In Wichita, open records relief may be on the way

A new law in Kansas may provide opportunities for better enforcement of the Kansas Open Records Act.

This year the Kansas Legislature passed HB 2256, captioned as “An act concerning public bodies or agencies; relating to the state of Kansas and local units of government; providing certain powers to the attorney general for investigation of violations of the open records act and the open meetings act; attorney general’s open government fund …”

The good part of this law is that it provides additional enforcement options when citizens feel that government agencies are not complying with the Kansas Open Records Law. Before this law, citizens and news organizations had — effectively — two paths for seeking enforcement of KORA. One is private legal action at their own expense. The other is asking the local district attorney for an opinion.

Now the Kansas Attorney General may intervene, as noted in the summary of the new law: “The bill allows the Attorney General to determine, by a preponderance of the evidence after investigation, that a public agency has violated KORA or KOMA, and allows the Attorney General to enter into a consent order with the public agency or issue a finding of violation to the public agency prior to filing an action in district court.”

Not all aspects of this bill are positive, as it also confirms many exceptions to the records act and adds to them. It also adds to the authority of the Attorney General, as have other bills this year.

The City of Wichita has been obstinate in its insistence that the Kansas Open Records Act does not require it to fulfill certain requests for records of spending by its subordinate tax-funded agencies. The city believes that certain exceptions apply and allow the city to keep secret records of the spending of tax funds. The city may be correct in its interpretation of this law.

But the law — even if the city’s interpretation is correct — does not prohibit the city from releasing the records. The city could release the records, if it wanted to.

Fulfilling the legitimate records requests made by myself and others would go a long way towards keeping promises the city and its officials make, even recent promises.

The city’s official page for the mayor holds this: “Mayor Longwell has championed many issues related to improving the community including government accountability, accessibility and transparency …”

During the recent mayoral campaign, Longwell told the Wichita Eagle that he wants taxpayers to know where their money goes: “The city needs to continue to improve providing information online and use other sources that will enable the taxpayers to understand where their money is going.”

In a column in the Wichita Business Journal, Wichita Mayor Jeff Longwell wrote: “First off, we want City Hall to be open and transparent to everyone in the community.”

Following, from 2012, discussion of problems with the City of Wichita and open government.

Wichita, again, fails at open government

The Wichita City Council, when presented with an opportunity to increase the ability of citizens to observe the workings of the government they pay for, decided against the cause of open government, preferring to keep the spending of taxpayer money a secret.

The occasion was consideration of renewing its contract with Go Wichita Convention and Visitors Bureau. I asked, as I have in the past for this agency and also for Wichita Downtown Development Corporation and Greater Wichita Economic Development Coalition, that they consider themselves to be what they are: public agencies as defined in the Kansas Open Records Act.

In the past I’ve argued that Go Wichita is a public agency as defined in the Kansas Open Records Act. But the city disagreed. And astonishingly, the Sedgwick County District Attorney agrees with the city’s interpretation of the law.

So I asked that we put aside the law for now, and instead talk about good public policy. Let’s recognize that even if the law does not require Go Wichita, WDDC, and GWEDC to disclose records, the law does not prohibit them from fulfilling records requests.

Once we understand this, we’re left with these questions:

Why does Go Wichita, an agency funded almost totally by tax revenue, want to keep secret how it spends that money, over $2 million per year?

Why is this city council satisfied with this lack of disclosure of how taxpayer funds are spent?

Why isn’t Go Wichita’s check register readily available online, as it is for Sedgwick County?

For that matter, why isn’t Wichita’s check register online?

It would be a simple matter for the council to declare that the city and its taxpayer-funded partner agencies believe in open government. All the city has to have is the will to do this. It takes nothing more.

Only Wichita City Council Member Michael O’Donnell (district 4, south and southwest Wichita) gets it, and yesterday was his last meeting as a member of the council. No other council members would speak up in favor of citizens’ right to open government.

But it’s much worse than a simple failure to recognize the importance of open government. Now we have additional confirmation of what we already suspected: Many members of the Wichita City Council are openly hostile towards citizens’ right to know.

In his remarks, Wichita City Council Member Pete Meitzner (district 2, east Wichita) apologized to the Go Wichita President that she had become “a pawn in the policy game.” He said it was “incredibly unfair that you get drawn into something like this.”

He added that this is a matter for the Attorney General and the District Attorney, and that not being a lawyer, she shouldn’t be expected to understand these issues. He repeated the pawn theme, saying “Unfortunately there are occasions where some people want to use great people like yourself and [Wichita Downtown Development Corporation President] Jeff Fluhr as pawns in a very tumultuous environment. Please don’t be deterred by that.”

Mayor Brewer added “I would have to say Pete pretty much said it all.”

We’ve learned that city council members rely on — as Randy Brown told the council last year — facile legal reasoning to avoid oversight: “It may not be the obligation of the City of Wichita to enforce the Kansas Open Records Act legally, but certainly morally you guys have that obligation. To keep something cloudy when it should be transparent I think is foolishness on the part of any public body, and a slap in the face of the citizens of Kansas. By every definition that we’ve discovered, organizations such as Go Wichita are subject to the Kansas Open Records Act.”

But by framing open government as a legal issue — one that only lawyers can understand and decide — Wichita city government attempts to avoid criticism for their attitude towards citizens.

It’s especially absurd for this reason: Even if we accept the city’s legal position that the city and its quasi-governmental taxpayer-funded are not required to fulfill records request, there’s nothing preventing from doing that — if they wanted to.

In some ways, I understand the mayor, council members, and bureaucrats. Who wants to operate under increased oversight?

