Show-Me Institute Podcast
Missouri Ballot Issues and The Return of Three Mile Island
David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to discuss: Missouri’s Amendment 6, the Kirkwood sales tax vote, the state’s minimum wage proposition, the return of the Three Mile Island nuclear plant, and more.
Produced by Show-Me Opportunity
- Broadcast on:
- 07 Oct 2024
- Audio Format:
- other
(upbeat music) - Welcome to the Show Me Institute Podcast. I'm Zach Lohorn from Show Me Opportunity. And today I'm joined by David Stokes, the lives of Alice and Avery Frank from Show Me Institute. So we're a little bit about a month away from an election. And there's gonna be a lot of things, a lot of issues that voters are gonna see in the ballot. Today, we're gonna take the first half of the podcast to go through a few of them and give people some information that they can use in November. So we're gonna start with you, David, and Amendment 6. Tell us about court fees and pensions. - Well, Amendment 6 is very interesting and generally, generally negative, I think. It's about instituting a court fee to fund the pensions. It's listed as salary and benefits, but it's mostly for the pensions, for county sheriffs and prosecutors. Not for lots of sheriffs. People are gonna read this bill and think it's for all the deputy sheriffs and the assistant prosecutors around the state and lots of people. Nope, it's just for the elected county sheriffs and the elected county prosecutors around the state. So not very many people, about two per county at any one point in order to be exact. So they're doing this constitutionally because they did it legislatively and it was thrown out by the Supreme Court to pay sheriffs and prosecutors. At the time it was only sheriffs, now it's for prosecutors too. To pay them based on court fines and fees, it was a $3 fee for every court filing in Missouri that funded this. And the Supreme Court ruled correctly, in my opinion, that our constitution is supposed to give an incentive for prosecutors or sheriffs or people in the legal system to get a financial benefit from filing more charges or filing more cases. You don't want the people in charge of making these decisions to somehow, even in some tangential way, know that the more cases they file, the more money is raised to then go into the pension fund that can benefit them. And not to mention you, we don't wanna do things that make it harder for ordinary people to access court. Even if it's just $3, that's $3 that makes it harder for a lower income person to file in order of protection or file a small claimed case or whatever it may be. There are, of course, hundreds of thousands of court filings every year on the state of Missouri. So that's what this fee would go to. They're doing it constitutionally to get around the effect that the courts have thrown it out. There's a lot wrong with it. Again, we talked about how it's only benefiting a very few people. It's further expanding the defined benefit aspect of it, meaning that it's sort of an old fashioned pension. It's gonna reinforce that. If we are gonna increase the pensions for these positions, and I've got no problem doing that at the local level, that local taxpayers should pay, not this fee system, but through general taxes. If you're gonna do that, you should do it with the more modern defined contribution plan where these elected officials could put a percentage of their own salary into a fund they can control, not the old fashioned benefits here. So it's a really a troubling idea. And in particular, I'm trying to get the word out in St. Louis County that you really are getting jobed if you're a St. Louis County tax payer here. St. Louis County doesn't have a law enforcement sheriff's department. We have the county police department and the sheriff's department is just sort of a side position serving papers, doing some of the jobs that sheriff's do in other counties, but it's not a law enforcement position. So the county sheriff, the St. Louis County sheriff is not in this retirement fund, the Missouri State Sheriff's retirement fund. So as the largest county in the state, which includes the presence of CT Corporation, the largest registered agency in the state, St. Louis County would generate far more money from these court filing fees than any other county in the state of Missouri. And it would benefit far less because it don't even have to share off that would get the funded here. So if you're in St. Louis County, you're really getting jobbed here on this proposal. And they know that, of course, the people who put it together are well aware of this. So there's plenty of good reasons to vote. I don't want to tell people how to vote. There's plenty of good reasons to think twice before you would normally want to support law enforcement as many Missourians naturally do, including myself. And in St. Louis County, there's especially good reasons to think a third time about this. - So James Scholes talks often about the health of the teacher's pensions in Missouri. What do we know about