2014 ANNUAL REPORT

© photo by Aaron Palmer

On the set of Gone Girl in Cape Girardeau

What is wrong with this picture?

A LETTER FROM THE CHAIRMAN AND THE PRESIDENT

Table of Contents

A Letter from the Chairman and the President ...... 3-5

Doubling Down on the Minimum Wage in Kansas City...... 6-7

Dreaming of a New Riverfront Stadium ...... 8-9

Say Goodbye to Regulation and Public Ownership...... 10-11

Thinking Differently About Health Care ...... 12-13

Blocking Out the Sun­­—A Parable of Lost Freedom...... 14-15

Needed: More Public Scrutiny of Backroom Deals...... 16-17

Financial Report...... 17

A Tale of Two Students...... 18

Taxes and Border Wars ...... 19

Media Matters ...... 20-21

Meet the Interns ...... 22-23

Publications...... 24-25

Board of Directors and Staff...... 26-27

A LETTER FROM THE CHAIRMAN AND THE PRESIDENT

Dear Friends: our state from this film’s production have outweighed the seen, but Cape Girardeau basks in sunlit glory. skimpy, benefits. The Mississippi River shimmers in the distance. It is a beautiful fall Playing a Mug’s Game day in southeast Missouri, a day like many others, but with one We can begin by examining some of difference: A Twentieth Century Fox the shameless hype that is so often film crew is getting ready to make used to justify the expenditure of some magic of its own. public money for private gain. Our cover photo (taken during the According to former U.S. Senator filming ofGone Girl) captures the Christopher Dodd, chairman moment perfectly. So why do we ask: and CEO of the Motion Picture Association of America (MPAA), R. Crosby Kemper III “What is wrong with this picture?” Gone Girl is a shining example Chairman To quote Frédéric Bastiat in his of how “Movie and television famous economic essay,1 the productions provide a tremendous troubling element in this picture is boost to the economy of hosting not what is seen, but what is unseen, communities, first with the or hidden from view. significant investments made during production and then often through Nothing tells you that the making increased tourism for years to of Gone Girl cost Missouri taxpayers come.” In a press release, the MPAA more than $2 million and left a trail provided what it called “a detailed of broken promises on job creation economic account” from Twentieth and tangible economic benefits. Century Fox, which said: Nothing tells you that this film is part of a much larger problem. The production hired 116 Every year, our elected officials Missourians, including over 30 throw away hundreds of millions of off-duty law enforcement officials, dollars of taxpayer money—through and the cast and crew stayed over Rex Sinquefield public assistance to a wide range 7,000 hotel room nights. The President of commercial projects. More than movie also utilized over 1,400 Hollywood movies, this includes extras. everything from casinos and sports stadiums to big-box retail outlets and Is that so? lavish corporate headquarters. After a careful examination of public As cofounders of the Show-Me filings by the film company, Jessica Institute—Missouri’s only free- Stearns, an intern at the Show-Me market think tank—let us take you Institute, discovered that not even behind the scenes in Gone Girl and one of the 116 reported job positions show how the unseen but real costs to was “full time or high paying,” and not a single Missourian remained

1 “What Is Seen and What Is Not Seen in Political Economy,” by Frédéric Bastiat, published in 1850.

The Show-Me Institute: Where Liberty Comes First

on the payroll. She reported her more than $400 million of public It makes no more sense to subsidize findings in an article in theSoutheast financing to build a new riverfront the owners of NFL franchises (or the Missourian on Dec. 21, 2014. stadium in Saint Louis to replace the fans sitting in luxury boxes) than it Edward Jones Dome and try to keep does to give taxpayer money to high- Perhaps there was an uptick in the St. Louis Rams football team paid movie stars and producers. employment in the hospitality from bolting to a new home in the industry as a result of the six weeks Los Angeles area. The Show-Me Institute: A Bridge to and the “over 7,000 hotel room Better Public Policy nights” that cast and crew spent in As usual, proponents of the plan Missouri. But who was really paying are extolling the public benefits that One of the real tests of an for their food and lodging? would supposedly flow from this organization that calls itself a “think expenditure—claiming that would tank” is this: Can it change the Even if Ben Affleck and other save Saint Louis from the ignominy thinking on important issues or members of the cast and crew were of ceasing to have an NFL franchise questions? seen to drop a lot of $100 bills at and lead to the regeneration of the The Show-Me Institute met this restaurants and nightspots around city’s downtown area. Cape Girardeau, they had Missouri challenge in 2014. We brought taxpayers to thank—as their unseen But wait, we have heard those about a dramatic change in people’s benefactors—in funding their arguments before. They are the thinking on transportation funding. extravagance. same arguments that elected officials At the outset of the year, the Missouri from the city and state were making The Missouri Department of Department of Transportation 25 years ago in calling for public (MoDOT) declared that it was Economic Development (DED) gave financing of the Edward Jones Dome. $2.36 million in film tax credits to running short of funds for highway Twentieth Century Fox, with food What happened to the growth and bridge maintenance. A and lodging as one of the primary that was supposed to come from consensus quickly developed among costs qualifying for the credits. For the dome, which opened in 1995? lawmakers in Jefferson City in favor the recipients, state tax credits are Answer: It is nowhere to be seen, as of a constitutional amendment almost as good as a direct cash grant. large areas close to the dome remain authorizing a statewide sales tax. They can sell, exchange, and transfer mostly empty. More than just plugging the funding film tax credits to any third party that gap, the proposed 0.75 cent sales has a tax liability in Missouri. For more on the stadium issue, we tax would have left MoDOT with urge you to read the article on page 8 a substantial surplus, which could In short, we, as a state, were playing of this annual report. Suffice it to say have been used for other projects to a mug’s game—emptying our own here, we hope (and expect) that the help drum up local support for the pockets to pick up the tab for visiting city and state will not repeat the same amendment. Hollywood stars, while getting little mistake they made more than two or nothing in the way of tangible decades ago in cutting a sweetheart MoDOT invited cities and counties economic benefits in return. deal for the Rams (charging a across the state to submit their own negligible rent for occupying a hugely wish lists of things to do with the Once Burnt, Twice Wise? expensive stadium built at public surplus funds. Not surprisingly, local expense). officials responded with a wide variety Today Missouri Gov. Jay Nixon is of hastily conceived projects (such as backing a plan that would provide greenways, bike paths, and trolleys).

4 SHOW- ME INSTITUTE | 2014 ANNUAL REPORT

The Show-Me Institute: Where Liberty Comes First

The so-called “concrete lobby”— radio and television shows across the • concentrate on creating a construction companies, design firms, state, and penning many newspaper favorable environment for all and trade unions—jumped on board commentaries, letters to editors, and businesses and working people the tax-and-spend bandwagon. So did blog posts. and stop trying to pick economic the Missouri Chamber of Commerce winners and losers. and Industry. Lobbyists spent more They also pointed out a more than $1 million on television and equitable and sustainable solution: We quoted the great Frédéric Bastiat radio ads to promote the amendment. raising gas / diesel taxes and making at the beginning of this letter, and expanded use of tolling (possibly we will come back to him for further Standing athwart those forces, the coupled with privatization of sections wisdom at the end. Show-Me Institute cited three main of roadway to capture more of the reasons why Missouri should reject disciplines and benefits of free-market In one of the early criticisms of the transportation funding proposal thinking). central planning and socialism, and move to an entirely different Bastiat wrote: “The State is the great model. When Missouri voters went to the fiction by which everyone tries to live polls on Aug. 5, they rejected the at the expense of everyone else.” He First, the proposed tax was unfair. proposed sales tax increase by the went on to enunciate the unbeatable Why should cross-country truckers— stunning margin of 59 to 41 percent. advantage of a market economy over responsible for a disproportionate a planned economy: “If everyone amount of the wear and tear to our In January, Missouri Gov. Jay Nixon enjoyed the unrestricted use of his road and bridge system—get off specifically endorsed the idea that faculties and the free disposition of paying very little, while individual Missouri should make increased use the fruits of his labor, social progress residents who did not even drive of tolling and user fees to support would be ceaseless, uninterrupted, would see another increase in already major improvements on Highway 70 and unfailing.” high state and local sales taxes? and other roadways and bridges. We wholeheartedly agree on both Second, it would create the wrong A year ago, when we spoke of the counts. At the Show-Me Institute, incentives. If you tax shoppers to advantage of the user-pays approach, we are passionately committed to pay for roads, you turn the roads hardly anyone in Jefferson City agreed advancing the principles of limited into a free resource for drivers— with us. Now there is broad support government and individual liberty 2 encouraging further congestion and for the idea. within our cities, counties, and state. road degradation. A Freedom-based Agenda Third, the whole plan had the As part of a pro-market, pro-growth Sincerely, makings of a giant boondoggle— agenda, we believe that the Missouri going far beyond the original mission Legislature should: of keeping Missouri’s transportation infrastructure in good repair. • eliminate costly and unproductive state tax credits Show-Me Institute policy analysts that favor certain businesses at and researchers drove these points the expense of others; home from a variety of platforms or forums—speaking at public meetings, • lower taxes for everyone; and June 8, 2015 giving testimony, appearing on