What I don’t understand is the Wichita news media’s lack of interest in this matter. Representatives of all major outlets were present at the meeting.

I also don’t understand what Council Member Lavonta Williams (district 1, northeast Wichita) suggested I do: “schmooze” with staff before asking for records. (That’s not my word, but a characterization of Williams’ suggestion made by another observer.)

I and others who have made records requests of these quasi-governmental taxpayer-funded organizations have alleged no wrongdoing by them. But at some point, citizens will be justified in wondering whether there is something that needs to be kept secret.

The actions of this city have been noticed by the Kansas Legislature. The city’s refusal to ask its tax-funded partners to recognize they are public agencies as defined in the Kansas Open Records Act is the impetus for corrective legislation that may be considered this year.

Don’t let this new law be known as the “Wichita law.” Let’s not make Wichita an example for government secrecy over citizens’ right to know.

Unfortunately, that bad example has already been set, led by the city’s mayor and city council.

National Transit Database, an interactive visualization

An interactive visualization of data over time from the National Transit Database.

The National Transit Database holds data for transit systems in the U.S. I’ve gathered some key statistics and presented them in an interactive visualization.

Some definitions used in the database:

UZA: The name of the urbanized area served primarily by a transit agency.
UPT: Unlinked passenger trips.
PMT: Passenger miles traveled.
OpExp Total: Total operating expense.

There is also a set of cities named “Wichita peers.” These are cities that Wichita has been compared to in a variety of situations. Some I selected because they were of similar size to Wichita.

The visualization holds three tabs or sheets. One is a table of figures. The other two illustrate data for a single year, or a single transit system.

Click here to access the visualization.

Kansas sales tax has disproportionate harmful effects

Kansas legislative and executive leaders must realize that a shift to consumption taxes must be accompanied by relief from its disproportionate harm to low-income households.

While Kansas legislative leaders and the governor praise the shift from income taxes to sales taxes, they ignore the severely regressive effect of sales taxes in Kansas. That is, a sales or consumption tax affects low-income families in greatest proportion relative to their incomes. The primary reason for the harshness of the Kansas sales tax is its application to food purchased in grocery stores. Few states tax food, and many of those that do apply a lower tax rate to food.

During the debate over a proposed sales tax increase in Wichita last year, I gathered data from the U.S. Census Bureau regarding expenditures on various categories for five different levels of household income. My findings were that if the city raised sales tax by one cent per dollar, the lowest income class of families would experience an increase nearly four times the magnitude as would the highest income families, measured as a percentage of after-tax income. Others produced similar results. This is the regressive nature of sales taxes.

At the national level the Fair Tax is a program whereby income taxes are replaced by consumption taxes. Proponents believe it would be a positive factor for economic growth. In recognition of the regressive nature of sales taxes, the Fair Tax plan includes a “prebate” to compensate households for the sales tax paid on necessities like food. In effect, there would be no tax on food and other necessities, up to the poverty level.

During the legislative session this year, Kansas Legislative Research told legislators that increasing the sales tax from 6.15 percent to 6.50 percent would generate $164,200,000 in additional revenue to the state. This implies that a one percent increase in the sales tax rate would generate about $469 million in revenue. (This is based on static analysis, and therefore does not account for the changes in behavior that the higher sales tax would induce, however large or small the effect.)

Effect of sales tax on consumers of different income levels. Click for larger version.
Effect of sales tax on consumers of different income levels. Click for larger version.
It’s thought that the present sales tax on food results in about $390 million in tax collections. While these two values — 469 and 390 — are not equal to each other, the $469 million figure is close to the gap between revenues and expenses. (The tax bill the legislature passed will raise about $400 million, but it is widely believed the governor will have to make an additional $50 million in cuts.)

So what would have happened if the legislature had raised the sales tax by one cent per dollar and eliminated the sales tax on food? The answer is the sales tax in Kansas would be less regressive.

I modified my worksheet to allow for adjustment of the sales tax rate for general purchases, and for food separately. I gathered the results for three scenarios and present the results in a chart. I use the sales tax rates that Sedgwick County residents would experience. This includes a one cent per dollar county-wide tax in addition to the statewide rate. (Most counties and cities add to the statewide rate. The unweighted average sales tax rate for Kansas cities is 7.835 percent, based on Kansas Department of Revenue figures.)

Kansas sales tax effects by income quintile, three scenarios. The vertical distance between the lines is a measure of the degree of regressivity. It is larger for lower income households. Click for larger version.
Kansas sales tax effects by income quintile, three scenarios. The vertical distance between the lines is a measure of the degree of regressivity. It is larger for lower income households. Click for larger version.
The blue line, labeled “Sales tax at 7.15% on all purchases” is the current tax in effect in Sedgwick County. Note that the lowest quintile of households pay nearly seven percent of their after tax income in sales taxes. For the highest quintile the value is less than two percent.

The gold line (“Sales tax at 7.50% on all purchases”) represents the rates that will be in effect after July 1. Note that the vertical distance between the blue and gold lines is larger for low-income households than for high-income households, again illustrating the regressive nature of sales taxes.

The red line (“Sales tax at 8.15%, food at 0%”) illustrates the situation had the legislature raised the sales tax by one cent per dollar and eliminated the sales tax on food. Notice that the vertical distance between the red and gold lines is greatest for lower-income households, and becomes less as income increases. This means that under this policy, the sales tax is less regressive. But the Kansas Legislature did not do this. Instead, it implemented a sales tax changes that increases its regressive nature.

