First, I’d like to thank Hugh Scott for his response to my op-ed arguing against expansion of the MetroLink system. I doubt we will ever see completely eye to eye on the subject, but an informed dialogue can still be illuminating for everyone involved.

Before I respond directly to any of Scott’s points, let me just clarify something that may have been unclear from the op-ed (a 700-word format does not allow for full explanation of every point): I was not arguing against the proposed half-cent sales tax. My point was that we should not expand the MetroLink system into areas with relatively low population densities because the lines would have low ridership and be even more heavily reliant on tax dollars than current lines.

Scott observes that the flexibility of buses is a disadvantage as well as an advantage, a point well-taken. Light rail is undoubtedly better than buses when it comes to understanding routes. However, the question is whether that disadvantage outweighs the advantages of flexibility and lower costs that buses provide, and my answer is that it depends on population density. The denser an area, the more rail should be preferred to buses, and vice versa.

With regard to the possible lines of MetroLink expansion, Scott is perfectly right that Metro does not plan on expanding the system without federal funds to diffuse the costs of constructing the line(s). However, even if a new line would not cost area taxpayers a cent to build, it could still be a bad deal for them if very few people rode it and they were then on the hook for operating costs. Again, my argument is that the best method of forecasting ridership is through population density. Aside from the north-south corridor, none of the proposed lines come close to matching the densities found along the current lines.

Finally, I agree that MetroLink performs well against the light-rail systems of other cities, but that is a relative metric when the question should be an absolute one: Do the benefits justify the costs? Even existing lines do not meet the profit-loss test used in the private sector, so light-rail systems are not efficient by our most common metric for success. Perhaps we need another absolute standard we could use to determine which light-rail lines are successes and which are failures, but for now the best that can be said is that it is unclear whether the benefits of MetroLink expansion would outweigh the costs.

The Show-Me Institute recently released an op-ed by research assistant John Payne titled, “Adding New MetroLink Lines Too Costly, Inefficient.” The piece appeared on the Riverfront Times blog on Feb. 15, along with comment from the paper, and ran in the St. Louis Business Journal on Feb. 19.

We recently received a thoughtful response from Hugh Scott, III, who has been a member of Metro’s Board of Commissioners for nearly five years, commenting on Payne’s op-ed. In the interest of furthering dialogue about important issues like public transit funding, his entire letter appears unedited below:

As even noted anti-tax advocate Glenn Beck acknowledged on his show yesterday, (2/22/10) some taxes are necessary. In the case of public transit, I would maintain that taxes supporting these systems inure to the economic benefit of metropolitan areas. Public transit enables people to commute to jobs and transit centers provide a critical mass of customers for businesses located near them. Not only does Metro employ 2000 St. Louisans but it assists countless thousands of workers to get to jobs in healthcare, retail, manufacturing and distribution. For many of these commuters, no public transit would mean no job.

Show-Me Research Assistant John Payne misses the mark in his article, “Adding New MetroLink Lines Too Costly, Inefficient.” While he tacitly agrees that public transit is important for our community, he advocates opposition to the proposed referendum for a ½ cent sales tax on the April ballot. The focus of his criticism is on the part of the proposal which suggests some the addition of light rail corridors. Extending light rail is however, not the major thrust of the proposal.

Throughout its history, BiState (Metro) has not had sufficient dedicated taxes to support its operations. It has relied on the beneficence of the City of St. Louis and the adjoining Missouri and Illinois counties, the States of Missouri and Illinois, and the Federal government to provide operating subsidies. Some of these entities have been generous over the years. Others have been quite parsimonious. In all cases, awarding of funds is arbitrary and Metro must beg for money from its stakeholders on an annual basis. If Metro is expected to operate in a business-like manner, it must have a stable reliable source of revenue. This, in fact, is what the April 6 ballot proposal is really all about.

When the last tax measure failed in a very close vote in November of 2008, Metro was forced to cut 40% of its bus and train service and 400 staff members. This resulted in the loss of at least 5000 jobs in our community. While half of these cuts were quickly restored due to the receipt of emergency funds from St. Clair County and the State of Missouri, deeper cuts will be necessary if the proposed tax is not approved by the voters. With the approval of the new tax, pre-2009 service will be restored and the current system will be able to operate on a stable financial footing for the first time in memory.

Other short term (1-5 year) priorities include implementation of a bus rapid transit system similar to the “higher speed bus routes” advocated by Payne, adding amenities such as a “smart card” fare system, and beginning planning for more light rail. These programs will be implemented only after the pre 2009 service is in place and only when funds are available. The five year plan does not call for construction of new light rail corridors.

Putting a light rail extension in service will take a minimum of ten years. It will also require large amounts of federal funds in order to build. Metro does not believe that the community should “foot the bill” for any Metrolink expansions without the majority of the funds being provided by the federal government. Instead Metro is asking for funds to begin the planning process so that when federal funds become available for light rail expansion, St. Louis will be in line. It only makes good sense to spend some money on planning. Otherwise, federal money for light rail will go to other cities and St. Louis will be left out.

Payne tries to make a case for increased bus service as opposed to more light rail. He asserts that buses are a better form of transit because they are cheaper and provide more flexible route opportunities. This was precisely the argument made by former BiState CEO, Col. Rudolph Smyser in the 1960’s when he ordered the shutdown of the last of the street car lines in St. Louis.

While it may be argued that buses are superior to light rail from an economic standpoint, flexibility of routes is precisely the problem with buses. Businesses which might prosper by being near a transit stop do not locate near bus stops because a bus stop might easily move to another street or corner. Many non-transit dependent customers will not ride buses because it is often difficult to know where the bus is going. With streetcars, subways and light rail, one need only look at a map showing landmarks or look down the track to know where the car is headed.

In some ways, Metro has successfully mitigated the confusion caused by changing bus routes by creating a hub and spoke system integrating buses and light rail. Thus a person who boards a bus that says “Clayton Station” can expect to travel to the Clayton Metrolink station. Similarly, a passenger who boards our most heavily traveled bus route, Grand Avenue, can be confident the bus will travel north or south on Grand without deviating. In a sense, our increased market share in buses may be in part attributed to our lack of flexibility with routes not the reverse.

In conclusion, Metro has built a world class transit system which integrates bus and rail service quite successfully. While our population density might be low for light rail travel our market share compared to peer group cities is very high. Light rail continues to gain popularity from non-transit dependent riders and nationally, our market share is in the top three cities in our ten city peer group. The April ballot proposal is about preserving this fine system. Our first priority must be to stabilize the existing system. Future planning is always important but it comes further down the list of priorities.

A map of the schools and their proposed status, according to the plan released by the Kansas City School District.   Click to enlarge.

Superintendent John Covington has a new vision for the Kansas City School District, and it involves halving the number of schools in the district from 61 to 31 or 30. Initially, the “rightsizing” plan sounds drastic, but Covington is adamant. The school district, which had 75,000 students 20 years ago, now has only has 17,500 students and 50-percent occupancy.

