickets to sell at even higher prices to finance the trip (nothing wrong with that; it’s just peculiar). It’s like a modern suburban version of Easy Rider, with two extra pop concert tickets substituted for the cocaine. If Phil Spector gets out of jail to buy this woman’s tickets in Columbus, that is really gonna freak me out.

For the record, there should be rules limiting the number of tickets one person can by, and there is nothing wrong with efforts to enforce those rules on scalpers. That would be a case of a private entity (the venue) choosing to offer its product to as many people as possible. Efforts should continue to block scalpers from buying huge numbers of tickets via computer programs, or however else they do it. But that does not mean it should be a crime for people to sell commodities they purchase for whatever price they choose. Changes to the law that legalize scalping for sporting events should be extended to concerts.

Hannah Montana tickets are not clean water after a flood, or Red Cross blood after an earthquake. Hell, they’re not even Cake tickets or something people will remember six months from now. They are just items to be bought and sold on the open market. If Hannah Montana teaches this principle to young girls, it will be an excellent lesson in basic economics, as explained decades ago by a band worth paying top dollar for.

(Note: Phil Spector played the man who bought the drugs in Easy Rider. I HATE explaining references, but considering most people won’t get it, and he is currently being tried for murder, I probably needed to do so.)

World-class cycling came to Missouri. For one week in mid-September, Missourians were offered an intimate look at the sport. Judging by the crowds and the enthusiastic press, the state embraced the Tour of Missouri and consumed the product of watching cyclists whizz by at 30 miles per hour.

There has been some criticism of state officials, including in this blog, arguing that the state’s return on its investment is negative. I have not seen the final tally, but suppose that Missouri State Government paid $1 million to sponsor the Tour. On average, between 3 and 4 cents of every dollar of Gross State Product (GSP) is received by Missouri’s General Revenue Fund. Thus, the break-even point is somewhere between $25 million and $33 million in additional GSP that would have to be generated by the Tour of Missouri. I have seen the estimated economic impact from the Tour de Georgia and am skeptical. The bottom line is that it is unlikely that the Tour of Missouri created enough new jobs or new physical capital to generate an additional $25 million of GSP. Nor were there enough idle resources — such as empty hotel rooms — used by out-of-state fans and participants to add that much to the Missouri economy. Rather, what we saw was people substituting the goods and services associated with the Tour of Missouri, displacing other forms of entertainment. As such, I would agree with the narrow economic calculation of the rate of return; it was probably negative.

Does this mean that the State of Missouri should not have sponsored the event with any funding? That answer is yet to be determined. Economic theory indicates that governments do improve welfare when they use resources to overcome coordination failures in the market. In this case, can one imagine that the Tour of Missouri would have been an entertainment offering without the state government’s sponsorship? No. It is difficult to coordinate the numerous activities necessary to put on such a cycling festival; profit-motivated entrepreneurs are probably incapable of solving the coordination problem. Hence, there is a role for government to solve these issues and provide its citizens with this form of entertainment.

The rate-of-return argument notwithstanding, stewards of the state resources must be vigilant. Over time, the justifiable size of state sponsorship will decline as the coordinating problems decline. There will always be issues with state roads and protection that require some state intervention. However, the initial mobilizing services will disappear in several years. If the Tour of Missouri is valuable enough to Missouri citizens, it will survive declining state sponsorship. Ultimately, market forces will determine the value to this enterprise just as it vets all goods and services that consumers choose from. It will take several years to assess the outcome, though there are hints from the revealed preferences of the thousands of people lining the Tour route.

A parent writes to the St. Louis Post-Dispatch that he’s upset the schools’ CEO isn’t attending the Parent Assembly:

As a parent of two children in the district, I have received dozens of automated phone calls and mailings over the past months informing me that parental involvement is the key to successful schools. The governor’s machinations with Mr. Sullivan’s appointment and Mr. Sullivan’s repeated failure to meet with district parents make a mockery of the idea.