2 In the 2015 session of the Missouri Legislature, lawmakers failed to pass a transportation funding fix. However, legislators will be focused on the problem in 2016, and there is a broad agreement that fuel taxes and tolling are the best solution. Doubling Down on the Minimum Wage in Kansas City

Will Kansas City follow the recent For example, imagine that you own higher minimum wages resulted example set by Seattle and San a hamburger restaurant. You know in lower employment. Even more Francisco by raising its minimum there are machines available that significant, increased minimum wages wage to $15 an hour? If some can flip hamburgers, but a person seriously harmed employment for religious and civil rights leaders get can do the job for a lower price. low-skilled workers, the very people their way, it would. Yet a look at However, as this person becomes the minimum wage is meant to help. those cities reveals the damage that more and more expensive to employ, increasing the minimum wage to such the burger-flipping machine becomes This makes sense if one goes back to a high level may cause. more and more attractive from a the burger-flipping machine example. business perspective until the owner The simpler the task, the easier it is In San Francisco, Borderland Books, eventually replaces the person because to replace the human who performs a store that has been in operation for his labor costs so much more than the said task with a machine or some 18 years, said it may have to close machine. other tool. Building a machine to because of the new $15 minimum flip burgers is easier to do than to wage. Now, the five workers, A review of the economic literature perform neurosurgery (at least for including the owner, are at risk of reveals many studies that show now). Thus, hamburger flippers losing their jobs. earn $7.65 an hour, while neurosurgeons earn salaries It was not hard to foresee “The true minimum in the six figures. The value what would happen to of the former’s work pales businesses like Borderland wage is zero—the in comparison to the value once the minimum wage amount an unemployed of the latter’s. went up. Nor is it difficult to predict what will person receives from his By reducing employment happen in Kansas City nonexistent employer.” for low-skilled workers, if it chooses to raise the the minimum wage not minimum wage. As the only hurts these people floor on wages goes up, the —Milton Friedman in the present, but number of jobs available also hurts their future will decrease. earnings ability. Dr. Jeffrey Clemens and Michael The concept behind this is simple. As raising the minimum wage will Wither, both of the University of you make something more expensive, California-San Diego, estimated the the demand for it will decrease. This destroy jobs. In one analysis of proposed federal minimum wage impact of the minimum wage on simple economic fact holds true employment and income growth for for lemons, lightbulbs, and labor. increases, the Congressional Budget Office estimated that an increase low-skilled employees. They found By mandating businesses pay their that increasing the minimum wage employees more, these cities are of the minimum wage to $10.10 would reduce national employment reduced the chances for these workers making that labor less attractive from to earn salaries ($1,500 a month) that a cost perspective. by 500,000 jobs. David Neumark and William Wascher reviewed the would put them in the lower-middle economic literature and found that class.

6 SHOW- ME INSTITUTE | 2014 ANNUAL REPORT Doubling Down on the Minimum Wage in Kansas City

The authors believe the reason for don’t actually need a “living wage” in this phenomenon is that higher the first place. The reason for this is minimum wages reduce employment that many low-income workers are opportunities for low-skilled not members of low-income families. workers (something that Neumark In fact, according to one calculation and Wascher found as well). Many by David Neumark, nearly half of minimum wage workers are at a point workers on the minimum wage are in in their working lives when small households that earn income greater gains in experience lead to increases than three times the poverty line. in wages. In fact, one study by Ralph Only 13 percent of workers who Smith and Bruce Vavrichek found make the minimum wage are at or that employees making at or below below the poverty line. That is why the minimum wage, on average, saw supporters of the minimum wage Michael Rathbone their salaries increase by 20 percent describe it as a “blunt instrument” for after a year on the job. By increasing helping poor families. Even President infringement on economic freedom. the minimum wage, governments are Obama’s former chief of economic Free markets are all about voluntary making it harder for these low-skilled advisors, Christina Romer, says the exchange for mutual benefit, and a workers to reach that first rung on the minimum wage isn’t especially well politically dictated minimum wage earnings ladder, thus harming their suited for alleviating poverty. doesn’t allow this to occur. But more future earnings potential. importantly, given its actual impact, Raising the minimum wage is increasing the minimum wage is Many of those who are lucky enough popular, as evidenced by its support counterproductive and immoral. to keep their jobs after a minimum in public opinion polling. However, wage increase will be workers who the minimum wage is still a gross

Dreaming of a New Riverfront Stadium

Karl Marx—the father of “scientific socialism” and the million from the state and $30 million each from the greatest producer of fallacies and false predictions in city and county). the history of economic thought—got one thing right. When he said, “History repeats itself, first as tragedy, The Edward Jones Dome was a 100 percent publicly then as farce,” he accurately and humorously predicted financed project. The Rams paid no part of the the attempt now underway to secure $400 million in construction costs and they have paid an annual rent of public funding for a new riverfront stadium in Saint $250,000, or just 1 percent of the $24 million annual Louis. cost that taxpayers have been paying to service the debt on its construction. That is a 99-to-1 split—in Why would anyone consider putting more public favor of the profit-making tenant over the amazingly money into a new football stadium for the St. Louis accommodating public landlord. In this case, the team Rams after the shellacking that Missouri taxpayers have has also received all luxury-box revenues and claimed taken—and are still taking—on the team’s existing 75 percent of advertising and naming rights. stadium, which is only 20 years old? That’s a good question. In their desperate quest to land a new NFL team—to replace the old Cardinal football team which departed By the end of this calendar year, Saint Louis City and for Phoenix in 1988—the political and civic leaders County and the state of Missouri will have paid off of that time did something else that was very foolish. $360 million out of the $480 million in bonds that They gave the team the right to opt out of the original financed the construction of the Edward Jones Dome lease agreement 10 years early—in 2015—if the (formerly the TWA Dome), which opened in 1995. stadium did not rank in “the top 25 percent of NFL That will leave another $120 million in annual bond stadiums”­— even if that meant having to build a whole payments falling due between 2016 and 2021 ($60 new stadium, wholly or partly at public expense.

