Thanks to Janese Heavin’s excellent coverage on her Class Notes blog, I’ve been keeping an eye on the drama surrounding the Columbia School Board’s pursuit of an 11-percent increase in the district’s school tax levy. Much of the controversy has been rooted in the fact that the school board drew $10.3 million from its reserves to pay first-year salaries for 70 newly-hired positions, knowing that the salaries could not be sustained without an increase in the levy.

But the whole story took a rather baffling twist with remarks made by one of the school board’s members at a recent forum for school board candidates:

“We didn’t think it would be prudent to come to taxpayers and ask for
an increase with” $36 million “in reserves,” he told about 20 attendees
at an NAACP-sponsored forum for school board candidates. “We spent them
down purposefully. We did that with the full understanding that we
would have to make decisions about how to cut costs or seek a levy. …
It was a prudent decision to spend down reserves first.”

This is a classic case of the "better to ask forgiveness than permission" mentality. The school board knew that Columbia’s taxpayers would not willingly shoulder an additional tax burden, so they hired first — hoping the move would force taxpayers to accept an increase in taxes. With the hires made and the new personnel already present in the schools, the board was betting that the citizens would not call its bluff.

As appalling as this tactic is, there is a rather mystifying point that also needs to be highlighted: Columbia’s School Board, surprisingly, seems to be quite good about meeting its budget on a year-to-year basis. The district has ended nine of the last 10 years with a surplus, building its reserve from about 13 percent in ‘96–’97 to nearly 25 percent before last year’s $10.3-million hiring spree. To be sure, the budget itself is bloated by certain unnecessary expenditures, but I would be thrilled if other public school districts consistently kept within their budgets. April’s election in Columbia will tell us whether the city’s voters are sufficiently impressed with the school board’s stewardship that they’ll overlook the shady planning of the board members.

An editorial in the Southeast Missourian (link via Combest) compares the proposed sales tax holiday to cough syrup:

A statewide proposal to create a sales-tax holiday in late June to stimulate the economy is drawing criticism. You might compare the idea to taking cough syrup; it may not taste very good to some, but overall it will leave the economy feeling better.

This is an apt comparison, although not for the reason given in the editorial. Cough syrup temporarily makes you feel better, but it just masks a symptom; it doesn’t make your cold go away or improve your health in general. Likewise, a sales tax holiday appears to help the economy for a few days, but without doing any long-term good.

We’ve been very proud at the Show-Me Institute to be at the forefront of HSA reform in Missouri. The “new rules” of health care necessitate a more personal approach, one in which individuals manage their own health care needs directly.

But it’s not just SMI that believes in the market approach to health insurance. An article on CNN Money this morning is waving the HSA banner too. And really, when you think about it, how strange is it that the country has been so slow to embrace an open-market approach to health insurance in the first place? What continues to amaze me is that we as a nation continue to view health insurance premiums and coverage as “one size fits all.” How alien that would seem to us for any other type of insurance policy. Just think how much consumers have benefited as insurance has been deregulated in other markets.

In part, the CNN Money article chronicles Jason Jeffords of Bedford, NH. Jason pays $240/month for a high-deductible comprehensive health insurance plan for his entire family. His premium is determined by his own health risk and that of his family.

The catch is that Jason’s deductible is $10,000, meaning that all costs below that level are paid out of pocket. But that’s where HSAs come in. Similar to a 401k, Jason opened an HSA account through his employer, allowing him to contribute tax-free earnings each month. His employer ups the ante by contributing $5,800 annually. These funds can be withdrawn at any time to cover medical expenses that fall below Jason’s annual deductible (again, tax free). And the interest on Jason’s HSA earnings grows tax-free. If funds remain when he retires, they can be withdrawn exactly like in a 401k. They’re also portable, so Jason can change employers and still retain his benefits.

HSAs are the model for the future of health care. Employers are much better off contributing funds to their employees’ plans indirectly than financing their employee’s health care costs directly. And the portability and choice aspects allow families to better manage their health care as new needs arise. This solves the problem of the nation’s current uninsured (who generally must live sans insurance if their employer doesn’t provide it) while keeping costs under control. In other words, the nation’s current insured will no longer be able to abuse the system by having their costs subsidized through a diffusion of responsibility. It is this system that has priced so many people out of the insurance market to begin with.