The St. Louis Public Schools are right that parents need to be involved in education. But parents are most involved when they choose their kids’ schools themselves. If they have no option but a failing public school district, all the automated phone calls in the world aren’t going to make them more enthusiastic. This is especially the case when the district’s CEO doesn’t even appear at meetings he promised to attend.

If parents were customers with choices, schools would be more responsive to them. Back in June, Sullivan declined his salary to make a statement: The St. Louis Public Schools aren’t a for-profit business. Maybe he should reconsider that position. After all, what CEO earning a salary would skip shareholder meetings?

Can’t you just imagine seeing this scene playing out …

Cordish to Centene: "Excuse me, sir? What it is, Mr. CEO; we’re from out of town."

Centene To Cordish: "No s%!t."

Cordish: "We’d really appreciate it if you would move your corporate headquarters down to our brand-new downtown development instead of Clayton."

Centene: "What, for free? Gimme $78 million dollars in tax credits and incentives."

Cordish: "We’re not gonna give you $78 million on top of everything else the taxpayers have already paid for."

City of St. Louis (from passenger seat and reaching for checkbook / aldermanic approval): "I think that’s fair, Cordish."

Cordish: "Here’s $78 million, plus a brand new sales tax for your own sales tax district." (Pauses while Centene pockets it all.) "Keep the change."

Needless to say, I could go on and on. I would really have liked to work "a Torino with no wheels on it" into this, but I think I have made my point. The fact that the above scene actually takes place in St. Louis is all the better, in case you forgot that.

The move of Centene is just another insane example of businesses playing various cities against each other in order to get taxpayer money they don’t deserve. I may sound naive here (and I am not at all naive when it comes to government and politics), but if cities such as St. Louis would just improve their overall business climates, they would not have to give away the store to favored targets. These incentives and tax credits are necessary precisely because of the earnings tax and other disincentives for business in the city. Getting rid of those disincentives first makes giving away new incentives far less necessary.

Via Combest, may this "problem" continue for a very, very long time!

An article in this morning’s St. Louis Post-Dispatch details the rising trend in “educational larceny” — the term used for families who cross district boundaries to send their children to school. Over the past few years, the number of larceny cases has increased precipitously as families seek to escape troubled school districts.

Parents enrolling their children in better performing districts may use the address of a relative or friend, a business, or even a blank lot. But when school administrators uncover the truth, students are forced back to their home districts, often with legal ramifications for their parents. “Sometimes they’ll beg you to stay. It can be heartbreaking,” says Vershaun Howze, Director of Enrollment for the Hazelwood School District.

The University City School District investigated 113 suspected larceny cases last year, and found 82 violations, while Hazelwood School District reported 92 infractions. And the Ladue School District has uncovered 11 violations this year alone — the same number as the entire 2006-2007 school year.

Parents shouldn’t have to resort to fraud in order to provide their children with decent educations. The rising trend in educational larceny demonstrates the need for significant school reform in Missouri and the steps parents will take to provide their children with decent educations. How much more evidence does the Legislature need?

Both the Kansas City Star and KSDK - Channel Five in St. Louis are reporting on the difficulty of getting tickets to see Hannah Montana (whoever the hell that is) for fans and their exasperated parents. (I highly recommend the comments section after the Star article, by the way. The first commenter admits to almost getting cussed out by her children when she failed to get tickets. I don’t know if that is more hysterical or pathetic, but it’s clearly both.) Both stories report on scalpers/brokers charging upwards of $1,000 for a ticket to see the heiress to the Achy-Breaky fortune (I learned this from the article) sing about acne, or roller skating, or rainbows, or whatever.

Needless to say, people are outraged, as if there is some inherent right to concert tickets. Not surprisingly, some politicians are pandering to the parents:

"Rep. John Burnett, a Kansas City Democrat and an opponent of the law, had said legalizing scalping would permit price gouging. He tried to limit resale prices to no more than 20 percent of face value, but his amendment was defeated."

Price gouging is when you raise the price of lumber fivefold the day after a hurricane. In a legal sense, it does not have, and should not have, anything to do with the price of tickets to a concert. Rep. Burnett is not alone (emphasis added).