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Dreaming of a New Riverfront Stadium

This escape hatch is now responsible for causing history 4. After getting a MLS team, getting (and to repeat itself. According to Forbes, the St. Louis funding) a soccer hall of fame. Rams football team is now worth about $930 million. Experts say that the value of the franchise will jump to 5. Funding an entertainment center at the $2.5 billion to $3.5 billion if the team moves back to Union Electric Light and Power Company. the Los Angeles area. Any such increase in value would 6. And finally, because Dave Peacock (the head more than offset the cost of building a new stadium, as of stadium task force set up by Gov. Nixon) Rams owner Stan Kroenke—a billionaire developer—is thinks the Rams owner is committed to clearly prepared to do, having assembled a site in the relocating to Los Angeles, getting Kroenke Inglewood neighborhood. to sell the Rams to another owner who will All of which means that today’s leaders in the city and keep the team in Saint Louis. state now face the same question that predecessors did One thing is certain. When considering whether 25 years ago. They are asking themselves: “Do we want Missouri should pony up $150 million in development to spend hundreds of millions of dollars of taxpayer tax credits and support the issuance of another $175 money to build a new stadium on spec”—in the hope million in public bonds, Missouri lawmakers should that this act of fealty might cause the National Football note that the clear consensus among professional League to do something to insure that Saint Louis economists is that sports stadiums do not generate would continue to have a team? significant economic growth or urban regeneration. Surprisingly (or farcically) enough, there is some Speaking specifically of the proposed new riverfront support for doing so. Missouri Gov. Jay Nixon is stadium for the Rams, University of Chicago economist supporting a revised “funding plan” that calls for Allen Sanderson said: “Building a football stadium is taxpayer support for $400 million out of the $1 billion probably one of the worst expenditures of taxpayer cost of building the stadium. dollars there is. . . . To say it’s going to put on the map, As Show-Me Institute Policy Analyst Joseph Miller it’s going to be a catalyst for economic development . . . noted in a blog post on May 14, 2015: that’s just nonsense.” The revised plan relies on a growing and increasingly preposterous list of contingencies. These include: 1. Getting a team owner and the NFL to cover $450 million in costs for a new stadium. No team owner, especially the Rams’ owner, has expressed any willingness to do this. 2. As things stand, a plan to fund a new stadium needs to go to a public vote in the city. Residents might vote no. 3. Getting a Major League Soccer (MLS) team in Saint Louis. Joseph Miller Say Goodbye to Regulation and Public Ownership

“Government is not the solution believe that there is a set of utilities services for lower prices. Arnold to our problems,” Ronald Reagan that governments must build, own, residents found these arguments famously said. “Government is the and manage. But an expanding persuasive and voted to approve the problem.” economic literature and practical sale of the city’s wastewater facilities experience from cities across the last fall. However, in today’s world, it state show that private companies is not just the Leviathan that can provide the money and the While the government directly we must contend with, but the know-how to offer better public provides only a limited number of growth of government that has utilities than local governments. public services, the regulatory power found thousands of ways (big and In the case of Arnold, the city of the state often reaches much small) and thousands of places to was looking to sell its wastewater further into the local economy, become embedded in our daily facilities to Missouri American stifling competition and fighting lives. Excessive government afflicts Water, a company with a proven economic progress. Regulation us at the city and state levels no track record in Missouri. The sale of advocates argue that individuals less than the national level. That facilities would have created more working together cannot make means we must fight at multiple investment, a large initial payment informed decisions about how levels to reclaim our liberties and to the city, and competitive utility much services should cost and to make Missouri’s economy truly pricing. what is a proper risk; bureaucrats competitive. need to decide for everyone else. Institute analysts argued on the radio Unfortunately, regulatory bodies set At the Show-Me Institute, our and in articles that Arnold should up to police our choices are more analysts and scholars demonstrate take the opportunity to get private often than not captured by the the power of the market and the investment and private management various companies they are meant effectiveness of society working of this wastewater utility. They to regulate, which in turn use the without government involvement showed that when privatization power of government to keep out every day. Take, for example, the is done in a careful manner that small competitors and protect their issue of wastewater privatization in ensures proper oversight of the business models from disruptive Arnold. In Missouri, like elsewhere private company, people get better innovation. in the nation, we often are led to Got a car? Turn it into a money machine. The city is buzzing and Uber makes it easy for you to cash in on the action. Plus, you’ve already got everything you need to get started.

10 SHOW- ME INSTITUTE | 2014 ANNUAL REPORT Say Goodbye to Regulation and Public Ownership

Missourians were given a very visible both on the airwaves and in print, Taxicab Commission, which still reminder of this tendency over the how local regulations were decidedly has taxi company representatives as course of the last year when new not limited to protecting consumers’ members. The Show-Me Institute’s ridesharing services, such as Uber safety. In testimony to both the analysts and scholars will continue and Lyft, attempted to enter the Missouri House and Senate, to champion the benefits of market highly regulated taxicab markets Miller argued that the economic innovation and open competition in Saint Louis, Kansas City, and opportunity provided by ridesharing until all Missourians are free to use other cities. These new businesses companies was both overwhelming (or participate in) ridesharing and were unwelcome interlopers in and evident in cities where the regulations are truly limited to basic complacent taxi markets, where the services already operated. Local safety protections. regulators controlled the number communities can create hundreds of of taxis, what kind of cars drivers jobs and provide increased mobility, Government’s pervasive presence could use, what they could charge, all without spending a single dime, in the economy did not reach and even what drivers could wear. if they are simply willing to release everywhere overnight, nor will it The offended reaction of city officials their regulatory grip on taxi markets. be possible to take it away all at to the sudden entry of Lyft was a once. Miller’s work on the Arnold rude reminder that, too often, local Over the past year, Missouri has sewer privatization and ridesharing officials see setting up a new business made much progress on ridesharing. regulations are just a small part not as a right, but as a privilege that While significant barriers still of that effort. But as Missouri only politicians may grant. exist in Saint Louis, improved continues to demonstrate how regulations that may allow the services that are traditionally thought In response to the attempts of entry of ridesharing companies of as government mandates can regulators to kick ridesharing out have been approved in Kansas be better left to private companies of cities, Policy Analyst Joseph City. The state government also or individual choice, residents will Miller pointed out how local taxi has made serious moves toward know with increasing confidence regulations have gone too far and, limiting localities’ ability to block that they do not need politicians to in many cases, were completely ridesharing companies, as well as manage the economy or our daily outdated. He was able to explain, reforming the St. Louis Metropolitan lives.

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Thinking Differently About Health Care

After returning to the company that had ousted him only keep them at the whim of the government and a decade earlier, Apple’s founder was on a mission the insurers it closely regulated. Millions lost coverage. in 1998. In a dozen more years, as Walter Isaacson Premiums didn’t fall on average; they rose, especially on recounts in his highly readable biography, Steve Jobs, the young. the visionary business leader “revolutionized six industries”: personal computers, animated movies, Demand for that replacement may be rising faster and music, phones, tablet computing, and digital coming sooner than some may think. publishing. And he “reimagined a seventh”—in This summer the United States Supreme Court will creating the stores that became shrines to his memory rule on King v. Burwell, a case that may very well in the days and weeks following his death from prevent the federal government from imposing its pancreatic cancer on Oct. 5, 2011. insurance mandate tax in states that don’t have their In doing all of these own state-based insurance exchanges. This includes things, Jobs exhibited Missouri. Without the threat of a government penalty, a genius for delivering Missourians would be free to choose health care plans innovative products that focus on their individual health care needs, rather that just about anybody than be forced into bad insurance plans to meet the could use. As he put political needs of government bureaucrats. it in an interview with Suddenly, the focus in American health care would Businessweek , “Simple can turn back to the patient, not the government. What a be harder than complex: novel idea! You have to work hard to get your thinking clean to Of course, a positive ruling in King doesn’t get us to make it simple. … That’s “simplicity” in America’s health care system by itself. Patrick Ishmael been one of my mantras— Over the last half-century the government has done its focus and simplicity.” best to turn health care delivery into a Rube Goldberg machine of bad incentives and even worse results. Fortunately, the lessons of Jobs’ success are not exclusive to any one industry. Unfortunately, “focus When we think about “health insurance” in the and simplicity” remain far removed from American United States, for instance, the concept is basically health care. indistinguishable from the idea of a “health maintenance plan.” That’s a problem. Rather than a reform that focused attention on patients and simplified the country’s health system, the passage Why? When we buy insurance for our homes, does of Obamacare in 2010 instead heralded a new wave of it usually pay for lawn maintenance? When we buy old thinking—thinking that puts government, not the car insurance, does it pay for our oil changes? Of patient, at the center of our country’s health care. course not. Insurance is supposed to protect us from the unforeseen and the catastrophic. Yet because of Over the past five years, health care spending in the government decisions dating back to World War II, we United States has risen, access has declined, and the as Americans see health care and health insurance as quality of care for millions of Americans has suffered. somehow the same thing—which helps to explain why Emergency room visits didn’t fall when Medicaid our health care is so expensive. expanded; they increased. We didn’t get to keep the insurance plans we had if we liked them; we could

