Sponsorships

State government never has enough money to fix the roads, educate our kids, take care of those of us in our declining years, pay our prison guards and state employees  enough to get off of food stamps, maintain hundreds of buildings it owns, keep our air and water safe, and a lot of other things.

I woke up on a Monday morning a few weeks ago with the solution.  I think it was the day after I’d watched the Indianapolis 500 in person and the NASCAR 600-mile race at Charlotte that evening on the telly.  It came to me that state government could make millions if it followed an economic model based on racing.

A few years ago the stock car race at Indianapolis was called something like the Your Name Here Crown Royal Brickyard 400 Powered by Big Machine Records.  Each year the name of some citizen—a private citizen who was a veteran or someone who had voluntarily done something of public benefit would be picked to fill in the “Your Name Here” part of the event name—a nice thing to do to recognize the importance of people like most of us who do good stuff just because we do good stuff.

And if you watch any of these events, you know that the first thing the winners do in the post-race interview is thank all the sponsors whose logos adorned their cars and are sewn onto their fire-resistant driving suits. “You know, Goodyear (Firestone) gave us an awesome tire today and our (Chevrolet, Honda, Toyota, Ford) had awesome power.  I’d like to thank Bass Pro, M&Ms, Budweiser, Coke, Monster Energy, Gainbridge, NAPA, and all my other sponsors who make this possible—and the fans, you’re the BEST!!!”

Suppose state government was run like that.

At the end of a legislative session, the Speaker and the President Pro Tem, in their joint news conference, began with “We have had an awesome, productive session here at the Anheuser-Busch Capitol powered by Ameren.”

“The Monsanto Department of Agriculture driven by the Missouri Farm Bureau will be better equipped than ever to regulate corporate farming through the Tyson CAFO Division.

“The Master Lock Department of Corrections employees are getting a significant pay increase; The Depends Division of Aging is expanding its services significantly; the Tracker Marine Water Patrol is able to hire more officers; and the Dollar General Department of Revenue is going to install new computers to get our H&R Block tax refunds out faster.

“The Cabela’s Department of Conservation sales tax renewal has been put on the ballot next year.  The Wikipedia Department of Higher Education driven by Nike has been given more authority to approve such programs as the Shook, Hardy & Bacon Law School at UMKC, the Wal-Mart Business School in Columbia, the Eagle Forum Liberal Studies program at UMSL, and technology developed at the Hewlett-Packard 3-D Missouri University of Science and Technology will now be capable of building new football facilities on our campuses for pennies..  And we found additional funding for the Cologuard Department of Health and its Purdue Pharma Division of Drug and Alcohol Abuse.

We also were able to put a proposal on the ballot next year to increase funding for the Quikcrete Department of Transportation.

“We couldn’t do all of the great things we’ve done in the 101st Session of the Citizens United General Assembly fueled by Laffer Economics without the support of all of our state’s other great sponsors.

“And we appreciate the participation of you citizens out there.  We couldn’t do this without all of you. You’re the BEST!!!”

And the confetti made from 1,994 un-passed bills would rain down and the legislative leaders would spray champagne (or, more likely, shaken-up Bud) all over each other in the Chamber of Commerce and Industry Legislative Victory Circle (previously known as the rotunda) and the legislative mascot dressed as the Official State Dessert would dance to a celebratory song performed by Sheryl Crowe, who next year will be chosen as a project by a third-grade class studying state government to be the subject of a bill designating her as the Official State Country Singer.

This would never work, of course.  We can’t see members of the legislature in uniforms that have state government sponsors’ patches all over them during the sessions or campaigning in outfits that have the logos of their donors.  And the Senate would just flat out refuse to tolerate anything that would eliminate Seersucker Wednesdays.

Even if government tried something like this, the Supreme Court would be tied up for years in lawsuits determining whether sponsorships should be calculated as Total State Revenue under the Hancock Amendment, thereby triggering tax refunds that would undermine the entire idea.  And Clean Missouri would get another ballot proposal approved by voters that would tie the Missouri Ethics Commission into knots trying to define whether sponsors constitute campaign donors.

Hate to say it folks.  In the real world, if we want better services or more services or better roads or prison guards who don’t have to hold two other jobs, it’s us taxpayers who will have to be the sponsors of state government.    And after all, shouldn’t we want to be

THE BEST?

“Our” disasters

There’s something about a disaster that becomes personal even to those who are not damaged by it.   Many people take a personal ownership of it, even take a peculiar personal pride in it even if their property stays dry and intact.

We’re seeing some of that in Jefferson City in the wake of our tornado a few days before the Memorial Day Weekend and the accompanying flooding.  This is “our” disaster and we see and will see other disasters through our lens.

It’s not unusual.  Those of us who remember the 1993 flooding measure floods in other parts of the country against that one and in some odd way find satisfaction in thinking, “Theirs isn’t as bad as ours was.”   The Joplin tornado has become our measuring stick when we see reports of tornado disasters in other parts of the country.  Theirs isn’t as bad as ours was.

Until the disaster takes off OUR porch, blows down OUR house, destroys OUR business.

OUR tornado took nobody’s life.  It damaged about 200 buildings in Jefferson City, some of which will have to be removed because they cannot be repaired, but compared to Joplin it was a little thing.

Except it’s OUR thing.   And now we will consider ourselves kin to Joplin and we will see reports of tornadoes in other places through OUR lens, not in terms of extent of damage but in terms of fellowship.  We have now joined the fellowship of them.

We don’t know if the folks in Joplin, on hearing of the tornado that hit Eldon then Jefferson City, have thought inwardly, “Huh! We had it a lot worse than they did.”   But it is likely natural that some of them would have evaluated our situation against the extent of their disaster.

We’re still waiting to see if our rainy spring continues, as it did in 1993, and pushes later flood crests that establish new references that end observations such as, “Yeah, it looks pretty bad.  But back in ’93…,” the same way that the 1993 flood ended observations from the real old-timers that, “I remember back in 1951…”

In Eldon and in Jefferson City right now, though, the focus is on recovery. The comparisons with later disasters will come after the debris is cleared away, the buildings that can be saved are saved, and the buildings that cannot be rescued are bulldozed down and the lots where they stood grow new grass.