“We’re getting calls about angry constituents,” Mayor Mark Funkhouser told Tinnen. “We want the level of unhappiness to go down and the level of happiness to go up, however you get it done.”

The honorable mayor seems to be confusing "promoting the general welfare" and "the pursuit of happiness" with the casual meaning of happiness as it relates to pre-teens. The role of government, at any level, is not to increase happiness for people. It is to perform basic functions that allow people to pursue their own happiness. And while governments do it all the time, they should still avoid interfering with the free market as much as possible. And the few exceptions to that should be in cases of war or natural disasters, not pop concerts.

In order to understand the title, you may need to re-read (or just read for the first time, if you are one of the few people on earth who does not check our blog every day) my post from yesterday on this issue.  The Kansas City Star reports that the Clay County Commission has elected to enact a tax rate of 24 cents per hundred dollars in order to fulfill the judicial order from the recent lawsuit. That rate has been set to meet the requirements of the judicial order, but to raise no more money than that. Well, it might be a little more than that, but not very much in the scheme of things for a fairly large county like Clay — so my point stands. 

The key part of this choice is that Clay County will continue to rely on sales taxes to fund county services, except for the transportation issues that the lawsuit dealt with. The Clay County Commission deserves tremendous credit for making smart and responsible financial decisions for the people of Clay County. I think its decision to rely on the sales tax should be given strong consideration by other counties similar to Clay, such as St. Charles.

When the Legislature passed HB 1944 last year (modifying existing laws related to eminent domain use), it included a provision to establish an Office of Ombudsman in order to “provide guidance for citizens about condemnation proceedings and procedures” and also to report on eminent domain use within the state.

The Ombudsman position has fallen to Anthony Martin, a 29-year-old Washington University Law School graduate with “no particular experience [in] eminent domain [law].” The Legislature envisioned the Ombudsman position as a source of information for the public on eminent domain use, not as a property rights advocate. And the fact that Martin is requesting that his position be referred to as the “Property Rights Czar,” strikes me as a revealing misnomer.

Although Martin claims that he is against the use of eminent domain for private developments, I’m skeptical of how effective he can actually be in preventing such abuses. As a public official, he is unable to provide legal advice to eminent domain victims. And the fact that he is a resource for eminent domain victims may encourage further use of the practice, now that victims will receive “assistance and guidance” from the Ombudsman.

Creating the Office of the Ombudsman position is a step in the right direction, because at least it recognizes that eminent domain abuse exists, but I have to wonder — do Missouri citizens really need a “czar” to defend their rights?

In my neverending quest to be an expert on the most obscure local government topics possible, I now present to you the St. Louis County municipal library system! Nine municipalities have library systems that predate the St. Louis County library system: Webster Groves, Kirkwood, Ferguson, Richmond Heights, Maplewood, Brentwood, Valley Park, University City, and Rock Hill. In the interest of full disclosure, plus some local pride, I am president of the U. City library board. Anyway, the county library newsletter recently had some great articles on municipal libraries, which I have scanned in and present to you here. What is the point of this post, you ask?

Each of these nine local libraries has its own local property tax. The residents of these nine systems pay this tax — not the county libarary tax. All nine have higher tax rates than the county system, which is 15 cents per hundred dollars of assessed valuation. The attached article has the tax rates, although I know University City’s rate has decreased significantly since this list was put together, and others may have as well. The difference in tax rates is pretty small in real terms, but it’s there. So, finally, I am getting to my point …

Should these nine municipal libraries merge into the county system, as former library districts in Clayton and Florissant did decades ago? Let’s take them each as they come. University City, Webster Groves, Kirkwood, and Ferguson are four of the larger municipalitites in St. Louis County, and as such are capable of supporting entities — such as libraries, and more — on their own. I have been to three of those four buildings, and each is very impressive, with a substantial collection. While all may be close to existing county system libraries, I really don’t see any gains for any of the above four cities in consolidating their library systems with the county’s. The tax savings would be very small, and the residents of these four communities like having their own, wonderful libraries.

