Category Archives: taxes

Jurassic government

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How many times will we hear the cheap, vague, promise to “fight big government” in this campaign year.  Candidates pressed by their voters—and the voters need to do this is great intensity—might come up with a statement that equally cheap and vague.

We’ve run into someone who actually thinks about that. He’s also realistic about what needs to happen—and what realistically can NOT happen,

Maybe he’s just whistling in the wind, but Professor Donald Kettl is suggesting the push toward smaller government is counterproductive.  He’s not arguing for bigger government but he does argue that there is an alternative to the philosophy that cutting “the size” of government is the silver bullet that will solve government’s problems.

Kettl is a former dean of the University of Maryland’s School of Public Policy and is a senior fellow at the Brookings Institution, one of the most prominent think tanks in Washington.  It calls itself non-partisan although media reports put it barely on the left side of the liberal-conservative scale (53 on a scale of 100).  Regardless of where you fall on that scale, his observations are worth evaluating.

Unlike many who rail against “big government” or proclaim government is “too big,” Kettl puts some serious thought behind what his contentions.

Kettle begins his 2016 book, Escaping Jurassic Government, with an observation partisans on both side of the government aisle seem to agree on: “There is a large and growing gap in American government, between what people expect government to do and what government can actually accomplish.”   Government, he offers, comes out poorly when the public compares what it can do with what the private sector does, an image worsened by the cynical “and sometimes nasty view” expressed through social media.

But he points to the contradictory nature of the public’s attitude toward government when he speaks of “citizens’ rising—and sometimes impossible—expectations about what government ought to do for them,” and continues, “No matter the issue, the first instinct when problems arise, even among the biggest advocates for smaller government, is to see government as the cavalry and wonder why it doesn’t arrive faster to help save the day….Almost no one likes big government, but no one expects to have to cope with problems alone.”

The result is what he calls Jurassic government.  “Like the dinosaurs, government is strong and powerful. But like the forces that led the dinosaurs to extinction, government is failing to adapt to the challenges it faces. American government struggles with its most important and fundamental decisions. Even worse, it too often fails to deliver on the decisions it makes. That wastes scarce public money and leaves citizens disappointed,” he writes.

How did we get here?   It’s simple, he says.  This country has lost its commitment to competence in government.  And he argues that competence cannot be restored simply by cutting funding for programs and agencies.

His book focuses on the federal government.  But the points it makes apply, too, to state government.  The goal, he says, is competence, not necessarily size.  “We need to restore government’s capacity to deliver on what we decide as a country we ought to accomplish…We do have it within our grasp to restore confidence that what the government seeks to do it will do well.”   But it won’t be easy.

Kettl notes that the growth of government has been a bipartisan affair—Democrats creating three and turning one into two.  Republicans have created three new departments and have reduced one (Nixon kicked the Post Office out of the cabinet).  But in terms of the thirty-two countries in the Organization for Economic Cooperation and Development, the United States has has fewer government employees as a share of the national workforce than the average among the OECD countries).  It might be surprising to realize that only one in eight federal bureaucrats work for the federal government.  Government spending as a share of the economy  is less than the average spending of those 32 nations.  Kettl says government employment has been flat at the state and local levels since the days of Ronald Reagan. The number of local government workers  has increased, however, as population has increased.

Is privatization the answer to reducing government costs? Kettl maintains it is not and, in fact, reduces accountability.  He cites several instances in which government has been criticized for failing to do its job—but it is the private contractor to whom that job has been outsourced that has failed—and accountability has suffered.

He notes the greatest increases in government costs is in entitlement programs while total government spending has stayed pretty flat.

He thinks liberals who want to increase government spending won’t get far because slow long-term economic growth will not provide much new money to pay for many initiatives.  And while conservatives want to cut government spending, most of the federal budget is consumed by payments on the national debt, entitlements, and defense spending.

At the state level, he says, the outlook is not good.  “The U. S. Government Accountability Office forecasts that state and local governments could face structural deficits for the next fifty years,” he writes.  Aging populations will put pressures on state governments while public opposition to higher taxes “make it unlikely” that state spending will grow.

The upshot of all of this, he suggests, is-–as he puts it in one of his chapter titles—“Government’s Size Can’t Change (Much),” and to condense much of the book into a line or two: cutting government’s ability to pay its bills only reduces government’s ability to do the things it is supposed to do well.