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Thinking Differently About Health Care

We don’t really see prices for health care. In fact, It’s time to “reimagine” health care. We can have a we’re incentivized through the structure of modern simpler, easier-to-use, and less prohibitively expensive “insurance” (that is, maintenance) plans to overuse care system than the one we have today. to make the cost “worth it.” Obamacare doesn’t bend the cost curve down; in fact, absent clear prices for consumers, it does everything to bend it up. We need a simpler health system that empowers patients and causes providers to focus on meeting their needs—not the needs of the government. What does that mean? • Protecting and encouraging direct pay care arrangements, which have the advantage of removing middleman insurers from between patients and their primary care physicians. • Reducing burdensome regulation and paperwork in the health care industry. This means not only drawing down the cartelization hospitals enjoy through Certificate of Need laws, but also responsibly relaxing scope-of-practice laws to ensure qualified health care providers can provide needed care to underserved populations. • Expanding the tax advantages of buying health insurance that are available to businesses to the When a bill is 2,700 pages, employees themselves. If they choose, employees there is no equality: Instead, should be empowered to find health insurance that runs with the patient—not just with the patient’s there’s a hierarchy of privilege job. micro-managed by unelected, • Promoting greater price transparency and unaccountable, unconstrained, leveraging market forces to drive down the cost of unknown and unnumbered many medical procedures. bureaucracy. • Rooting out waste, fraud, and abuse in our Medicaid program and introducing reforms that Columnist / author incentivize Medicaid patients not only to access Mark Steyn, better and more affordable care, but also to ultimately leave the program. writing about the Affordable Care Act • Allowing insurers to compete across state lines. Blocking Out the Sun— A Parable of Lost Freedom

In his satiric parable “The national market with it at a price Candlemakers’ Petition,” the fabulously reduced. manufacturers of candles, street lamps, and tallow lobby the Clearly, if a government were to order French Chamber of Deputies for everyone to switch from sunlight protection against a powerful foreign to candlelight, it might create or competitor—namely, the sun. preserve a number of jobs in candle- They ask for a law ordering their making and related industries, but countrymen to keep all windows and it would also impoverish a far larger doors closed and covered during the number of people—forcing them day. to replace a cheap and easy-to-use resource with an inferior yet more Brenda Talent, CEO We are suffering from the expensive product. At the same Show-Me Institute intolerable competition of a time, it would deprive people of the foreign rival, placed, it would freedom to act as they want inside seem, in a condition so far superior their own homes. No one understood the connection to ours for the production of light between free markets, free trade, and that he absolutely inundates our Could anything so ridiculous happen freedom itself any better than Frédéric in today’s Bastiat, the 19th-century French world? economist with the impeccable logic It happens all and acid pen who is quoted in other the time. How pages of this annual report. about the use Bastiat understood that no one of government “orders” growth in a market subsidies and economy. It comes about naturally, mandates to spontaneously, as a result of countless support the individuals competing with one production and another to satisfy the needs of others. consumption If a need arises, entrepreneurs will of “alternative” step forward to meet it—assuming energy sources they are not stopped from doing so by such as wind, their own government. But the great solar, and overarching theme of Bastiat’s work biofuels? Or is just that—the endless mischief and how about grief caused by government actions the misnamed that preempt property rights, limit Affordable competition and freedom, and favor Care Act, more some groups and individuals over commonly others. known as Photo credit: Medi Belortaja — www.toonpool.com Medi credit: Photo

14 SHOW- ME INSTITUTE | 2014 ANNUAL REPORT Blocking Out the Sun— A Parable of Lost Freedom

Obamacare, which has been aptly Socialism,1 like the ancient ideas described as “a carnival of perverse from which it springs, confuses the incentives”? In more than 20,000 distinction between government pages of rules and regulation, and society. As a result of this, Obamacare piles on benefits that every time we object to a thing everyone is required to have, whether being done by government, they want them or not (e.g., people the socialists conclude that we in their 50s and 60s must insure object to its being done at all. We themselves against the nonexistent disapprove of state education. risk of unwanted pregnancies), Then the socialists say we are while insisting that insurers suspend opposed to any education. We actuarial judgment and write many object to a state religion. Then money-losing policies. The law also they say we want no religion at Bastiat has encouraged a shift from full-time all. We object to state-enforced work to part-time work through the equality. Then they say that we are lives as they choose as long as they requirement that employers with 50 against equality. And so on, and accord the same freedom to everyone or more full-time workers provide so on. It is as if the socialists were else. He was a major figure in the comprehensive health insurance plans to accuse us of not wanting people anti-slavery as well as the free trade or pay stiff fines. to eat because we do not want the movements in the time period leading state to raise grain. up to the American Civil War. I would argue that the free market is mankind’s greatest creation—doing Let me update Bastiat’s list with more Today’s progressives strut about more than any other human artifact current examples (e.g., We disagree the stage acting as if they have a to promote peace, prosperity, and the with a state-enforced “living” wage. monopoly on the truth—impugning spread of knowledge and creativity. Then they say we are against a living the integrity of anyone who dares But it would be folly to expect wage. We disagree with higher taxes and to disagree with them on a host of anyone of a progressive mindset— more spending. Then they say we are issues. It is not just free trade or free meaning anyone who thinks of well- against the poor and middle class). But markets that are under attack, but meaning government as the primary the bigger point is this: Whenever we free speech and honest discourse. agency of progress—to agree with say that the market economy—freed I will leave the last word to Monsieur this statement...despite the unbroken from government restraints—offers Bastiat. This is what he had to say to string of failures over the past the greatest good for people at all the know-it-alls who call for more century by governments practicing levels of income, the standard fallback and more government: “Ah, you communism or socialism. position on the left is to change miserable creatures! You who think the subject and accuse us of bad you are so great! You who judge For the progressive, good intentions intentions—of wanting to inflict humanity to be so small! You who always trump bad outcomes. Bastiat greater misery on those at the bottom wish to reform everything! Why don’t understood this point very well, as he rungs of society. demonstrated in this passage from his you reform yourselves? That task book The Law: To Bastiat, it was axiomatic that all would be sufficient enough.” people should be free to live their

1 Bastiat’s use of this term clearly extends to today’s progressivism.

Needed: More Public Scrutiny of Backroom Deals

Stockton. Detroit. Illinois. New Jersey. The fiscal Show-Me Institute analysts have promoted transparent problems facing the governments of these communities collective bargaining in a variety of ways, including are national news. The prospect of cash-strapped a primer on government labor relations; a variety of governments defaulting on their debts not only research, articles, and commentaries; video blogs; and threatens to destabilize the economy, but the stories testimony before the Missouri Legislature. of excess, such as the San Bernardino union contract that paid an average annual salary of $190,000 (plus Chesterfield’s Monarch Fire Protection District and pension and benefits) to each of its top 40 firefighters, Columbia Public Schools set a standard for open are a cause of moral outrage. government in Missouri that our analysts have praised. Both of these districts recently opened the When we look at state and local governments doors to their collective bargaining sessions and held struggling to pay the bills, the story is usually the same: these meetings in the open so that members of the Public institutions are stuck with pension plans that public could attend. Unfortunately, these districts the private-sector economy simply cannot support. are exceptions rather than the norm, which raises Although there are many factors at play here, one huge the question: What are the government agencies that part of this story is the role of government unions collectively bargain outside the public’s view trying to fighting for unsustainable pension systems and public hide? spending that an informed public never would agree to.

Across the nation, government unions and public officials meet behind closed doors to set compensation and internal department policies. In fact, while most states have a Sunshine Law that requires policy-setting meetings of state or government agencies to be held in the open, only a couple of states’ sunshine laws apply to government collective bargaining sessions. Missouri is not one of the few states where the public’s right to transparency is honored; a loophole in our Sunshine Law allows government unions and public officials to collectively bargain in closed sessions. When the public is kept from meetings between government officials and government unions, government acts in a way to benefit itself to the detriment of the taxpayer. Government collective bargaining sessions should be public meetings. After all, it is in these meetings that unions and government officials set public policy through the discussion and adoption of labor agreements. Citizens need to be informed about what their government is doing, and transparency leads to accountability.