Now let’s take Brentwood, Richmond Heights, and Maplewood. Each of these is a much smaller town, but all are known for one set of things, tax-wise: retail shopping and sales tax dollars. All three have very low property tax rates — just above the county rate — and all three have low property taxes in general, because sales tax revenues fund most of city government. Not coincidentally, with the tremendous retail growth in all three cities during the past decade, all three have new library buildings for their residents.  Maplewood, in particular, is not close to any existing county libraries, although parts of Richmond Heights and Brentwood are not far. I don’t see any real gains or reasons for consolidation for any of these three systems.  The current tax system favors all three of them and the local libraries are easily well-supported.

This brings us to Rock Hill and Valley Park. They are the two smallest cities listed, and Rock Hill has by far the highest tax rate. Valley Park is close to exising county libraries, while Rock Hill is not. (My guess is that families want to be able to make a very short drive or walk in order to get to the libaray, and distances that would be fine for most things are too far for the library.)

Rock Hill is well-known for its recent financial difficulties — although things are improving, thanks (and I use that term very loosely) to retail projects brought about by eminent domain. Nonetheless, Rock Hill’s residents would benefit from the large tax cut. With Valley Park’s small population and low tax rate, I have to wonder about the quality of their library (which I admit I’ve never been to).

Final recommendation: Valley Park should dissolve its library system and enter the county system. Rock Hill should also dissolve its system and attempt to join Webster Groves’ or Brentwood’s system. If that does not work, Rock Hill should join the county system also. The other seven municipal systems should remain as they are. Now go read some books!

Bringing preventive health care to poor Missourians is a laudable goal. But going through health insurance is the wrong way to do it:

The Insure Missouri plan, which would allow qualified participants to sign up for a number of private health insurance plans, would cost $631.2 million by fiscal 2010 and be funded through a combination of state funds and federal money that goes to hospitals to help pay for indigent care.

The purpose of health insurance is to protect your other assets, such as your house, so that you don’t lose them if you have unexpected medical expenses. It’s not meant to pay for routine preventive care. When we make people pay for routine expenses through insurance, insurance becomes more expensive for everyone.

So why are politicians always trying to sign people up for insurance? Robert Fogel explains in this book that taxes on insurance create an incentive for lawmakers to expand insurance programs. Governor Blunt seems to have fallen into that trap.

The Clay County Commission meets this afternoon to decide what to do with its property tax rate. One option on the table is to do nothing. The Kansas City Star has the update.

Here’s a quick recap: Several years ago Clay County decided to rely on sales taxes only (very cool); some cities and road districts sued, claiming the county still had to fund certain transportation projects through property taxes; a judge agreed with the road districts and ordered Clay County to fund them (all my writing on this has assumed that the judge made a correct and appropriate decision). Now, the Clay County Commission is trying to decide if it should: a) attempt to continue funding the road and bridge improvements, as ordered, through a higher sales tax to be approved by voters; b) set a property tax low enough to cover only the ordered road funding; or, c) set a higher property tax and end the experiment of relying only on sales taxes. There, I think I summed that up pretty well! From the Star:

"An outside auditor is recommending the county set aside as much as $6.1 million from its 2008 general operating budget to pay money it will owe for road and bridge maintenance, Barton said."

I think that "a" and "b" are both fair and reasonable options. But if the citizens of Clay County wish to continue their sales tax plan, as it appears they do, than "a" is the best option. However, if the commission decides to go with "a," and then the people of Clay County reject a higher sales tax at the balllot to pay for the road and bridge funding, then Clay County could be in serious financial straits.

While I think the voters of Clay County can be trusted to make a financially responsible decision, especially since many people from outside the county would help them fund road improvements via a higher sales tax, the possibility of a rejection and the resulting serious financial situation must be at least considered. It will be very interesting to see what Clay County decides.