Anyway, the article is a great read and I’ve rambled on long enough. The point is that a health care revolution is coming and people who choose to manage their own health care today are poised to be much more financially secure than those who wait until change is thrust upon them. Which group do you want to be in?

I’d like to apologize for the title, first off, as I really don’t like the word "deadbeat" — but the pun was too good to pass up.

The State of Illinois, as reported by this article in the Post-Dispatch, recently enacted a new policy that refuses to grant hunting or fishing licenses to fathers who are behind on child-support payments. As the article plainly explains:

A $14,000 child support check was handed Rachel Miller because the father of her two sons likes to hunt white-tail deer.

Apparently, though, the individuals who have been forced to make that choice aren’t too happy about the fact that the government is getting more involved with their affairs:

[The father] isn’t happy about the turn of events. He says the way the state works now, they’re in control of way too many things.

Child support, like most topics in family law, is a touchy subject. And while I agree that there should be some government impetus toward parental responsibility (if for no other reason than fathers should take care of their children, rather than passing that burden on to the state) I feel like options such as paycheck garnishment often go too far in restricting the freedoms of "deadbeat dads," who are not always as much to blame for an unfortunate family situation as the mother — but who still get stuck with the bill for children they’re often not allowed to see.

But that’s not what we’re talking about here.

If you want to make a claim against the fishing license, fine. But I think it’s pretty apparent that the State of Illinois is justified in restricting who runs around in the woods and shoots off a firearm or bow. Unless you’re hunting for food for the children who you owe child support to, the state should be able to restrict the activity of recreational hunting as a motivation for fathers to fulfill their lawful financial obligations.

This isn’t an issue of "oh, they can afford a hunting license, so they should be able to afford child support," because that’s a ridiculous comparison. A deer license in Illinois for 2008 costs $15, while child support payments are often in the thousands of dollars per month. This is a carrot and stick issue. Hunters want to hunt, but they need to tend to responsibilities before they can play.

Or, they could just take their children hunting with them … which might have solved the whole problem in the first place. Just a thought.

There is such a thing as too much milk, even if it does a blog good, so I’ll move on to another topic. The Post-Dispatch has an article about a city reviewing the results of its use of red-light cameras to improve safety make money. At the very least, we can credit the St. Peters Police Department for taking a hard look at the results of the cameras, and for trying to ensure the owner is also the driver. And while they point to a reduction in accidents at intersections, they admit they can’t credit it to the cameras — and also that they have no measure of the increased rear-end collisions at the same places. From the article (emphasis added in all excerpts):

But there was a piece of good news. The number of traffic crashes in St. Peters dropped 34 percent between 2005 and 2007 — though the report acknowledged that attributing the decline solely to red light cameras is problematic.

"While experiencing a reduction in crashes both citywide and at the target sites, the impact of red light photo enforcement on driver behavior may be difficult, if not impossible, to quantify," the report said.

Some studies have found that while red light cameras can help reduce side crashes, they can increase the number of rear-end accidents, as drivers slam on their brakes to keep from setting off the cameras.

Townsend said St. Peters has yet to determine whether the number of rear-end accidents has gone up.

In fact, the cameras do increase rear-end collisions — as several studies have shown. I don’t think anyone would deny that an increase in people covering their faces as they go through intersections is a bad thing. This can’t help but lead to an increase in accidents of just about any type, from front-end collisions to Dukes of Hazzard–style river jumping:

Police refer to them as "duckers" — drivers who try to shield their faces from red light cameras as they run signals at intersections watched 24/7 by electronic traffic enforcers.

The city of St. Louis maintains no such pretense of making sure the owner is the actual driver, nor do officials even pretend to care about anything other than raising revenue:

[T]he city of St. Louis is pulling in substantial revenue. Of nearly $2 million in total ticket revenue in the past year, the city has kept about $1.6 million, said Ron Smith, the city’s operations director.