The plan (from what has thus far been released) may bring a much-needed change. By consolidating facilities, the school district can better allocate funds tied up in buildings and redundant administrative costs. The district has faced low test scores and budget deficits, and officials hope that this radical change will improve both. As for the cost:

As it stands, the District receives about $12.8 million net monthly less than what that it needs to sustain operations. Fortunately, the District currently has about $91.2 million in its operating fund to coverage the shortage. The Right Sizing plan will drastically reduce costs and wipe away the $12 million deficit. As with your personal budget, the District’s goal moving forward is to not spend more than the revenue it receives.

Given the reduction in student population, rightsizing looks like it could be a step in the right direction, but a full analysis will have to wait until more details are released.

The purpose of this post is to walk through the math that Dr. Joseph Haslag and Abhi Sivasailam used in their case study, “Previous Estimates Overstate ‘Fair Tax’ Rates, Harms,” in an effort to be completely transparent.

First, they estimated the average family size in Missouri:

average family size = (size of Missouri population) ÷ (number of resident filers)

= 5,778,901.81 ÷ 2,626,773.55 = 2.2

Next, they estimated the size of the average rebate value, using the federal poverty threshold approximation associated with a family of 2.2, which is $15,393:

average rebate value = federal poverty threshold approximation × sales tax rate proposed in HJR 36

= $15,393 × 0.0511 = $786.58

Then, they estimate the cost of the rebate system, which is equal to the amount of rebates awarded:

(average rebate value) × (number of families qualified for the rebate) = (cost of rebate system)

$786.58 × 2,626,773.55 = $2,066,167,540

Lastly, they compute τ, the revenue-neutral tax rate:

τ = (government revenue + cost of rebate program) ÷ (aggregate personal consumption)

τ = ($7,117,761,408 + $2,066,167,540) ÷ $158,531,333,333 = 0.0579313171 = 5.793 %

where government revenue equals the sum of individual income, corporate income, and sales taxes.

We see that the size of the tax base, β, decreases if the amount of exemptions increase. This indicates that the sales tax needs to be assessed on a broad base in order to for the rate to remain low. By decreasing the number of exemptions that exist in the status quo, Missouri can establish a sales tax rate that’s lower than other estimates have suggested.

In their case study, Haslag and Sivasailam explain that expanding the list of services that are taxed would not result in a dramatic increase in the cost of living. In a previous post to this blog, Sivasailam elaborated on this concept:

[I]t’s important to understand that a change in the tax code implies a change in incentives. People and firms alike respond to these changing incentives in many ways, including altering their supply and demand of goods and services. With that in mind, the claim that the prices on all goods and services would increase by the tax rate is misleading.

Legislators in New Hampshire are debating whether to declare apple cider the official beverage of their state. As is often the case with proposed state symbols, the bill was submitted at the request of a group of elementary school students. Students at another school have lobbied for milk to receive the honor instead.

New Hampshire state representatives talk about the official beverage proposals as if naming these symbols actually accomplished something:

Rep. Leigh Webb of Franklin saw a problem with both drinks, saying, “Neither is unique to New Hampshire. [...] It will help agriculture, but I’m not sure this is the way to do it.”

This legislator implies that state symbols have the power to shape consumption patterns and improve health:

State Rep. Brian Poznanski, a Democrat from Nashua, reflected on his youth in supporting cider.

“In junior high and high school, I drank sugar and more sugar,” Poznanski said. “There’s a huge obesity problem in this country.”

The students’ teacher has a more realistic perspective on state symbols, and acknowledges that an official beverage probably won’t change people’s actions any more than the official recognition of state animals does:

“My students wanted cider to be a symbolic representation of New Hampshire because of autumn and farm stands,” Nichols said. [...]

“We have a white-tailed deer as our state animal, and I’m not sure what that does for the economy, but it’s symbolic because it’s here. That’s what the children were going for, not to exclude milk by any stretch of the imagination.”

It’s clear from her statement that some people already associate apple cider with the state of New Hampshire. Her students nominated it because they’ve seen apples growing and they’ve seen stands selling cider. Many other New Hampshire residents identify these familiar sights with their state.

People are justified in thinking of apple cider as symbolic of New Hampshire. But it’s a bad idea for New Hampshire to create a new state symbol recognizing it, for the same reasons I’ve opposed the proliferation of official symbols in Missouri. Long lists of state symbols encourage people to ask the government to sign off on their opinions and preferences. They give the impression that for a symbol to count, it needs a state imprimatur.

However, there is a positive aspect of state symbols that I’ve overlooked. When people watch their representatives argue about whether cider or milk should be the state beverage, they may conclude that legislators don’t share their priorities. This could prompt them to realize that if they want to get things done in their state, they’re better off finding solutions in the market. Elected representatives are often apt to shy away from making waves about the things that matter to their constituents and instead talk about less consequential things like official drinks. Maybe the official political fish should be the red herring!

Competition and choice are characteristics of a free and open marketplace. Some have suggested that a more open market for health care insurance could resolve a few issues in the present health care debate. That would help, because increased competition among health care insurance suppliers might reduce costs. This came to mind during the recent California health insurance shock. If you hadn’t noticed, many people were surprised when a leading California health care insurer proposed a 39-percent rise in the price of premiums for those individuals who buy their own insurance. It was noted that this price increase came at a time when the largest health care insurers had an average profit increase of 56 percent, even though the economy was down. As those insurers indicated, the profit had resulted from the prior year’s activities, while the proposal to raise premiums was related to an expected change in future costs.

Rather than paying this high premium, some purchasers may want to shop for something less expensive. Those insurance policy purchasers might want another company — perhaps one that reinvested some of its profits in a way that kept its premium prices lower. While trying to visualize how this might play out in Missouri, the question arose: Would people who find coverage unaffordable in this state buy less costly policies from another state, if available? Then, if some lower-priced policies were available, would some of the currently uninsured take advantage of that situation? If that were so, would that resolve some of the problems in our health care dilemma? Are we seeing a situation develop in which marketplace competition might benefit our community? To learn more about this, I thought it reasonable to see how this would express itself in Missouri.

My first concern was whether there were any significant barriers to such competition. This was examined by the O’Neill Institute at Georgetown University recently. As many know, states have a primary role in regulating their own health insurance industry. The federal McCarran-Ferguson Act spells out “the respective roles of the federal and state governments in regulating health insurance.” However, the O’Neill Institute’s answer, in rather general terms, is that this barrier can be bypassed. Although the existing act separates federal and state roles in regulating health insurance, the people at the O’Neill Institute believe that legislation could be designed around the business end of insurance, specifically relating this to interstate commerce. But the key point is that yes, it can be done.

Given that it can be done, is that what we want to do? What will happen if many people from Missouri buy less-expensive health insurance policies from a company headquartered across state lines called, say, Out-of-Missouri Co. (OOM)? One can imagine that if everyone purchasing OOM insurance stays healthy, more people would be insured but at a lower immediate cost. At first, that appears good. But what if my neighbor with hypertension and diabetes buys an OOM policy, too? If that happened, the managers at OOM would need to raise the premiums for everybody; that is because OOM Co. would be insuring more sick people. That could cause two results: 1) the people in OOM’s home state would have to pay a higher premium price, and 2) so would we. If the resulting price remains lower than any comparable Missouri price, we are better off; but we may have harmed our out-of-state neighbors by causing their prices to increase.

