I’ve been remiss in pointing out this article at The American by our former editor, Tim Lee, about how eminent domain abuse in Missouri harms the very poor residents that officials are ostensibly trying to help. The article serves as a brief introduction to some of the material in his recent study, "The Specter of Condemnation: The Case Against Eminent Domain for Private Profit in Missouri."

Another copy of the article also turned up a couple of days ago at The Cato Institute, where Tim is now an adjunct scholar. Be sure to read the article, then read the study, and learn how your neighborhood may be vulnerable to the bulldozers as well.

The St. Louis Post-Dispatch has a story today, via Combest, on St. Louis County’s newly born property tax reform group, and the Haenni family, which has gotten involved with it. Property owners throughout Missouri will be receiving their tax bills in the mail in the next few days. Many people, like my family, just get their personal property bills while the big one goes to the mortgage company, but enough people get them both that I predict major difficulties for any tax increase proposals on the November ballot.

The main problem the Haenni family sees is the large fund reserve balance kept by their school district, Kirkwood. (I know it seems this blog has been all Kirkwood lately, but that’s just a coincidence.) A national expert on education financing has this to say about Kirkwood’s large reserve balance of about 33 percent:

A national school budget expert questioned the need for any district to have fund balances of millions of dollars at the time tax revenue comes in.

Nationwide, the rule of thumb is five, possibly 10 percent at the most, at any time in a district fund balance," said James W. Guthrie, a professor of public policy and education at Vanderbilt University. He is president of the American Education Finance Association.

"Having fund balances that don’t dip below double-digit percentages (of the operating budget) is stunning and inexcusable," Guthrie said.

The interest alone from that balance can be very attractive to districts, he said.

"But I think it’s fair for the taxpayers to say that they’d rather some of that balance pay for a new park, or better ambulance service.

"Or, of course, to be returned to them in the form of a tax cut."

The new property tax group in St. Louis County is terrific. I am not opposed to property taxes, however. In fact, I much prefer them to income taxes — but the assessment system in Missouri needs to be reformed. I will have an op-ed with my ideas flushed out shortly.

In essence, I believe a property assessment should be set at the exact value of a sale price, and then all property within a county should be increased each year by an average amount determined by an impartial real estate value index. That would get rid of the entire reassessment system and eliminate the crazy discrepancies between neighbors we all see every reassessement year.  Also, certificates of value need to be required statewide. If some counties want to keep the sale amount private from everyone but the assessor, that’s fine, but we shouldn’t have a system where people in some counties are assessed more accurately than others.

While the MSBA was too busy attacking the competition to notice this, I found a public school success story. Governor Blunt wants to expand the virtual school program:

In a statement released on Friday, Blunt announced that he is recommending to the state legislature a $1 million increase for MoVIP, bringing the total funding for the program to $6.2 million.

"Working with Missouri’s General Assembly, we have increased funding for elementary and secondary education by half a billion dollars," Blunt said in a news release. "The $1 million increase I am recommending for Missouri’s virtual schools will help to ensure that all Missouri students have the educational options they need to reach their full potential."

The new Virtual Instruction Program is popular with students and parents, especially those who live in rural areas with limited course offerings.

There are other public school success stories out there. When parents can choose — whether it be choosing a charter or magnet school, or an online course — they’re happy to choose public school options. But when you tell them their kids have to go to the nearest brick-and-mortar school, even if the school is failing or unresponsive to their kids’ needs, they complain.

The MSBA is blogging away … telling us about the successes of public schools in Missouri, right? Well, not quite. Their latest post smears the Show-Me Institute and a few other organizations, cites some studies that fail to find benefits of private schools (for Justin Hauke’s criticism of one such study, click here), and comments:

MSBA and Missouri’s Education Roundtable strongly oppose voucher schemes such as tuition tax credits because they divert precious resources from our public schools and subsidize private schools that are not accountable to the public.

I hope the MSBA will show us some evidence that traditional public schools use resources well or are accountable to the public. When I looked through this week’s education headlines in search of public school accountability, I found this story about the St. Louis Public Schools. The district can’t even explain the education jargon in its new plan, let alone get parents to support it.

But the disaster in St. Louis isn’t even mentioned in the MSBA post, which they categorized under the heading "Religion." Huh? Apparently in the eyes of the MSBA, traditional public school success is a revealed truth that needn’t be backed up with empirical evidence.

Not really, but I like the image. Dr. Homer Tourkakis’ fight to keep his dentistry practice going at the location he owns in Arnold is going to the Supreme Court. The full story is in the Suburban Journals. Our own Tim Lee discussed the good doctor’s case in his recent study on eminent domain abuse in Missouri. I urge you to pay attention to this case as it moves ahead. The state Supreme Court took a strong step forward for property rights when it decided in favor of Clayton property owners over Centene Corp. recently. We’ll see if we continue to go further on that path.