I haven’t consulted with Nancy yet, but if we win the big lottery jackpot(s) I think I’d like to offer one-million dollars to the Historic City of Jefferson, which has worked for years to revitalize East Capitol Avenue where some of the historic structures might become those grass-filled lots, to be used to supplement insurance payments to rebuild those damaged homes—even those now seemingly destined for destruction.  Gutting the destroyed interior and building a modern inside structure while salvaging the historic exterior would be a goal worth some of those lottery winnings.

But I’m not going to win the lottery.  Somebody else somewhere else always buys a winning ticket just before or just after I buy mine (I tell myself that).  I think I will send a much, much, much smaller amount, though.  And maybe others capable of greater philanthropic capacity will want to participate more grandly in saving what some think cannot be saved.

After all, it is OUR disaster. And part of comparing OUR disaster to those elsewhere in the future should include what we do now to save the things we are told can’t be saved.

History tells us an Act of God can be countered by godly acts that rescue people and the past from the worst that has happened.

I bought another lottery ticket a few days ago.  And I also wrote a check.

Food for thought

We stopped in Terre Haute, Indiana on our annual trip to cover the Indianapolis 500 for the Missourinet and as we nibbled on our bad-for-us hamburger and fries, we found an article in the local newspaper, the Tribune-Star, by Morton J. Marcus that we know will upset the Missouri Farm Bureau and other farm-advocacy organizations, Governor Parson, our friends at the Brownfield network, and numerous other people who continue to advocate for something Marcus thinks is an anachronism: agriculture as an important part of Missouri’s (and Indiana’s) economy.

We offer this as food for thought in a changing world—which has an unchanging reliance on the subject on which Marcus’ appears to have some relevant points. You are welcome to add your grains of thought to his observations in our “comments” section.

The article appeared in the Tribune-Star on May 22. It was published in the Indianapolis Business Journal the next day.

Last week, the governor of Missouri was interviewed on NPR and stated that farming was the number one industry in his state. I’ve heard the same claim from Indiana politicians. In fact, one Hoosier solon claimed farming was “the backbone of Indiana’s economy.” I responded, “Every corpse has a backbone.”

Why do people in Missouri and Indiana believe such exaggeration? Perhaps, at one time (in the 19th century) it was true. Farming does take up a lot of the land we see when traveling from one place to another. Plus, the farm lobby is still disproportionately strong.

How important is farming? Folks from Purdue love to say, “If you eat, you’re are part of farming.” Oh, so true! Plus, if you eat, you’re part of trucking, dentistry, and waste disposal.

Let’s look at three different measures not provided by the biggest farm lobby of all, the U.S. Department of Agriculture:

First, value added, the part of Gross Domestic Product (GDP), our basic measure of economic activity, attributed to Agriculture nationally (including farming, forestry, fisheries and hunting) is 0.8%, or 19th of 19 private sector industries. Number one is (drum roll… ) real estate, rental and leasing at 13.3%, followed by manufacturing at 11.4% of GDP.

To be blunt, total value added from farming is less than 0.8% of the U.S. economy. What will the farm lobby say? “Well, you’ve got to remember farmers buy lots of stuff and lots of money passes through their hands that wouldn’t be spent if we didn’t have farming.”

No one is talking about not having farming! That’s the argument of a child, not an industry. We measure economic activity as the value of the goods sold less the value of goods purchased. That’s what we call value added. And the sum of value added by all economic activity in the marketplace is GDP.

For Missouri, agriculture (Ag) is 1.1% of the state’s GDP. For Indiana, Ag is 0.9% of the state’s GDP. In each of those two states, Ag is 19th of the 19 major private sector economic activities in GDP. Only in South Dakota does Ag exceed 5% of the state’s GDP.

Second, personal income, the sum of earnings, rent, dividends, interest, and transfer payments (Social Security, Medicare, unemployment compensation, etc.) are received by — guess who? — persons. Farm earnings are net of the expenses of farmers, but include government subsidies. How many carpenters, janitors, teachers, surgeons can say the same?

In the nation, farming accounts for 0.4% of total personal income. In Missouri, the figure is 0.46%, in Indiana 0.33%.

Third, jobs. Farming, fishing and forestry account for a lofty 0.34% of jobs in the U.S., 0.18% in Missouri, and 0.12% in the Hoosier Holyland.

These are data for 2018. Not 1820, which might have been the source for the governor of Missouri. They are from the U.S. Bureau of Economic Analysis and the U.S. Bureau of Labor Statistics, not the fake news agents working in the speech-writing cubicle of every statehouse.

A couple of observations from your, uh, loyal observer:  I grew up in a farming community, on a five-acre farm. We rented our pasture to people with horses. I spent summers baling hay and cutting weeds out of Illinois bean fields in the days before pre-emergent herbicides.  Today, it seems, the phrase “small family farm” is a phrase for a time long gone.  HOWEVER, there is no doubt that the people who farm, whether they are a dwindling number of individuals or operations that have become corporations for various reasons, raise the food that feeds a growing population.  But whether agriculture is the “backbone” of our state’s economy in the 21st Century is an issue that Morton Marcus has rightfully raised.  Perhaps it is time to find a new defining phrase for the importance of agriculture.  But in doing so, we cannot forget that this industry that is a shrinking part of our total GDP is the source of our food.

A modern assessment of the economic value of agriculture in the greater scheme of the nation’s economy does not violate the old bumper sticker that says, “Don’t criticize agriculture with your mouth full.”  If anything, the comments from Marcus should make us appreciate, on a personal level, the importance to our well-being of agriculture in whatever business model its participants follow.

(Who is this Morton J. Marcus fellow?  He writes entertaining, informative, and sometimes provocative columns, a compilation of which you can find at https://howeypolitics.com/Content/Columns/Morton-Marcus/10/23.  He is director emeritus of the Business Research Center at Indiana University’s Kelley School of Business.  He taught economics there for more than thirty years and was an advisor on economic development and taxation to a half-dozen Indiana governors. One of his degrees in economics is from Washington University in St. Louis.  He has a bunch of other qualifications.  One write-up of his qualifications for his columns notes, however, “None of his advice has been taken.”)

 

Notes from a quiet (and perhaps flooded) street

Might one offer an observation about the extensive coverage of rainfall by the television weatherfolk?    They do an excellent job when weather is awful except for one thing.

What does it mean when they say the Missouri River is expected to crest at—for example—32.3 feet at Jefferson City?   Will there be 32 feet of water over the Jefferson City Airport?  Or in the River Bottom area west of the Capitol?  Will the community garden in what once was Cedar City (and the nearby Highway 63) have 32 feet of water over it?