There is much, much more in Kettl’s book, a lot of it challenging traditional political rhetoric.  He thinks today’s efforts to “cut” government size actually is cutting government’s competence and it is the declining competence of government that creates a distrustful public that criticizes the government for not meeting its obligations. It seems to this reader that he is pleading for those in government as well as those who pay government’s bills and want government services to throw away the bumper stickers and to put on their thinking caps.

If you’re in government, his study is worth reading.  If you are one of those paying the taxes and taking the services, it’s worth reading, too.

The dinosaurs, he says, didn’t think about the changing world around them and move realistically to adapt.  And we know what happened to them.

We think that his thoughts are worth serious consideration whether you’re the 53 or the 47 on the liberal/conservative scale.

Escaping Jurassic Government: How to Recover America’s Lost Commitment to Competence,  by Donald F. Kettl, published by Brookings Institution Press, Washington, D.C., 2016.

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Electronic Wampum

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Saw an article in The Hill last week that, “The value of most cryptocurrencies have plummeted in recent weeks, wiping out billions of dollars of wealth.”

Aside from the story needing a good editor (it should be “the value….HAS plummeted), I confess that I do not have the slightest idea why I should buy, sell, or invest in cryptocurrency.  And the Super Bowl commercials for it were pretty useless for me.  I wonder if they were paid for in cryptocurrency.

As I understand what I read from “helpful” internet sites, it’s a kind of currency that exists “digitally or virtually.”  There is no central or national issuing agency for the stuff.  There’s no FDIC.  It seems to be an anarchic system that creates something out of nothing other than the mind of someone who decides to start issuing “it.”  That person decides how many dollars buy a unit of whatever “it” is and people go nuts buying some of it. The person who creates it gets a lot of dollars and the person who buys it gets——

Well, some kind of units that have no physical properties. In other words, you can’t reach in your pocket and pull out some cryptochange to put in the parking meter. There’s nothing printed on paper for me to pull out of my wallet to buy a lottery ticket.

I get the idea that beads, shells, buttons, coins, and pieces of paper have value only if two parties agree on what their value is. But there seems to be no single worldwide party that determines what any particular “unit” is worth, as in an Indian Rupee is worth so many United States dollars, which are backed by a bunch of gold stored in Kentucky, which is itself valuable because somebody has decided it is.  But at least it is something somebody can see, touch, feel and perhaps even smell.

How much in “real” money will it cost me to buy 1,000 cryptosomethings?  And if I buy it or them as an investment, how will I realize any “real” money in return? Is this stuff more secure than the money I have stashed through the investment counselors at my local bank—who I don’t think have any, of my chidren’t inheritance invested in this electronic wampum.

Apparently there are coins of some kind, or tokens, or something in at least some of these operations but what is the common substance or means of exchange that establishes their worth—as in a dollar is the equivalent of so many Euros, or so many rubles equal a dollar?

Can I pay my taxes in cryptocurrency? When I look in the church offering plate and see that it’s pretty empty of tangible funds can I be comforted to know that it is heaped with non-tangible units?  Some sources say this stuff appears to be like stock.  If I buy some for $X and then sell it for $Z I might be liable for a capital gains tax and I would have to pay that in dollars.

Right?

But when I buy stock in American Veeblefleetzer, I know there’s a brick and mortar building tht is making veeblefleetzers.  If I invest in cryptostuff, am I investing in air?

I went to Kaspersky.com, which seems to know something about this, but I was not comforted when I was told, “If you own cryptocurrency, you don’t own anything tangible.  What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party.”

Kind of like our ancestors traded three beaver skins for a knife, I guess.  Except it’s not.

In this case it seems as if it’s more three  beaver skin units for a VIRTUAL knife unit—which I guess can be used to skin more beavers units that are chewing down tree units and building dam units on stream units.

Are the human equivalents of this system Unit-arians?   I spoke to a group of them a few months ago.  They looked pretty real to me.  I think I touched one or two of them and they seemed very solid.  Not virtual.

Curiously, Kaspersky says using a credit card to buy cryptothings is “risky.” Well, I guess using a piece of tangible plastic to buy a virtual unit of something that is stored in an electronic wallet that I cannot carry my credit card in, in my pocket, is——

Darned if I know.

Can you imagine what a turmoil things would be in if Missouri tried to pay for Medicaid expansion in cryptocurrency?

Here’s something else that I wonder about:

If, sometime in the future after I have departed this bewildering new economic world, these means of exchange that have been so common for centuries are completely replaced by cryptothings, what will be the purpose of Fort Knox?