Kansas has a food sales tax refund program. It has been altered several times in recent years. Even if households can — and do — claim it, it doesn’t cover their likely cost of sales tax on food. At a rate of 7.50 percent, the lowest quintile of households pay an estimated $263 in sales tax, which is far above the maximum refund.

Kansas legislative leaders have said that food sales tax could be an issue to tackle next year. One proposal this year had the tax on food falling to 4.90 percent. That is welcome, and would reduce the harsh regressive nature of Kansas taxation. But Kansas would still have a high tax rate on food. Kansas legislative and executive leaders must realize that a shift to consumption taxes must be accompanied by relief from its disproportionate harm to low-income households.

How to turn $399,000 into $65,000 in downtown Wichita

Once embraced by Wichita officials as heroes, real estate listings for two floors of a downtown Wichita office building illustrate the carnage left behind by two developers.

Broadway Plaza Building, Wichita, KSA decade ago the “Minnesota Guys” were the darlings of downtown Wichita. With a controversial form of real estate ownership — tenancy in common — they promised to revive downtown Wichita. City officials and civic leaders praised them. The city council found them so endearing that it awarded the Minnesota Guys over $10 million in tax increment financing — later increased at their request — although the developers were never able to tap into those funds. Now the two developers are facing numerous felony charges relating to securities violations.

This week the Wichita Business Journal reports that two floors of a prominent downtown office building are for sale at very low prices. The building is Broadway Plaza at 105 S. Broadway.

In 2007 the fourth floor of this building had an appraised value of $388,000, according to Sedgwick County records. The value fell to $210,900 the next year and stayed at that value for five years. Now the appraised value is $98,000.

The value of the eleventh floor followed a similar trajectory, being valued at $399,000 in 2007, falling to $160,100 for four years, and now appraised at $82,300.

Now the asking price for each floor is $65,000. At attempt at sale at auction earlier this year failed to produce any bids. The asking price represents a cost of about $13 per square foot. That’s less than the annual rent for class A office space in Wichita, downtown and suburban.

In 2011 I reported on how some downtown Wichita properties are plummeting in value:

A strategy of Real Development — the “Minnesota Guys” — in Wichita has been to develop and sell floors of downtown office buildings as condominiums. Some of these floors have been foreclosed upon and have come back on the market. Some once carried mortgages of $400,000 or more, meaning that at one point a bank thought they were worth at least that much. But now four floors in the Broadway Plaza Building, three floors of the Petroleum Building, two floors of Sutton Place, and one floor of the Orpheum Office Center are available for sale at prices not much over $100,000, ranging from $14 to $25 per square foot. Other downtown office buildings — very plain properties — are listed at much higher prices. For example, one downtown property is listed at $82 per square foot. … Some of these floors have had declining appraisals. According to the Sedgwick County Treasurer, the fifth floor of Sutton Place, which is listed for sale at $135,000, was appraised in 2008 for $530,900. In 2009 the appraised value dropped to $215,000.

Tax rates and taxes paid

Those who call for a return to 90 percent tax rates should be aware that few people actually paid tax at those rates.

Progressives are calling for higher income tax rates on the rich. The top marginal tax rate — that’s the rate that applies to high income earners on most of their income — was above 90 percent during most of the 1950s. From 2003 to 2012 it was 35 percent, and is now 39.6 percent. Some see that as a lost opportunity. If we could return to the tax rates of the 1950s, they say, we could generate much more revenue for government.

The top marginal tax rate is the rate that applies to income. It’s not the same as what is actually paid. This fact is unknown or ignored by those who clamor for higher taxes on the rich.

The mistake the progressives make is equating tax rates with the tax actually paid. For many people, there is a direct relationship. For workers who earn a paycheck, there’s not much they can do to change the timing of their income, find tax shelters, or shift income to capital gains. When income tax rates rise, they have to pay more. But people with high incomes can use these and other strategies to reduce the taxes they pay. In fact, there is an entire industry of accountants and lawyers to help people reduce their tax. Often — particularly in the past — investments and transactions were made solely for the purpose of avoiding taxes, not for any other economic benefit.

But: High tax rates make the middle class feel better about paying their own taxes. With top tax rates of 90 percent, they may believe that the rich are paying a lot of tax. The middle class may take comfort in the fact that someone else is worse off. But that is based on the misconception that high tax rates mean rich people actually pay correspondingly higher tax.

Top tax rates and taxes actually paid

Figure 1. The top marginal income tax rate has varied widely, but since World War II, tax revenue collected as a percent of GDP is remarkably constant.
Figure 1. The top marginal income tax rate has varied widely, but since World War II, tax revenue collected as a percent of GDP is remarkably constant.
A series of charts illustrate the lack of a relationship between the top marginal income tax rate and the income taxes actually paid. (Click charts for larger versions.)

Figure 1 shows that that top marginal tax rate has varied widely. But since World War II, the taxes actually collected, expressed as a percentage of gross domestic product, has been fairly constant. In 1952 the top tax rate was 92.0 percent, and income taxes paid as a percent of GDP was 13.5 percent. In 2012 the top rate was 35.0 percent, and income taxes paid as a percent of GDP was 11.2 percent.

Figure 2. The top marginal income tax rate has varied widely, but the average federal tax rates paid by top earners has varied less.
Figure 2. The top marginal income tax rate has varied widely, but the average federal tax rates paid by top earners has varied less.
Figure 2 shows how the top marginal income tax rate has varied widely, but the average federal tax rates paid by top earners has varied less. Data for this series is available only back to 1979.

Figure 3. The top marginal income tax rate has varied widely and has mostly fallen, and the share of federal taxes paid by top income earners has risen.
Figure 3. The top marginal income tax rate has varied widely and has mostly fallen, and the share of federal taxes paid by top income earners has risen.
Figure 3 shows how the top marginal income tax rate has varied widely and has mostly fallen, and the share of federal taxes paid by top income earners has risen.