Uh, no.

When we did flood stories at the Missourinet, we never used numbers like that.  Here’s why.

Flood stage at Jefferson City is 23 feet.   That means that a Corps of Engineers river gauge is someplace that measures the bank of the Missouri River at 723 feet above sea level.  The altitude changes as the river flows east or downhill. (Bank full at Washington is only 720 feet, or “20 feet” as is commonly said.)  Any water higher than that means the river is out of its banks.

So, 32 feet means the river is nine feet above bank full at Jefferson City.  It always seemed to us to be more meaningful to report the river was expected to crest nine feet over flood stage.  And a flood stage at 30.2 feet at Washington means the river will be about ten feet above bank full there.  Nine feet and ten feet are more meaningful to people who are five-feet-ten inches tall than thirty-two feet.

The record flood crest at Jefferson City in 1993, by the way was 38.65 feet, or as we reported it, 15.65 feet over flood stage.   There’s a graphic example of the accuracy of reporting flooding using the 15.65 feet standard we used.  Go to the restaurant at the airport and look at the markings on the door which record the levels of various floods.  The mark for the 1993 flood is almost at the ceiling level of the restaurant, about sixteen feet up, not thirty-two.

Having gotten that out of my craw—-

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A few days before the end of the legislative session, your observer watched some of the debate in the House about whether undocumented immigrants living in Missouri should be denied in-state tuition and financial aid when attending our state colleges and universities.

Among those banned from paying in-state tuition and financial assistance using tax dollars were the DACA people, children brought here at a young age by their undocumented parents.  The legislation says the state universities can use their own resources to provide that assistance or to make up the difference between in-state tuition and international student tuition.

The Columbia Daily Tribune had a story about then noting there were 6,000 people in Missouri approved for the Deferred Action for Childhood Arrivals program, or eligible for it.

 

A thought occurred during the discussion: Why couldn’t our universities, state or private, offer a course for those students that would lead to American citizenship, online for adults and especially for DACA high school students and current college students?  Might solve a few problems.

Might not be a bad idea to have a lot of our non-DACA students enroll, too.

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Come to think of it:  The capitol is awash in third-graders each spring, students who are taking their courses in Missouri government.   They sit in the visitors’ galleries for a few minutes and are introduced by their legislator and given a round of applause and then go downstairs to look at the old stage coach and the mammoth tooth.

It will be nine years before they graduate, months ahead of casting their first vote.  That’s a long time to remember what they saw and learned as third-graders.

I THINK I can remember the name of my teacher and the building I attended in third grade.  But that didn’t make me qualified to cast a learned vote the first time I had the chance to do so.

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I was driven out of retirement this year to lobby for the steamboat museum bill in the legislature.  The opportunity to help do something great for my town and my state forced me back into coat and tie more times in the last four months than I have worn them in the last four years. I found that I was regularly turning the wrong way to get to a meeting with a legislator in the most efficient way.  I had forgotten my way around the Capitol.

I confess there are some things I liked about being a lobbyist and being back in the capitol while the legal sausage was being made.  In all of my years as a reporter, my contacts with legislators were arms-length business arrangements.  As a lobbyist I got to spend a half-hour or more—sometimes less—in the office talking to lawmakers. And I met some REALLY interesting people, particularly the members of this year’s freshman class.

But, boy, did I miss my guilt-free naps. (A few times I hid behind a column in a side gallery of the House and snatched a doze—but those instances sometimes ran afoul of a school group that came in to see five minutes of debate that I’m sure didn’t teach them a darned thing about their government in action.  Or inaction.) And living by my own clock.  And going around in tennis shoes all day.  And going to the Y three days a week for the fellowship there that replaced the relationships I had while I was working.

But the chambers are dark and cool now.  And my naps have returned.  Until January when we take a stronger, better organized run at building a National Steamboat Museum in Jefferson City.  You’re welcome to join the effort.

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It was interesting to know that some things haven’t changed at all.  About three weeks before the end of the session, the place starts to get kind of squirrelly.  That’s about when the House gets all huffy because the Senate hasn’t turned fully to debating House-passed bills. And the Senate gets in a snit because the House hasn’t switched to Senate-passed bills.  And the budget isn’t done with the deadline looming.

 

In the second week, a purported compromise budget comes out and the chambers start and stop on no particular schedule depending on who’s filibustering what bill or which chamber thinks its conferees didn’t stand up for their chamber’s priorities, and whether to stop the entire process to have more conferences on a small part of a multi-billion dollar budget, and the Senate decides a “day” can actually last until sunrise the next morning or longer.

And the last week when legislators are like desert-crossing cattle who catch a whiff of water in the distance and scramble to get a bill dead a month ago resurrected and added to something moderately akin to the topic, thereby adding to the legend that “nothing is dead in the Senate until the gavel falls at 6 p.m. on the last Friday.”   And, oh, what a blessing that falling gavel is.

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The end of a session today is nothing compared to the days when the odd-year sessions ended at MIDNIGHT on June 15, usually with a “midnight special” appropriations bill just before adjournment that created funding for new programs approved during the session. The only people who knew what was in it likely were the people who hay-baled it together in the closing hours. Pandemonium hardly describes those nights when everybody was beyond exhaustion and more than a few were seriously—shall we say “impaired?”—because of social visits to numerous offices which were well-equipped with adult liquids.

 

And at midnight, many lawmakers went out to the Ramada Inn to celebrate surviving another session.  The Capitol press corps would start writing stories about the session, a process that was not nearly as much fun as falling in the swimming pool at the Ramada. Both groups would pack it in about sunrise—except for those of us who had newscasts all day Saturday.

One of the best things the legislature ever did was change the adjournment time to 6 p.m. on a Friday night.

Now—-

If we could only get rid of term limits now—–

 

Adjournment!


The sound of a gavel at 6 p.m. on the last day of a legislative session is the sound of freedom, of welcome relief for lawmakers, lobbyists, staff members, reporters, and others who for weeks have been under growing pressure to grasp success in the face of rapidly shrinking time. Within minutes after the gavel falls, the roads out of Jefferson City will be occupied by cars with license places beginning with the letters S and R, followed by their district numbers, speeding homeward and back to real life.

The members of the first session of the 100th General Assembly of the State of Missouri will repeat actions hundreds of their legislative ancestors knew well long ago. The capitol press corps will have a few hours to recap the day for it can go home, also exhausted but buoyed by the relief that adjournment brings them to.