As I said before, I think the county commision should be commended for trying very hard to respect the will of the citizens and keep the local tax rates as low as possible, while still meeting all its fiduciary responsibilities. I look forward to its final decision…

Here’s a moving story in the Post-Dispatch about a girl who’s had to work hard to attend private schools:

Jeleesa had wanted to be a lawyer. Cole opened the phone book and started writing letters. She figures she sent one to every law firm listed. Then she wrote to companies — big ones, like Monsanto, the former Ralston Purina Co., and Anheuser-Busch.

Cole’s life became a hunt for connections. She scribbled names on scrap paper at meetings, at work, at school. She came away with lists of charities, foundations and businesses. She tracked down the Knights of Columbus, Catholic Charities and even pro football players.

Low-income families shouldn’t have to work as full-time fundraisers just so their kids can get a high-school education. But the positive side of this story is that it shows how beneficial parental choice can be. When Jeleesa had to improve her grades in order to stay at her new private school, she excelled beyond everyone’s expectations.

Yesterday, Attorney General Jay Nixon and several legislators called for reform to Missouri’s payday loan industry, arguing that it engages in predatory lending practices targeted at uniformed consumers. As evidence, Nixon cites the fact that Missouri lenders charge an average APR of 422 percent on payday loans, with some companies charging as high as 1,950 percent.

Nixon would enact legislation to cap payday loan interest rates at 36 percent and eliminate the practice of renewing outstanding loans, a practice that consumer groups argue traps borrowers in a vicious cycle of spiraling debt.

I have no doubt that some payday lenders engage in morally questionable lending behavior, but capping the rate of interest is not going to solve this problem. Consumer interest rates are primarily determined by credit risk, and if the Legislature caps the rate at which lenders can charge interest on their loans, lenders will be forced to issue fewer of them. And since payday loan consumers have the highest risk of default, they are the people most likely to be priced out of the market.

Moreover, it is likely the case that if borrowers are in such desperate financial straits as to borrow money at a rate of 1,950 percent, they will find a lender — whether legally with a payday lender, or illegally in the black market. And at least with a payday lender, default is settled by foreclosure on some kind of collateral. In the black market, it usually involves a crowbar.

In short, payday loan reform is one of those “feel good” legislative issues that does little to fix the problem it is targeted to address. If legislators are concerned with predatory lending practices, they should work to increase consumer education, rather than pricing consumers out of the market entirely, forcing them to obtain funds under much worse conditions. Capping the rate of interest is simply bad policy.

Traffic ticket hotspot St. George, Missouri, is still on people’s minds after that ugly incident with the police officer last week. Charlie Brennan has been talking about it a lot on KMOX, and today the Post-Dispatch ran an interesting article on the problems small police departments can have. Here’s a key statement of interest to me in the article:

St. Louis County alone has 64 departments among its 91 municipalities. Only Cook County, Ill. has more departments in one county.

Cook County has five times the population of St. Louis County, by the way, and not too many more municipalities (about 130 to 91). By my nature, I am inclined to strongly prefer small government, but at some point it just gets ridiculous — and 91 municipalities and 64 police departments in one county is more than ridiculous. The amount of unnecessary tax money we spend on redundant positions, the amount of bull$&!t tickets written by small police departments to finance city services, the ability of tiny cities to throw a wrench into major transportation projects for the entire area, like Westwood almost did with Conway Road and I-64 … at some point, small government becomes too small.

I admire Jackson County, with its 18 municipalities — including Kansas City. I also like the parts of unincorportated St. Louis County, where over 300,000 people live without a city government and the county does a fine job of providing services at lower tax rates than most nearby municipalities do. I don’t want state mandates to force consolidation, although that would not be terrible. What I want for is the residents of these tiny cities, with their own police forces, to just disincorporate on their own.

Let’s keep the largest 40 or so towns in the county, and even allow them to grow via mergers. At some point, though, we need to have fewer St. Georges and Velda Villages in St. Louis County.

I had the great honor of meeting Mr. Wendell Cox yesterday evening. Mr. Cox is an international expert on issues of land use, transportation and mobility, property rights, and the housing market. We spoke for about an hour and he was just terrifically interesting, fun and friendly. He is affiliated with dozens of think tanks around the country, and, since he lives in the St. Louis area, we here at the Show-Me Institute look forward to having an opportunity to work with him on issues of mutual interest. I encourage everyone to check out the websites he operates, which have voluminous information on all sorts of issues.

