May 14, 2015

Private Buses: The Once (and Future?) Transit Option

Imagine you thought that there was a lot of demand for express bus service between two or three locations in Saint Louis or Kansas City, locations that were not currently well connected by transit. You think you could make good money charging people a shuttle service between these locations. But would the government allow you to run such a business?

If you are in Kansas City, probably not. According to the city’s for-hire vehicle code, jitneys (fixed-route buses not otherwise regulated by the government) are illegal. City ordinances do not describe a method for getting the government to approve a private bus route.

jitney

In Saint Louis, the Metropolitan Taxicab Commission’s (MTC) For-Hire Vehicle Code expressly allows for private shuttles, which can travel from one fixed point to another (although likely not more complex routes). Unfortunately, the regulatory hurdles toward getting a commercial service shuttle are formidable. It requires applying for certificate of need and necessity (which the MTC can refuse to grant at will), along with a plethora of other regulatory requirements. Getting permits to operate just one shuttle will cost you more than $3,000.

These regulatory roadblocks, along with competition from the heavily subsidized bus services (subsidies pay for more than 80 percent of costs in Saint Louis and Kansas City), likely have much to do with the absence of private bus routes in Missouri’s cities. But it was not always this way. In the early 20th century, jitneys took most American cities, including Kansas City and Saint Louis, by storm. They were faster, cheaper, and more flexible than incumbent streetcar competition. Hostility from streetcar owners and the nascent taxi industry pushed most cities to make jitneys illegal; but in Saint Louis they morphed into “Service Cars,” which served parts of North Saint Louis until the 1960s. At that time, Bi-State (Metro) moved to buy out the existing competition that was “skimming the cream” off its customer base.

Today, transit in Missouri’s cities is the exclusive domain of public monopolies, with limited competition from heavily regulated taxi markets. The resulting waste, inefficiency, and poor service are the predictable result. However, there is opportunity for improvement. In the United States, and especially internationally, private bus routes still exist. Reducing government control to only essential transit services, and allowing the private sector to provide the rest, could create space for competition and innovation in the transit market. Of course, a necessary first step toward that opportunity is to actually make private bus routes a legal possibility; that’s a change Kansas City and Saint Louis can and should make right away.

May 13, 2015

Collaboration and Competition

On Friday afternoon, Ronald Garan Jr., a retired U.S. Air Force colonel and NASA astronaut, addressed about 40 students at a charter school in Kansas City, Mo. His talk featured plenty of pictures and videos of his time aboard the Space Shuttle Discovery and the International Space Station. Garan’s talk was about cooperation and collaboration to solve the world’s challenges.

Garan_v2I had the opportunity to visit briefly with Garan after the talk. I wanted to know how he squared the principles of collaboration and cooperation with competition. After all, everything that made his career in the space program possible was accomplished through competition—whether a space race between nations or a bidding process among companies seeking to sell products to the U.S. government. That is when Garan distinguished between proper competition and destructive competition.

Proper competition gets us better good and services. It comes from having an even playing field; the company with the best product wins. A destructive competition does not bring us those things because it often lacks the necessary rigor, data, and transparency.

Without rigor and data, good intentions fail. To make his point, he offered an example from his experience working with developing countries. An organization might have a splashy website and a compelling celebrity endorsement. The company may show off the new wells they put in place, but if no one is focusing on whether those are working properly the whole effort is wasted. Garan said, “Sometimes there is too much emphasis on the new and shiny and not the tried and true.” No one wants to watch a TED Talk on the same old ways of doing things, he suggested, even if those ways are the most effective.

Therein lies the real lesson: Open yourself to rigor, data, and transparency. For governments it means fostering the productive competition that leads to legitimate innovation and improvement. For the taxpayers it means not getting caught up in new things simply because they are new; value what works, even if it is less flashy. And always make sure that government is transparent.

Can Normandy Be Saved?

Normandy (2)

They say those who forget history are doomed to repeat it. To better understand the seemingly intractable problems in the Normandy Schools Collaborative, I decided to head to the St. Louis Public Library newspaper archives to see what folks had written about Normandy in the past. I found this:

Hire more minority teachers, revamp the high school curriculum, improve discipline.

Sound familiar? These suggestions are quite similar to the comments Normandy’s most recent superintendent, Ty McNichols, made in 2013. In fact, what I found in the archives was written by former Normandy Superintendent Bruce A. Smith in a 35-page report about the status of the school district in 1988.

“Everything here is fixable,” McNichols had said. “It takes time. It can’t happen overnight. But it can be fixed.”

Nearly 30 years after Smith’s report, we seem to be no closer to improving the Normandy School District. The same old tactics will not lead to a better result.

A recent report from the Thomas B. Fordham Institute points toward a more stark strategy—closing low-performing schools.