Perhaps we need to look at why the OOM policy was lower than the Missouri policy in the first place. There could be several reasons for this. Those that are most common are the following.

1. The people in the state where OOM is registered might be healthier than the people of Missouri. That could be true, but if OOM Co. were swamped with sick Missourians purchasing their policies, its costs would increase.
2. The insurance regulations in the state where OOM is registered might be different, and the insurance coverage being offered might not be the same as what is needed in Missouri. The regulations in the state where an insurance company is registered are ostensibly intended by that state to protect the residents from their most common problems. The distribution of disorders in Missouri may not be the same as in that other state, so the insurance may not satisfy Missouri’s regulatory requirements.
3. Health care costs vary geographically. As a result, insurance purchased in a state with less-expensive health care costs might not be sufficient in another state. As a result, the purchaser of OOM may have a greater out-of-pocket expense.

So, what would happen if we were to go ahead with this? It is expected that the first people that might take advantage of this are those who are currently uninsured. Those uninsured that are young and healthy would be rapidly accepted by the OOM insurer. Those that are less healthy might not be accepted by an OOM insurer, because of their preexisting disorders. A great many sick Missourians might be unable to buy this less expensive OOM insurance. That means that you and I could end up having to contribute to their care, and the result may be an additional expense to be borne by everyone in the state. But, in reality, this expense is not something new; we are already paying it now.

Interestingly, the Congressional Budget Office looked at this issue about five years ago. They found that if the benefits available from states with the lowest costs were in effect nationally, the price of individual health insurance policies for those able to purchase them might be reduced by an average of about 5 percent. So, it seems that Missouri’s young healthy uninsured would be able to purchase OOM health insurance, and each purchaser might save about 5 percent. But an unintended consequence could be an increase in health care costs for everyone else.

Well, that is one choice. As the health care debate continues, we will have to look at some of the others before deciding which option we want.

Saint Louis’ only orchestral music station might be changing formats, and it has two area congressmen pretty angry:

U.S. Reps. John Shimkus, R-Collinsville, and Lacy Clay, D-St. Louis, are asking the Federal Communications Commission to weigh the potential negative consequences of selling KFUO (99.1 FM) to a company that broadcasts “Christian contemporary” pop music.

The station is currently owned by the Missouri Synod of the Lutheran Church. Facing a cash crunch, it agreed to sell the station last year for $18 million to Gateway Creative Broadcasting.

The pending sale — which still needs federal approval — has raised a cacophony of dissent from the St. Louis arts community, bemoaning the loss of the only station in the region where listeners can hear full time from Brahms, Bach and others.

As someone who likes orchestral music and listens to KFUO fairly often (it is number five on my car presets) but absolutely hates Christian contemporary, I sincerely hope the station keeps its current format.

That being said, what do Shimkus and Clay expect the Missouri Synod to do if this sale is blocked? The church probably wants to sell the station because it is a drain on the church’s resources, so it might just stop broadcasting even without a sale to save the operating expenses. Barring that, the Missouri Synod will have to cut back on other goods or services that it sees as more vital than the radio station. Such a cutback could include anything from laying off marginal employees to reducing charitable work.

If people are interested in saving KFUO’s current format of Bach, Beethoven, and Brahms, they should organize a fundraiser or a pledge drive for the station.  KDHX 88.1 FM in Saint Louis (number four in my presets) provides a format for numerous different genres of music that are never heard on pop radio, and all without almost any advertising because the DJs and workers are almost all volunteers and listeners give them money for the good work they do. If people truly want a station to play concert music in Saint Louis, they will support it monetarily. If not, then as much as I or anyone else may not like it, the scarce resources used to broadcast it currently should be used for some other kind of programming that people like more.

From KMOX:

The Missouri House Budget Committee was told two Missouri prisons could close down if the House cuts funds by five percent.

The warning was delivered to the budget officials by Public Safety & Corrections Chairman Dwight Scharnhorst from St. Louis County.

A top official told Scharnhorst how losing nearly 20 million dollars would effect on the Department of Corrections.

“His statement at the time was, ‘I will definitely have to close one institution, possibly two.’ It would be minimum security, he designated that right away.” said Scharnhorst.

Adult Prison Director Tom Clements says non-violent prisoners and those eligible for parole could be released before the end of their sentences.

So, what’s the problem? The state would save money, and people who mostly should not have been in prison in the first place would be free. I suppose those who work in the closed prison(s) would be hurt in the short term, but this would be an improvement for the economy as a whole because the money formerly spent on incarceration would be available for more productive uses. The same applies to the former prisoners who just might be able to return to (or start) useful employment. I simply fail to see the danger in this “warning.”

Link via John Combest.

Using the “Show Me: The Spending” web tool, I isolated the amount of money that government agencies in Missouri have spent on agency-provided food during the last decade:

Trend of Agency-Provided Food In Missouri (2009 dollars)

When I was an undergrad at the University of Wisconsin–Madison, I sat on the Student Services Finance Committee, which allocated $28 million to student organizations providing educational and diversity services. During our budget hearings, the issue of organization-provided food was one of the more controversial.

I’ve always thought that food is an example of wasteful spending, whether it be funded by student-segregated fees or taxpayer dollars, because it isn’t available to and doesn’t directly benefit all students on campus, or all taxpayers within a state. Once it is consumed, it cannot be used again. Plus, $4 million per year is a big tab — and this sum doesn’t include money spent on food while traveling. If government agencies in Missouri stopped providing food, they could make up 2/3 of the revenue that is lost through the sales tax exemption on yachts, for example.

That stated, I realize that it is unrealistic for this number to be zero; there are certain situations in which agency-provided food can be appropriate. On the SSFC, we adhered to a food policy in order to be consistent and viewpoint neutral.

On the bright side, at least government agencies in Missouri haven’t increased their expenditure on food over the last decade.

The home of Shirley Hamilton, in the 2200 block of Madison Street, in Saint Louis’ north side.

Although NorthSide redevelopment plans for her area indicate that Hamilton’s neighborhood is slated to be replaced, Hamilton said she’s not concerned. As a resident of a city block with only three houses, she said, she’s been expecting this. “It’s been going on as long as I’ve been here,” she said.

Another home on the 2200 block of Madison. Photos by Caitlin Hartsell.

Shirley Hamilton has been living at 2209 Madison since 1978. Her home is one of three houses on the 2220 block of Madison, all of which are small, but tidy. Between each house is a good amount of open space.

These three houses fall squarely within the boundaries of the recently approved $8.1 billion development of the city of Saint Louis’ north side. Of course, about 4,600 other properties also fall within those boundaries, but in the case of the 2200 block of Madison, NorthSide Regeneration LLC, the company behind the development, may be endangering one of its most frequently invoked promises.

That promise concerns the use of eminent domain. Although eminent domain is constitutional, it can be very unpopular, especially if it appears that a government agency is using that power merely to help a private business.