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Financial Report * Needed: More Public Scrutiny of Backroom Deals INCOME Individual Donations:...... $2,134,065.00 �������������� 90.94% Foundation Grants:...... $210,385.00 ���������������� 8.97% Other Income:...... $2,169.00 ���������������� 0.09% Simply put: Taxpayers have a right to know where their money is being TOTAL $2,346,619.00 spent and how their government operates. Sunlight, as they say, is the Individual Donations best disinfectant. Foundation Grants Other Income

EXPENSES Overhead:...... $292,594.00 �������������� 15.86% Program:...... $1,552,444.00 �������������� 84.14%

John Wright TOTAL $1,845,038.00

Program Overhead

Note: The board of directors covers the overhead expenses of the Show-Me Institute. Since 2006, donations from supporters have funded education and research exclusively.

STATEMENT OF FINANCIAL POSITION Current Assets:...... $1,148,708.00 �������������� 96.04% Fixed Assets:...... $47,426.00 ���������������� 3.96%

TOTAL $1,196,134.00

Current Assets Fixed Assets

*Show-Me Opportunity, a supporting organization, is included in this consolidated financial report.

A Tale of Two Students Taxes and Border Wars

From blogs to op-eds to Angel’s about the differences between her reported some disturbing behavior Story, a four-minute video former school district and her new on the part of his teachers. His documentary that attracted over high school. physics teacher hadn’t planned a 2,300 YouTube views, the Show-Me lesson since January. His AP English Institute has been at the forefront of To say nothing of increased teacher would leave the classroom, helping the public understand the academic expectations, the only to return again to see whether effects of Missouri’s school transfer environment at Kirkwood was students had questions about that program. a culture shock. In Angel’s first day’s worksheet. semester, she bumped into a Angel’s Story focuses on one student between classes. Her An endless succession of teacher student’s transition from her immediate reaction was to brace resignations throughout the year former school district, Riverview herself for a fight, but the student discouraged students like Hensley, Gardens, to one of the top- apologized. Matthews knew, then, who had wanted to believe that performing districts in the state, that Kirkwood High School was a with state oversight Normandy Kirkwood. The school transfer different kind of school. could improve. It did not. law had allowed Angel, as well as 2,000 other students, to transfer Nearly six months after the Numerous studies indicate that from unaccredited school districts Institute’s profile on Matthews, the students who utilize school choice and attend higher-performing former Riverview Gardens student’s programs have better educational schools. Many students traveled on success at Kirkwood made the front outcomes. As the school transfer the bus as long as two hours daily. page of the Sunday Post-Dispatch. law issue progresses, the Show-Me Though she ranked in the upper Institute will continue to lead the half of her class, she had been policy discussion, advocating for the at the top in her former district. expansion of choice. Nevertheless, Angel was thrilled to participate in the transfer program. In May, the legislature passed House She’ll head to the University of Bill 42, which would do just that. Missouri–Columbia in the fall. If signed by Gov. Nixon, students in the Normandy district could Another front-page article in the cross district boundaries and attend Post-Dispatch told the sorry story North Side Community School of an honors student who chose in Saint Louis City, which is only not to transfer and spent his senior minutes from several Normandy year in the failing Normandy High elementary schools. Brittany Wagner School. Classroom disruptions made learning difficult. With no North Side Principal Stella Erondu Show-Me Institute staff members books to take home and a lack of told Brittany Wagner, “If the public James Shuls, Brittany Wagner, Rick homework assignments, Cameron schools aren’t working, get alternate Edlund, and videographer Darin Hensley said, “This school year educational systems . . . or let them Morley visited then-rising-senior I can honestly say that I haven’t come to schools like mine so that Angel Matthews’ home in North learned much of anything.” we can take care of them, because Saint Louis County twice to record they actually are the future.” her story. They interviewed Angel Aside from the school opting not and her mother, Shauna Matthews, to offer honors courses, Hensley

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A Tale of Two Students Taxes and Border Wars

Do taxes matter? As Wilson wrote: Then there is the Kansas City metropolitan area, a living laboratory Just ask Patti Bossert, a 57-year- The governor declared that Kansas that straddles the border with old entrepreneur who owns two was “open for business”... He Missouri. On Gov. Brownback’s side employment agencies in Topeka, boasted: “Our new pro-growth of the divide, the top personal rate Kansas. tax policy will be like a shot of is now more than a full percentage adrenaline into the heart of the point lower than Missouri’s 6.0 Three years ago, Kansas enacted the Kansas economy.” biggest tax cut of any state in recent percent, while small business owners history, relative to the size of its The comment was subsequently like Ms. Bossert pay 0.0 percent. economy. It reduced the top personal picked up by critics who wondered income tax rate from 6.4 percent to why the Kansas economy wasn’t 4.9 percent. Furthermore, Kansas suddenly leaping ahead at, say, eliminated the state income tax for 4%-5% growth annually. When small business owners who file as Mr. Brownback ran for re-election, individuals. national reporters descended on the Sunflower State and quickly made As a small business owner, Ms. Kansas the national symbol for the Bossert was suddenly freed from alleged depredations of “trickle- having to pay any personal or down economics.” business income tax to the state of Kansas. In anticipation of the Yet voters re-elected the governor by a $40,000 that she would save in 2014, four-point margin. The news coverage she invested $375,000 in purchasing missed the substantial improvement Andrew Wilson and remodeling an old building in in the state’s economic performance Topeka—making it the new company post-tax reform. headquarters on October 15. She is “I just think Kansas City is a great expanding further in 2015, saying, • Unemployment in Kansas has study,” Gov. Brownback told Wilson. “Our business has been phenomenal. dropped to 4.2 percent, tied for “This is an unusual place, where th Wages are going up, and the big 14 lowest in the country. you’ve got a city virtually equally problem now is that there are more divided between two states.” The • From 1998 through 2012, Kansas results? Over the past two calendar available job openings than there are ranked 38th in private-sector job qualified people to fill them.” years, private-sector jobs increased by growth. In 2013, it climbed to 5.6 percent on the Kansas side and th Show-Me Institute Fellow and 27 place, and in 2014 it moved only 2.2 percent on the Missouri side. st Senior Writer Andrew B. Wilson to 21 , placing it in the top half of In the same period hourly wages grew told Ms. Bossert’s story in a weekend states. $1.22 on the Kansas side, compared Wall Street Journal with $0.61 on the Missouri side. commentary in the • In the second half of 2014, (“Seeded With Tax Cuts, Kansas hourly wages in Kansas grew 3.5 Harvests the Benefits,” A9, May “If your objective is to grow the percent, according to Bureau of 16-17, 2015), which also drew upon economy,” he said, “would you rather Labor Statistics, far faster than the put more money into government, a 45-minute interview with Kansas national average of 1.9 percent. Gov. Sam Brownback. or leave it in the hands of small business.”