Cameras in St. Louis don’t take pictures of drivers’ faces, so the city does not have the problem with duckers that St. Peters faces.

To be fair, if you go to court in the city and swear under penalty of perjury that you were not the driver, you can get the ticket dismissed. The best thing about people in local government is being able to watch your neighbors work to build a better community, and dedicate large amounts of time and effort to their city. The worst thing about some (not all, just some) of the people in local government is that they are all about the immediate and local issues, and have no knowledge of — or, more likely, just don’t care about — broader issues, like how red-light cameras and eminent domain abuse take away our liberty, piece by piece. (In the case of cameras, its the liberty to be presumed innocent that’s under assault, among other things.) So I hope we see an end to red-light cameras sometime soon.

My colleagues have done an excellent job of demonstrating the unconstitutionality and general craziness of the proposal to forbid labeling milk "hormone free." I’d like to point out that if we follow this line of reasoning, we’ll have to change the labels on all other breakfast foods, too:

• Cereal will no longer be labeled as "crunchy" or "crispy," because that implies other cereals are soggy.
• Eggs will no longer be labeled "free-range," because that implies some hens are raised in tight spaces.
• No more golden delicious apples, because that implies other apples are not tasty.
• No more "I Can’t Believe It’s Not Butter," because that implies you could believe that other butter substitutes are just substitutes.

In short, this proposal is just as bad as the FDA’s idea to forbid labeling suncreens above SPF 30, because it implies that the higher SPF sunscreens offer more protection … even though they do.

The St. Joseph News-Press has a report today (spotted via John Combest) about two bills before the General Assembly that would prohibit certain truthful labeling on dairy products. As the story points out, these bills have nothing to do with the contents of the milk bottles — they just prohibit how milk producers would be allowed to label their products.

This is a very important matter for many smaller dairy producers because, with so many large dairies utilizing hormones or other chemicals to increase their cows’ output, the smaller operations want to assure consumers that their milk is not produced using such methods. It’s a selling point that both helps the farmers differentiate their product from similar products and helps consumers make informed decisions about the food they are buying for their family. If a customer would prefer to purchase products that have not been produced with the use of certain hormones or chemicals, why on earth would the General Assembly try to prevent dairy farmers from providing the relevant information?

Special interests. And, unfortunately, they seem to be well-served by the bills currently under consideration. These bills are essentially geared to prevent large hormone- and chemical-using dairies from unwanted competition by the smaller guys — but they also specifically exempt dairy producers using "organic farming," as defined by the state. Organic farmers will love this, because they can continue to realize the benefits of differentiating their products from the large producers without having to compete for consumers against small non-organic dairies. Thus, the bill’s advocates can achieve their goals while minimizing opposition.

In addition to being terrible policy, this scheme is unconstitutional. Both the First Amendment of the U.S. Constitution and Article I, section 8, of the Missouri Constitution protect freedom of expression — including commercial speech. These constitutional provisions safeguard the right to advertise truthfully about a product, so long as the product itself is legal and the advertisement does not mislead consumers about its attributes. The labels that would be banned by these bills are well within the constitutions’ protections because they merely make an accurate statement about the contents of the products therein. And even if it were found that a dairy producer’s labeling was false, the proper solution would be to punish the falsehood rather than to prohibit other producers from placing truthful labels on their products.

Mr. Combest has the link to a St. Joseph News-Press story on an absolutely ludicrous idea that combines the worst parts of the nanny state with the worst of rent seeking. Can you believe that some people, in 2008 … in America … think they have the right to produce milk without hormones, and to actually put a label on the milk saying that? If we allow this, pretty soon we’ll have to let liquor stores say they have the "coldest beer in town" even if they can not prove with certainty that it is, indeed, the coldest in town. Perhaps there is a legitimate reason why small dairy farmers should be prevented from labeling their milk "hormone free" — which it is — other than pressure from lobbyists for larger dairy farmers, but I can’t possibly imagine what that reason would be. At least one consumer quoted in the story understands capitalism and liberty:

"It’s my choice, whether it’s healthier or not,” Karen Schaefer said as she grabbed two bottles of Shatto milk from the dairy case. “If they don’t use the hormones, they should be allowed to say that.”

