“Isn’t that just a voucher?” I often hear that question when I discuss enabling students to use public dollars to attend private schools. This question is an attempt to do two things: (1) lump all forms of state-supported private school choice programs into one group and (2) dismiss these programs with a word that to some has a negative connotation. Labeling all programs that give students the ability to attend a private school with state money a “voucher” may be an effective rhetorical device, but it obfuscates the important distinctions that exist between different types of programs. Even worse, it ignores the potential benefits private school choice programs can bring to students and the state.

Throughout the country, lawmakers have discussed expanding educational options for students by establishing charter schools or allowing public dollars to go to private schools. Yet bills that legislators proposed often failed to gain much traction; in part, because opponents of school choice often hail the traditional system where children are zoned for a local public school based on their address. Some view this method of delivering public education as the model because democratically elected officials control the schools on a local level. Though democratically controlled local school districts meet the needs of many students, they simply cannot satisfy the needs of all families. Many families, mine included, have found the traditional system to be frustrating and unresponsive.

Missouri’s economic growth is lagging behind the rest of the country. As we wrote in our recent research report, “Cutting The Ties That Bind: End Missouri’s Corporate Income Tax,” Missouri’s economic performance places it squarely in the bottom tier of economic performers compared to other state economies.

This paper discusses taxpayer-funded lobbying and attempts to qualify its use in Missouri. In connection with this paper, the Show-Me Institute has collected contracts between dozens of local governments and lobbying firms in Missouri and made those contracts available at smiinfo.org/lobbycontracts. Those contracts will give Missourians a better idea of who their local governments are hiring for lobbying, what they are aiming for, and how they are spending tax dollars.

The practice of government using tax dollars to lobby other governments appears to often be a lose-lose proposition for taxpayers. In many cases, if the lobbying succeeds, government expands; if it fails, government wastes tax dollars. The authors hope that this paper and the disclosure of existing contracts will subject taxpayer-funded lobbying to greater scrutiny, transparency, and accountability in Missouri.

Full Essay (PDF)

Related Links

Commentary: “Missouri’s Taxpayers Lobbying To Pay More Taxes?” by Mary Kate Hopkins

Public Documents: Missouri State and Local government lobbying contracts, searchable

For more than a decade, Missouri has suffered economically. Formerly a state of middling economic fortunes, Missouri now sits firmly in the bottom tier of growth nationally. From 1997 to 2011, Missouri was ranked 48th out of 50 states in real state gross domestic product (GDP) growth and 46th in total employment growth.

Imagine a school in which the highest prize for academic achievement went to the student who had been there the longest. Though it seems ridiculous to reward students in this manner, this is exactly how school districts reward teachers — by longevity. Teachers by and large are paid on a single salary schedule. These schedules not only fail to reward teachers based on their quality, but they fail to recognize that teaching different subjects and grade levels requires different skill sets and that those particular skill sets are in varying demand in the marketplace. For instance, there are reportedly 3.1 jobs in science, technology, engineering, and math (STEM) for every one unemployed person in Missouri. In comparison, there is only 1 non-STEM job for every 3.7 unemployed people. This means teachers with strong backgrounds in math and science may have more, higher-paying options outside of teaching. This is a reality we must address.

The purpose of this essay is to examine the relative economic performance of Missouri with two comparisons. Our first benchmark is the overall U.S. economy, where we find that output and job growth in our state has consistently lagged behind that of the nation as a whole. For example, if Missouri economic performance had simply paced that of the nation since 1997, state output would be $285 billion higher than it is today. We draw out the consequences of this stagnation in terms of lost tax revenues, jobs, and charitable contributions. A second benchmark is our neighbors: Missouri’s economic performance was dead last or second to last when compared to our neighboring states. In short, Missouri’s relative performance over the last decade and a half has been dreadful.

The Coalition for Missouri’s Future, a group organized to oppose efforts to eliminate Missouri’s income tax and replace it with a more broadly-based sales tax (a.k.a., The Fair Tax), has produced a series of papers questioning the benefits of the switch. The papers — currently there are five — have been written by Brian Schmidt, the former executive director of the Missouri General Assembly’s Joint Committee on Tax Policy, who is now doing private consulting. The papers raise some interesting questions and fair points, but they cannot be considered legitimate economic analysis. If the organization who commissioned the papers wanted useful propaganda, they got it. If they wanted any type of serious economic analysis, the papers fail completely in that regard.

Missouri’s two largest cities, and their related primary counties, have chosen substantially different systems of local government. The stark differences between Saint Louis and Kansas City stand out, even though it is common for larger cities within the same state to have different government structures.1 These differences among the governments of Kansas City and Jackson County, and Saint Louis City and the neighboring, but separate, Saint Louis County, are both obvious and subtle. In fact, the few similarities are rare enough to be notable by that reason (similarity) alone.

Proposition A, passed by Missouri voters last November, requires that Kansas City and Saint Louis allow citizens the opportunity to vote on the continuation of their local earnings taxes within six months of the measure’s passage. Voters may decide to maintain their earnings taxes at that time, or they may choose to sunset it over the coming 10 years. As they weigh their decision, it is important for officials to begin considering alternative methods by which their cities can raise revenues that will fund necessary services.

Although the theory behind replacing earnings taxes with other revenue sources is fairly straightforward, its empirical importance has not been settled. The purpose of the present essay is to offer a new perspective on the possible empirical implications of city earnings taxes in Saint Louis and Kansas City.

Which tax structure — sales or income — is most preferred by the typical Missourian? Because both types of taxes are distortionary, it is difficult to tell whether welfare is higher under the system relying more heavily on the income tax or under the system relying more heavily on the sales tax. This essay uses quantitative methods built on logically consistent economic theory to compare welfare under the two alternative tax structures.

A tax-swap proposal to eliminate both Missouri's personal income tax and corporate income tax in favor of a static revenue-neutral sales tax increase is currently edging ever-closer to becoming a constitutional amendment. The benefits from reform could be enormous if the process is administered well and the constitutional amendment is carefully crafted. 

Missouri's economic development and growth rates are chronically below average. During the past 10 years, employment has grown 8.8 percent nationally, while Missouri has boosted jobs by only 6 percent. Economists have provided one explanation for the state's lagging performance: Missouri's personal income tax rates.

The state government in Missouri has issued $3,478,108,538 in targeted tax credits since 2000. Meanwhile, there is much evidence that this expenditure doesn't encourage economic activity and job growth. This essay explains how targeted tax credits programs in Missouri are a significant problem that negatively affects Missouri's economy.

By most measures, Missouri is not a high-tax state. Its property and corporate tax rates are among the lowest in the country. It doesn’t have an inheritance tax. In a study for the American Legislative Exchange Council (ALEC), economist Arthur Laffer, financial journalist Stephen Moore, and Jonathan Williams, director of ALEC’s Tax and Fiscal Policy Task Force, rank Missouri’s economic outlook at 23rd among states.

But all isn’t well. Missouri’s economic development and growth rates are chronically below average. During the past 10 years, employment has grown 8.8 percent nationally, while Missouri has boosted jobs by only 6 percent. In their study, Laffer, Moore, and Williams provide one explanation for the state’s lagging performance: Missouri’s personal income tax rates.