Sources of data for these charts are the Internal Revenue Service, Bureau of Economic Analysis, and Congressional Budget Office.

Hauser’s Law

In 2010 W. Kurt Hauser explained in The Wall Street Journal: “Even amoebas learn by trial and error, but some economists and politicians do not. The Obama administration’s budget projections claim that raising taxes on the top 2% of taxpayers, those individuals earning more than $200,000 and couples earning $250,000 or more, will increase revenues to the U.S. Treasury. The empirical evidence suggests otherwise. None of the personal income tax or capital gains tax increases enacted in the post-World War II period has raised the projected tax revenues. Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19% regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92% (1952-53) and as low as 28% (1988-90). This observation was first reported in an op-ed I wrote for this newspaper in March 1993. A wit later dubbed this ‘Hauser’s Law.'”

Incentives matter, economists tell us. People react to changes in tax law. As tax rates rise, people seek to reduce their taxable income. A common strategy is to make investments in economically unproductive tax shelters. There is less incentive to work, to save and build up capital stocks, and invest. These are some of the reasons why tax rate hikes usually don’t generate the promised revenue.

The subtitle to Hauser’s article is “Tax revenues as a share of GDP have averaged just under 19%, whether tax rates are cut or raised. Better to cut rates and get 19% of a larger pie.” Figure 1 illustrates. The top line, the top marginal tax rate in effect for each year, varies widely. The other two lines show total taxes and federal income taxes as a percent of gross domestic product. Since World War II, these lines are fairly constant, even as the top marginal tax rate varies.

WichitaLiberty.TV: Radio show host Joseph Ashby

In this episode of WichitaLiberty.TV: Radio talk show host Joseph Ashby joins host Bob Weeks to discuss his interview with Kansas Governor Sam Brownback, the end of the legislative session, and Republican presidential candidates. Episode 87, broadcast June 21, 2015. View below, or click here to view at YouTube.

Economic freedom leads to better lives for all

Economic freedom, in countries where it is allowed to thrive, leads to better lives for people as measured in a variety of ways. This is true for everyone, especially for poor people.

This is the message presented in a short video based on the work of the Economic Freedom of the World report, which is a project of Canada’s Fraser Institute. This video is made possible by the Charles G. Koch Charitable Foundation.

One of the findings highlighted in the presentation is that while the average income in free countries is much higher than that in the least-free countries, the ratio is even higher for the poorest people in these countries. This is consistent with the findings that economic freedom is good for everyone, and even more so for those with low incomes.

Civil rights, a clean environment, long life expectancy, low levels of corruption, less infant mortality, less child labor, and lower unemployment are all associated with greater levels of economic freedom.

What are the components or properties of economic freedom? The presentation lists these:

  • Property rights are protected under an impartial rule of law.
  • People are free to trade with others, both within and outside the country.
  • There is a sound national currency, so that peoples’ money keeps its value.
  • Government stays small, relative to the size of the economy.

Over the last ten years, the United States’ ranking has fallen relative to other countries, and the presentation says our position is expected to keep falling. The question is asked: “Will our quality of life fall with it?”

Economic freedom is not necessarily the platform of any single political party. Even with a Republican president and Republican congress, the size of government rose. In 2005 the Cato Institute studied the numbers and found this: “All presidents presided over net increases in spending overall, though some were bigger spenders than others. As it turns out, George W. Bush is one of the biggest spenders of them all. In fact, he is an even bigger spender than Lyndon B. Johnson in terms of discretionary spending.” This was before the spending on the prescription drug program had started.

Critics of economic freedom

The defining of what economic freedom means is important. Sometimes you’ll see people write things like “Bernie Madoff was only exercising his personal economic freedom while he ran his investment firm.” Madoff, we now know, was a thief. He stole his clients’ money. That’s contrary to property rights, and therefore contrary to economic freedom.

Or, you’ll see people say if you don’t like government, go to Somalia. That country, one of the poorest in the world — but not the poorest — is used as an example of how bad a form of government is anarchy. The evidence is, however, that Somalia’s former government was so bad that things improved after the fall of that government. See Peter T. Leeson, Better Off Stateless: Somalia Before and After Government Collapse and History of Somalia (1991–2006).

You’ll also encounter people who argue that some countries are poor because they have no natural resources. But there are many countries with few natural resources that have economic freedom and a high standard of living. Most countries that are poor are that way because they are run by corrupt governments that have no respect for economic freedom.

Some will argue that economic freedom means the freedom to pollute the environment. But it is in wealthy countries that the environment is respected. Poor countries, where people are struggling just to find food for each day, don’t have the time or wealth to be concerned about the environment.

Corporate income tax rates in U.S. and other countries

Over the past two decades most large industrial countries have reduced their corporate income tax rates. Two countries, however, stand out from this trend: France and The United States.

In Abolish the Corporate Income Tax economist Laurence J. Kotlikoff writes “I, like many economists, suspect that our corporate income tax is economically self-defeating — hurting workers, not capitalists, and collecting precious little revenue to boot.”

Top Marginal Corporate Income Tax Rate in G7 CountriesHigh taxes in America cause companies to invest overseas in order to escape these high American taxes. For example, Apple takes steps to minimize the income tax it pays, as do most companies. In Calculating Apple’s True U.S. Tax Rate law professor Victor Fleischer explains and estimates what rate Apple pays:

The whole point of the Senate hearing was to show how Apple shifts substantial amounts of its economic profits from the United States to Ireland, where they are taxed at a rate close to zero. Those profits are then sheltered in Ireland and untaxed unless Apple decides to bring the cash back to the United States.