A supporter of the proposed ban on labeling hormone-free milk as hormone-free has a less clear understanding of such things — or perhaps he does understand, but just wants to throw up as many roadblocks as possible for his competition:

“In saying their milk doesn’t contain something, they are implying that other products do, which often isn’t the case,” Mr. Hegeman said.

So the fact that the small producers might IMPLY something (this must be said like Chris Penn in Reservoir Dogs) is now grounds to limit their freedom? This has to be the most unconstitutional proposal in Missouri since Ladue tried to ban signs protesting the Gulf War from someone’s yard. (This must be said like Lionel Hutz, attorney at law. I am not going to say where Lionel Hutz comes from, because if you don’t know, I have no desire to associate with you.)

I should be more careful about what I say on this blog, because when I make crazy suggestions, people take my advice. When I asked whether longer sales tax holidays might be better than three-day ones, that was a rhetorical question. But now Illinois legislators are proposing a 10-day sales tax holiday to help people out with their back-to-school shopping in August. I predict that people will rearrange their shopping days to buy things during those 10 days, rather than later in the month. Kind of like how they react to Missouri’s sales tax holiday, only spread over a longer time period.

I hope Missouri and Illinois aren’t going to engage in an arms race of longer and longer sales tax holidays. If a state decides its sale tax is too onerous, it can lower the rate. That would help people and the economy all year round, and people wouldn’t have to change their shopping schedules in August.

The nation was stunned in 2005 when the United States Supreme Court ruled that the United States Constitution allowed the City of New London, Conn., to force its citizens out of their homes simply because the city thought it could generate more taxes if their modest residences were replaced with luxury condominiums and high-end retail stores. The popular outrage against the Supreme Court’s decision resulted in a widespread effort (in which the Show-Me Institute’s director of policy, Jenifer Zeigler Roland, played a major role) to make sure that Kelo could not happen in other states.

Unfortunately, as has been demonstrated by a recent court decision, Missouri was among the states whose eminent domain reforms merely rearranged deck chairs on the Titanic. Unless the Missouri Supreme Court proved willing to restore the property rights guaranteed by the state’s Constitution, cities and agencies across the state could continue to take perfectly normal properties in order to give them away for the profit of a governmentally preferred owner. With last week’s unfortunate decision in City of Arnold v. Tourkakis, (and kudos to Nick for an excellent post on this topic) it seems unlikely that the Missouri Supreme Court is willing to prevent the eminent domain abuse that currently plagues this state.

This abandonment of property rights is deeply unsettling. As a nation — and as individual states — Americans adopted Bills of Rights in order to make sure that certain essential liberties would never be subject to restriction or elimination. Among those freedoms is the assurance that governments have no right to take away someone’s property unless it is required for the construction of a road or public building. The real-life consequences when the government does take someone’s property illustrate why this power mustbe tightly limited.

Eminent domain is rarely threatened against wealthy people or those who can fight back. Instead, the usual targets are communities composed of minorities, the poor, and/or the elderly. In the middle of the 20th century, cities so regularly used eminent domain against black neighborhoods that the practice was commonly referred to as "Negro removal." That offensive label eventually fell out of use, but poor black communities continue to be condemned far more frequently than white communities. A 1989 study estimated that of 10,000 families that Baltimore displaced in the name of removing blight, fully 90 percent were African-American. Mindy Fullilove, an expert on the impact of eminent domain on minority communities, estimates that more than 1,600 black neighborhoods have been destroyed nationwide.

But then there are elderly people. In Kelo v. New London, Wilhelmina Dery was an 87-year-old still living in her family home, in which she was born. All she wanted was to live out her final days in those beloved, familiar settings. She eventually did get her wish, but only because she died before the city got its chance to kick her out of her home.

In Norwood, Ohio, the city took the residence of Carl and Joy Gamble, an older couple who received their condemnation notice just days after they were finally able to retire. They were uprooted from the home in which they had raised their family and built their American Dream, and separated from their nearby family and friends, after which they moved into a small apartment with a daughter in Kentucky. After a grueling three-year legal war, the Ohio Supreme Court vindicated their rights, but the stress drove Carl to his grave and left Joy in such delicate health that she couldn’t return to the home she had sacrificed so much to save.