Proponents of the development, including developer Paul McKee, NorthSide lawyer Paul Puricelli, Alderman April Ford-Griffin, and Alderman Marlene Davis, have said repeatedly that the city won’t use eminent domain to take owner-occupied homes, and that fears to the contrary are unfounded. In fact, the company went even further. When NorthSide applied for millions of dollars in tax credits from the state, the company submitted an affidavit stating, among other things, that “The Applicant has not identified any owner-occupied residences for acquisition under the Redevelopment Plan.” McKee, the chief manager of NorthSide, signed it.

Along with that affidavit, NorthSide submitted a list of about 260 owner-occupied residences to the state. Hamilton’s home and the house sitting the farthest west on her block were on that list.

NorthSide has also disclosed some of its preliminary plans for the area in its redevelopment plan, which was submitted to the city when the company applied for nearly $400 million in tax increment financing (it has been approved for up to $380 million). One of the more interesting pages of that plan is page 24, which is a map of “proposed open space” for the area.

According to that map, NorthSide plans to remake four city blocks into open space: the area lying between Madison Street and Maiden Lane, west of 22nd Street and extending a little past Jefferson Avenue. In other words, despite all the assurances about the limits on eminent domain for the NorthSide project — including the affidavit of its chief manager — Hamilton and her neighbor are two owners who may not have long to occupy their homes.

That’s not to say that the company didn’t try to purchase Hamilton’s home. About a year ago, she said, she got a letter from a lawyer, representing an anonymous buyer, looking to purchase her home. When Hamilton called the number listed, she said, she was quickly offered $60,000 for the property. But Hamilton, who is retired, wasn’t interested in searching for a new home, and asked instead if the buyer could offer her a deed to a different property, elsewhere in the city. The lawyer promised to check, Hamilton said, but never called back. A few months later, Hamilton said, she was sent the same form letter.

Hamilton said that her next door neighbor did sell. According to city property data, the second house on the block is owned by MLK 3000, one of the companies that NorthSide used to acquire properties under the radar. Hamilton said she isn’t interested in moving, but if the developer could offer a trade instead of money, she would consider it. She’d like to stay in the city.

An email inquiring about how concrete the plans for open space are, and whether NorthSide would adjust its plans if property owners were unwilling to move, did not receive a response from Bill Laskowsky, NorthSide’s chief development officer, and a company representative.

Ultimately, Hamilton said, she’s not concerned. As a resident of a city block with only three houses, she said, she’s been expecting this.

“It’s been going on as long as I’ve been here,” she said. Laughing, she noted that when Mayor Freeman Bosley Jr. was in office, her home was slated to become a golf course.

“I’ll deal with it when it comes,” she said.

According to NorthSide’s plans and its submitted list of owner occupied residences, two other homes appear to be slated for open space: one on the 2500 block of Madison, and one on the 2700 block of Glasgow Street.

Within other documents submitted by NorthSide, the company has designated the area surrounding Hamilton’s home as “mixed use,” which could indicate a different set of plans for the area.

A committee in the Missouri House has heard a bill to keep the Missouri Gaming Commission from closing the President Casino (or any other casino) on “purely economic grounds.” The testimony makes clear the Kafkaesque bureaucratic nightmare into which the commission has placed the President Casino:

Some House lawmakers said the idea of “inadequate declining performance” seemed subjective and was a hard standard to interpret.

Rep. Vicki Englund, D-St. Louis County, questioned how the commission evaluates casino’s performance and asked lobbyist Jim McNichols, who testified on the commission’s behalf to explain how casinos could be expected to meet standards when they weren’t explicitly provided with standards to comply with.

McNichols said the commission works hard to involve casinos in the rulemaking process.

The Missouri Gaming Commission opposes the bill, but McNichols said he couldn’t speak to the specifics of the President Casino case because there was a pending legal matter.

This may strike some people as a crazy idea, but I think it should be up to the owners of a business to decide whether it lacks sufficient revenue to justify operating, not the decision of a government commission with no set standards by which it must abide. And, of course, if the President is forced to close, it is not only the casino’s owners, employees, and patrons that would suffer, but also gamblers at other casinos. Following the decrease in competition, casinos would be able to pay out a lower amount in winnings at the margin.

Missouri Gaming Commission Executive Director Gene McNary got right to the heart of the matter in his written testimony when he wrote that passing the bill to keep the President Casino open would “neuter the commission and, in effect, take away our ability to regulate Missouri’s gaming industry.” I doubt he shared my view that this would be a positive development, however.

Mr. Combest linked this morning to a story in the Jefferson City News-Tribune about a proposal to reduce the length of the legislative session in Missouri. To this I say, “Amen!” Just like the size of the legislature, the length of time in session is a factor in the logrolling potential that constantly builds pressure for more spending, more laws, more restrictions, etc. (Here is a link to a study demonstrating that professional legislatures — and length of time in session is one of the variables used to determine “professional” status — spend more money per person than citizen legislatures.)

So, I readily agree that Missouri should have a shorter session, because I basically agree with P.J. O’Rourke that preventing a politician from governing is like preventing a pit bull from eating your child. Anything that limits the ability of government to infringe on our freedoms is good by me. You can find a lot more on this subject in my paper about government in Missouri from the perspective of public choice economics.

I do wish someone would have called us to testify about this proposal, though. From the article:

No one spoke for or against the plan during Monday’s hearing.

Nobody ever said public choice economics was exciting. …

This article describes neuroscience research that seeks to explain an observed correlation between breastfeeding and higher child IQ scores. What caught my eye was the fact that a Parents as Teachers program in North Carolina helps recruit subjects for the study. Here, a Parents as Teachers educator expresses her approval:

“It’s very interesting and has a lot of validity,” said Marcie Petty, an educator with Parents as Teachers whose office is in Cheatham’s lab. “It makes you think about what your children eat and what they’re taking in.”

Encouraging participation in medical studies goes beyond Parents as Teachers’ mission of promoting good parenting practices. It’s entirely possible to be conscious of what your children are eating without signing them up for research.

I see two problems with Parents as Teachers recruiting subjects for studies. First, parents may not understand the difference between enrolling in a study and the other activities that Parents as Teachers promotes. Playing and reading helps their children learn; research helps scientists do their jobs. Parents may feel pressured into joining studies that won’t benefit their children one way or the other. They also might feel guilty if they go against the educator’s recommendation to enroll their children in research.

Second, as you know if you’ve read the comments to my last post on breastfeeding, people disagree about the effects of breast milk. Some researchers think breastfeeding is crucial for children’s health; others dispute its importance. No one study can put this question to rest. If Parents as Teachers educators tell parents that a study is valid and that it’s a good idea to participate in it, that could be viewed as an endorsement of the study’s findings.

I’ve never heard of a Missouri Parents as Teachers program suggesting that children join research studies. And, although Parents as Teachers programs are connected by a national organization, they’re run individually by local people, so the fact that a program in another state did something is no indication that it will happen here. Still, people need to know about what the program does in other places, and to consider whether those aspects should be replicated in Missouri or avoided. Any publicly funded programs that go to people’s homes and endorse specific activities need to be closely scrutinized — and that includes Parents as Teachers.