File this article under "Like we said …" The Kansas City Star had an article last week about the fact that people really do move from high-tax states to low-tax states. The point of the article is more "How to do it and avoid an audit," but here at the Show-Me Institute we have already pointed out the benefits of repealing Missouri’s income tax. In fact, this story uses the same expert we did:

It isn’t clear how many people move exclusively or mainly for tax reasons. But from April 2000 through June 2006, there was a net migration of 2.3 million people moving from states with income taxes to states with no income taxes, an average of more than 1,000 people moving per day, says Richard Vedder, an economics professor at Ohio University in Athens, Ohio, based on an analysis of census data.

If Missouri were to enact some combination of long-term spending restraint and sales-tax increases, we could eliminate the income tax in our state without major cuts to government services. Combine the absence of a state income tax with our very affordable housing markets (see p. 31), and Missouri could truly become a magnet for Americans looking to move.

But why would we want that? We wouldn’t even know where all these new people went to high school …

As best I can tell, Clay County will decide tonight as to their tax rate for 2007. At least, it is on the agenda, although it could of course be tabled to be acted on at a regular meeting rather than a work session. Every local council runs slightly differently, so I don’t know exactly how they run things there. That aside, the Kansas City Star published a good editorial last week calling on Clay County to let the voters decide whether they want to choose between continuing the sales-tax-only system via increasing sales taxes to meet the new road demands, or reinstituting a property tax. If the road and bridge demands on the county, coming out of the recent lawsuit, can be met by a moderate increase in the sales tax, than I agree that should be given very strong consideration — as opposed to reinstituting the property tax.

The citizens of Clay County have elected to try something very interesting in choosing to rely only on sales taxes to fund county services. The county should do all it can to continue that decision.

It will be interesting to see whether any other counties elect to go that route. The county in the Saint Louis-area for which this plan might make the most sense would be St. Charles County. They have plenty of retail outlets in St. Charles to, perhaps, make it work. Somebody in St. Charles government should run those numbers. Perhaps I will — should I get just stupendously bored one day.

So my wife and I are watching the all-time classic "Say Anything" this weekend when I heard something I never realized before, probably because I didn’t work at a think tank when I saw the movie before. Anyway, as this is one of my favorite movies, and one which I sometimes reference (will not waste time searching for a past reference — we unfortunately don’t catalogue our posts by "pop culture allusions"), it was cool to hear that the fellowship school valedictorian Diane Court was going to London for was, to quote her dad, "an international think tank." Pretty neat, huh?

The other highlight of seeing the movie again was catching a very young Ari Gold as one of the characters hanging out at the Gas ‘N Sip trying to get Lloyd to go to a kegger with them. "Bitches, man!"      

Via Combest, there are numerous articles today about the grant from the US Dept. of Transportation to MoDOT, funding an study of new truck-only lanes on I-70. This is a terrific idea. I hope they give strong consideration to tolling those truck-only lanes, and allowing additional trailer rigs within them, in order to make tolls fair to the truck companies. Here is the original press release. The recent plan to hire a company to repair and maintain 802 bridges was a great initial step in realistically dealing with our transportation and infrastructure needs in Missouri. How we go about improving I-70 and I-44 is the next big question.  The use of tolls (through public-private partnerships, which are constitutional) MUST be strongly considered as the best way to pay for these improvements.

Many people paying attention to eminent domain issues, disputes, and outrages are aware of how Rock Hill took the home (via court action) of Drs. Rob and Judy Hanson in order to facilitate a development by Novus. Apparently, it was not enough for Rock Hill to forcibly take the Hansons’ home, against their will, in order to build a strip mall to meet the desperate retail needs of mid-county.