Will gold reserves mean anything in a world where there is no central or issuing agency for various cryptocurrencies that might be established, the value is which is determined by whomever does the establishing?

Will a Pound still be a Pound the world around? You know, pound, as in £?

The Yen?

The Rupee?

The Leu?

The Sol?

The Euro?

I guess they’ll have value as collector’s items.  And then people will use virtual currency to buy them as decorative collectables and people of the future will look a our clothes and wonder what pockets were for.

The Casinos in Our Pockets

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We lived in an “appointment” world in 1993, when the first Missouri laws governing casino gambling were written.  Voters had approved riverboat gambling, as it was called then, in 1992. The first casinos on boats would open in the spring of 1994.

Many of us still got our national news with the 5:30 network newscasts on television and our local news at 6 and 10 p.m. when those laws were written.

If we wanted to buy new clothes, we went to a clothing store during the hours it was open.  We went to grocery stores during their open hours to get our food.

We knew when each day we could go to the mailbox to get letters from friends and relatives.

And by the end of the year we knew that if we wanted to gamble we would have to go to the riverboat at a certain time to be admitted.

The Station Casino-St. Charles and the President Casino on the moored Admiral riverboat opened May 27, 1994. Gamblers could board the boat in St. Charles from 9 a.m. to 1 p.m. for a two-hour cruise (for which they paid three to five dollars, depending on the day). If they missed the cruise time, they had to wait for the boat to come back so we could pay to get aboard for the next trip.

The President never cruised. It was permanently moored near the Gateway Arch because the old aluminum Admiral had no engines. Gamblers would pay two dollars during the week and five dollars on weekends and could board every two hours from 10 a.m. to midnight.

But the world was changing and the change accelerated each year. “Appointment living” was beginning to diminish although many of us did not realize it at the time.

There were some hints, however.

The Pew Research Center reported in 1994 that the percentage of Americans getting news from the internet at least once a week had more than tripled since 1991, going from 11-million to 36-million news users.

The number of hosts on the internet tripled from January, 1994 to January, 1996, the year something called a “browser” was created—Netscape, the same year that the island nation of Antigua and Barbuda passed a Free Trade and Processing Act allowing licenses to be given to companies wanting to allow internet users to gamble. By the end of the year there were fifteen gambling websites. The next year there were 200 and by 1998, a study was published showing online gaming revenues had topped $830-million. Modern online gambling in this country dates from November 22, 2010 when the New Jersey Senate passed a bill allowing certain forms of online gambling.

It was about that time that the casino industry was starting to see an erosion in patronage. In Missouri, casino admissions reached almost 54.3-million in FY 2005 then declined for three years before climbing back to almost equal 2005’s number. Admissions began annual declines after FY 2011.  In FY 2019 (the last full year before the pandemic crippled casino business), casino admissions had declined by 49%.

Various reasons for the decline can be suggested but the end result seems to be the same—people just don’t go to where casinos are.

So the casinos have to go where the people are.

The situation is not unique to the casino industry. It is part of our changing lifestyles and those changes have become more obvious with the COVID-19 Pandemic that has forced casino closures for in-person business and quarantines for many who would patronize them.

We no longer live in an “appointment” world.  We can buy clothing at any time of the day off the internet.  We can use the internet to get our groceries delivered.  We can order deliveries to our homes from our favorite restaurants.  The same with our pharmaceuticals. Telemedicine is eliminating some office and hospital trips.

Casino betting can happen 24 hours a day because, as one source has observed, “everyone has a casino in their pocket.”  Casinos are looking for new products that can be offered through the ubiquity of the internet that we call up on our ubiquitous cell phones.  First is sports wagering. But later, Missouri legislators are likely to be asked to let table game betting to take place remotely.

Those who find gambling a reprehensible sin will find nothing redeeming about gambling on the internet.  But thousands of other Missourians will welcome the opportunities—as they welcome opportunities to grocery shop from home.

In a world where less and less of life is lived by appointment, the gaming industry knows it must change. And it is, as it should.

Missouri’s casino gambling laws must change, too.  Laws written and fees created in the days of physical customer presence in casinos need to be changed to account for virtual presence.  State services relying on gambling fees and taxes will be increasingly diminished as appointment gambling diminishes.  Casinos, profiting from laws of the 1990s appointment culture, resist modernization of the law. It is understandable that they do.