The correspondent for the Liberty Tribune wrote at the end of a very long March 2, 1855, “As it is late at night and I am worn down with fatigue, and constant application, I beg leave to do as the Dutchman’s team did in the sands of the Mexican desert—just quit.”  His column was published in the March 16 edition.

Yet, before I take my final leave of you, Mr. Editor, I would like to picture to your mind’s eye the scene of the last day of the session.  The day was bright and balmy—a lovely spring day with its light and shade—its sun and its showers—gay groups of ladies in and about the Capitol—Old Nature was loosing the bands of winter, and the tide of the mighty stream that sweeps the base of the capitol was rapidly increasing in strength. The shrill whistle of the steamboat at the wharf called away one-third of the members, with hearts buoyant to see their long-absent wives, sweet-hearts and little ones. The stage coaches were all filled and crammed with departing members and their trunks and sacks of public documents to enlighten the dear people. Private vehicles were rattling along the streets loaded to the guards with absconding legislators. All was bustle, hurry, confusion, mixture and disorder. The confusion of tongues at Babel, or the cloven tongues on the day of Pentecost, could scarcely have been more wonderful or picturesque. The Speaker’s hammer, the very symbol of authority, was as little heeded as the woodpecker’s tattoo, on the hollow tree.  Several ineffectual efforts were made to introduce bills—to call up bills—to make reports—to pass resolutions &c.  A member would rise at his desk and at the top of his voice cry out Mr. Speaker! A dozen voices at the same time, still a little louder. Mr. Speaker! Rap, rap, rap goes the Speaker’s gavel. Another member shouts out Mr. Speaker, I move to have the St. Louis riot act read, as this appears to be “an unlawful assemblage of persons!” At length, after many attempts to do business, within a thin and disorderly house, a resolution was passed deferring all the business on the clerk’s table and in the hands of the committees, until the first Monday in November next. Resolutions were then passed by both houses, notifying his excellency, Gov. Sterling Price, that they had completed their business for the present sitting, and appointing a committee to wait upon him with a copy of the resolutions.—In a short time the committee returned stating that the Governor had no further communications to make with either house of the General Assembly. A motion was then put and carried to adjourn over to the first Monday of November next.  Then, sir, scatterment took place which I shall not further attempt to describe.

Yours respectively, Publius.

The legislature in those days met in the winter months after the crops were in and before the next planting season.  It was allowed to carry over unpassed bills from one year to the next within the two-year session.  A lot of things have changed in the 164 years since “Publius” filed his report. But one thing remains.

When the gavel falls at 6 p.m. today, scatterment will take place once again.

 

Into the World

It’s graduation season, the time when hundreds of thousands of young people will be leaving the family nest bound for college, the military, or independent grownup life.

They’re empty or near-empty vessels who will be filled with life experiences that might make them entirely different people in thirty years than they are now.  When they return for class reunions they will find with the passing years that are less a class and more a diverse community.

Kelly Pool, the former Centralia newspaper publisher who was the Secretary for the Capitol Commission Board that oversaw construction of the capitol lived to be ninety years old. Eventually he was editor emeritus of the Jefferson City Post-Tribune and wrote an entire newspaper page of reflections and inspirational thoughts each week for many years. In late 1943, he looked at the way people respond to the “youth will be served” slogan and found many people didn’t agree with it—although thousands of “youngsters” were fighting World War II.  But Pool argued the old saying is true and “more and more the world is coming to recognize the power and grandeur of youth.”

The world is young—always will be,” he wrote. “Youth will has always been in the vanguard,” he said as he put together a list to prove his point:

Alexander conquered the world at 26.

Napoleon made all Europe tremble at 25.

Cortez conquered Mexico at 26.

Alexander Hamilton led Congress at 36.

Clay and Calhoun led Congress at 29.

Henry Clay became speaker at 34.

Calhoun was secretary of war at 35.

Daniel Webster was without peer at 30.

Judge Story was on the supreme court at 32.

Goethe was a literary giant at 24.

Schiller was in the forefront of literature at 22.

Burns wrote his best poetry at 24.

Byron’s first work appeared at 19.

Dickens brought out “Pickwick Papers” at 24.

Schubert and Mozart died at less than 35.

Raphael ravished the world at 20.

Michelangelo made stone to live at 24.

Galileo’s great discovery was at 19.

Newton was at his zenith when only 25.

Edison harnessed lightning when only 23.

Martin Luther shook the Vatican at 20.

Calvin wrote his “Institute” at 21.

(“Judge Story” was a reference to Justice Joseph Story, 1779-1845, who is best known as the Justice who read the decision in the Amistad case. John Calvin as a post-Luther Reformation thinker and pastor whose writings led to the formation of Presbyterianism.)

All of which, wrote Pool, is that “our boys and girls should not let the precious hours of their youth be wasted. Begin early to make your mark in the world, and drive hard to become one of the youths who ‘will be served.”

J. Kelly Pool continued to write his “Kellygrams” pages each week for the newspaper until shortly before his death at the age of 90 in 1951.

Why wait to become a victim?

We have talked to about 115 members of the legislature about the bill to build a national steamboat museum in Jefferson City that will house the holdings of the Arabia Steamboat Museum when its lease runs out in Kansas City in 2026

A few of them have told us casino interests have talked to them, too. That’s not unexpected because the primary financing for the museum projects we’re talking about comes from increasing the casinos’ admission fee by a dollar—which would eat into the annual windfall casinos get because the fee has not changed since it was established in law a quarter-century ago although the value of the dollar has.

We’ve been told of a couple of the messages given to some of these lawmakers.

First: that the casinos will come after them in 2020 if they vote for our bill.

Second: for those with casinos in their districts, that they’ll be blamed for any employee layoffs at their casinos if they vote to increase the admission fee.

As far as the second issue goes: That’s so much dishwater.  And we have the numbers to prove that casino employment has nothing to do with admission fees; it’s a function of the number of people playing casino games—-and that number hit its lowest level in twenty years in the last fiscal year, leaving casinos with about 25% fewer employees than they had a few years ago—something we’re pretty sure they’ve never mentioned to their home communities.

And that gets us to—-

Some advice for legislators who have gotten these messages or will get them—or some other message intended to influence their votes on our issue. And it holds true any time someone threatens retaliation for your vote—on whatever issue.