the health of this pension system that you're talking about? But the heart of my question is, is this something that's needed? Why is the change being proposed? - Well, I don't know about the overall health of this pension system. It's very small. Again, it's just for current sheriffs, current elected sheriffs and retired elected sheriffs. I believe it's probably healthy from a fiscal perspective. Nothing I've read about it says the pensions not to fail, but it is small. And that's probably why they want more money in it to pay sheriffs more. I have no problem paying elected sheriffs more, but people should do that with proper state authorization at the local level. If they want to raise their own taxes to pay, if they want to raise their own property taxes to pay their elected sheriff a little more, by all means go ahead and do so. But this court fee system is a really bad idea for a number of reasons as we've discussed. And it appears to be, this is how they want to fund this increased pension to generate a lot of money. Again, much of it from St. Louis County, which doesn't even have a sheriff, which would again be substantially the largest funder of this entire program here. The St. Louis County prosecutor might be in it, but the St. Louis County prosecutor, that's a well paid, well, well, which I have with a lot of good benefits and a pension. I mean, they don't need this for the county prosecutor here. If rural counties need more money for their elected officials, for their salary and benefits, then those areas should increase taxes to do it, not do this statewide fee-based system. - All right, moving on to a proposition, as opposed to an amendment that I'm sure a lot of people have been hearing about, it's the minimum wage issue on the ballot next month, Elias. So I feel like we heard about this not too long ago, Missouri raised voted to raise its minimum wage recently, right? - Yeah, so back in 2018, Missouri voters chose to raise the state's minimum wage from 785 to where it is today at 1230 an hour. And if this initiative goes into effect, it would raise it to 1375 and 2025, and then go all the way to $15 an hour in 2026, and then we would be adjusted every year afterwards, according to inflation. And then this initiative on top of raising the minimum wage also will require employers to provide one hour of paid sick leave for every 30 hours that their employees work. So there's a lot to this initiative, and it certainly would be raising costs on employers. - And paid sick leave, that's a completely new wrinkle. That wasn't in the 2018 vote. That seems like that it's something that's distinct from previous discussions around raising them minimum wage in the state. - Yes, this is a completely new thing. There's a lot of technical details to it. It treats different sizes of employers differently. So I think if you have over 15 employees, you have to basically authorize more paid sick leave when there's a little bit of leniency for employers with fewer than 15 employees. But the big thing is that every employer is going, if this goes into effect, would have to be providing one paid hour of sick leave. And I think some of the finer details might have to get ironed out in court later. - All right, so I just wanna quickly walk through some of the things that people who support this proposition will say. So people who are making the current minimum wage, if it passes, they will make more money. Isn't that a good thing? - Well, there will be an increase in the wage that some people making the minimum wage currently are making. But what we've seen, decades of studies have shown this, is what typically happens when the government mandates increase costs for businesses, that they're going to have to find a way to deal with those increased costs. So what are they going to do? Either lower employment, so employ fewer employees. They might reduce hours. So what happened in Seattle, when they raised their minimum wage, was that their basically employers were keeping basically the same number of employees, but they basically just reduced the hours that people are being scheduled. And then another option, I guess, besides the reduced employment, reduced hours, is that you start seeing basically different, you basically see different workers are starting to be higher gear. It's more difficult for lower skilled workers, so your minimum wage job stops being the place for the lowest skilled workers, high schoolers, which you see a lot. It becomes a more higher skilled thing, and especially if you couple that with the pay leave, it becomes much more expensive to bring on employees. So I think you are going to see a much different behavior from employers, if this would go into effect. - And how do neighboring states factor into this? I'm thinking specifically of Illinois here, just because St. Louis Metro area extends into Illinois, people cross the border, but when one state is thinking about raising their minimum wage, how is that impacted, or how does that impact, I guess, neighboring states that kind of share a