These overseas profits create deferred tax liabilities that will not be taxed until the cash is repatriated. But Apple is reluctant to repatriate its overseas cash; it would rather lobby for another tax holiday and bring the cash back tax-free. An added benefit of a tax holiday for Apple is that it would provide a quick jump in reported earnings when the accounting entry for the deferred tax liability is reversed. …

Thus, Apple’s “true U.S. tax rate,” according to my own calculation, was 8.2 percent.

The corporate income tax rate in the United States is 35 percent. So how does Apple pay such a lower rate to the U.S? It locates operations overseas. It earns profits overseas, and pays taxes there.

Using the visualization.
Using the visualization.
If corporate tax rates were lowered, we’d see more economic activity here rather than overseas. That would help workers in America, as they can’t easily move their capital and investments overseas to take advantage of lower tax rates. But the wealthy — like Apple’s shareholders — can do that, and they have.

Using data gathered by Tax Policy Center at Brookings Institution, I’ve prepared an interactive visualization of corporate income tax rate trends over time. Click here to open the visualization in a new window.

Wichita schools may ask for higher taxes

The Wichita Eagle reports that the Wichita public school district may ask for more property tax revenue. Following are some charts for this district.

The chart of spending is per student, inflation adjusted. On the enrollment and employment chart, note that the ratio of employees — including teachers — to students has been on a mostly downward trend for many years. Click charts for larger versions.

History of spending in the Wichita school district. Figures are per student, adjusted for inflation.
History of spending in the Wichita school district. Figures are per student, adjusted for inflation.
Enrollment and employment statistics for the Wichita school district.
Enrollment and employment statistics for the Wichita school district.

Cash incentives in Wichita still in use

Wichita is moving away from the use of cash incentives for economic development, except for this.

We’ve been told that the city is not going to use cash incentives for economic development. But an item the Wichita City Council will consider this week includes a cash grant of $30,000. It follows a similar project the council considered two weeks ago that included a grant of $10,000.

The building at 100 S. Market as it appeared in 2009. This building is slated to receive a grant of $30,000 to improve its exterior.
The building at 100 S. Market as it appeared in 2009. This building is slated to receive a grant of $30,000 to improve its exterior.
These grants are part of the city’s facade improvement program. Under it, properties in certain parts of the city can apply to use special assessment financing to pay for the improvement of their outside appearance. The city borrows the funds and advances them to the property owner. The bonds are repaid through special assessment taxes that are added to the property’s tax bill.

This process is similar to the way the city finances improvements such as street, water, and sewer infrastructure in new neighborhoods or commercial developments. Except: The infrastructure in new development becomes the property of the city. For a facade improvement project, the improvements remain private property.

Are facade improvement cash grants an exception to the new era of economic development in Wichita? Or when will we start implementing these new policies? Some might say that the grants are not for the purposes of economic development. If not, then how does the city justify these grants?

With tax exemptions, what message does Wichita send to existing landlords?

As the City of Wichita prepares to grant special tax status to another new industrial building, existing landlords must be wondering why they struggle to stay in business when city hall sets up subsidized competitors with new buildings and a large cost advantage. From June 2014.

Tomorrow the Wichita City Council considers whether to grant property and sales tax exemptions to a proposed speculative industrial building in north central Wichita. If approved, this will be the second project undertaken under new economic development policies that allow for this type of tax exemption.

Those with tax abatementsCity documents estimate that the property tax savings for the first year will be $312,055. This exemption will be granted for five years, with a second five year period possible if performance goals are met.

The city documents also state that the project will also apply for a sales tax exemption, but no estimate of these tax savings are given. It’s common for a project of this type to have about half its cost in purchases subject to sales tax. With “site work and building” at $10,350,000, sales tax in Wichita on half that amount is $370,012. Undoubtedly a rough estimate, it nonetheless gives an idea of how much sales tax the developers will avoid paying.

(If city hall has its way, the sales tax in Wichita will soon increase by one cent per dollar, meaning the developers of this project would save $421,762 in sales tax. While others will hurry to make purchases before the higher sales tax rate takes effect — if it does — these developers will be in no hurry. Their sales tax is locked in at zero percent. In fact, once having a sales tax or property tax exemption, these developers are now in a position to root for higher sales and property tax rates, as that increases costs for their competitors, thereby giving these tax-exempt developers a competitive advantage.)

City documents give the benefit-cost ratios for the city and overlapping jurisdictions:

City of Wichita General Fund 1.30 to one
Sedgwick County 1.18 to one
USD 259 1.00 to one
State of Kansas 12.11 to one

It’s not known whether these ratios include the sales tax forgiveness.

Wichita City Budget Cover, 1992While the City of Wichita insists that projects show a benefit-cost ratio of 1.3 to one or better (although there are many exceptions), it doesn’t apply that standard for overlapping jurisdictions. Here, Sedgwick County experiences a benefit-cost ratio of 1.18 to one, and the Wichita school district (USD 259) 1.00 to one. These two governmental bodies have no input on the decision the city is making on their behalf. The school district’s share of the forgiven taxes is 47.4 percent.

When the city granted a similar tax exemption to a speculative warehouse in southwest Wichita, my estimates were that its landlord has a cost advantage of about 20 percent over other property owners. Existing industrial landlords in Wichita — especially those with available space to rent and those who may lose tenants to this new building — must be wondering why they struggle to stay in business when city hall sets up subsidized competitors with new buildings and a large cost advantage.