Media Matters

A good day for the Show- Me Institute’s Director of Communications Rick Edlund typically involves two or three major media “hits.” On a “great” day, the count may go as high as six or seven—including one or more newspaper op-eds or commentaries, multiple appearances by Show-Me Institute Rick Edlund analysts and writers on television and radio shows around the state, and links to Show-Me Institute contributor to The American Spectator, The Weekly commentaries by popular online blog posts like “Tony’s Standard, and the Wall Street Journal. Director of Kansas City” and the Daily Caller. Government Accountability Patrick Ishmael writes on a regular basis for Forbes online. Edlund explains, “From conscientious citizens to talk show hosts to lawmakers, Missourians are hungry for Even with the onset of the Internet, 55 percent of good information and real insight into public policy Americans regard television as their primary news issues that affect their lives. So we try to provide free- source, according to a recent Gallup poll. For that market viewpoints through every media platform we reason, we are thrilled that television news channels can as often as we can.” and talk shows have increasingly turned to Show-Me Institute analysts. In 2014, longtime analyst David Stokes took on the role of director of development at the Institute, but Kansas City and Saint Louis public television news he continues his weekly appearances on the “McGraw shows have tapped Institute representatives as panelists Milhaven Show” on the Big 550 KTRS (8:35 a.m. every with regularity. Brenda Talent has appeared on Saint Monday in Saint Louis) and “Morning Magazine” with Louis’ Donnybrook as a guest panelist on a consistent Kevin Burns on News/Talk KRMS (9:15 a.m. every basis. Kansas City’s counterpart, Ruckus, likewise has Thursday in Osage Beach). welcomed Institute representatives Crosby Kemper and Patrick Tuohey regularly. The Institute’s analysts not only make weekly appearances on the “Gary Nolan Show” on the Eagle These general discussion programs discuss a wide range 93.9 in Columbia and KWOS in Jefferson City (10:05 of regional news, and our regular participation proves a.m. every Thursday), but they also appear on various that the Institute’s analysts have their fingers on the shows on Saint Louis’ KMOX Radio. On the Kansas pulse of a broad range of Missouri policy issues. City radio front, Patrick Tuohey is a frequent guest on the “Darla Jaye Show” on KMBZ. Edlund explains, “In every important public policy matter in Missouri, we want to be a part of the Resident Fellow and Senior Writer Andrew Wilson discussion. So having a seat at so many excellent media has written major commentaries for leading papers outlets throughout the state allows us to get the word throughout Missouri—and has also been a regular out about free-market principles.”

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Media Matters

“The Show-Me Institute is a great resource for my radio show. They are friendly, knowledgeable, and always interesting. They have a point of view, which is great, but more important to me is the audience learns something every time they are on the air.” —McGraw Milhaven Host of the McGraw Milhaven Show on the Big 550 KTRS “David Stokes and the Show-Me Saint Louis Institute add very valuable insight for our listeners on the issues that affect us here at the Lake of the Ozarks and throughout the state of Missouri.” —Kevin Burns Host of the “Morning Magazine” on News/Talk KRMS Osage Beach

“The Show-Me Institute is a great resource with a deep bench of experts who advocate smart, well-researched free-market principles.” —Mark Reardon Afternoons, 2 to 6 p.m., KMOX Saint Louis photo credit: www.smalltoday.com credit: photo

Meet the Interns

In the nine months that she spent as an intern at the Show- more, and gained more valuable skills, at the Show-Me Me Institute, Jessica Stearns spearheaded research into Institute than in a year in the classroom,” she says. Missouri’s film tax credit program. She wrote a series of op- eds and blog posts with a wealth of details showing how our Christien West, interning taxpayers had picked up the check for more than $2 million with the Show-Me Institute in expenses racked up by Twentieth Century Fox in coming last summer, worked closely to Missouri to filmGone Girl. What did Missouri get in with Fellow James Shuls return? Mostly just a “fleeting moment in the presence of on the case study “De- Hollywood stars.” Centralization Through Centralization: The Story “Don’t be fooled by reports of the Recovery School that these tax credits pay for District.” Christien explains themselves,” Jessica wrote that the project strengthened in an article that appeared his beliefs in free-market in the Southeast Missourian solutions for education: on Dec. 21, 2014. “The Christien West “During the project, I truth about film tax credits learned about the merits is that they bleed taxpayers of school choice and how market forces can improve the to subsidize an industry quality of our schools in Saint Louis and Missouri as a that last year brought in whole.” $36 billion in revenue worldwide. . . . Let’s leave Like his friend Jessica, Christien graduated from Saint Jessica Stearns Hollywood in California so Louis University in May, earning a bachelor’s degree in that Missourians don’t have applied mathematics and economics. He too is planning to finance celebrities’ espressos or massages and focus on a career in public policy and calls his internship at the attracting businesses and investors to Missouri that won’t Show-Me Institute “a fantastic learning experience.” “The leave taxpayers to foot the bill.” entire Show-Me Institute team really pushed me to think critically and carefully about policy issues,” he says. Jessica worked almost three full days a week at the Show- Me Institute while finishing her senior year at Saint Louis Christien did further research on Certificate of Need University. She graduated in May with a bachelor’s degree regulations for hospitals. “I wrote a series of blog posts, an in political science and economics. The next stop in her op-ed, narrated a Show-Me Now! video, and gave a ‘lunch academic career is London School of Economics and lecture’ on these regulations to expose their adverse impact Political Science (LSE). She will begin work in September on the health care market.” In his commentary, “Delays in pursuing a master’s degree in public policy and and Blockades: Certificate of Need in Saint Louis,” he administration at LSE. She believes her internship solidified examined the impact of regulations on the quality, cost, her acceptance into this prestigious school. “I’ve learned and accessibility of health care in hospitals.

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The Show-Me Meet the Interns Institute By the Numbers, Also interning last summer, Abigail Fallon, who graduated from Lindenwood 2014 University with a degree in economics and will attend the University of Oregon School of Law in the fall, says she 17 was drawn to the Show-Me studies Institute’s libertarian ideals when the Institute hosted events on campus. “Coming 44 from a family that owned a commentaries Abigail Fallon small business, working in an environment that promoted free-market policies made sense to me.” 372 Abby found great success in her first few weeks as an blogs intern. Her commentary “Mid-Missouri Food Trucks Face Roadblocks” was published not only in the Kansas City Star but also in the Columbia Daily Tribune. Fallon says this was 19 a big success for her. “It meant a lot to me to get my op-ed testimonies published. That was really exciting. Even though I was able to work on my own projects, I had a tremendous amount of help from everyone at the Show-Me Institute.” 65 Education Policy Research Assistant Brittany Wagner videos recalls, “Abby’s hard work and dedication on projects made her an important member of the team.”

During their time at the Show-Me Institute, Stearns, 41,096 West, and Fallon challenged themselves with difficult and visits to important projects. Their high caliber of work contributed www.showmeinstitute.org greatly to the Institute’s goal of promoting free-market solutions for the state of Missouri. 46,476 visits to www.showmedaily.org

21,001 views on YouTube 6,890 Facebook likes

Publications

COMMENTARIES 2014

January 8: “Let Market Guide Us to Prosperity in 2014,” June 26: “Beware the Jabberwock (and Downtown by Andrew Wilson. Streetcars),” by Joseph Miller. January 21: “Crime and (Doggie) Punishment: A Tale (or July 7: “Mid-Missouri Food Trucks Face Roadblocks,” by Tail) of Lost Freedom,” by Andrew Wilson. Abigail J. Fallon. January 30: “Reform, Not Spending, Should Top Agenda,” July 8: “Excessive Regulation, Not Lyft, Needs to Stop by Patrick Ishmael. Operating in Saint Louis,” by Joseph Miller. February 17: “Ambulance Service an Example of July 8: “Five Good Reasons to Reject KCI Terminal,” by Privatization’s Benefits,” by David Stokes. Joseph Miller. February 17: “Privatization Can Benefit Missouri July 11: “Thomas Piketty and Mises’s ‘The Anti-Capitalistic Taxpayers,” by David Stokes. Mentality,’” by Andrew Wilson. February 20: “Pragmatic Privatization Works Best,” by July 21: “A Transportation Sales Tax Is Bad Policy for David Stokes. Missouri,” by Joseph Miller. February 27: “Current Teacher Pension Systems Impose a July 21: “Proposed Amendment 7 Is Bad Policy,” by Joseph ‘Tariff’ on Labor,” by James Shuls. Miller. March 17: “Minimum Wage Hurts Workers,” by Patrick August 5: “Teacher Retirement System Demands Reform,” Ishmael. by James Shuls. March 21: “Clayton Seeks Four-Leaf Clover of Tax August 11: “Nix the NIDs,” by David Stokes. Increases,” by David Stokes. August 21: “Privatization in Education: Not as Scary as March 24: “Bad Data, Bad Tech, and No Expansion Lead to Some Think,” by James Shuls. Fall in Missouri Medicaid Enrollment,” by Patrick Ishmael. August 21: “Delays and Blockades: Certificate of Need in March 31: “Expansion Is Wrong Move for Medicaid,” by Saint Louis,” by Christien West. Patrick Ishmael. September 4: “Taxing a Population: Saint Louis and April 3: “Two Cheers for the Isla Del Sol Causeway,” by Kansas City’s Earnings Tax Draw People Away,” by R.W. Joseph Miller. Hafer. April 14: “Racing to the Wrong End Zone – In September 9: “Please Convince Me: The Pros and Cons to Transportation Funding,” by Joseph Miller. Raising Property Taxes in Columbia,” by Michael Rathbone. April 23: “Cape Girardeau Should Think Twice Before September 10: “Arnold Wastewater Privatization: Don’t Establishing CID,” by David Stokes. Waste the Opportunity,” by Joseph Miller. May 9: “Excessive Regulation, Not Lyft, Needs to Stop October 6: “Missouri Should Embrace Common Core Operating in Kansas City,” by Joseph Miller. Conflict,” by James Shuls. May 11: “Parents Agree: More Is Better,” by James Shuls. October 7: “A Lesson for Missouri: Indiana Toll Road Bankruptcy Highlights Privatization Advantages,” by Joseph May 29: “Missouri’s Conservatives: Resolved to Be Miller. Irresolute,” by Andrew Wilson. November 6: “Let’s Continue to Protect Our Local June 26: “Want Better Teachers in High-Need Schools? Fix Schools,” by James Shuls and Brittany Wagner. Pensions,” by James Shuls. November 10: “Gone Girl, Gone Jobs,” by Jessica Stearns. June 26: “Creationism: The Left’s Weapon Against School Choice,” by James Shuls. November 18: “A Look Past Gone Girl Excitement Reveals a Raw Deal for Missourians,” by Jessica Stearns.