workforce? - Well, it can have a really big impact, especially when it comes to raising the idea of raising it to $15 an hour, because $15 an hour would basically make Missouri the highest minimum wage of our surrounding states, except for Illinois once they eventually raise it, which I think is going into effect in the next couple of years. But many of Missouri surrounding states, Kansas included have a below $10 an hour minimum wage. And so when you're looking at something, say Kansas City, where there's many people that live in Kansas City, Kansas, work in Missouri, or live in Missouri, and work in Kansas. But the minimum wage job in Missouri is $15 an hour, and the minimum wage job in Kansas is sub 10. I mean, that's going to have a major impact. It's going to be hard for businesses in Missouri. And I don't think we can say just yet exactly what's going to happen. There's been plenty of economic studies that sort of show what businesses try to do in this case. But in the battle between Missouri and Kansas, I don't think it would be a good move at all. All right, and two more items back to you, David. We're going to start on the eastern half of the state, St. Louis area. There is a sales tax increase that's going to be on the ballot for people in Kirkwood. - It's an interesting proposal in Kirkwood. They want to create a citywide transportation development district with a half cent sales tax to fund road improvements, sidewalks, other improvements, transportation related in the city. - Our regulators know that the show me it's who is not fans of transportation development districts, community improvement districts, and special taxing districts like that. They can occasionally be used properly much more often. They're just subtle vehicles for corporate welfare. So Kirkwood has done a few things right to, I think, to at least to address those concerns. First of all, they're putting it to a vote of the people. As oftentimes these districts are formed just by property owner signature, which can sometimes just be one property owner who institutes their own tax on their own property to then sort of subtly nudge the tax money into corporate welfare. And sometimes it's not so subtle. So Kirkwood at least gets credit for a citywide vote on this, which they did about two and a half years ago, and it was rejected. So it certainly might be rejected again. The other thing they've done is Kirkwood is maintaining, the city is maintaining a good portion of the control over the money. So it's not just going to go to public tax dollars turned over to private developers through a CID or a TDD board that is controlled by a private party, so then use all the funds for essentially private purposes, which you see routinely in TDDs and CIDs around the state of Missouri. So Kirkwood at least, I think, if it passes and raises the money, they will spend it on true public purposes. I just, but it doesn't change the fact that I just don't like the plan, really, to fund sidewalks and local roads through a sales tax as sort of a naked attempt to target your shoppers to get them to pay as much for it as they can for things that you should be funding yourself. And furthermore, when you getting a little theoretical here, when you pay for the cost of driving, like the roads especially, from something that's unrelated to driving, like the cost of groceries, you're sort of subsidizing driving in your community. And that's not a good idea. So I'd like to see Kirkwood try a local gas tax, which is rare in Missouri, but perfectly legal for cities to do. And interestingly enough, the Post-Dispatch just said a big story on the rapidly growing city of Forestel out in St. Charles, and they are one of the few cities that has a local gas tax. So it can be done in not inhibiting economic growth, apparently. So I'd like to see Kirkwood try that route, and if the gas tax doesn't work, then a property tax increase. The sales tax is just a bad way to do this. It'll be interesting to see what Kirkwood voters decide. - And sometimes when these sales tax increases are being pitched to the public, there's this line about, you mentioned shoppers that other people will pay for it. You know, us fine Kirkwoodians will not bear this cost. It'll be the people who come and show, but the way that St. Louis County, the St. Louis area is what, it's not like these are people driving in for Orlando. Like it's- - Right, they're people from DePair, and then next year DePair is gonna raise their sales tax and say, well, we'll get those other shoppers out there to pay for our stuff. Right, everybody wants to, you know, it's the old line, don't tax you, don't tax me, tax demand behind the tree. I mean, everybody wants to use earnings taxes or hotel taxes or sales taxes to get that tourist or the commuter or the shopper to pay for their stuff. And in the end, it just leads to, everybody always raising their sales tax. It's to the point where now we have 10% or higher throughout the St. Louis metropolitan region. Everybody's just raising it the chance to get. And it's a