Go after THEM. First.

Don’t keep it a secret.  Don’t wait to become their victim.

Remember who you are.  You are the one who writes the laws, not them.  You are the one charged by your constituents with watching out for their broader interests, which might not be the best interests of a smaller but influential interest.

You are the one who supports something good for all Missourians rather than bowing to pressure from a few very well-to-do special interests whose only concern is how much money they can take out of the state.

You are the one who goes home for long weekends during the legislative session. You are the one who is in your district every day seven months of the year.  You are the one who talks to folks at the coffee shop or the restaurant.  You are the ones who speak to the civic clubs. You are the ones who send out a newsletter to your constituents. You are the ones likely to be interviewed on the hometown radio station or by the local newspaper—which might print your newsletters.

You are the one who can tell the folks at home the things the industry won’t.

You control the message every day, every week, not just at campaign time. You are the one who has every opportunity to explain why you have supported the broad public interest in the face of the narrower interests that think they can force you to let them write the laws that govern their operations.

Opponents of legislation such as our steamboat museum bill hope you won’t tell your constituents what they’ve said to you.  But you have every opportunity to do it.  And we can’t think of a single reason why you shouldn’t.

A few years ago, several legislators were told that if they didn’t vote the way a powerful private citizen wanted them to vote, they would find themselves facing well-financed opponents backed by the private citizen’s checkbook.  All of them won—after telling their constituents about the effort to bully them.

Let’s also be clear that there is nothing wrong with someone supporting a candidate that has views different from your own, views that might be more favorable to those who differ with you politically and philosophically. You should have to defend yourself in the competition of ideas.

But you don’t have to wait silently for someone to make you the victim they say you will become because you cast your vote for a greater public good than theirs.

Remember who you are.

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They never give up, do they?

The newest trick by the casino industry to escape any taxes on another slug of money removed from customers’ pockets has been heard by a House committee.  No action’s been taken and it’s likely too late in the session for this latest scheme to make it into the statute books. But there’s always next year.

If the bill somehow passes this year, that casinos will take another $100,000,000–plus out of Missouri in the next four years. And big boatloads annually after that.

It’s another broken promise by the industry.

Since the day casino gambling was legalized in Missouri, most of the tax on the industry’s adjusted gross receipts has been earmarked for education. For 25 years, that’s been okay with the casinos.

Not anymore.

A trend that could, in time, wipe out all of the gambling money going to education has been gaining momentum in the last four years.  The casinos are giving out coupons to customers allowing them to get free plays at machines and gaming tables. And they seem to be giving out more and more.   The legislative fiscal oversight office says the growth in taxes collected by the state in the last four years from these free play coupons has averaged 8.73%.  In Fiscal 2018, the state collected $37.8 million dollars from those taxes. Thirty-four million went to the “gaming proceeds for education” fund. The rest went to the home docking cities.  More about that later.

The casinos think there should be no tax charged on the money casinos take in from people using those free play coupons. None. They propose completely phasing out the 21% tax on money they make from these promotions in the next five years.

Some if this is kind of technical so I ran it past an accountant who gave me some help. When you read the technical stuff, that is the part from my advisor.

Here’s how it would work.

Suppose you wager $100 at the casino, twenty dollars from the coupon the casino has given you and eighty more out of your own pocket. You win $40 (half of it from the coupon and half of it from your own pocket).  You walk out of the casino sixty dollars in the hole.  The casino, by giving you a twenty-dollar coupon has made sixty dollars.

That’s how the current law works.  The state collects 21% of the sixty dollars you left behind, or $12.60.

The argument from the casino side seems to be that the $20 coupon comes from the casino’s previously-taxed adjusted gross receipts.  So it shouldn’t have to pay tax again when the $20 comes back.

The industry claims it recognizes only $80 in revenue, that it paid out $40, so its adjusted gross receipts are forty dollars, not sixty and therefore owes the state only $8.40, one-third less than the present law requires.

Whatever.

What the casinos want is to pay NO tax. The bill says, “Promotional play receipts shall not be taxed after June 30, 2023.”

Thus, the bill seems from here to say the casino that gets a business tax deduction with its promotional coupon would be excused from paying any gaming taxes on adjusted gross receipts generated by that coupon when it is gambled.

My accountant friend thinks the casinos are creating an un-level playing field (imagine that, casinos have tilted tables!) where the wagers are not taxed but the patron winnings from those wagers are still allowed to be deducted from the casino gross receipts, thus lowering the casino’s AGR taxes.

There’s an even greater hazard here.

The casinos want to pay no taxes on promotional play receipts. There is nothing in this bill that prohibits casinos from issuing promotional play coupons to every customer. And as the oversight division of fiscal research points out, the casinos’ use of promotional play has been increasing.

Fiscal research estimates the state will collect $244,650,481 under the existing 21% tax on promotional play between this fiscal year (FY2019) and FY2023.  If the present tax says in effect—as it has all this time—the state would collect an additional $62,457,772 in FY2024 and each year after that.

BUT if this bill passes this year and the tax rate is gradually reduced to zero, the state would collect only $138,624,390 during that same period, and would collect nothing in FY2024 and every year after that.  That’s a loss of $106,026,891 during that phase-in period plus the $62.4 million each year afterwards. .

But it’s not just the education fund that will get hurt with this demand from the casinos.  Ten percent of the adjusted gross receipts tax goes to the home dock cities that already are seeing their funding reduced because the dollar they get from casino admission fees isn’t worth anywhere near a dollar.  Fiscal research estimates they will lose $10,602,610 by the end of FY2023 and will lose $6,245,777 each year after that.

Many years ago the casino industry agreed that the tax on adjusted gross receipts would go for education with a little bit to the home dock cities.  At that time all of the promotional play was taxed. If this bill passes, hundreds of millions of dollars more will go to casino corporate headquarters instead of being used to underwrite a small percentage of Missouri’s school funding and meet additional costs the home dock communities have because they have welcomed a casino.

As usual, the casinos get richer and richer while the causes that are supposed to benefit from casino taxes get poorer and poorer.

Just another example of an industry that cares not one whit about the people of Missouri, its education system, or even for the communities that think they’re great corporate citizens.

They’re not.

But they never give up, do they?