What is not understandable is why the Missouri General Assembly would not want to protect the state’s interests by bringing our laws from the appointment era into the virtual, but very real, era.

 

The parable of the caretakers’ wealthy friends

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And the professor came among them as they convened to determine the welfare of the people.

And the professor said unto them, “Do not foolishly assume that following an unchanging law benefits the great mass of people who have chosen you to make wise decisions on their behalf.  Nor should you find it adequate to proclaim that enriching a few by adhering strictly to the law is good.”

And he said, “Suppose you, as caretakers of the common good, approve a generous spending plan of $32 billion for the benefit of those who have chosen you. And suppose you determine that $32 billion is adequate for the future and ignore the undeserving who believe your good stewardship of financial resources has become inadequate.

“But inevitably the system generates $33 billion in the next year, and $35 billion in the second.  By following the law, friends and supporters of those who established the “adequate” amount can divide the excess totaling $4.5-billion.

“But in the fullness of time,” said the professor, “those who are limited might rise up and say to those they assume to be their caretakers, ‘This is unfair for inflation has reduced the buying power of $32 billion to only $26 billion and those who rely on actually having $32 billion are becoming impoverished and the people who elect the caretakers are suffering.’”

“’You have established by the growth in wealth of your friends and supporters, year after year, the true value of the $32 billion. Yet you have refused to adjust the law to be fair to the greater number of those you serve while bowing to the wishes of supporters who offer benefits to you for being with them.’”

“’But we are only following the law.  We are meeting all of our obligations,’” you respond. “We are blameless.”

And the professor cast disdainful eyes upon them and said, “Your professions are hollow and self-serving! Those you proclaim are well-served are instead growing thin, yea, their ribs are beginning to show.  In the interests of fairness and justice, it is time—yea, it is PAST time—to adjust the law so that they shall be fulfilled.”

“But,” the caretakers said to the professor, “we do not understand why we should be forced to give our excess back to those who fall under the law.”

The professor rose and he said with passion, “Wisdom without honor has become greed.  You have impoverished those you claimed to help and it is time for those remaining with honor to show the courage to recognize what you have done and to correct it to the benefit of the greater public welfare.”

But the friends and supporters did not care about those who were being impoverished as they grew wealthier.  “You cannot change the law,” they said.  “Giving the impoverished dollars that are worth dollars would be punishment for our success.  Have pity on us for we are your friends.”

And the professor stood nearby hoping the caretakers of the public good would see the hollowness, self-serving, and greed of the supporters who demanded protection from those who trusted the caretakers to be just.

 

Who should control sports wagering?

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Kurt Erickson’s article in last Friday’s Post-Dispatch should be a warning that the state’s control of casino gambling is in danger.

Erickson wrote that four of our professional sports teams are launching a petition campaign to legalize sports wagering, an issue the legislature has talked about for several years but has been unable to get out of its own way and approve.

The St. Louis Cardinals, the St. Louis Blues, the Kansas City Royals, and the St. Louis City soccer club have filed nine proposed petitions with the Secretary of State. One of them will become the focus of a campaign to amend the constitution to allow sports wagering. The proposals also establish various tax rates and earmark revenues from sports wagering.

Some of the proposals will lower the overall tax on casino gambling by creating a super-low rate on sports wagering revenues. The proposals also change the way funds from gambling taxes are allocated.

Both are issues of legislative concern—-and of concern to educators in particular.  Both are issues the legislature dealt with in the 1990s when casino gambling was first legalized. The earmarking of funds from casino gambling has been a legislative prerogative from the beginning. The legislature changed the earmarks once, moving portions of casino admission fees from support for early childhood education to support for nursing homes and cemetery development for Missouri veterans.

Legislative leaders need to protect the general assembly’s authority to determine the best interests of the people of Missouri—the people who send their representatives and senators to the capitol on their behalf.

The only way to do that is to approve sports wagering during the 2022 legislative session.

The BEST way to do that is to recognize that casino gambling laws enacted in the 1990s are no longer adequate thirty years later at a time when casino gambling as an industry and  public access to casino gambling are changing.

Additionally, it is time the legislature recognize that the two-dollar admission fee established in 1993 has become a multi-million dollar liability to the state and to the casinos’ own host communities.

Proposed legislation has been written, but not introduced, that addresses all of those topics.  One of the major provisions is increasing the admission fee to a contemporary amount that is the equivalent of 1993’s two dollars. The United States Bureau of Labor Statistics says the equivalent for this fiscal year is $3.67.  A new estimate will be released in February, during the legislative session.