bad idea, but I do give Kirkwood credit for at least addressing some of the structural problems with CDs here. - Before we move on to Platt County, is that a real saying or did you just make that up? - That is a real saying, Russell Long, the former chair of the Senate, long time chair of the Senate Finance Committee. I'm talking the United States Senate, Russell Long was from Louisiana as Huey Long's son. That was a ditty he used to sing around Washington, D.C. a lot. Russell, Senator Russell Long, who I believe is deceased at this point, deserves all the credit. - He lives on in music, he lives on in song. - All right, on the Washington half of the state, Platt County, this issue is, I think, pretty unique because the money that the revenue that would come from this tax increase is gonna go to a specific charitable fund, right? - Platt County, Kansas City makes up a good portion of Platt County, the county's a little north and west of Jackson County there along the Missouri River. Got suburbs of Kansas City, some rural parts in the far north, I'd say, and then parts of Kansas City itself. Anyway, they're proposing a quarter cent sales tax for a children's services fund, which is a tax and about a dozen counties in the state of Missouri already have this, either a quarter cent or an eighth of a cent, that all the money raised goes to a commission that then distributes the fund towards charities in the county that work primarily on children's mental health service areas. That's defined a little bit more broadly than that, but it does go to kids' services. And who can be opposed to that, of course? We're gonna, well, I think there's a lot of things to be concerned about it, you know. So many things, A, it just comes down to politicizing charity, I think, is a very, very bad idea. You've seen this years ago in St. Louis County where there were some disputes over a board and how they were funding it, and it became a part of a campaign for county executive. It was lobbying charges back and forth from each other. Politicizing charity is a very dangerous road to go down, and you're gonna create this board, and then these charities become dependent on the taxpayer funding, and then the members of the charities boards have to consider who they're gonna support in certain elections. It's really just a bad idea. I also don't like the idea of mandating charity. Charity's a wonderful thing. We work for a nonprofit, but the sort of mandating charity through taxes, I think is also a bad road to go down, and there is some evidence that charities can become dependent on the taxpayer funds and start raising funds on their own less than they otherwise would, and that's harmful. And the charities grow to depend on it, and the charities who are using their funds and efforts to get this tax passed in Platte County, they do wonderful work. Nobody's criticizing the work that these charities do, but they do have supported the same tax in Clay County and Jackson County in the Kansas City area, and they do apply for funding from it. So they sort of have an interest in this, and the last real objection to it, really, is that the last thing we need is another really tiny, small, taxing district with no oversight. And there are problems with these, whether they're TDDs or CIDs or a Children's Services Fund, but we saw that in Lafayette County, which is just a little bit east of the Kansas City area, about a decade ago, where they had real issues with their Children's Services Fund, how it was being spent inappropriately with no oversight on charities that weren't properly qualified for it. And these were real issues here, and as these types of various senior service funds, Children's Service Funds, whatever they may be, as they expand around the state, we're gonna see more and more of that. So I hope the voters in Platte County, who obviously want to support kids' services in their county, I hope they, again, think twice, we're using that phrase a lot here, before they just reflexively assume that higher taxes for these charities are gonna have an overall benefit for the county. - Avery. - So Microsoft is working with a private company, Constellation, to bring Three Mile Island, the nuclear reactor, back online. Please explain. - Yeah, first for the listeners who maybe don't know what Three Mile Island is, I'll give you a little history lesson, back in 1979, Three Mile Island, had a little bit of a meltdown, and is regarded as the worst accident in US nuclear history, and people got really scared of it, and basically after that accident, a mountain of paperwork and regulations came down on the nuclear industry, and basically stonewalled any more growth in the American nuclear industry. There's 93 operating nuclear reactors in the United States right now, and only five of them were constructed after 1990, so it's like that plant basically stonewalled any more expansion. And now, I don't know if I'd say ironically, I would say more of a plot twist. It's like Three Mile Island is kind of signaling the revival of the American nuclear