The man who isn’t there (but he really is)

Some of the sports wagering bills going through the legislature’s digestive process this year bring to mind Hughes Mearns poem that begins:

Yesterday upon the stair I met a man who wasn’t there…

Some bills establish a process by which someone can bet on sporting events remotely.  But whether in doing so they are the person who isn’t there is open to question.  So today, let’s look at the casino industry’s efforts to avoid paying admission fees for the largest segment of new gamblers it hopes to attract by legalizing sports betting, people the industry thinks should not be considered there.

This issue is important for the Missouri Gaming Commission’s worthy causes—including veterans homes and cemeteries—and for the casino industry’s home dock cities, which also rely on income from the casino admission fees. And, of course, there’s the museums proposal from Jefferson City that also asks for admissions fee money.

Reading the bills instead of just listening to the casino industry explain them raises or should raise some red flags. We will raise a few today—and we won’t even get much into the industry’s effort to direct the conversation in the direction of how much it is willing to be taxed.

Casino attendance has been declining since its peak in FY 2010-2011, dropping in fiscal year 2018 to its lowest level in twenty years. Casinos hope that opening sports books in the casinos will draw people back, particularly new people, and those new people will discover other kinds of gaming while they’re there for sports wagering.

It’s unlikely to produce a BIG turnaround in attendance, certainly nothing that will return casinos to the halcyon days when they were reporting fifty-million admissions or more (a decade ending in fiscal year 2012). But as the bills are now written, it will add millions to the casinos profits, although a relatively small amount compared to the overall adjusted gross receipts, largely because they don’t think about seventy percent of the sports bettors should be counted as casino admissions.  We’ll confront that strategy in a minute.

The proposed legislation gives our thirteen casinos a monopoly on sports betting. The bills require casinos to have a specific area set aside and staffed within the casino to handle those bets. A person who enters the casino wanting to bet that the Cardinals will beat the Cubs by more than fifteen runs must go to that specifically defined area where that person will offer to make a wager.  The casino will accept that offer and, when the final score is St. Louis 19, Chicago 3, the bettor will be paid.  If the score is 19-4, the casino keeps the bettor’s money.  The acceptance, handling, processing and final resolution of the bet is handled within that prescribed area of the casino.

But the casinos also want to allow betting through use of computer, whether it’s a big desktop tower or a cell phone or maybe the increasingly sophisticated things people put on their wrists these days. And that is likely to be most of the sports bettors.  They call it “remote” betting although some definitions of “remote” are debatable.

A webpage that keeps track of gaming trends in Nevada and elsewhere, playnevada.com, reports that 70 percent of all sports wagering in New Jersey, the first state to legalize online sports betting after last year’s Supreme Court ruling, were placed online.  It also reported Nevada, which seemingly has video gambling machines in every supermarket, business, bathroom, airport terminal, and anywhere else that people go, reports mobile sports wagering is used from twenty-five percent to more than fifty percent of the betting in Nevada’s many sportsbooks.  It’s difficult in Nevada’s case to be more specific because—and this is something we might come back to in a later post for a different reason—Nevada does not separate mobile and on-site wagering. That’s why it’s harder in Nevada than it is in New Jersey to determine what percent of sports wagering is done outside casinos.

Missouri’s proposed legislation would separate on-site wagering from remote wagering, which could be detrimental to veterans services or to home-dock communities that rely on in-person wagering in the sports book area but also could provide a major increase in casino profits. Missouri’s casinos want it that way and expect the legislature to rubber-stamp the idea.

As we compose this, we don’t know the final form sports wagering legislation will have if it makes it to the governor this year.  So we’re going to construct a scenario based on common provisions in the bills and a few differing provisions in some bills.

Missouri’s proposals don’t let just anybody dial a casino, and bet on sports. A bettor first has to go to the casino (where that person presumably will have to enter, thus triggering a two-dollar admission fee for the state) and register, open a betting account, and get a password.  That person then can leave and bet from anywhere in Missouri.  At least one proposal allows betting from other states if the other state lets Missourians place bets there.  It’s called reciprocity. On the other hand is a proposal that allows betting a few feet from the gambling area—-which doesn’t sound very “remote.”

If those provisions are in the bill that gets passed, the way will be clear for Betting Bertie to place a bet in say, Boonville, even if he is in Bevier.  He does. And he loses. Since he was not in the casino personally there is no admission fee paid to the state.  The bucks Betting Bertie of Bevier bet at Boonville go straight to the boat’s bottom line. The casino gets richer. The veterans and the home dock community get no benefit at all from this increased business because Betting Bernie doesn’t set his boots inside the Boonville boat.  At least that’s the way things are proposed.

Now comes the part likely to get the casino industry lathered up.

We argue, and we would bet that a number of members of the legislature might agree, that requiring Betting Bertie to physically go to Boonville to register as a bettor constitutes the creation of a presence within the sports book area. The bills require casinos to keep detailed records in the casino of Bertie’s betting.

If Betting Bertie does not place a bet, it’s as if he’s not present that day. But if he does put down a bet that is accepted by the casino, processed by the casino, and paid off by the casino in the sports book area as required, he has activated that established presence and has electronically entered that casino.  And because the casino has accepted the bet, processed it, and paid it, it has acknowledged that he has had that presence in that casino.

Because the casino has decided to admit him to the sportsbook area with his bet, the two-dollar admission fee should apply as surely to him as it would apply to someone who walked in. A bet is a bet whether it is made by someone sitting in a comfortable chair staring at all the big screen teevees or whether it is made by someone sitting in an office chair in Bevier.  Both parties have entered the casino, one physically and the other electronically. Admission is admission—at least if the casino wants either bettor’s money. It cannot get Bertie’s money if it does not acknowledge the presence it as established for him by accepting his application and giving him his password.

Casinos will argue that physical and electronic admissions are different. But the end result is the same—the casino is most likely to win and the principle of winning is the same whether that person walks in or phones in. There is no bet if there is no acknowledged presence.

To put it more directly: The casino recognizes the arrival of the electronic bettor because it maintains a space for that person’s arrival thanks to the required registration and subsequent password issuance.  The password is the equivalent of the turnstile the on-site bettor has to go through to place a bet.

By making the password the electronic equivalent of the turnstile, the legislature can make sure that casinos don’t game the system further than they already do by claiming seventy percent of sports betting is different from the on-site betting, thus benefitting only the casino and not improving funding for veterans (and others) and home dock cities. The casino industry likes to cite Las Vegas practices in advocating a part of this bill and remember: Nevada does not separate mobile and on-site betting.