In School Closures and Student Achievement: An Analysis of Ohio’s Urban District and Charter Schools, researchers found that school closures have positive impacts on student achievement. Three years after schools closed, displaced students from urban districts, on average, gained 49 cumulative days of learning in reading and 34 cumulative days in math, relative to the comparison group.

The authors of the study also found that students who were displaced after a closure typically ended up in a higher-quality school. Fifty-nine percent of traditional public school students and 68 percent of charter school students transferred to higher-quality schools.

The evidence presented suggests that if policymakers are concerned about student achievement in low-performing schools, they should shut down those schools, instead of wasting more time, money, and patience trying to fix them. Resources then could be redirected toward starting new schools or expanding the capacity of existing higher-performing schools.

After decades of proposed “fixes,” are further attempts to improve Normandy Schools Collaborative misguided? Is closing down the district and allowing the students to be absorbed by neighboring districts the solution policymakers should really be thinking about?

These tough questions need answers. But one thing is certain, if we want to get serious about saving Normandy students, perhaps it’s time we stop trying to save Normandy schools.

May 12, 2015

Video: Funding the Missouri Highway System

Last week, I spoke to the Columbia Pachyderm Club on how Missouri could fund its state highway system. The talk is about 15 minutes, followed by a lively question and answer session. See the full video here:

Even AFSCME Opposes the Stadium “Boondoggle”

During an American Federation of State, County and Municipal Employees (AFSCME) lobbying event to push an across-the-board pay increase for state workers, I heard a good bit of rhetoric from the government union about “fighting for pay.” Fearful that AFSCME views their fight for pay as a fight with the taxpayers, I publicly asked who they are fighting against. The response surprised me:
maztwitter

Jeff Mazur, AFSCME executive, claims that the union’s fight is with politicians who would rather spend money on corporate welfare, such as tax credits and publicly funded stadiums. I’ve written favorably before about AFSCME’s opposition to corporate welfare, and a publicly funded football stadium is corporate welfare at its worst. I’m glad more people, including labor organizations, are seeing the stadium proposal for what it is.

Kansas City Embarks on New Bad Idea

Kansas City government is going into the grocery store business near 31st Street and Prospect Avenue on the east side. According to the Kansas City Star:

City manager Troy Schulte said the city will spend $950,000 to buy the existing strip mall and parking lot from its current owners, then another $11,050,000 to demolish the empty grocery store that now sits on the site. The city will borrow the money for the project, then repay the loans with projected taxes generated by the development and a special one-cent sales tax collected at its stores.

The city will lease the property to Sun Fresh for $10 a year, but will not provide any subsidies for operating the store.

That last sentence made me laugh: The city will spend $12 million to buy and build the place and charge the tenant $10 a year—but there won’t be any operational subsidies, as if rent isn’t an operational cost.

The problem is that the people who make a living running grocery stores by investing their own money do not think this is a good idea. If they did, the original grocery store might not have remained vacant for 10 years and the proposed grocery store wouldn’t need such a steep subsidy. Taxpayers are underwriting it because it is not a good idea.

Even the Kansas City Star editorial board is skeptical, offering, “The project is a financial gamble for taxpayers.” They concluded, “History shows that a lone project can’t really lift up an entire community. It takes a much bigger effort to do that.” This is true, according to an NPR story last year:

“The presumption is, if you build a store, people are going to come,” says Stephen Matthews, professor in the departments of sociology, anthropology and demography at Penn State University. To check that notion, he and colleagues from the London School of Hygiene and Tropical Medicine recently surveyed residents of one low-income community in Philadelphia before and after the opening of a glistening new supermarket brimming with fresh produce.

What they’re finding, Matthews says, is a bit surprising: “We don’t find any difference at all. … We see no effect of the store on fruit and vegetable consumption.”

It really isn’t surprising. If there was a demand for fruits and vegetables, someone would be providing them. But the demand isn’t there, even when shiny new stores are built.

Once again, Kansas City leaders are embarking on an expensive and ill-considered campaign using public dollars that does not address the real underlying problems. When it fails, the city and its residents will be no better off than before, just poorer. And the infrastructure, crime, and education issues that really need to be addressed will be that much worse.

grocery

May 11, 2015

Shocking Support for Taxing Bed and Breakfasts

Bed & breakfasts (B&Bs) have a long history in this country. To many they are associated with comfort and an antique ambiance. To the taxman they are a prime opportunity to raise revenue.

bb-signLast week, the St. Louis Post-Dispatch reported that Saint Louis bed & breakfast owners are upset over the city assessor’s decision to assess their property (or at least the part used as B&Bs) as commercial properties. I can understand why these owners would be upset. According to the way properties are assessed for property tax purposes, if B&Bs were even partially assessed as commercial properties, the owners’ property tax bills would go up substantially.