The proposed legislation increases the admission fee to $3.50, leaving seventeen cents unclaimed.

The proposed legislation increases the admission fee to $3.50.  We know the casinos will vehemently oppose this provision because they like to keep a dollar-67 in 2021 dollars for every two 1993 dollars they give the state (which have a purchasing power of only a dollar and nine cents now). They’re happy getting richer and richer while the state gets poorer and poorer

The proposal leaves seventeen cents unclaimed. The filing of the possible petitions has prompted a suggestion for the remaining seventeen cents.

We know from past experience that the private owners of professional sports teams will expect the legislature to put up state taxpayer funds to help pay for a new stadium. The tub-thumping for a downtown Kansas City Royals stadium is well-underway, in fact. The state does not have the major funds the teams want it to commit without cutting funding for other state programs.  A provision not yet in the suggested gambling reform bill could direct the unclaimed seventeen cents into a state fund for construction and renovation of professional athletic facilities, alleviating the inevitable pressure on the state for help with new professional facilities.

With wagering being permitted on sports, it is only proper that part of the proceeds from that activity be directed in that direction.

One reason sports wagering legislation has struggled and foundered in past legislative sessions is the effort to bring so-called grey-market gambling machines in convenience stores under state regulation. Efforts to make the two issues run in tandem have been counterproductive.

There is no doubt that it is important the state regulate those machines. But the stakes have been increased enough on sports wagering with the proposed petition campaign that the two issues should be separated and sports wagering should be a higher priority.

Nothing in what has been written today should be considered as opposing either sports wagering or regulation of the grey market convenience store machines. The author does not oppose either but does believe our gambling laws are outdated and are costing the programs the state once promised would be funded by those taxes and fees tens of millions of dollars a year.

The governor and the legislature have many issues to consider as priorities in the 2022 session. One of them is changing the law to make it harder to circulate petitions. We hope that issue will not obscure the importance of the sports wagering effort.

The proposed petition campaign should make state authority to regulate gaming and to appropriate the proceeds from it one of the major issues as a stand-alone matter that will not be endangered by other issues.

It’s What We Do

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We are replacing today’s usual reflection on life by Dr. Frank Crane with a reflection on a regrettable reaction by our governor to a good piece of journalism in which the journalist did what journalists are supposed to do journalistically and did what a good citizen should have done ethically.

In all my years of covering Missouri politics I have never heard of any of our top leaders suggest a reporter should be jailed for giving the state a chance to correct a serious problem before a story was published.

Let’s be clear:

There is nothing wrong with testing whether the information about us held by government is safely held.  You would expect a journalist to defend another journalist who was able to prove some private information held by the Department of Elementary and Secondary Education wasn’t so private after all.

And I am.

Good journalists test and challenge systems, people, programs, and policies to see if they are what they claim to be.  It’s a responsibility we have.  If I can get information about you that the government claims is protected, how safe are you from those who want that information for malicious purposes?

We were involved in just such an issue many years ago and it exposed a weakness in state government that could have exposed everybody’s most important private information.  This is the story, as I remember it.

Steve Forsythe was the bureau chief for United Press International back then. In those days there were two highly-competitive national wire services.  Steve’s office in the capitol was next door to the Associated Press office in room 200 , which now is carved up into several legislative offices.

One day, Steve called the Department of Revenue because he couldn’t find his previous year’s income tax return, something he needed for the current year’s return.  Could the department send him a copy of his previous year’s return?  Yes, he was told. What’s your address? And a few days later it showed up in his mail box.

Steve was a helluva reporter who instantly realized what had happened.   The Missourinet was a UPI client.  He called me and we talked about what he had learned and we decided on a test.

We lured one of State Auditor Jim Antonio’s employees to call the department and use the same line that Steve had used. The department gladly agreed to mail the previous year’s tax return to her.

—except the return she asked for was that of State Revenue Director Gerald Goldberg.   And the address she gave was mine.

A few days later, a fat envelope arrived in my mailbox.

Steve and I went to the Jefferson Building that afternoon and, as I recall it, stopped Director Goldberg in the lobby as he was returning from lunch.  I handed him the envelope and asked him to open it.  He was stunned to see his personal state income tax return inside it.  There was a brief moment of, I suppose we could say, anger. But as Steve explained to him why we had done what we had done, he calmed down.  On the spot he said he’d immediately look into the situation.  I don’t think he wound up thanking us but we didn’t expect any thanks.

