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.