Missouri exempts yachts from sales taxes. And, like most selective sales tax exemptions, this policy has several negative consequences. Mike McGraw wrote about this in the Kansas City Star over the weekend (link via Combest).

First, there is a fiscal problem: Missouri is losing $6 million a year as a result of the exemption. The fact that Missouri is cutting other areas of its budget (e.g., education and battered women’s shelters) to address its deficit exacerbates this problem.

Second, there is a fundamental problem: The policy encourages rent-seeking. Boat producers benefit because the sales tax exemption provides an incentive for a person to buy a bigger boat than she would otherwise. From the article:

The additional revenue that taxing large boats would generate would be more than offset by sinking boat sales and lost jobs, said Mike Atkinson of the Lake of the Ozarks Marine Dealers Association. [...]

Exemption-eligible boats appear to be especially popular with Jefferson City lobbyists, whose colleagues have fought for years to keep the tax break on the books.

I tried to brainstorm a list of consequences of the sales tax exemption on yachts that are positive, albeit admittedly insignificant, for the purpose of this post. For one, Missouri residents benefit from some ironic boat names, such as “Tax Haven,” “Tax Seaduction,” and “Special Interest.” (These are just as witty as Tiger Woods’ yacht, “Privacy.”) Additionally, this exemption removes any incentive for members of film production companies to misuse the film tax credit program in Missouri to purchase a yacht for their personal use. They’d have to go to a different state.

I’m quite a bit late on this one, but a couple of weeks ago, the Missouri Senate overwhelmingly approved a bill that would essentially shut down all strip clubs in Missouri. The bill would ban strippers from, well, stripping, because it would would require them to be at least partially clothed, and even when partially clothed, they must stay at least six feet away from customers. Oh, and they wouldn’t be able to serve liquor, either. I doubt many strip club patrons are going to want to go to a club where they can’t drink, and where the girls all have to walk around with tape measures to ensure they don’t get too close, so I suspect many of these businesses would likely close.

The most obvious consequence of these closings would be that people formerly employed in that segment of the adult business in Missouri would either seek new lines of work or move to other states that are more accommodating of their current professions. The supply of this good may diminish or even disappear, but the demand for it won’t go anywhere. This situation could easily lead to results that should give pause to the social conservatives who support this bill.

The increased hassle of the legislation might dissuade some people from consuming such lascivious services, but others will seek out substitutes. It would likely lead to an increase in the consumption of pornography and prostitution (and some unemployed strippers would probably enter the world of prostitution, as well). But that still may not be the worst of it.

A 2006 study by Clemson University economist Todd Kendall argued that greater access to Internet pornography helped drive down the incidence of rape during the prior two decades. In a Slate article, fellow economist Steven Landsburg summarized Kendall’s findings:

First, porn. What happens when more people view more of it? The rise of the Internet offers a gigantic natural experiment. Better yet, because Internet usage caught on at different times in different states, it offers 50 natural experiments.

The bottom line on these experiments is, “More Net access, less rape.” A 10 percent increase in Net access yields about a 7.3 percent decrease in reported rapes. States that adopted the Internet quickly saw the biggest declines. And, according to Clemson professor Todd Kendall, the effects remain even after you control for all of the obvious confounding variables, such as alcohol consumption, police presence, poverty and unemployment rates, population density, and so forth.

OK, so we can at least tentatively conclude that Net access reduces rape. But that’s a far cry from proving that porn access reduces rape. Maybe rape is down because the rapists are all indoors reading Slate or vandalizing Wikipedia. But professor Kendall points out that there is no similar effect of Internet access on homicide. It’s hard to see how Wikipedia can deter rape without deterring other violent crimes at the same time. On the other hand, it’s easy to imagine how porn might serve as a substitute for rape.

If not Wikipedia, then what? Maybe rape is down because former rapists have found their true loves on Match.com. But professor Kendall points out that the effects are strongest among 15-year-old to 19-year-old perpetrators—the group least likely to use such dating services.

Moreover, professor Kendall argues that those teenagers are precisely the group that (presumably) relies most heavily on the Internet for access to porn. When you’re living with your parents, it’s a lot easier to close your browser in a hurry than to hide a stash of magazines. So, the auxiliary evidence is all consistent with the hypothesis that Net access reduces rape because Net access makes it easy to find porn.

There are legitimate reasons to question such a strong conclusion on Kendall’s part, some of which were pointed out by Steven Levitt of Freakonomics fame, but it cannot be easily dismissed. Furthermore, it would be inappropriate to draw direct parallels between Kendall’s study and the strip club situation in Missouri, because they are not perfectly analogous. Most obviously, 15-year-old to 19-year-old boys are not likely to be found in strip clubs to begin with. Still, the general idea holds up. People seeking sexual gratification may turn to much worse alternatives in the absence of easy access to common consensual options like pornography and strip clubs.

Let me be very clear: I am not predicting that this law would result in a measureable uptick in rapes in Missouri. In fact, absent a good control group, it would be hard to establish statistical correlation, let alone causation. What we do have is some very suggestive evidence that the law of unintended consequences may apply to this law in a fierce way, and it is something that the law’s supporters should think carefully about.

According to a story from WSIL:

A plan pushed by Rep. Mike Bost, R-Murphysboro, could bolster a core of his district’s economy. Bost wants to create a fund that would go toward improving the region’s wine industry.

He’s proposing to divert a portion of the revenue from the excise tax on wine, and reinvest it in the industry. It’s classic rent-seeking behavior. He also uses the copycat argument (i.e, “other states are doing it, so mine should, too”) that many legislators use to justify production incentive programs for their favored industries.

“This is not anything that hasn’t been done in other states,” Bost said. “That is why the state of Missouri has grown its wine industry so well, and it’s because they are able to do this.”

Although it is true that Missouri provides assistance to wine producers, it does this in a manner that’s different than the one proposed in Illinois. Rather than diverting excise tax revenue, Missouri provides a generous tax credit to wine producers.

Using the “Show Me: Tax Credits” web tool, I discovered that Missouri has awarded $5,736,848.39 under the Wine and Grape Tax Credit during the past decade. The largest recipient, Stone Hill Wine Company, received a combined sum of $2,005,629.22 from 2002 through 2004:

Trend Wine and Grape Tax Credits Awarded in Missouri by Vendor

First and foremost, I disagree that a state should rely on tax credits to attract businesses. A state is better off if it has businesses that are self-sustaining, not reliant on government assistance.

That said, however, I prefer Illinois’ proposal to Missouri’s Wine and Grape tax credit program because it places the burden of the subsidy on users rather than on non-users. In Missouri’s program, all taxpayers in the state pay for the subsidy. In the Illinois proposal, only those who consume the product are assessed. It’s a user-fee system that’s analogous to the way in which gasoline taxes and tolls fund highway maintenance.

Additionally, it’s fallacious to expect that the production and consumption should be equal within the state. States like Missouri and Illinois should focus on the activities that they do best, and then realize the benefits of free interstate trade. If Illinois were serious about maximizing its wine consumption, it would specialize in some other type of production that it can do more efficiently, and then trade with another state that has a comparative advantage in producing wine.