Wichita property taxes

Property taxes in Wichita are high for industrial buildings, and even higher for commercial buildings. See Wichita property taxes compared. So it’s difficult to blame developers for seeking relief. But instead of offering tax relief to those who ask and to those city hall approves of, it would be better to have lower taxes for everyone.

Targeted economic development incentives

The targeted economic development efforts of governments like Wichita fail for several reasons. First is the knowledge problem, in that government simply does not know which companies are worthy of public investment. In the case of the Wichita, do we really know which industries should be targeted? Is 1.3 to one really the benchmark we should seek, or would we be better off by insisting on 1.4 to one? Or should we relax the requirement to 1.2 to one so that more projects might qualify?

This assumes that these benefit-costs ratios have validity. This is far from certain, as follows:

1. The benefits that government claims are not really benefits. Instead, they’re in the form of higher tax revenue. This is very different from the profits companies earn in voluntary market transactions.

2. Government claims that in order to get these “benefits,” the incentives must be paid. But often the new economic activity (expansion, etc.) would have happened anyway without the incentives.

3. Why is it that most companies are able to grow without incentives, but only a few companies require incentives? What is special about these companies?

4. If the relatively small investment the city makes in incentives is solely responsible for such wonderful outcomes in terms of jobs, why doesn’t the city do this more often? If the city has such power to create economic growth, why is anyone unemployed?

Do incentives work?

The uncontroverted peer-reviewed research tells us that targeted economic development incentives don’t work, if we consider the entire economy. See: Research on economic development incentives. Some of the conclusions of the studies listed there include:

No evidence of incentive impact on manufacturing value-added or unemployment”

Small reduction in employment by businesses which received Ohio’s tax incentives”

No evidence of large firm impacts on local economy”

No permanent employment increase across a quasi-experimental panel of all Cabela’s stores”

“Employment impact of large firms is less than gross job creation (by about 70%)”

These research programs illustrate the fallacy of the seen and the unseen. It is easy to see the jobs being created by economic development incentives. It’s undeniable that jobs are created at firms that receive incentives, at least most of the time. But these jobs are easy to see. It’s easy for news reporters to find the newly-hired and grateful workers, or to show video footage of a new manufacturing plant.

But it’s very difficult to find specific instances of the harm that government intervention produces. It is, generally, dispersed. People who lose their jobs usually don’t know the root cause of why they are now unemployed. Businesses whose sales decline often can’t figure out why.

But evidence tells us this is true: These incentives, along with other forms of government interventionism, do more harm than good.

Wichita water statistics update

Updated statistics show that the Wichita ASR water project has not been producing water at the projected rate, even after projections were halved.

An important part of Wichita’s water supply infrastructure is the Aquifer Storage and Recovery program, or ASR. This is a program whereby water is taken from the Little Arkansas River, treated, and injected in the Equus Beds aquifer. That water is then available in the future as is other Equus Beds water.

With a cost so far of $247 million, the city believes that ASR is a proven technology that will provide water and drought protection for many years. Last year the city recommended that voters approve $250 million for its expansion, to be paid for by a sales tax. Voters rejected the tax.

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative
According to city documents, the original capacity of the ASR phase II project to process water and pump it into the ground (the “recharge” process) was given as “Expected volume: 30 MGD for 120 days.” That translates to 3,600,000,000 (3.6 billion or 3,600 million) gallons per year. ASR phase II was completed in 2011.

At a city council workshop in April 2014, Director of Public Works and Utilities Alan King briefed the council on the history of ASR, mentioning the original belief that ASR would recharge 11,000 acre feet of water per year. But he gave a new estimate for production, telling the council that “What we’re finding is, we’re thinking we’re going to actually get 5,800 acre feet. Somewhere close to half of the original estimates.” The new estimate translates to 1,889,935,800 (1.9 billion) gallons per year.

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013
Based on experience, the city has produced a revised estimate of ASR production capability. What has been the actual experience of ASR? The U.S. Geological Survey has ASR figures available here. I’ve gathered the data and performed an analysis. (Click charts for larger versions.)

I’ve produced a chart of the cumulative production of the Wichita ASR project compared with the original projections and the lower revised projections. The lines for projections rise smoothly, although it is expected that actual production is not smooth. The second phase of ASR was completed sometime in 2011, but no water was produced and recharged that year. So I started this chart with January 2012.

Since 2013 was a drought year, perhaps we shouldn’t evaluate the production of ASR that year. So to present ASR in the best possible light, I’ve prepared a chart starting in July 2013. That was when it started raining heavily, and data from USGS shows that the flow in the Little Arkansas River was much greater. Still, the ASR project is not keeping up with projections, even after goals were lowered.

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II
On the chart of monthly production, the horizontal line represents the revised (lowered) annual production projection expressed as a constant amount each month. This even rate of production is not likely, as rainfall and river flow varies. In the three years that ASR phase II has been in production, that monthly target been exceeded in just one month.

In May 2015, the ASR project recharged 114 million gallons of water. Its design capacity is 30 million gallons per day, so the work done in May represents four days of design capacity. The ASR project is able to draw from the Little Arkansas River when the flow is above 30 cfs. As can be seen in the chart of the flow of the river, the flow was above this level for the entire month.

Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs.
Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs.
At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.
At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.

Examining a Kansas school district election

In its campaign to convince voters to raise taxes, the Auburn-Washburn school district deceives voters. David Dorsey explains.