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Publications

December 7: “Remembering Pearl Harbor,” by Andrew Wilson. December 11: “Give Tesla and Missourians a Fair Deal,” by ESSAY Joe Miller. ESSAY July 2014 July 2014 ESSAYJuly 2014 THE COMPARATIVE EXPENSE OF THE COMPARATIVETHE EXPENSE COMPARATIVE OF EXPENSE OF ESSAYJuly 2014 THE COMPARATIVETHE EXPENSE PROPOSED OF NEW TERMINAL THE PROPOSED NEWTHE TERMINAL PROPOSED NEW TERMINAL December 11: “Highway Funding in Missouri: The Fuel THE PROPOSEDPLAN NEW FOR TERMINALPLAN KANSAS FOR CITYKANSAS CITY PLAN FOR KANSAS CITY PLAN FOR KANSAS CITY INTERNATIONALINTERNATIONALBy Joseph Miller AIRPORT AIRPORT INTERNATIONALBy Joseph Miller AIRPORTINTERNATIONALBy Joseph Miller AIRPORT Tax Option,” by Joe Miller. and the costs of existingand terminal the costs of existing terminal repairs, as defined inrepairs, statements as defined from in statements from and the costsBy Joseph of existing Miller terminal KCAD officials andKCAD publicly officials released andrepairs, publicly as defined released in statements from Executive SummaryExecutivedocuments. Summary Executivedocuments. Summary KCAD officials and publicly released Executive Summary and the costs of existing terminal The purpose of this essay is to analyze documents. The purpose of this essayWe is examineto analyze only publiclyWe examine available only publicly availablerepairs, as defined in statements from the costinformation of a proposedThe and purposenew planning terminal of documents this essay is to analyze The purpose of this essaythe cost is toof analyze a proposed new terminal information and Weplanning examine documents onlyKCAD publicly officials available and publicly released plan at Kansason the new Citythe terminal International cost of plan,a proposed and new terminal December 18: the cost of a proposedplan new at terminalKansas City International on the new terminalinformation plan, and and planningdocuments. documents “Students Need Choice, Not Pie-in-the-Sky Airport (MCIany alternative or planKCI) at versus options Kansas a that City have International plan at Kansas City AirportInternational (MCI or KCI) versus a any alternative options that have possible major renovationAirport (MCI of the or KCI) versuson the a new terminal plan, and Airport (MCI or KCI)possible versus major a renovationbeen of the released. We beendo not released. propose We do not proposeWe examine only publicly available existing terminals.evaluatingpossible The any new novelmajor terminal terminal renovation or repairany of the alternative options that have possible major renovationexisting of terminals. the The new terminal evaluating any novel terminal orinformation repair and planning documents plan that theplan, Kansas existingnor do City we terminals. Aviationattempt to The generate newbeen terminal released. We do not propose existing terminals. planThe newthat terminalthe Kansas City Aviation plan, nor do we attempt to generateon the new terminal plan, and Departmentan (KCAD) originalplan that hasanalysis the proposed Kansas of the Citywider Aviationevaluating any novel terminal or repair Solutions,” by James Shuls. plan that the KansasDepartment City Aviation (KCAD) has proposed an original analysis of the widerany alternative options that have envisions a neweconomicDepartment single impact terminal (KCAD) of the that proposed has proposedplan, plan nor do we attempt to generate Department (KCAD)envisions has proposed a new single terminal that economic impact of the proposedbeen released.plan We do not propose will replace theorenvisions possible current alternatives.three-terminal a new single terminal an original that analysis of the wider envisions a new singlewill replaceterminal the that current three-terminal or possible alternatives. evaluating any novel terminal or repair will replaceADVANCING the current three-terminal LIBERTYdesign, with supportingwill replace improvements the current three-terminal economic impact of the proposed plan design, with supporting improvements plan, nor do we attempt to generate ADVANCINGdesign, with LIBERTY supporting improvementsto the roadways, design, parking with lot, supporting and improvementsor possible alternatives. WITH RESPONSIBILITYto the roadways, parking lot, and an original analysis of the wider WITH RESPONSIBILITYto the roadways, parkingairfield. lot, The andairfield. focus here The is tolimitedfocus the roadways,here to ais limited parking to a lot, and ADVANCING LIBERTYBY PROMOTING economic impact of the proposed plan BY PROMOTINGairfield. The focusdiscussion here is limited ofdiscussion the tocosts a of of airfield.this the proposalcosts Theof thisfocus proposal here is limited to a December 31: WITH RESPONSIBILITYdiscussionMARKET of the SOLUTIONS costs of this proposal discussion of the costs of this proposal or possible alternatives. “New Year’s Resolutions for Missouri ADVANCING LIBERTYMARKET SOLUTIONS BY PROMOTING FOR MISSOURI FOR MISSOURI ADVANCINGADVANCING LIBERTY LIBERTY WITH RESPONSIBILITY WITH RESPONSIBILITY WITH RESPONSIBILITYMARKET SOLUTIONSPUBLICADVANCING POLICY LIBERTYBY PROMOTING WITH RESPONSIBILITY MARKET SOLUTIONS BY PROMOTING BY PROMOTINGFOR MARKETBY MISSOURI PROMOTINGADVANCING SOLUTIONS PUBLIC MARKETLIBERTY POLICY WITHSOLUTIONS RESPONSIBILITY FOR MISSOURIPUBLIC POLICY FOR MISSOURI PUBLICFOR MISSOURI POLICY PUBLIC POLICY BY PROMOTING MARKET SOLUTIONS MARKET SOLUTIONSPUBLIC POLICY Lawmakers,” by Andrew Wilson. FOR MISSOURI FOR MISSOURI PUBLIC POLICY PUBLIC POLICY December 31: “Riding to the Hounds of Corporate Welfare,” by Brenda Talent.