We could have asked for anybody’s tax return, I suppose, even Governor Teasdale’s although that might have been a harder ask.  But this was bad enough.

There naturally was a certain amount of hand-wringing and anguish and probably some hostile thoughts about two reporters who were not known as friendly toward the administration to begin with pulling a stunt like this. But rather quickly, the department recognized that we had not opened that envelope and we had not looked at the director’s return, had not made any beneficial use of the information, had not yet run a story, and that we certainly did not intend anything malicious in our actions.

Antonio was less than enthusiastic that we had used one of his trusted employees as a tool for our investigation, but he also recognized the problem we had pinpointed.

The department almost immediately changed its policies to outlaw accepting telephone requests such as the ones that led to the stories UPI and The Missourinet later ran and instituted a process designed to protect the confidentiality of those returns.

From time to time in later years I wondered if I should see if the department’s policies had slipped back to those days when Steve and I embarrassed it.   But I never did.   Every year, Nancy and I file our state tax returns and assume you can’t have them mailed to you with just a phone call.

I suppose Governor Teasdale could have demanded a criminal investigation of our actions but he didn’t.  His Department of Revenue just fixed the problem.  Steve went on to a long career with UPI, which eventually lost in the competition for wire service clients to the AP and closed its capitol bureau.  I went on to a long career with The Missourinet, which still serves a lot of radio stations in Missouri. We didn’t often care if we ruffled some feathers from time to time as long as we were reporting the truth—and that always was our goal.

Good reporters do what they are called to do—question, investigate, test, and report.  Sometimes those whose skirts that turn out to be dustier than they think they are don’t like the findings.

One big difference between the days when Steve’s tax return and the security of private information turned into a state policy-changing news story and today, when a reporter’s news story about the security of private information has led to threatened criminal charges, is the change in times. We are living in stressful times that not only breed physical and political disease, but tend to breed reactions that are less prudent than necessary.

But that won’t discourage good reporters from doing what they have a calling to do.  And the day it does, all of us are losers, even those who are embarrassed by what reporters find.

 

Running government as a business, or—-

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It’s an easy suggestion to make: Government should be run like a business. We first heard this piece of oratory so long ago we have forgotten when and we’re sure it wasn’t original then.  So let’s test the validity of that idea. We’ll test it by reversing it. Suppose you ran your business the way Missouri government is run.

The first thing you would do because it would be popular with your customers is cut prices.  Customers like free stuff and if it can’t be free, it should be priced as lowly as possible.  People will like your store a lot because they will pay as little as possible for the merchandise. The best way to keep your prices low is to pay your employees as little as possible. Many won’t stay very long but that’s okay.  There are always more where they came from.

Of course, your merchandise won’t be of the quality of some of your competitors because you’re holding down the prices and you couldn’t afford better merchandise anyway. Your customers won’t complain about the inferiority of the product until it falls apart on them when they need it the most.  And their complaints will be easy to ignore because most of the others are satisfied with inferiority or mediocrity.

You won’t be able to pay for the new roof your store needs.  The parking lot will develop cracks and potholes you can’t afford to fix.  The place might not be as clean because there’s not enough money for a cleaning crew.  A lot of your business equipment is outdated because you can’t afford new stuff that will speed up payment processes or handle orders. You don’t have the money to train employees to use the new equipment anyway.  Your customers won’t mind the inefficiencies as long as you’re cheap enough.

You think about all of this for a while and you realize you’ll make the money you need to fix all of these problems if you just lower your prices some more, which will produce more customers who will in the long run spend more money.  You also can get by with fewer employees. That will help you become more prosperous and shoppers won’t mind if there are fewer people to wait on them or fewer people who can help them find something or order something.

Yep.  That’s the answer.  Keep prices low. Don’t worry about quality. Don’t bother with retaining employees. People will love you because they don’t have to pay much. Of course, they won’t get much.

Run your business the way government is run. Watch government be run the way you run your business.

Prosperity is just around the corner!

The Forty-Something State, Again, Still

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Let’s have a show of hands.

How many of you, when you think of people who have had the most influence on your lives put at least one teacher in your top ten?   I have at least three.

A lot of people in a lot of roles in our society do not deserve our praise; they deserve our awe.  As schools begin classes in whatever form, teachers join first responders of all stripes and health and mental health workers of all kinds, public safety employees, and men and women in uniform who “provide for the common defense” on the platform of heroes.