Eight reasons why the Auburn-Washburn (USD 437) LOB election increase is a ruse

By David Dorsey, Kansas Policy Institute

Auburn-Washburn USD 437 is in the midst of a Local Option Budget (LOB) election, asking district voters to approve an up-to three mill increase in their taxing authority. As part of the effort to convince us to support their request, I received, along with every other USD 437 resident, a propaganda card via USPS last week. The card (of which I have provided both front and back) includes virtually every deceptive tactic used by school districts to cajole voters into supporting a tax increase, including the implication that without this extra money, the futures of little Evan and Clare are in doubt.

I must preface the following remarks by saying that I have largely supported the district’s expansion in the past, having enthusiastically voted in favor of building a new elementary school (Farley) several years ago. I also recognize that as school districts go, USD 437 is well run. Their administrative costs are below the state per-pupil average and are 17th lowest among the 25 largest districts statewide. And undoubtedly the relative quality of USD 437 plays a role in increasing property values in the district. Having said that, it doesn’t detract from the fact that this election is just plain unwarranted. Below is the flip side of the card followed by eight reasons why the election is truly needless.

  1. They already have the money.  As the table shows, USD 437 has a consistent cash reserve balance of about $9 million each July 1. The card says they are going to use cash reserves to cover part of the “Block Grant reductions,” but the $386k in taxes they tell us they need represents less than five percent of the district’s cash reserves. If they pulled the $386k from those reserves (taxes they received in prior years but didn’t spend), they would still have several million more than in 2008 and prior years, and the district didn’t say they lacked sufficient reserves during those years.
  2. They don’t spend the money they budget. In the 2013-14 school year, USD 437 spent nearly $2 million less than budgeted.  Do they really expect the voters to believe they need another $386 thousand (out of a total budget of over $65 million – roughly six-tenths of a percent) to “maintain our excellent schools?”
  3. They use misleading tactics to imply they have, and will continue to suffer budget cuts under the  block grant funding formula. They say (in bold, nonetheless) that the state reduced cash support by over $1.1 million for the current school year. Actually, the truth is under the three-year block grant funding law, USD 437 will get an increase in state aid of $1.4 million from $30.5 million to $31.9 million (4.3%).
  4. They act as if they have no authority over spending. According to the card “expenses are expected to rise next year by $1,252,000.” They speak of costs as if they are analogous to flood waters; that they are simply at their mercy and have no control over them. And this argument gets to the heart of the prevailing mentality that instead of trying to be more efficient with taxpayer money, school districts feel they are justly entitled to more taxpayer money.
  5. It’s simply a last-chance cash grab. Under block grant funding, districts must have LOB elections prior to July 1, 2015 or wait two years.
  6. It’s another false choice, right from the give-us-more-or-we’ll-have-to-cut playbook. The card itemizes six potential ways they “will consider” increasing fees/charges to students and five rather vague ways to reduce expenses. Do they really believe it will take a 1% increase in the LOB (again, that’s six-tenths of one percent of the total budget) to keep from increasing class sizes or from having to “Cut Programs (TBD)?”
  7. Kansas taxpayers are already overburdend and will experience yet another tax increase at the state level. School districts don’t operate in a vacuum. As USD 437 is asking their residents to pony up more money at a local level, the state legislature will be increasing taxes statewide by as much as $470 million. Those of us who will foot this bill can’t simply demand a pay raise to cover our increased food, insurance, transportation, or housing costs. So why should school districts be able to?
  8. It will not improve student outcomes. I saved the most important reason for last. Regardless of the dire implications, the result of this election will have exactly zero effect on the educational outcomes of little Evan and Clare when they enter kindergarten — three years from now!

Wichita has cut waste, officials say

Wichita city officials say they have worked hard to eliminate waste. Well, except for this.

Looking south on Topeka from Broadway, May 29, 2015 at 11:25 am. Four burning street lights are seen here. There were dozens more further south.
Looking south on Topeka from Broadway, May 29, 2015 at 11:25 am. Four burning street lights are seen here. There were dozens more further south.
It’s been an ongoing problem in downtown Wichita. Not only are bench lights apparently permanently switched on, we find the tall street lights also burning in the middle of the day.

This is especially problematic given these two Fridays — with street lights switched on near noon — were Riverfest Fridays. Many visitors, both natives and tourists, may have been downtown to see the waste on display. It doesn’t promote a good image for our city and its leaders.

A Downtown Wichita street light struggles to compete with the midday sun. June 5, 2015.
A Downtown Wichita street light struggles to compete with the midday sun. June 5, 2015.
The wasteful spending on illuminating street lights in the middle of the day is an indication of the attitude of the city as explained in Forget the vampires. Let’s tackle the real monsters. Through public service announcements on television and Facebook, Wichita city officials have urged citizens to do things like unplugging microwave ovens when not in use. This saves a very small — vanishingly small — amount of electricity at a huge cost of inconvenience.

So while the city advises you to unplug alarm clocks and cell phone chargers when not using them, note that the city cares nothing about running the street lights in the middle of the day.

The lights illustrated in these photographs are, undoubtedly, a small portion of the city’s spending. But you don’t have to look very hard to find waste like this, and we know that small examples of waste are multiplied many times. So when city leaders tell us that there is nowhere left to cut in the budget, that everything that can be done to trim the fat has already been done, and that the only thing we can do is raise taxes — well, think of this photograph and others illustrated in Wichita advances in the field of cost savings, Another Friday lunch, and even more lights are on, To compensate, Wichita switched on the street lights, In Wichita, the streetside seating is illuminated very well, In Wichita, the rooftops are well-lit and On a sunny day in downtown Wichita you can see the street lights.

City of Wichita official Facebook page.
City of Wichita official Facebook page.
This is not to say that waste like this does not occur in the private sector. Of course it does. But businesses and individuals have a powerful incentive to avoid waste that isn’t present in government: Businesses and people are spending their own money. And even if they waste money, it’s their money, not ours.