Dr. Tourkakis sums up his position succinctly:

According to Tourkakis, his dental patients and the city’s general population have continued to support him.

"They don’t feel that private property should be transferred to another for profit," Tourkakis said.

He added that property is not easy to obtain and that once it is acquired, it just doesn’t seem fair to have the property taken away.

Much, much more on this case, and others like it, to come from the Show-Me Institute.

A front page article in yesterday’s Wall Street Journal detailed (and criticized) Wal-Mart’s aggressive accounting methods, designed to minimize its state corporate income tax liability. The company pays an inordinate amount of money to accountants and attorneys to exploit custom-tailored loopholes in state tax codes. So, while the average state corporate income tax is 6.9 percent (on top of the 35 percent federal rate), Wal-Mart paid, on average, 3.8 percent in state income taxes over the past decade.

A lot of people hate Wal-Mart. I’m not one of them. I think the company has done more to provide for low-income families in this country than any government transfer program in history. They’ve provided savings to untold numbers of consumers by focusing on the bottom-line, even if you despise their approach. And I generally find that the harshest critics of Wal-Mart are those with the luxury of having the resources to shop elsewhere.

But the point of the Journal article shouldn’t have been to demonize Wal-Mart and its “aggressive” accounting; instead, it should have focused on the gross inconsistencies in the nation’s tax code. Far too often, state legislators utilize the tax code to protect favored industries and to encourage or reward particular behavior. But this indirect approach simply benefits large corporations, which have the resources to exploit the loopholes and evade taxes, leaving small businesses and individuals with the burden of higher effective tax rates than their wealthier counterparts. This defies any conventional notion of an equitable tax system.

If state legislators would stop using the tax code as their personal “thank you” card to their corporate supporters, then companies like Wal-Mart would be forced to pay a flat tax, regardless of how creative their accounting is. Instead, big-box retailers have every incentive to circumvent the law. And in a high volume/low margin industry such as retail, the only way Wal-Mart can even justify expansion into high-tax states is if they are able to evade taxes and increase their margins.

So maybe instead of criticizing Wal-Mart, we should criticize the state legislatures and their inconsistent tax codes.

I see, by way of Combest, that the Missouri School Boards’ Association has started a blog. One of its stated objectives is to "get the word out about public education success stories in Missouri." In case you’re concerned that a blog like that will be updated only once in a blue moon, another stated goal is to discuss legal issues and federal and state legislation — about which, we can all agree, there is much to say.

I don’t expect this new blog to be a local version of Cato-at-Liberty, but I’m looking forward to the exchange of ideas it’s sure to trigger.

Liberty, Mo. (Clay County), is considering raising utility fees, aka taxes, on its citizens as part of its 2008 budget. The Kansas City Star has the story here (scroll down to the third story). The kicker here is that nowhere in the article, or from what I can find on their website, do they appear to even be considering selling off and privatizing their water services. The op-ed I wrote here about Kirkwood, in St. Louis County, applies even more to Liberty, as Liberty treats its own water, as well as using its own distribution system.

Liberty does not need to do this. Missouri-American is more than capable of purchasing the water system and serving the needs of the citizens. And with the proposed Liberty rate increase, they can almost certainly do it at a lower cost to the city and its residents, even after you remove the one-time profit of the sale from the equation.

To Liberty’s credit, they do seem to have bid out their trash collection services, which are handled by BFI. Plus, the city has one of the better municipal websites I have visited, so let’s give them props for that, too.

Along with David Stokes, I had the pleasure of attending two all-day sessions training Missouri broadcasters how to use the techniques of Computer-Aided Research and Reporting, first on Friday at UMKC and, the following day, at UMSL. This is a program started about eight years ago by a couple of folks at the Heritage Foundation — Bill Beach, director of Heritage’s Center for Data Analysis, and Mark Tapscott, formerly director of Heritage’s Center for Media and Public Policy, and now editorial page editor of the Washington Examiner. They were joined at our sessions by Greg Elin, chief data architect for the Sunlight Foundation, and Robert Bluey, who now holds Mark Tapscott’s old position at Heritage. In fact, Robert currently has a couple of entries on his blog about their Missouri trip.

The Show-Me Institute sent me to DC in July to take a look at one of Heritage’s CARR seminars, and decide whether the program was worth bringing to Missouri. Not only is the program incredibly valuable — for younger newcomers to journalism and old hands alike — but in a way, bringing this program to Missouri is like bringing it home. The textbook given out during the training sessions was written by none other than Brant Houston of the University of Missouri-Columbia.

One of the primary benefits of a program like this is that it shows essential skills can be taught in a non-ideological environment, even if the teachers have their own political points of view. Folks at the Show-Me Institute, the Heritage Foundation, and the Sunlight Foundation — in addition to all the attending reporters and editors — would all undoubtedly find many things to disagree about (and did, as evidenced by our lunch and dinner conversations). But the material presented in the training sessions was entirely informational — about how to use computers in researching articles, checking claims of fact, analyzing the use and misuse of statistics, and learning about all the new and varied ways Internet technology allows information to be gathered and used in ways unimaginable only a few years earlier.