industry. It is a deal between Microsoft and Constellation to exclusively provide power for data centers. Microsoft are building out all these data centers with AI in multiple states, and these data centers take up a lot of electricity, a lot of electricity, so much that they're activating at 800 megawatt Three Mile Island, just to power data centers. - It does seem like no bad ideas in a brainstorm, kind of thing, Microsoft, sitting around trying to figure out how they're gonna pull all this power for these AI data centers, and someone just raises their hand and says, what about Three Mile Island? And so now they're working with this private company. Before we break down the further details of it, do you have any initial thoughts on that, on a corporation having a need, and then going directly to this company, Constellation, and having this exclusive energy? It's like kind of a bespoke energy situation. - This idea has actually been floating around for a little bit. I will say I'm surprised that they used as bigger reactor as Three Mile Island. There's been ideas floating around for a couple years that small, modular reactors could be used to power these huge data centers or huge industries. And it's not really unprecedented. You think of all of the US aircraft carriers, they're powered by a little nuclear reactor. They're like a little city and they're powered and they move across the ocean. It's like using a reactor exclusively to power one thing. It's not unprecedented. It's been used by the US military, and now they're trying to use it more in the big industry that's popping up in the United States. And I think it's a good idea. And it's kind of coming at a time where we need more power. There's a power transition that's going on in the United States. Lots of coal plants are shutting down. And coal plants are pretty steady. They provide a consistent stream of energy. And with all of them closing down, it's like, how am I gonna power data center, which needs steady electricity? Like you want AIs to be running smoothly. You want all of this to be running smoothly. It doesn't need to be choppy and going up and down with solar panels or windmills. You need something steady. And a lot of these companies, like Microsoft, have a climate pledge for zero emissions by 2040. So it has to also be zero emissions. And where do all steel look except for nuclear for powerful and zero emissions generation source? And I think this is a good idea. And I think a lot of more private companies are gonna team up with private nuclear developers to make this stuff happen. - We talk a lot about the reputation of nuclear, the PR issue that it has. Do you think that big corporations like Microsoft doing things like this, bringing reactors back online? Do you think this kind of helps the reputation that, like you said, nuclear is kind of having a moment? - Yeah, I think nuclear is at a really good place right now compared to where it was after Three Mile Island and in the decades following Three Mile Island, just recently the Advanced Act, which is a bill that was targeted just to grow the American nuclear industry, it passed the Senate 88 votes to two against. That's pretty bipartisan. And in the House, it was 3934 and 13 against. And then you look at US public surveys who we have 71% of Americans today favor building more nuclear plants versus 47% in 1998. It's like, nuclear is getting a big jump in the political capital and in public opinion sphere. And it's just like, wow, we can provide these needs and nuclear has a better rep now. It's nuclear is needed a good reputation because people are generally and justifiably so, fearful of it. And if the public isn't behind it, nuclear is not gonna grow. But now we see today that people want green energy. A lot of people are concerned with climate change. And you look around and it's like windmills and solar panels aren't powerful enough to do it. And if you really want green energy, you wanna net zero emissions, you have to have nuclear. Many advocates have come out and said, we can't do zero emissions without nuclear energy. And so these corporations saying, hey, let's do it. We'll get some PR from it. - Finally, how should people, policymakers, sitting in Missouri read this story? I mean, Thromal Island famously, not in Missouri. So what do you think our takeaways should be? - Electricity demand is going up across the country with data centers, electric vehicles, electrical manufacturing. These heavy industries require a lot of power. They need something to power them. And most of the country, politicians and the public do want it to be clean. Like people are kind of more apprehensive towards pollution now. So they do want it to be clean. And it seems that Thromal Island really is signaling that nuclear is gonna get another chance in the United States. And Missouri can either take a part of it and get rid of our own rules, like the construction works in progress law that prohibits us from even being a part in this revival. Or we can just sit on the sideline, watch other people