I sympathize with any business owner that is facing a higher tax bill. However, I do not oppose this change. Saint Louis is doing the right thing here. If a property is engaged in commercial activity, the city should assess it as a commercial property. The situation is trickier with people renting rooms through airbnb. These lodgings are not necessarily full-time establishments, and so some mechanism needs to be in place to make sure they don’t get a tax advantage compared to traditional B&Bs.

Having a large property tax base is important. It’s especially important in Saint Louis because it can serve as a way to reduce (or even eliminate) the earnings tax. The Show-Me Institute released a paper arguing that the earnings tax could be replaced by a two-tier property tax (this differs from a traditional property tax in that the two-tier approach taxes the land more heavily than any improvements on the land). Even if the city sticks with a traditional property tax system, a wider base can generate more revenue to offset any reductions in the earnings tax.

Paying more in taxes is never fun, but low taxes for some shouldn’t come at the cost of a hollowed-out property tax base.

Lambert Officials Admit: Market for Cargo “Disappeared” Post-Aerotropolis

lambert

Four years ago, the Show-Me Institute came out strongly against plans to spend upwards of a half-billion dollars to turn Lambert-St. Louis International Airport into an “Aerotropolis.” The plan revolved around the idea that Chinese cargo shipped through Saint Louis could be profitable—but only if the government subsidized it to the hilt. As our readers know, the project died not once but twice that year, and has died each year it has been introduced since.

It’s a good thing it kept dying too, as a story from the St. Louis Post-Dispatch showed last week.

In September 2011, a China Cargo flight carrying 80 tons of manufactured products landed at Lambert and was greeted by dignitaries from across the region. But airport officials said that market disappeared amid a downturn in international cargo. [Emphasis mine]

Imagine if Missouri had committed to the Aerotropolis project and then, poof, the market “disappeared”—which of course assumes it was ever really there. Taxpayers would have been left holding the bag.

The admission about Aerotropolis was part of a larger article about a lease just signed for a new “Mexico Hub” at Lambert, a story my colleague Joe Miller has already detailed. Lambert’s director, Rhonda Hamm-Niebruegge, says that the airport “is not paying a penny” for the new project, and if true, it’s a very good thing. At a time when its passenger traffic is down, the last thing Lambert should be doing is speculating on real estate, especially given its track record.

However, it’s not clear whether the Mexico Hub developer will try to draw on existing government subsidy programs to advance the project. An airport project at Lambert fully financed by the private sector seems very good; the concern is whether this project is too good to be true. One would hope that state and local officials would be chastened after the Aerotropolis debacle if they’re considering handing out tax incentives, whatever their scale.

I certainly hope the Mexico Hub project can move ahead on its own merits and without taxpayer money. Cargo markets have “disappeared” before, and taxpayers shouldn’t be on the hook if history repeats itself. We’ll keep you posted.

May 9, 2015

No, Transparency Benefits the Academy

University_of_Missouri_-_Memorial_UnionMizzou Professor of Spanish Literature Michael Ugarte recently wrote an op-ed published in the Columbia Daily Tribune where he voiced his opposition to a bill that would require public universities to post course information online.

From Ugarte’s commentary:

[T]he reason I’m against SB 465 is that I don’t trust the motivations of those who are proposing it. It’s a bill with an agenda that goes far beyond a desire for transparency. It provides an opportunity for those determined to question, debunk, attack and diminish the pedagogical and research projects of university professors. I don’t think the effects will be positive; rather, we will have more of the same: animosity and lack of understanding.

As someone who has written on and testified in support of curriculum transparency for Missouri’s public universities, I can tell you that my motivation for supporting proposals like this comes from a conviction that public universities—and all public institutions—should be candid and open with the public about their affairs. Members of a public university should abide by the same transparency laws as everyone else who works in our public sector.

My motivation for supporting this bill doesn’t stem from a desire to “question, debunk, attack or diminish” the university, but I find it odd that a scholar would view someone questioning his work as a problem. Scholarship thrives on debate and challenges. As a student at Mizzou, you can bet I questioned my professors. They questioned, attacked, and debunked me right back. And I got a great education because of it.

I disagree with Professor Ugarte’s contention that an open academy will breed animosity and lack of understanding between it and the rest of society. On the contrary, I believe an open and honest discourse is the way you build trust and understanding. And there’s no reason why open and honest discourse can’t involve questions, debate, and, yes, sometimes even debunking.

May 8, 2015

Millennials Prefer Suburbs . . . and Cars

If you live in Kansas City, you’ve doubtlessly heard breathless paeans to millennials from city leaders and how we must spend public money to attract them. From entertainment districts to apartment buildings, airports to convention hotels, restaurants to streetcars, everything has been sold on the premise that we must cater to the creative class.