I was recently told about an elderly couple in Rolla who weren’t physically able to cope with a move when they were threatened with eminent domain. The wife had Alzheimer’s disease and the husband was terrified to complicate her dementia by moving her to an unfamiliar environment. Unmoved by their plight, the city tried to make it look like they were just holding out for more money. One councilmember said they should just move to a nursing home.

Someone’s home represents their stability and shelter, both in physical and emotional ways. It is the centering location in their life, the place to which they should be able to return each day and know that they have their own place in the world. These things are especially precious for people who can claim ownership of very little else. But rather than protecting the rights of these citizens, both courts and legislatures have been content to sacrifice their security in the name of "progress," or — more coarsely — so they can be replaced with a wealthier, "more desirable" class of people.

Eminent domain abuse is not just unconstitutional — it is unjust, immoral, and abhorrent. And, assuming that Missouri’s lawmakers and courts will continue to stand by as more and more home and business owners are wrecked by these abuses, the people of this state will have no choice but to
amend the state Constitution in the hopes of restoring the security that should be an American birthright.

To combat childhood obesity, school districts across the country have adopted ever-more-draconian measures to ensure that students are provided with a “healthy diet” throughout their school day.

While I take no issue with schools encouraging healthy eating habits (certainly, I think this is a good thing), I do object to some of the more stringent measures that schools have chosen to take, such as zero tolerance policies. Mostly, my objections stem from the fact that I am fundamentally opposed to omnipresent “father knows best” statist policy, in which the state tells people how they should or should not run their lives. But it’s not just that I object to the terms of such measures, it’s that enforcement of such standards is practically impossible. Schools should recognize that it is up to parents to instill good eating habits in their children, and not the responsibility of the schools themselves. Because despite school districts’ best efforts to prevent “unhealthy food” in their schools, where there’s a will there’s a way.

Case in point: A California-based newspaper details the ever-growing black market for candy among grade-school students. Of course, this is old news to young’ns like me. I remember my own candy racketeering in middle school. Of course, I was only a candy runner in those days (I helped deliver it), not the actual candy supplier (that is, I didn’t keep it in my locker … those kids got suspended).

If SMI addressed social issues, I might argue that this logic unfortunately carries forward to the adult world, as well. But mostly, I think it is interesting how even children understand fundamental economics. That is, when schools (or government officials) limit supply amid strong consumer demand, they make it very profitable for black-market suppliers to deliver their product.

Frenchtown, a historic French quarter of St. Charles, is the latest challenger of spurious eminent domain abuse.

In 2006, the St. Charles City Council voted to designate 15 acres of land in the Frenchtown area as “blighted.” Once again, the rationale for the “blight” designation had little to do with actual urban decay. Rather, it was ostensibly seen as little more than a policy tool to award property tax break incentives to wealthy developers. For a review of Missouri eminent domain abuse, I remind readers to check out Tim Lee’s comprehensive study.

The worst part of the story, however, is the shameless defense by the city’s eminent domain advocates:

Supporters of the measure argued that a large-scale effort was needed to combat longstanding decay and that a piecemeal approach [...] wouldn’t work. They said eminent domain was a last-resort tactic that probably wouldn’t be used in most cases.

And yet these same advocates argue that eminent domain should be used in this situation. But what keeps future developers from appealing to the same logic? Surely, the eminent domain advocates recognize the slippery slope they have created. If property rights aren’t constitutionally protected, then there’s no reason to believe that any developer’s assets will be any more secure than the property they originally usurped.

What incentive do businesses have to relocate to a district that has already set a precedent for eminent domain abuses? What about the Homer Tourkakises of the world? Entrepreneurs who invest their time and savings into developing a vibrant business in St. Charles are now at the mercy of future political whims. Eminent domain doesn’t strengthen property values, it destroys them.

Who is the better steward of land resources: the vested individual with a business interest, or an unelected bureaucrat with a vision?