These events wouldn’t have been possible without the generous support and organizational efforts of Don Hicks of the Missouri Broadcasters Association. We owe him a huge debt of gratitude.

On October 17, Judge Richard G. Callahan rendered a decision in the case brought by many of Missouri’s school districts alleging that the State of Missouri does not adequately fund public education. Judge Callahan concluded that the state is meeting its constitutional obligation to spend 25 percent of the state budget on K-12 public education.

Legal proceedings are not cheap. According to an Associated Press article written by David Lieb, two organizing bodies of Missouri’s school districts — The Committee for Educational Equality and the Coalition to Fund Excellent Schools — have spent $1.9 million and $700,000 respectively. In addition, the St. Louis School District spent $600,000. Overall, plaintiffs have spent $3.2 million in trying this case.

At the time the case started, the school districts would have thought of this as an investment. In this context, the return is abysmal. After spending $3.2 million, the additional funding — after enforcing Judge Callahan’s ruling — will be zero. So, from the school district’s perspective, the return is negative-100 percent, so far. Perhaps it is too early to measure the returns. Often, it takes time to realize the gains from such an investment. I cannot accurately forecast how this trial will affect Missouri’s legislature. Hence, it is possible that the school districts will realize significant gains in the future.

What is the likelihood that Missouri’s General Assembly will feel compelled to increase their contribution to K-12 education? In my view, the answer is that they will not. For the sake of disclosure, I should mention that I computed the Legislature’s obligation for this trial, presenting evidence that the state was more-than-meeting its constitutional minimum. Indeed, my independent calculations indicated that the state spent more than 35 percent of its discretionary budget on K-12 education in each of the last three years. Based on my calculations, it is difficult to imagine that the Legislature will feel compelled to increase its contribution to elementary and secondary education, given that it is spending more than one-third of its discretionary budget on this activity. By this reasoning, the most likely event is that K-12 education will receive the same funding, as a percentage of the state’s general revenue, as it did last year.

Thus, unless Missourians want to specify an even larger fraction of state resources to funding elementary and secondary education, the return to this trial investment will not improve much from this year’s utter failure during the next few years. In economics, the question starts with the opportunity cost of the resources spent on this trial. Even if the per-district expenditures are a small fraction, the relevant question is whether the school districts would have had a higher return by spending those resources on producing education. It is hard to imagine that the return would be negative-100 percent if spent on books, teachers, science equipment, etc. Elementary economics tells us that resources should flow to their highest valued use. It is time for school districts to apply this logic.

Regular readers of this blog know that I like to include references to literature in the titles of my posts. So, of course, I was intrigued to learn that Gov. Blunt is now seeking a poet laureate:

Blunt is working with the Missouri Center for the Book to determine length of term and a basic job description. The center is a nonprofit group that promotes the importance of books and reading.

"This is a public acknowledgment of the value of literary arts," said Mark Tiedemann, board president for the center. "It puts a face on what is all too often overlooked."

We have official state invertebrates; now we’ll have an official poet.

The problem with this phenomenon is not that it burdens taxpayers — the poet laureate won’t receive a salary, just like the crayfish aren’t compensated — but that it gives the impression that everything worthwhile needs government sanction or approval. Why don’t we just appreciate our state’s wildlife and writers without official designations? And no matter how diplomatically the poet is chosen, any choice is sure to annoy somebody out there because of subject matter or poetic style.

In some ways, this might be a better move than giving crayfish a special title. Most states do have poet laureates, and many people like the idea. If a laureate is chosen once every few years, that doesn’t waste elected officials’ time the way hundreds schoolchildren lobbying for official bugs could.

On the other hand, a choice of a partisan poet could lead to unnecessary public discord. At least crayfish don’t write anything controversial.

I have written before about the proposed new 911 tax on cellular phone bills. There is a great article in the Sikeston Standard-Democrat (link via Combest) about the latest meeting of the legislative task force considering how to improve 911 service in Missouri. In prior posts, I had worried that a statewide 911 fee/tax would not be used just to improve the location ability of 911 cell calls, but to add 911 service to the parts of Missouri that had never bothered to institute it in the first place at their own cost. Needless to say, I appear to have been justified in the concern (emphasis added):

As it is also proposed that 40 percent be diverted to help rural counties without 911 establish their service, that means his center would only get about 30 cents per cell phone —minus 3 cents that would be deducted for processing, Wells said. He said that means it would take five cell phones to make up for a single land line.

It should absolutely be required that if this cellular tax passes, rural counties that have never established 911 service be forced to institute a local phone tax as well to pay for a portion of their new emergency service. They should not be allowed to make taxpayers statewide pay for something they should have paid for themselves decades ago. If the state does not make that a requirement, I’m going back to a beeper.