Nevermind.

Millenials-in-AdulthoodResearch featured in Business Insider tells us that millennials aren’t much different from their parents’ generation.

“They still want good restaurants, but now it’s also about space, affordability and being able to send their kids to a good public school,” said Paternite, 45, who added that about 70% of her business now comes from young families who are making the move from Brooklyn or Manhattan.

Millennials, typically defined as those born between 1981 and 1997, may be turning into their parents after all. A generation that’s been stereotyped as urban, single, and aghast at the idea of a car-based life in the suburbs is starting to age, prompting fund managers to bet on companies that should benefit if the US birth rate reverses a six-year slump.

Oh, and their supposed desire to get away from cars? Also false:

The generation once seen as shunning cars accounted for 27% of new auto sales in the US last year, up 9 percentage points from 2010, according to a recent study by JD Power and Associates.

The stereotype was probably never true, yet it has driven so much of the policymaking, rhetoric, and spending from City Hall. Readers of this blog see nothing new here. We’ve been debunking the millennial myth here and here and here.

In the meantime, the rest of the city—where people are actually living—has been neglected and left to dry up. Rather than chase mythical populations of the future, we need to fix the real problems that impact the quality of life for millennials—and everyone. This means streets, sewers, schools, crime, and we need to do so efficiently while keeping taxes low.

Investment at Lambert Could Bring Mexico Hub to Saint Louis

This week, the St. Louis Airport Commission approved a plan to lease airport property that once housed the McDonnell-Douglas complex to Bi-National Gateway Terminal LLC. This company would invest $77 million in the property to create a new freight terminal. In addition, another private company (owned by the same person as Bi-National) has already successfully petitioned for a dual-customs facility at Lambert. The plan is to create a cargo hub in Saint Louis for freight from Mexico.

lam

Leasing airport property to a private company for aviation-related business makes good sense. Most airport land is virtually impossible to sell because of federal grant assurance restrictions. Allowing private companies that would benefit from access to the airport to lease adjacent property (rather than letting the land lie fallow) is a win for the private business, the airport, and the local economy. As things stand, far from spending money, the airport should receive about $13.5 million a year in lease payments. There are currently no plans to spend any airport money for the facility.

If the plan to use Lambert as a Mexico Hub succeeds, it could mean lower landing fees for commercial airlines, which can attract more flights. The public at large would benefit from more travel options, as well as from any jobs that a cargo hub would create. In the worst-case scenario—the private company fails—the airport would not be worse off financially. If anything, it would be better off, as the airport would have a new dual-customs facility and freight terminal to attract more business.

However, Saint Louis residents should keep an eye on the project, because all too often local governments will shift the risk of these investments from the private sector to taxpayers. The plan to make Lambert a “China Hub” just a couple years ago is a prime example of this tactic. There is no talk of local subsidies yet, but that could change.

Lambert-St. Louis International Airport, as Saint Louis’ only large airport, is vital to the local economy. Allowing the private sector, rather than local governments, to make the investments and take the risks of building a freight hub is a strategy that the airport, and the public at large, would benefit from.

Courts Should Avoid Setting Policy in Columbia Schools

Decorative Scales of Justice in the Courtroom

The Columbia Public School District (CPS) and the union representing teachers in the district, the Columbia Missouri National Education Association (CMNEA), are embroiled in a labor dispute. The union wants a labor agreement with a pay increase for its members, while the district, in a tight place financially, wants to keep costs down. Unfortunately, because of recent court decisions, the courts might get involved here, substituting their judgment for that of the negotiators.

In 2012, the Missouri Supreme Court expanded its jurisdiction by reading a duty of “good faith” collective bargaining into the state constitution. The words “good faith” do not appear in the text of the constitution, but the supreme court has spoken and lower courts will follow the supreme court’s lead. As a result, courts throughout the state may now intervene in government labor relations if they determine this duty is not being honored.

The new “good faith” standard could affect the labor situation at Columbia Public Schools. The union and the school board met several times this year but did not come to a final agreement by the last scheduled bargaining session. Oddly enough, even though there are no more bargaining sessions scheduled this year, CMNEA is showing up to the school’s administrative building and “waiting” for a CPS bargaining team to arrive. In the Columbia Daily Tribune, one union official described the district’s refusal to continue negotiating after the last scheduled bargaining session as a failure to negotiate in good faith.

If the courts get involved here, it would be bad news for Columbia citizens. Columbia voters elected a school board to manage their public schools. Not a union. Not the courts. If a court steps in and forces a binding labor agreement that the duly elected school board didn’t agree to, the court would be setting school district policy against the will of the people.

« Newer PostsOlder Posts »
A project of the


Search Show-Me Sunshine docs @

Top Posts

Show-Me Data


Archives

Categories

Powered by Wordpress