Critics of the Illinois proposal are correct to state that the money being spent on wine production cannot be spent on other programs, such as education. However, the same can be said of the money that Missouri taxpayers spend via the wine and tax credit. No matter how it is routed, taxpayers are going to be poorer by the amount of the subsidy.

This weekend, KC Star columnist E. Thomas McClanahan had a terrific article about the benefits of replacing earnings taxes with a land tax, as proposed for St. Louis and Kansas City by Show-Me Institute executive vice president and University of Missouri–Columbia economics professor Dr. Joseph Haslag. This is the second major KC-area piece that really demonstrates an understanding of how a land tax creates a better incentive structure relative to other types of taxation. The Pitch had an excellent story on the issue in 2008.

As if the article was not great enough, I also want to share the remarks of commentor number 3, “jayhawk6″, who said:

Good explanation for just how the land tax works. The spiteful aspect of property taxes [...] is that a homeowner can be discouraged from improving his/her home because it will raise its value and thus the tax burden.

We thank both McClanahan and “jayhawk6″ for the attention and focus on this important issue. McClanahan is absolutely right when he says that a land tax should be adopted as an eventual replacement for the current property tax system even if the earnings tax is maintained. (But it should NOT be maintained.) Although, as the article explains, this would entail amending the state constitution, counties in Missouri could move in that direction simply by applying more of the current value of property to the land, and less to the improvement. Then, as the property might be improved, the taxes would rise less because the portion determined by land value would hold steady.

The St. Louis Post Dispatch covers both sides of the urban chicken controversy in this article. In the paragraphs that deal with complaints about unwanted chickens, you could replace the word “chicken” with the name of any other pet. When you allow people to keep animals, some owners will be irresponsible and some will abandon their pets. This is no more reason to outlaw urban chickens than the glut of chihuahuas in California animal shelters is reason to forbid chihuahua ownership.

Unwanted chickens will be kept to a minimum if the birds go to people who seek them out of their own volition. Foisting chickens on reluctant citizens will result in abandoned animals. With that in mind, I’m not in favor of the Maplewood-Richmond Heights School District’s plan to encourage chicken ownership. The district has a goal of convincing 50 families to keep chickens. I’m afraid that if it offers too much encouragement, people who aren’t so excited about chickens are going to give in and adopt them, only to abandon them later. A better goal would be to provide information about chickens to anyone who’s interested, without setting a lower bound for the number of chicken owners.

The district’s on-site chicken coop is a good idea; children can learn a lot about animal life cycles from watching chickens. When I was in elementary school, individual classrooms raised chicks. Building one coop for the whole school might allow for more efficient maintenance, and classes could come one at a time to observe the birds. It also could be more practical to keep chickens on a permanent basis than to order new chicks each year and give them away when school’s out.

[NOTE: Since the original publication of this blog entry, additional information has been released about the filmmakers accused of purchasing personal vehicles using Iowa's film tax credit program. From the Iowa Republican:

We would like to emphasize that these are separate filmmakers from those involved in production of the film The Scientist, also referenced in the blog entry below.]

Three companies and three individuals that were involved in the production for the film The Scientist have been charged with inflating and falsifying expenses in order to obtain more than $1.85 million in tax credits through Iowa’s film tax credit program.

According an article in the Des Moines Register:

Weiner Runge, a 44-year-old film-maker and resident of St. Louis Park, Minn., is accused of a felony for reportedly inflating values of expenses on applications to the state for tax credits. Over the course of the project, Weiner Runge inflated the cost of making the film from $767,250 to almost $1.8 million, according to the Attorney General’s office. [...]

Saunders, 37, [...] provided free services that were used to claim $2.5 million in credits. Saunders also faces felony theft charges.

The following are specific examples of how they are accused of inflating the cost of the services and products that they consumed under the guise of the film tax credits.

Court records indicated Maximus Production Services filed claims for rental equipment that were significantly inflated, such as $225 each for a push broom, a hand broom, a metal rake, a pick axe and a sledge hammer, and two shovels for $450.

The invoices also included various sizes of step ladders that ranged from $900 each up to $1,125, and a 24-foot extension ladder reported to have been rented for $1,350.

As for the most egregious misuse of Iowa’s film tax credits, filmmakers involved in two other productions bought a Mercedes and a Land Rover for themselves. From the Des Moines Register again:

[S]tate officials found [movie]-makers had used the tax credit program to purchase two luxury vehicles worth more than $60,000 and other items later put to personal use.

If these filmmakers purchased their vehicles in Minneapolis, the combined state and county sales tax rate would have been 7.375 percent if not for the tax credit exemption. That means that the filmmakers avoided paying more than $8,850 in sales taxes on their combined vehicle purchases. This is the amount of money that the film producers saved buying the vehicles in Iowa under the guise of a film production, and it represents lost sales tax revenue for Minnesota. Filmmakers who live in Hollywood, Calif., would have an even greater incentive to buy luxury cars using film tax credits in other states because the combined state and county sales tax rate there is 9.75 percent. For a purchase of $120,000, then, a person would have to pay an additional $11,700 in sales tax.

Supporters of film tax credit programs say that the films have economic and fiscal impacts beyond the amount that the filmmakers spend in the state. We’ve discussed this concept in a previous post on this blog, in fact. I’d like to pose the following questions to these supporters: How much economic activity does the purchase of a luxury car generate in the state economy? How much extra output does it yield for the state? Will this motivate more people to move to the state? My answers are, in order, “not much,” “none,” and “no,” but I am eager to read their comments.

I worry that Missouri’s film tax credit program could be at risk of the same kind of fraudulent activity, because it has a structure similar to Iowa’s program. Under both programs, the tax credits are transferable. Iowa has since pulled the plug on its program to scrutinize its accounting, and Missouri would be better off doing the same.

Writing in the Missouri Record, Mizzou political science professor David Webber highlights some of the hard numbers behind Missouri Chief Justice William Ray Price’s call to lessen the criminal sanctions on nonviolent offenders:

Missouri has twice the number of nonviolent offenders in prison [as] it did in 1994. The number of new inmates in 1994 was 4,857; in 2009 it was 7,220. The cost per inmate is now $16,456 per year or about $45.00 per day. The total appropriation to the Department of Corrections in 1994 was $216 million now it is over $670 million—an increase of over 300 percent[.] Worse yet, Missouri’s recidivism rate is 41.4 percent within two years.

Price is also concerned with inconsistencies in sentencing across the state’s judicial circuits. The average sentence for the lowest sentencing circuit is 4.5 years and for the highest circuit is 9 years.

The Chief Justice shares the same opinion that most citizens have about crime—violent, dangerous criminals need to be incarcerated—but he doubts the effectiveness of locking up first-time offending drug and alcohol addicts. Price states boldly: “We also know that simple incarceration, no matter how expensive, does not cure addiction. Treatment with strict judicial oversight does.”

If newspaper editorials are any kind of indication, the idea that we need a cheaper and more humane way of dealing with drug offenders and the like is extremely popular. Hopefully, political inertia will not doom such a worthy cause.