Now, because the Hanson family allowed neighbors and friends to remove some fixtures (wood, doors, etc.) from the home before they were forced to vacate it, Rock Hill is suing the Hanson family for a half-million dollars in damages!!! The important thing to note here is that the house was scheduled to be torn down by Novus!!! Novus had plans to demolish the entire house, and indeed did demolish it in January, before which the Hansons sold some of the home’s fixtures, donating the money to Habitat for Humanity. In the interest of clarity, Rock Hill did own the home at the time the Hansons sold the fixtures. Nobody denies that, but to sue for a half-million dollars is unjustifiable, in my opinion, for a house that was set to be demolished.

In my opinion, this is truly one of the most abusive lawsuits I have ever heard of. Here is the petition for the lawsuit, which may be nothing more than a bullying attempt by Novus and Rock Hill to get the Hansons to drop their ongoing request for a jury trial to determine the fair value of their seized home. No matter what, it is an outrageous example of the serious problems with eminent domain laws in our state.

The Saint Louis County Council has voted to keep its property tax rate the same, rather than lowering it in response to property assessment increases. The story is here in the Post-Dispatch and here on KMOX (via Combest). While Saint Louis County government deserves great credit for keeping its base tax rates low for a number of years now, I believe it would have sent a strong message to taxpayers and other government entities if the council had voted to lower the tax rate, even just slightly. That message would simply have been that the county would follow the spirit of the Hancock Amendment, even if the letter of the law did not require a rollback. So, now the single largest governing body in the State of Missouri, outside of state government itself, has chosen not to roll back its rates. This is unfortunate.

Come to think of it, I wonder whether the state itself rolled back its property tax rates. I would guess not, because they set a rate based on statewide reassessment, not individual counties. And with elected assessors doing the assessin’ in most of Missouri, the increases were undoubtedly far less than in Saint Louis County, with its 22 percent average increase.

I should be clear that the Saint Louis County average is probably more accurate than the elected assessor’s work, but it still needs to be reacted to with a rollback.

This post is not about the specific incident that has landed a St. George police officer in trouble. It is not that I don’t care about the incident, just that it is outside of our mission and research areas at the Show-Me Institute. That aside, many people who read the story in the Post-Dispatch or saw it on the news are probably wondering where the hell St. George is. If you live in South St. Louis County, you know — as it is a pretty famous speed trap.

St. George has a population of 1,288. While very small, there are many smaller municipalities in the county. The city itself is funded in three primary ways: property taxes (very low) on residences, a share of sales tax money from the county sales tax pool, and speeding tickets. The speeding tickets are the real rub, as they are what allow the city’s property taxes to be so low, thereby removing any incentive for the citizens of St. George to disincorporate.

There are a number of cities in St. Louis County that are able to exist financially largely through speeding tickets. Rock Hill is probably the most well-known example, but St. George is right at the top of the list. The fact that Missouri is the national leader in fixing (or "amending," in legalese) tickets is part of the story — the fines go up, but the points and insurance don’t, so nobody really complains that much when they get a b.s. ticket in Rock Hill or St. George, or wherever.

The state passed a good law a few years back limiting the total amount that a city could get from tickets as a portion of its total budget. Perhaps that limit should be lowered further, and as property taxes go up in the affected tiny municipalities, people might get serious about consolidation or disincorporation. For now, though, just be careful when driving on McKnight/Rock Hill Rd. As the officer says, the limit is 7 mph over, or 10 on holidays.

Tonight, Clay County has scheduled a public meeting to discuss setting its tax rates for 2007. As we have discussed here and here, they might have to reinstitute a property tax because of a court ruling. I have no idea what their final decision will be, but I look forward to reading about it tomorrow in the Star.

In a related event, Saint Louis County Residents For Property Tax Relief Now (or StLCRFPTRN, for short) intends to appear at tomorrow night’s County Council meeting to again demand a reduction in the county property tax rate. Although not legally required to roll back its tax rate, because it is so far below the authorized cap, St. Louis County lowered its rate under similar circumstances in 2005 and should do so again. I commend the activists within StLCRFPTRN for their dedication — although they should strongly consider shortening their name, along with demanding a rollback.

Both meetings should be interesting, if you are into this sort of thing — which I, for better or worse, am.