There is precedent within existing law that argues for our point.

If free passes or complimentary admission tickets are issued, the excursion boat licensee shall pay to the commission the same fee upon these passes or complimentary tickets as if they were sold at the regular and usual admission rate.

The provision kept casinos in the early days when real excursions were anticipated from declaring that everyone entering the gaming floor had been given a free pass or complimentary ticket.  As proposed statutes are written now, electronic entrance to the gaming floor and remote placement of bets is the equivalent of a free pass or complimentary ticket that, without existing law, would be treated as a non-admission. A strong argument can be made that it should not be considered as any kind of a free pass or complimentary ticket. And we suspect there are people who would support the concept—veterans groups and home-dock communities for example—who would be losers because the casinos are proposing an end-run around the admissions issue.  Why shouldn’t these bills consider remotely-placed bets to be “admissions” when the bets are received, processed, and (if necessary) paid in the casino or on behalf of the casino by a third party that conducts the wagering at the casino?

The answer is simple: the casinos don’t want them treated that way because if remote betting is not considered an “admission” there is no admission fee obligation to the state and to the host communities.  The casino thus increases its gross receipts without increasing any payments for veterans homes and cemeteries or home-dock communities and other causes. As we’ve noted before, they’re already getting tens of millions of dollars in windfalls because the admission fees are not inflation-adjusted each year and they fight aggressively if anyone suggests they should be.  By not considering remotely-placed but in-house processed bets as “admissions” their windfall will get windier.

Some additional proposed language that on first blush seems to be fairly benign appears on second blush to be much less than that.  Here’s how that works:

One of the bills appears to make that point when it says, “All sports wagers…shall be deemed initiated, received, and otherwise made on the property of an excursion gambling boat within this state.”  While that language would appear to support the points just made, please note the phrase “on the property.” Another bill seems to clarify that wording by saying sports bettors can wager on sports at “a hotel, restaurant, or other amenity that is operated by the certificate holder and subject to the supervision of the (gaming) commission.” A restaurant twenty feet from the turnstile to the gaming floor is an okay place “on the property” from which to place a bet. We suspect there are some folks who don’t think that quite qualifies as “remote.”

The definition of “on the property” is troublesome.  On one hand, the casino must establish a specific area where sports wagering is done and processed by the casino. On the other hand are suggestions that someone can be anywhere, even right outside the turnstile leading to the casino, or in a room of a hotel owned by the casino. These provisions seem to sanction avoidance of physically entering the specified area or of even entering the broader casino betting floor while on casino property, thus avoiding an “admission” and thus avoiding the two-dollar admission fee..

That is why it is important that the use of the password—from wherever—should constitute entrance to (or admission to) the specific area set aside for sports wagering and thus trigger the admission fee.

We hope the General Assembly’s final version of a sports wagering bill does not allow the casinos to ignore existing standards that require admission fees—that help veterans, home-dock communities and others—for seventy-percent of those the industry hopes to lure inside its specified sports betting areas physically as well as electronically.

—because the man who isn’t there

really will be there.

Casino abuse

Missouri’s casino industry is feeling abused.

And those of us who want to do something great in Jefferson City are the apparent chief abusers.

Takes one to know one.

We’ve now had committee hearings in both the House and the Senate on the Steamboat Legacy Fund bill that suggests Missouri’s casino industry be the main funding source for the creation of a National Steamboat Museum in Jefferson City, the construction of a Missouri State Museum that has been needed for ninety years, and the conversion of the present state museum space into a Capitol Museum/Visitor Center that focuses on the history of the capitol and the function of state government.  Our goal is to do all of this without state funds and without any general tax increase.

In each hearing, the casino industry has complained that it’s being picked on because we (a small group of Jefferson City residents who have been working on these goals for more than a year) think the industry has capitalized on—–no, the proper phrase is “taken advantage of”—Missouri’s steamboat heritage for more than a quarter-century.

The casino industry thinks we’re picking on it by telling the truth about it.  We think the casino industry has earned the right to provide the financial base to accomplish these goals. 

We’ll start showing you why today.

The attempt to portray yourself as the victim when you are caught with your hand in the cookie jar is as old as cookies and jars.

The casinos aren’t victims. But there are victims—Missouri’s veterans and the home communities of the casinos in particular.  We’re going to show you how it happens by using numbers from three sources: Missouri Gaming Commission annual reports for the last 25 years, the United States Bureau of Labor Statistics, and the Federal Reserve Bank of Minneapolis.  And one other source: the casino industry itself.

Let’s begin this explanation with the parable of the 1994 pickup truck.  That was the year the first two casinos opened in Missouri. It was near the end of fiscal 1993-1994.  During that year, legislation went into effect establishing the two-dollar admission fee for casinos.

It’s important to understand that casino patrons do not pay that fee.  The casinos do, based on the number of people who gamble.

We won’t go into detail about how that number was established except to note that it goes back to the time when the industry convinced Missourians to allow casino gambling here by selling the image of steamboats cruising our great rivers on two-hour cruises while people could gamble (but lose no more than $500 per cruise). Each time someone went on a cruise, they would pay two dollars. One of those dollars was for the Missouri Gaming Commission and it’s “worthy causes” (more about those in a minute).  The other dollar went to the city and county that had a casino to offset the extra costs of public services because of the presence of a casino.  Leftover funds were used for capital improvements in those towns.  When the image of steamboats on our great rivers turned rather quickly into so-called boats in so-called moats the casinos decided not to charge patrons to enter the gambling floor. Instead the casinos counted noses and wrote checks to the state, probably making up that expense in charges for food and beverage, hotel rooms and the like, which is how the industry says it would make up for the dollar we are seeking for the museums project.

There is no doubt the host cities have made good use of that money.  But in the process they have become victims of their casino.

If the city street department in one of the first two casino towns bought a Ford F-150 four-wheel drive extended cab long-bed pickup truck in 1994, it might have paid the MSRP of $18,607.  By 2018 the truck badly needed to be replaced. But the price of a new Ford F-150 four-wheel drive, extended cab, long-bed truck, was $40,010.

The price of pickup trucks has doubled, and more.  But the city is still getting a dollar.  And it’s not a 2018 dollar.  It’s still 1993 dollar. And it’s not worth a dollar any more

The legislature in 1993 didn’t think to include an inflation adjustment clause when it set that two-dollar fee and the casino industry has successfully insisted the legislature not correct that shortcoming.