land big nuclear project, land Microsoft deals, land big data centers, and just sit back and ride the bench like we have on a lot of things. And I think we need to make sure to clean up our own state regulations. - It's important to remind people that the quip law, construction work in progress, as Avery said, was passed, specifically to stop the expansion of nuclear power in Missouri. I mean, if you just read it, you read like, well, it's preventing utilities from passing on cost to consumers before those consumers can benefit from us. So it's protecting consumers. - No, no, no, the history at the time, it was everybody knew it was being done to block additional nuclear expansion in the state. And unfortunately, it was passed. Look, sometimes Missouri voters do a good job with the referendums and sometimes like quip. They, I think they make the wrong choice. So revising quip to allow for the expansion of nuclear power in Missouri by any electrical utility or electric company, it would be, I think that has to be the first way we have to move in Missouri. If you're looking for what Missouri can do. - Yep. And finally, let's talk about what you guys are watching over the next week, Elias, let's start with you. - Well, there's a lawsuit that combines a few of my favorite things, Missouri's budget, Northeast Missouri, and the certificate of need loss. So they're basically the hospital in Kirk'sville just suing the state's Department of Social Services because this year's budget included money for basically a radiology center in Kirk'sville, but the Kirk'sville hospital was not the one that was going to be receiving that money, it was going to be the Hannibal hospital. And so Hannibal, notably roughly 100 miles away from Kirk'sville, is trying to build a radiology center in Kirk'sville after basically trying to deny Kirk'sville from establishing or buying new equipment for their radiology center through the certificate of need process. So there's the combination of should the state be, you know, picking sides in this battle? Can the state really be funding projects that haven't been approved by certificate of need loss? And, you know, what is Missouri doing with these certificate of need laws that no one in Northeast Missouri is getting radiology services because the hospitals are fighting over it. And so no one is getting anything. And so it's a great look into just how insane some of these certificate of need laws are. And so I think it's going to be something that's resolving very soon. And so I'm keeping a close eye on it. - Elias, are you suggesting that private medical companies are using certificate of need laws to limit their own competition? Are you suggesting that's happening? - I would never say that, but, you know, it raises some suspicions. - So go ahead and put it. David, what are you keeping an eye on? - We just submitted testimony to the St. Louis Board of Aldermen who I don't know if they're going to vote on Friday, but it's on the agenda for the imposition, some for some changes to the St. Louis City Senior Property Tax Freeze Program, which they passed last year. And then due to state law changes, they had to adjust some of the rules and presumably get rid of some of the decent things they put into an otherwise bad bill, such as limits on the size of the house. Now they're not really allowed to do that. In some but interestingly, the changes they're proposing don't really make all the changes the state says they need to make to it. So my solution, of course, is that instead of just accepting the state's dictates here that they should ditch the entire program, which they have every right to do. The city's counties are not required to have this program. In this case, the city of St. Louis acting as its own county. So I would love to see when this comes up for the city to make the right choice and move away from further dependency on the earning stacks, which is what this bill will do. And get rid of the Senior Property Tax Program in the city. Every county that has it should do that, but now the city's the one up for consideration. - Avery, what demographic would you like to anger with your, what are you watching? - On October 15th, the coal powered brush island energy facility will be closing down. We'll be retired. It provides about 1200 megawatts, which is enough to power about a million homes in Missouri. And I think sometimes that we look at these clean energy transition plans and we're like, oh, it's going to happen in 2014. It's so long away. And it's like, well, Mayor Max clothes, Rush Island's closed. More power plants are beginning to close in Missouri and Amran and all these people we have to ask, like, how are we going to replace this energy? How are we going to meet these needs? And it's just interesting to watch this transition and see how it all unfolds. - All right, as always, plenty more at showmeinstitute.org. We have a few events coming up. So showmeinstitute.org, check the events tab. David Elias Avery, thank you very much. (upbeat music) (upbeat music) [BLANK_AUDIO]