When it comes to recognizing all of these folks at the most basic level, however, we talk a good game but we don’t play a good game. We saw a recent survey by Business Insider that should bother all of us.  A lot.

Since then we’ve seen a report from the state auditor that buttresses what BI told us.

Business Insider is a German-owned website that focuses on business and economic issues.

The folks at BI have looked at figures from the U. S. Department of Education and the census bureau for the school year 2018-19, the most recent year for which data is available. It finds the average Missouri teacher was paid $50,064 that year.

The national average was $61,730.

Missouri ranked 44th.  The lowest-ranking went to Mississippi, which paid its teachers $45,574. West Virginia is 49th at $47,681.

The only thing that keeps Missouri from being West Virginia in the rankings is that our average teacher salary is a whole $46 a week more than the teachers there.

$46.

What’s worse is that when our average teacher salary is measured against inflation, our teachers have lost more than six percent of their purchasing power because of inflation in the last twenty years.

This isn’t news to our much-praised but barely-raised teachers.   But it should be disturbing to those who expect so much of them.

Spare me the excuse that you can’t solve a problem by throwing money at it.  The problem is the money. We need to throw $11,000 a year at our teachers just to get them to the national average.

This is a matter of recognizing the important role people play in building or maintaining our society. And in times like these when we are asking—and when some are DEMANDING—that these good people face the possibility that they are stepping into harm’s way every day they open their classroom door, recognizing how far below the national average they are in pay and doing nothing about it is demeaning.

Then when their school district doesn’t have enough money to provide their classrooms with enough basic things such as paper and pencils, we expect them to guy their own.

Now we have a virus threatening their well-being and the well-being of their students that has led to terrible cuts in state funding for education in this fiscal year. Legislation is being introduced in the General Assembly this year that will undermine state support for our schools and our teachers even more.

What is an appropriate salary for our teachers?  Don’t look to this otherwise all-knowing oracle for an answer.  We had two children in our house for about eighteen years. We can’t imagine having twenty or thirty children in one room for six or eight hours every day of the week—children who bring multitudinous health and personal issues with them from home.

We pat our hometown public servants on the head and tell them they’re doing good.  But we don’t appreciate them enough to pay them salaries that at least keeps up with inflation.

Such is the lot for anyone who sees public service—teachers, police and firemen, healthcare workers, sewage plant operators, government employees—you name it.  “What’s in it for them?” you might ask.  If you have to ask you’ll never understand the answer.

Sometimes being a low-tax state is nothing to brag about.

If you want to see how the states stack up in the teacher salary study, go to:

https://www.businessinsider.com/teacher-salary-in-every-state-2018-4#38-indiana-14

A month or so ago, State Auditor Nicole Galloway announced a study by her staff confirmed Missouri’s abysmal standing in education funding. She confirms Missouri ranks 49th in state support of elementary and secondary education. The report comes just two years after the auditor’s staff found more than two-thirds of local school districts have put increased financial burdens on local taxpayers in the last decade because the state (i.e., the governors and legislatures) budget for education has not kept pace with education’s costs.

We’ve cited before one of the favorite jokes of long-dead comedian Myron Cohen about the man who found a naked man in his wife’s closet one day and asked him, “What are you doing in there?’  And the man said, “Well, everybody has to be somewhere.”

Missouri is somewhere when it comes to funding for education, one of the things that is often spoken of as a key to the state’s economic health.  But Misouri’s “somewhere” in this case, as in so many others, is nothing to be proud of.

It’s about time

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The capitol started to cool at 6 p.m. last Friday, the official adjournment time of the 2021 regular session of the legislature.

Actually, as we understand it, the heat and the hard pulse of the building began to diminish at mid-afternoon when the Senate adjourned, deadlocked in an intra-party fight about the most notorious bill-killer issue for the last twenty or thirty years—abortion.

Tack some language on a bill that forbids any funding for any program that involved anyone who might say or think “birth control” and that bill goes to the grave’s edge with one foot on a banana peel.

That’s what took whatever wind was left in the sails of this session out of those sails.  Unfortunately, the effort this time was tied to a bill that continues a tax on hospitals—that are willing to be taxed—so more federal money is available to provide healthcare to poor people. Democrats let it be known the birth control amendment wouldn’t fly, especially after the Republicans refused to find funding for the expanded Medicaid program voters put into the Missouri Constitution last year. The Democrat leader moved to adjourn early and although the R’s had more than enough votes to defeat the D’s motion, it passed, leaving the House the only chamber still in business. The House, to its credit, slogged on despite expressions of urinary agitation toward the Senate.