STUDIES PUBLISHED IN 2014

January “Missouri’s Economic Record in the 21st Century,” by R.W. Hafer and Michael Rathbone. “Available Seats? Survey Analysis of Missouri Private School Participation in Potential State Scholarship Programs,” by July James V. Shuls. “The Comparative Expense of the Proposed New Terminal Plan February for Kansas City International Airport,” by Joseph Miller. “Justifying Boeing: A Post-Mortem Analysis on the Process,” “Teacher Pension Enhancement in Missouri: 1975 to the by Joseph Haslag. Present,” by Robert M. Costrell. “Government Privatization in Missouri: Successes, Risks, and “Saint Louis County Public Policy Recommendations,” by Opportunities,” by David Stokes. David Stokes. “Live Free and Learn: A Case Study of New Hampshire’s September Scholarship Tax Credit Program,” by Jason Bedrick. “Updated Estimates of the Effects of City Earnings Taxes on “Missouri Transition Costs and Public Pension Reform,” by Growth,” by Howard Wall. Andrew G. Biggs. “Decentralization Through Centralization: The Story of the March Recovery School District,” by James Shuls. “Giving Arizona Children Better Opportunities in Education: October A Case Study of the Nation’s Oldest Tax Credit Scholarship Program,” by Jonathan Butcher. “The 49th State: Revisiting Missouri’s GDP Sector by Sector,” by Joseph H. Haslag. April November “Pennsylvania’s Education Improvement Tax Credit Program: A Winning Educational Partnership,” by Andrew LeFevre. “Is There a Link Between Economic Freedom and State Economic Growth?” by R.W. Hafer. June December “Are Education and Economic Growth Related? Some Evidence from the States,” by R.W. Hafer. “Urban Neglect: Kansas City’s Misuse of Tax Increment Financing,” by Patrick Tuohey and Michael Rathbone. v Board of Directors

Crosby Kemper III - Chairman W. Bevis Schock - Secretary Crosby Kemper III is executive director of the Bevis Schock is a lawyer in solo practice in Saint Kansas City Public Library and former CEO of Louis. He founded the Shrink Missouri Government UMB Financial Corporation. He cofounded and PAC, which challenged the constitutionality of is chairman of the Show-Me Institute. He is the Missouri’s campaign contribution limits before the editor of, and contributor to, Winston Churchill: United States Supreme Court in 2000. He received Resolution, Defiance, Magnanimity, Good Will. He a B.A. in history from Yale University and a J.D. has served on the boards of the Thomas Jefferson from the University of Virginia. Foundation, the Kansas City Symphony, the Black Archives of Mid-America, Union Station Kansas City, and Lapham’s Quarterly. He helped Marilyn Joe Forshaw - Treasurer Strauss found the Heart of America Shakespeare Festival and was its first board chair. He also Joseph Forshaw is president and CEO of Saint founded and chaired the St. Louis Shakespeare Louis-based Forshaw, a family-owned business Festival. He received a bachelor’s degree in history founded in 1871. He has served for several years from Yale University.. as an advisory director for Commerce Bank, and is the managing partner of several family real estate partnerships. An alumnus of Saint Louis University High School, Forshaw received both his B.A. and Rex Sinquefield -President J.D. degrees from Saint Louis University. Rex Sinquefield is cofounder and former co- chairman of Dimensional Fund Advisors, Inc. He also is cofounder of the Show-Me Institute. In the Stephen F. Brauer - Director 1970s, he coauthored (with Roger Ibbotson) a Stephen Brauer is chairman and CEO of Hunter series of papers and books titled Stocks, Bonds, Engineering Company. From 2001 to 2003, he Bills & Inflation. At American National Bank of served as U.S. Ambassador to Belgium. He has Chicago, he pioneered many of the nation’s first served on numerous charitable and civic boards, index funds. He is a life trustee of DePaul University including the Saint Louis Area Council of Boy and a trustee of the St. Vincent Home for Children Scouts, the Saint Louis Art Museum, and the in Saint Louis, and serves on the boards of the Missouri Botanical Garden. He is a trustee of Saint Louis Symphony Orchestra, the Saint Louis Washington University in Saint Louis, a member of Art Museum, the Missouri Botanical Garden, Opera its executive committee, and a part owner of the Theatre of Saint Louis, and Saint Louis University. St. Louis Cardinals. He received a B.S. from Saint Louis University and his M.B.A. from the University of Chicago. James G. Forsyth III - Director James Forsyth is president and CEO of Moto, Kevin Short - Vice Chairman Inc., which operates the MotoMart chain of Kevin Short is managing partner and CEO gas stations and convenience stores. He is also of Clayton Capital Partners. In addition to president and CEO of two other family-owned contributing to various national trade and business businesses: Forsyth Carterville Coal Company publications, he is the coauthor of Cash Out and Missouri Real Estate. He serves on the boards Move On: Get Top Dollar And More Selling Your of St. Luke’s Hospital, YMCA of Southwestern Business. He is chairman of the Today & Tomorrow Illinois, and Commerce Bank of Saint Louis. He Educational Foundation, past president of the has served on the boards of Webster University Board of Education and current chairman of the and Forsyth School. He holds a bachelor’s degree Finance Council for the Archdiocese of Saint in economics from the University of Virginia. Louis, board member of the Children’s Scholarship Fund, and past member of the Chess Club and Scholastic Center of Saint Louis.

26 SHOW- ME INSTITUTE | 2014 ANNUAL REPORT v

STAFF BOARD OF SCHOLARS

Board of Directors BRENDA TALENT MICHELE BOLDRIN CEO Research Fellow Washington University in St. Louis RICK EDLUND Communications Director SUSAN K. FEIGENBAUM Louis Griesemer - Director Research Fellow Louis Griesemer is president and CEO of DAVID STOKES University of Missouri– Springfield Underground, Inc. He previously St. Louis served as chairman of the National Stone, Sand, Director of and Gravel Association. He currently serves on Development the Advisory Board for UMB Bank in Springfield BEVERLY GOSSAGE and on the board of Burgers’ Smokehouse in ANDREW B. WILSON California, Mo. He holds a bachelor’s degree from Research Fellow Washington University in Saint Louis. Resident Fellow and Senior Writer RIK W. HAFER PATRICK ISHMAEL Research Fellow Hon. Robert M. Heller - Director Southern Illinois University- Director of Government Edwardsville Robert Heller is a retired judge who served for Accountability 28 years on the Shannon County Circuit Court in Missouri, where he presided over a broad JOSEPH HASLAG range of civil and criminal cases both locally and MATTHEW throughout the state. He has served as a member HEIDENRY of several Missouri court-related committees Chief Economist and as a district chair for the Boy Scouts of Editor University of Missouri– America. He holds a J.D. from the University of Columbia Missouri-Columbia and a B.A. in philosophy from Northwestern University. PATRICK TUOHEY Western Missouri MICHAEL PODGURSKY Field Manager Director University of Missouri– Michael Podgursky - Director JOSEPH MILLER Columbia Michael Podgursky is a professor of economics George W. Bush Institute at the University of Missouri–Columbia, where Policy Analyst he served as department chair from 1995 to 2005, and is a fellow of the George W. Bush DAVID C. ROSE Institute. He has published numerous articles MICHAEL and reports on education policy and teacher RATHBONE Research Fellow quality. He serves on advisory boards for various Policy Researcher University of Missouri– education organizations, and editorial boards of St. Louis two education research journals. He earned his bachelor’s degree in economics from the University JOHN WRIGHT JAMES V. SHULS of Missouri-Columbia and a PhD in economics Policy Researcher from the University of Wisconsin-Madison. Distinguished Fellow University of Missouri– BRITTANY WAGNER St. Louis Gerald A. Reynolds - Director Education Policy Research Assistant Gerald A. Reynolds is general counsel, chief DANIEL THORNTON compliance officer, and corporate secretary for LG&E and KU Energy. He also was a deputy SCOTT TANNER Research Fellow associate attorney general in the U.S. Department of Justice. In 2004, President George W. Bush Executive Assistant designated Reynolds to serve as chairman of the HOWARD WALL U.S. Commission on Civil Rights, and in 2002 appointed him assistant secretary of education SARA ADDISON Research Fellow for the Office of Civil Rights. He received his law Development Assistant Lindenwood University degree from Boston University School of Law and his B.A. in history from City University of New York. BONNIE WILSON Research Fellow Saint Louis University 5297 Washington Place I Saint Louis, MO 63108 I 314-454-0647 I www.showmeinstitute.org

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