Wisconsin is debating another proposal involving milk. The Wisconsin raw milk bill I wrote about yesterday would put Wisconsin’s policy ahead of Missouri’s, but on this issue, Missouri already guarantees its citizens greater freedom. The matter I’m referring to is breastfeeding in public.

Breastfeeding in public places is protected by Missouri law. In fact, you can print out your own “license” featuring a quote from the statute, and show it to anyone who challenges your right to breastfeed.

Yesterday in St. Louis, opponents of the payday loan industry held a hearing, which was covered by the Post-Dispatch and linked to by Combest.

Here is my advice to every person in Missouri: Stay away from the payday loan industry; the vast majority of the time, it is a terrible financial decision to make use of it. Here is my advice to the government: Stay away from the payday loan industry; it is not your role to interfere in private contracts and prevent people from making poor financial decisions.

Then there are the unintended consequences that would result from eliminating, or severely restricting, the industry. It is not as though the people who now use payday loans would suddenly no longer have any need for a loan. Some would move into receiving loan services from the banking system (a good result), some would entirely lose the ability to obtain credit (a mixture of both positive and negative results), and some would turn to the loan shark industry with all of its attendant risks, violence, etc. So, if you want to improve the climate for loan sharking and enforcing collections with baseball bats, then by all means legislate the payday loan industry out of existence.

This set of arguments about payday loans has also been covered by Show-Me Institute op-eds superior to this blog post.

A Michigan school district is starting a program it calls “Begindergarten.” The idea is to help prepare preschool-age children for kindergarten through monthly sessions. Each month, parents and students will meet as a group for instruction. Parents will receive packets of reading materials and information about how to continue teaching their children at home.

The district is missing some of the advantages of programs like Parents as Teachers, that send educators into homes. It won’t have the opportunity to observe every child’s daily schedule and family environment. It also won’t be able to watch parent-child interactions very closely or make individualized suggestions.

On the other hand, the district won’t incur the cost of paying people to drive out to every child’s house and spend time with them one-on-one. While I’m skeptical of the assertion that Begindergarten “will not cost the district any money” — even if it’s run by volunteers, there’s at least the expense of photocopying all the materials — it won’t call for anywhere near as much funding as Parents as Teachers.

Some Parents as Teachers programs do minimize home visits as children get older, or place greater emphasis on group programs. It would be wise for more of the Missouri programs to move in this direction, because Missouri doesn’t have the resources to give every child the ideal home visiting program through age five. Parents as Teachers will have to consider whether the most costly aspects of its model are truly necessary for all the children it serves, or whether something like Begindergarten would be good enough for older children.

Using the “Show Me: The Spending” web tool, I mapped the historical line graph of the film tax credits allocated in Missouri during the past decade. The only spike in the graph occurred in 2009, and that was for Up in the Air:

Trend of Film Tax Credits Awarded in Missouri

The total number of tax credits that have been issued since 2000 is 35, for a total amount of $12,927,154. The average amount of a tax credit was only $369,347, which is much less than I anticipated. The smallest amount of credit that was awarded was $19,048, and the largest was $4,131,011. The latter award occurred in 2009, for Up in the Air, and it is represented by the spike in the graph for that year.

Although I disagree that Missouri should offer film production incentives, I am relieved to learn that few productions are taking advantage of it. Only one film has come close to the tax credit cap during the last 10 years. I have heard many of our commentators and politicians call for increasing this cap, but this graph leads me to believe that it would not encourage a marginally higher number of large-scale productions. It would be as efficacious as putting a price floor below the equilibrium price.

Missouri lawmakers, via Senate Bill 784 and House Bill 1812, have proposed to reform the Access Missouri program. Currently, the program awards need-based grants to Missouri students. Students attending private colleges may receive up to $4,600 of aid, and students attending public schools may receive up to $2,150. Under the reform bills, these amounts would be equalized to $2,850 for all students. The bills perplex me; is the brand of reform they endorse really necessary?

Proponents of reform have made three, general arguments, all of them dubious:

First, they assert that reform would make the distribution of public aid more equitable. It’s atrocious that private school students may receive more than $2,000 in additional funding than their public school counterparts. This is tantamount to pandering to special interests. This argument is very puzzling; do its exponents not remember that the award amounts were carefully derived from two years of collaboration among private and public representatives and financial aid experts in order to meet “just” and “equitable” standards? Do they not understand that public aid is already lavished upon public school students and that the Access Missouri grants constitute the only form of public aid available for low-income students attending private colleges? Would not equalization of AM grants then be tantamount to pandering to public college students at the expense of their deserving private school counterparts? Are taxpaying Missouri citizens choosing to attend private colleges less deserving of the taxpayer dime than those attending public colleges?

Second, they argue that private school students should not receive a higher subsidy because they chose a more expensive education. It is an inefficient use of government funds to confer grants to students who are simply “paying too much” for education that they could receive at a public institution at a much lower cost. Here, too, problems abound. First, this claim once again ignores the state appropriations already going toward public institutions and the students who matriculate there. Second, the claim assumes that private and public schools have homogeneous curricula that can easily be compared. The reality is more complicated. Private colleges offer unique course and degree possibilities, with unique levels of quality and market value relative to public schools. In that light, the value of education at a private college is private and subjective. Even if we were to assume that private and public colleges are perfect substitutes, it is unclear why Missouri should, other things being equal, choose to subsidize one group of students at the expense of another group.

Third, proponents suggest that reform would open access to more students. Some legislators have argued that equalizing the award amounts would result in an increase in the total matriculation of Missouri students. Given a dearth of quality data on the impact of Access Missouri, this claim is utterly unsubstantiated; without appropriate data, I find it very difficult to accept prima facie. To begin, the reform package reduces the maximum amount of private aid by $1,750 and increases the maximum amount of public aid by $750. All else equal, it is reasonable to assume that students would be less motivated to attend private colleges, but not significantly more motivated to attend public universities. Of course, all else would not be equal, and the sum effect of reform is difficult to project. What can be said is that the claim that access would increase as a result of the reform is premature.

The Post-Dispatch doesn’t seem to like the reform package, and instead suggests that schools compete for funds. As per this view, students would receive aid relative to the “effectiveness” of the institution they attend. It is an interesting idea, primarily because it would involve the development of outcome measures that higher education currently lacks.

I have a better idea, one on which I have previously written: Support students through higher education vouchers, and then use Access Missouri for the rest.

This is probably a little more radical than most of us would hope for, but still quite interesting. The news of a school district in Rhode Island firing every teacher comes to us via a former intern, and (personally speaking) one of my favorite Democrats, Calvin H.

Needless to say, I think the changes we need in Missouri require less dramatic action than this, but if this is what they had to do in Rhode Island, I hope it works out. Improving the school, not protecting jobs, is the ultimate goal of sensible education policy — and, if you read the article carefully, it sounds like up to half of the staff will likely be hired back anyway.

A proposal in Wisconsin would allow dairy farmers to sell raw milk, with a few conditions:

Under the bill, farmers with a grade ‘A’ dairy farm permit would be allowed to buy a permit to sell raw milk.  They would have to meet certain sanitary conditions for bottling milk and have a sign to let consumers know raw milk doesn’t provide the same protection of pasteurized milk.