It’s about time—-too little time to iron out problems assuming anybody wanted to do any ironing.

This isn’t the first time, by the way, that one chamber or another has quit early for one reason or another.

On the other hand, “it’s about time” has another and more positive meaning.

It’s about time the legislature approved a fuel tax increase that does not require a public vote.  The refusal of voter twice to support increases has left our transportation system in desperate straits and this observer thinks our lawmakers deserve a friendly pat for doing what had to be done—-although it should have been done years ago.

But discussing what should have been done has little value. What has been done is what’s important today.  Now.  My car is grateful and so am I.

It’s also about time the legislature finally decided state sales taxes should be collected on internet sales.  Again, it’s something that should have been done years ago but this year, it got done. Will it keep local stores trying to compete with internet super-super-super stores from closing?  In reality, not many probably.  But it’s nice to see the legislature get past the idea that having people pay sales taxes they should be paying is some kind of an onerous tax increase.

But there seems to be some kind of a tiny irony here.  Missouri will start collecting taxes on internet sales of things that lead to birth control.

We’re mulling what seems to be a logic disconnect in that but we haven’t figured it out yet.

An Untenable Position

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Missouri Gaming Commission Chairman Mike Leara was no doubt relieved by last week’s Missouri Senate defeat of an omnibus gambling expansion bill.

The bill would have saddled the cash-poor commission with even more things to regulate.

Senator Denny Hoskins’ bill would have allowed slot machines at truck stops and veterans and fraternal organizations (there is a big disagreement whether video lottery terminals are slot machines that we are not going to get into). It also would have legalized betting on sports in casinos.

The gaming commission is largely funded by admission fees paid by casinos.  One-half of the admission fees go to the commission and the other half stays with the thirteen host, or home-dock, cities. The bill did not address the problems caused by our long-outdated admission fee law.

The gaming commission had to cut more than two-dozen employees last year because the pandemic forced closure of our casinos for several weeks and admissions understandably lagged for the remaining months of the fiscal year.  The commission also reduced funding for the Access Missouri scholarship program administered by the commission by twenty percent.

The commission’s position has been further weakened by an almost decade-long thirty percent decline in   casino attendance, a drop from 54.3 million admissions in fiscal 2010-11 to 37.5-million in FY 2018-19, the last non-pandemic year. The pandemic year that ended last June 30 saw another drop of about ten million admissions, leading to the commission layoffs and reduction in the scholarship program. Admissions so far this year indicate another weak year for commission and home dock city income from casino patronage.

Pardon us while we get into some mathematics here:

The admission fee was set at two-dollars per person in 1993.

The commission, therefore, has been dealing for some time not only with declining income because of declining attendance but with declining value of the money it has collected in admission fees. Almost thirty years of inflation have reduced the purchasing power of fee income by about forty-five percent.

Those circumstances left the Missouri Gaming Commission with significantly reduced resources to regulate the casino industry, producing layoffs and taving Chairman Leara justifiably concerned about how well the commisison could regulate an entirely new form of gambling as well as regulate a large number of slot machines in veterans and fraternal organizations throughout the state.

The bill defeated by the Senate provided no protection against continued funding declines.

While the bill might have been seen by Leara as three lemons, it might be viewed somewhat differently by Missouri’s educators.

Other sports wagering bills in the last three years sought to tax sports wagering adjusted gross receipts at six to nine percent, far less than 21% rate on all other forms of gambling.  The effect of those proposals would have been to lower the state’s commitment of gambling funds to public education by tens of millions of dollars yearly. None of the amendments proposed during floor debate sought to change the Hoskins bill’s provision taxing sports wagering proceeds in the same way all other forms of gaming are taxed, a good first step in making sure next year’s sports wagering legislation protects other state interests as well rather than undermining them.

The Missouri Gaming Commission, faced with the likely return of this legislation in the next session in some form, would do well to evaluate its present financial situation that is significantly worsened by outdated gaming laws and suggest ways the legislature can protect the ability of the commission to do its job by bringing laws adopted in the last decade of the Twentieth Century into the third decade of the Twenty-first. Sports wagering legislation would be a solid vehicle to accomplish that.