The inflation calculators at the BLS and the Minneapolis Fed tell us that the equivalent of $2 in 1993 was $3.41 in 2018.  The host city in 2018 got a dollar per admission at its casino.  Had there been an inflation clause built into that 1993 law they would have gotten a dollar-seventy.  Plus another half cent.

And the situation is worse for the city because those webpage inflation calculators show the dollar they DID get in FY18 had the purchasing power of only 58 ½ cents.

Does the casino industry give a hoot?  Suggesting this avaricious industry should care about making sure its thirteen host communities receive a dollar that is worth a dollar will bring forth claims that such suggestions make the industry a victim somehow.

The other half of the two-dollar admission fee goes to the Missouri Gaming Commission which takes its annual operating costs out and then distributes the rest to a list of “worthy causes.”  Those causes have varied through the years but the biggest beneficiary in 2018 was the Missouri Veterans Commission Capital Improvement Trust Fund, which funds veterans’ homes and cemeteries.  Last year it got about $22 million.   In 1993 dollars.  While the casinos were hauling in 2018 dollars from people who thought they could go to a casino and win, the veterans homes and cemeteries were getting dollars worth 58 ½ cents in purchasing power..

In fiscal year 2018, the difference between a 1993 two-dollar admission fee and its 2018 equivalent value ($3.41) was more than $56 million dollars.

Where did that money go?  Not to veterans’ programs.  Not to the home dock cities.  That $56 million dollars in windfall profits left Missouri and went to casino corporate headquarters in Nevada and in Pennsylvania.

And each year, because there’s no inflation adjustment in that two dollar admission fee, the windfall gets bigger and bigger.  In the twenty-five years that Missouri has had casinos, the industry has had windfall profits of more than $830,000,000.  That’s as of last June 30.

That’s $830-million that has not gone to programs for veterans, early childhood education, college tuition assistance programs, programs for problem gamblers—and to the host cities.

And when representatives of Jefferson City suggest that about two-thirds of the windfall going forward remain in Missouri to keep a treasure trove of American history from being purchased by a museum in Pennsylvania and moved there, and to satisfy a 90-year need for a state museum that can REALLY tell the story of Missouri and its people and its resources, the casinos whine that we are abusing them.

The casinos will attack any proposal to make two-dollar admission fees worth two dollars.  And anybody who suggests it, or who suggests (as we have) that using part of the huge annual windfall profit casinos realize for something benefitting Missourians is making the casinos victims somehow, and we should be ashamed to suggest it. .

Reviewing every annual report of the Missouri Gaming Commission makes this clear: The casinos get richer ever year by paying the state in 1993 money.  The state gets poorer because the programs and services that admission fee goes for cost 2018 dollars to operate.

We know that casinos are not built because their patrons have an even chance of winning.  The tables are always tilted in the casinos’ favor.  The tables tilt even more with each passing year that they pay the state two dollars in admission fees.

An industry spokesman has accused those of us supporting this measure of suggesting the casinos make too much money.  As is often the case with statements from the industry, it’s less than truthful and is intended to deflect attention away from the issues. It’s not the amount of money the casinos make, it’s how much they KEEP, how they keep it, and how they are adamantly opposed to any idea that the two-dollar admission fee should be changed so that veterans and home dock communities get dollars that are worth dollars.

Now, having beaten up on these “victims,” let’s acknowledge some important things.

The casinos have broken no laws. They are paying what the law requires them to pay.  Whether they are keeping faith with Missourians who voted to have majestic steamboats cruising our rivers or keeping faith with those who thought two dollars was going to be worth two dollars is another issue.  But they have not broken any laws.

They have said in the committee hearings that they have met every obligation the state has put on them.  And they have. And they sure don’t want the state to update any laws that make one of their obligations be that dollars be worth dollars.

They say they provide thousands of Missourians with jobs.  And they do.  Not nearly as many as they used to—which they don’t talk about publicly—but they do provide thousands of jobs that pay millions and millions of dollars in wages and benefits.

They pay a lot of property taxes and in some places they pay for leases of city or county land for their boats in moats. Not much to sympathize about there. Those are costs of doing business.

Here’s another indication that the casinos don’t much care about anything but how many dollars they can take out of Missouri:

Last year, Missouri’s casinos had almost one-and-three quarters BILLION dollars in adjusted gross receipts (income minus payouts for the minority of customers who won anything).  And by the time they deducted the expenses the gaming commission forces them to report, the industry still had about $820-million left, including the $56-million in windfall profits from the admission fees.

Here’s another example of how our casinos don’t really care for much more than taking as many dollars out of Missouri pockets as they can:

The gaming commission requires the casinos to report their charitable giving each year.   Last year the thirteen casinos donated about $940,000 to charities.  If asked, they’d probably point to that number with a lot of emphasis and pride.  They like to do that kind of thing.

But it’s not what they say. It’s what they DON’T say that is important in understanding their avarice.

The charitable contributions last year were just .00054% of their adjusted gross receipts.  Remember than .01 percent represents one penny per dollar.

One casino with more than $70-million in adjusted gross receipts in FY2018 reported charitable giving of $915.

Your observer seems to be the chief casino abuser, I guess, because I came back from a meeting at the Steamboat Arabia museum in Kansas City a year ago with the idea that Jefferson City would be a great place for the museum’s new home when the museum’s lease runs out on its city-owned building in Kansas City in 2026. And our working group thinks an industry that has taken advantage of our steamboat heritage to make billions and billions of dollars should help preserve the heritage of the steamboats.

If the plan that our working group has developed in the last year constitutes casino abuse, all of us willingly plead guilty.

So the casinos accuse of abusing them, of making them some kind of victims.  Read the numbers again. And think about who is—and wants to remain—an abuser.

The question then becomes: Who really is abusing the system: a citizens group that wants to use casino money to create something good—great—for our state or the group that wants to truck as much money as it can out of the state for its own enrichment?

The problem can be corrected.  All it takes is 82 courageous members of the Missouri House and eighteen courageous members of the Missouri Senate who will vote for boats that are not in moats but whose cargoes are instead in museums or are waiting under farm fields for their stories to be brought to the surface.

The casinos have made billions of dollars from the heritage of those boats.  Giving back a relative few million to honor the importance of steamboats to America—and to casino development in Missouri—isn’t going to make any casino executives jump off the top floor of Wynn’s in Las Vegas.

More later.