The proposed change in law would give farmers greater freedom to sell their milk. And consumers would be able to make their own decisions about whether to purchase unpasteurized dairy products. Everybody would win.

The bill’s restrictions should be enough to protect the public. We don’t station a policeman by every cow to prevent farmers from drinking raw milk, and we needn’t impose that level of surveillance on other people, either. Regulators ought to concentrate on stopping fraud and deceptive advertising, like if a farmer were to display a sign saying “Buy pasteurized milk here!” when he’s really selling raw milk.

If Missouri adopted a similarly free milk policy, it would be a welcome end to the bizarre law that says exchanging cash for milk in a barn is legal, but the same transaction in a parking lot is prohibited.

Two op-eds, attributed to different members of the Missouri Dental Association (MDA), appeared in the Columbia Missourian and the Examiner in response to my op-ed about dental therapists (which appeared in both the Columbia Missourian and the Examiner). Although these responses were textually the same, they have different credited authors: In the Missourian, the op-ed is attributed to Dr. Rob Coyle, DDS, and in the Examiner, the authors are  Matt Niewald, DDS, president of the MDA, and Scott Roberson, DDS, trustee of the MDA. One can only wonder why the same piece is attributed to different authors, but a reasonable conclusion may be that the MDA asked its members to submit a pre-written op-ed to these newspapers. The MDA’s purpose is not secret, given that the last line of both pieces reads:

We would encourage others, both inside and outside of the profession, to contact your legislators and ask them to support the MDA agenda. Working together, we are confident we can bring common sense solutions that will improve the oral and overall health of our state.

The MDA suggests other factors, like Medicaid reimbursements, that may be contributing to the problem of providing access to dental care for Missourians. These are valid points, but they do not provide an adequate reason for their offhand dismissal of the value of dental therapists. The MDA implies that dental therapists “would compromise the safety” of patients. I’ve addressed the issue of the quality of dental therapists in the comment section of previous posts, and within the op-ed itself. The studies of dental therapists, from New Zealand, Australia, the UK, and Alaska, have so far shown that they provide quality in patient outcomes that is comparable to that of professional dentists, and studies show that altering licensure rules to allow dental therapists to practice could improve access to care for children in the United States.

This opposition by the dental lobby despite the lack of evidence to support their position, evidenced in op-eds like these from the MDA, or in legislation to prevent teeth-whitening in kiosks, is an attempt to keep market share by using government power rather than by providing a better service at a better price. Artificially protecting a profession from competition — especially high-quality competition — does not help keep patients safer. Arbitrary rules that prevent qualified mid-level professionals from entering the market only hurt the people they are purporting to help: the patients.

An article in the St. Joe News highlights the accomplishments of federal stimulus dollars in Northwest Missouri:

Missouri’s 6th Congressional District, only two of whose 26 counties gave electoral majorities to President Obama, got more than $314 million last year from the federal economic stimulus program. [...]

In Plattsburg, Mo., a $1 million stimulus grant is paired with a $4.3 million low-interest loan to help build a water treatment plant. “Those two things you can’t be upset about,” said City Manager D.J. Gehrt. “But it’s not as simple as getting $5.3 million and you can go out and start your project.”

The engineering plans were finished and submitted for review 13 months ago. But the reviews stalled while agencies pondered where the funding might flow. Further delays have come from setting up mechanisms to repay the debt incurred from the loan.

If all goes as planned, Mr. Gehrt said, the treatment plant will be completed in the summer of 2011, maybe a quicker timetable because of the stimulus money, but maybe not.

In the long run, he added, “it’s going to save the ratepayers in our service area a good amount of money.”

In St. Joseph, the stimulus program directed more than $31 million to recipients like the school district, Missouri Western State University, the Department of Transportation and Community Action Partnership.

Etc. No doubt some people are benefiting from the stimulus, but because government spending does not face a profit and loss test, there is no good way to determine which projects are worthwhile and which wasteful. The article also ignores all the things taxpayers and bond holders would have done with the money had it not been taxed away or loaned to the government — in other words, it only pays attention to the seen, but not to the unseen, effects of the spending. These recipients of stimulus funds would not have received the money to do what they’ve done, but that money would have been used instead to create something else, if it hadn’t been spent in the stimulus.

Furthermore, although the $314 million that the 6th district received may seem like a lot of money, it amounts to less per capita than the national average. During the last year, $334 billion in stimulus spending has been allocated with $119 billion going toward tax cuts and another $14 billion in individual benefits like additional unemployment insurance payments. That leaves $201 billion in spending projects awarded during the last year. According to Wikipedia, the population of Missouri’s 6th district is 621,690, and the estimated population of the United States is 308,705,000, which means that the district contains just barely more than 0.2 percent of the national population. Given that 0.2 percent of $201 billion is $402 million, the district falls under the national average for stimulus spending by $58 million dollars.

Maybe the 6th district’s underwhelming support for Obama during 2008 is in some way related to the underwhelming amount of stimulus funds it has received.

The Missouri Catholic Conference (MCC) has come out in opposition to the proposal to implement a statewide sales tax that would replace all corporate and individual income taxes. One of their major concerns is the effect that such a change would have on Catholic schools. By taxing Catholic school tuition, they argue, fewer families would be able to afford it, thus decreasing enrollment and forcing those children into public schools. This is a legitimate concern, but the MCC fails to take into account that with the repeal of the income tax, families would have more money to spend on discretionary expenses in the first place. This money could be devoted to educational expenses, thereby increasing the demand for Catholic school education.

In the chart to the right, the y axis represents the price of parochial education, and the x axis represents its quantity (P and Q represent the status quo price and quantity). The line labeled S1 shows one likely effect if the state income tax were replaced with a sales tax: An increased cost for parochial education would lead to a shift in the supply curve, wherein quantity demanded and supply provided would settle at a lower equilibrium. But the line labeled D1 shows another effect of the replacement of the income tax with a sales tax: Because families would have more money to spend that would have previously gone toward paying taxes, the demand curve for parochial education would shift, as well, leading to a higher equilibrium point for both supply and demand. We can’t predict which one of these effects will dominate, but the point is that replacing the income tax with a sales tax would not necessarily lead to a reduction in the amount of parochial school enrollment demanded by education consumers.

Another concern raised by the MCC is that because poor families already do not pay income tax, they would only be harmed by the implementation of a sales tax and would not benefit from greater income levels. However, as this blog post by Abhi Sivasailam notes, lower corporate and personal income taxes help fuel growth by attracting people and investment funds to the state. This results in higher employment levels and higher incomes, which benefit everyone. Furthermore, the bill as proposed in the Missouri Senate also includes a sales tax rebate for low-income families that may otherwise struggle to pay the sales tax.

The concerns brought forth by the Missouri Catholic Conference are not unfounded, but as my colleague Abhi Sivasailam reminds us, tax changes do not happen in a vacuum. The switch to a sales tax has the potential to greatly benefit Catholic schools in Missouri.