Taxation in the states

Examining tax collections by the states shows that Kansas collects more tax than many of our neighbors, and should put to rest some common myths.

Tax Collections by the States, Kansas and selected States, total and per capita.
Tax Collections by the States, Kansas and selected States, total and per capita.
Of a selection of nearby states, Kansas collects more taxes than most, on a per-person basis. The nearby table shows total tax collections, and tax collections per person. The chart shows collections grouped by major category, and one special category, which is severance taxes.

Some of the data regarding specific taxes is revealing and should shape the debate over taxes in Kansas. Consider severance taxes, which are taxes levied on extracting materials like oil, gas, and coal. The common narrative in Kansas is that states like Texas are sitting atop a sea of oil, with the severance taxes funding a major portion of state government. The data shows that Texas collected $223 per person in severance taxes in 2014. For Kansas the figure is $43. This difference — $180 — doesn’t account for the difference in total tax collections between the states. Texas collects $2,050 in total taxes per person, while Kansas collects $2,526, a difference of $476.

Tax Collections by the States, Kansas and selected States, 2014. Click for larger version.
Tax Collections by the States, Kansas and selected States, 2014. Click for larger version.
We also commonly hear that Kansas doesn’t have the tourism of states like Florida, and therefore doesn’t have the flood of tourism spending and accompanying sales tax. Again, looking at the data, se see that Florida collected $1,460 in Sales and Gross Receipt Taxes per person for 2014. Kansas collected $1,340. This is a difference of $120, while the difference between total tax collections for Florida ($1,779) and Kansas ($2,526) is $747.

You may use this interactive visualization to customize the table to fit your own needs. Click here to open the visualization. Data is from the U.S. Census Bureau, Survey of State Government Tax Collections and Bureau of Economic Analysis, along with author’s calculations. Visualization developed using Tableau Public. Data is expressed on a per person basis, not adjusted for inflation.

Examining Kansas City school district claims

A critical look at the statements coming from one of the largest school districts in Kansas leads to wonder if the Kansas City school superintendent is uninformed, misinformed, or simply lying. Dave Trabert of Kansas Policy Institute reports.

USD 500 Kansas City misleads on school funding and budget claims

By Dave Trabert, Kansas Policy Institute

At a time when many school districts are issuing misleading statements about school funding to parents, teachers and legislators, recent claims by USD 500 Kansas City set a new transparency low. A story in the Kansas City Star outlined the district’s plans to reduce spending, which Superintendent Cynthia Lane blamed on “…years of low state funding, rising costs and the loss this year of $2 million in state money because of a new block grant funding measure….”

Citizens are also dealing with rising costs, and school districts would like to inflict even higher costs on them — more taxes — to fund districts’ financial desires. “Years of low state funding” is a matter of opinion but data from the Kansas Department of Education and the Kansas Division of the Budget show that state funding and total funding of schools are setting new records this year.

Part of the 2015 increase in state aid ($522 million according to block grant files prepared by KSDE) is money that had been inappropriately recorded as Local aid in prior years (20 mills mandated by the Legislature for all districts) but state aid is still at an all-time high with that adjustment. Total taxpayer support of public education will also set a new record this year.

Contrary to Supt. Lane’s implication, however, USD 500 is not getting $2 million less in state aid with the block grant, it is gaining $12.8 million in state aid this year without counting any increases for KPERS, Bond & Interest or Special Education. What she is really saying — but doesn’t want you to know — is that she wanted an even larger increase and says the district is being “cut” because it didn’t get as much of an increase as it desired.

That is just the beginning of the district’s conscious efforts to mislead parents, teachers and legislators. “We have cut more than $50 million,” Lane said. “There is no longer any fat left. … I frankly think there is very little left to cut that doesn’t dramatically impact what we do for our kids.”

Budget cut claims don’t hold up

The district has definitely not reduced spending by more than $50 million as implied by Supt. Lane. They may have budgeted for and spent less than they would like (which is what Supt. Lane is really saying) but they most certainly have not cut spending recently (as she wants you to think). This comparison of the district’s budget and actual spending over the last ten years shows that spending less than the amount budgeted is rather common but doesn’t necessarily mean that spending was actually reduced; most often, it means that their plan to spend more was reduced. Districts openly admit that they budget more than they plan to spend to avoid having to re-publish a budget … but conveniently forget to mention that fact when claiming that their budget was cut.

Operating budgets were at record-highs in Kansas City this year and the two previous years; actual spending on current operating costs set records the last two years and likely will do so again this year.

Operating spending increases between 2005 and 2014 in the Kansas City district have been very large across all cost centers; capital spending also jumped but debt service has been stable. Administration spending “only” increased by 23 percent but it was well above average in 2005 and was the second highest spender among large districts last year (profligate USD 501 Topeka wins that prize at $1,568 per-pupil). Shawnee Mission, by comparison, spends $942 per-pupil on administration; spending at that level would save $9.4 million in the Kansas City district, which could be spent on Instruction or returned to taxpayers.

Listening to administrators and media reports, one would think the district is suffering from extreme austerity but district financial reports show otherwise. And these spending comparisons only reflect what has actually been spent. USD 500 also boosted operating cash reserves by $26.7 million over the period, going from $25.1 million in 2005 to $51.8 million in 2014. Operating reserves increase when more money is collected than is spent.

“Very little left to cut” is a farce

Supt. Lane may claim that there is very little left to cut but a July 2013 Legislative Post Audit report on the district says differently; page after page lists recommendations to bring district spending in line with market conditions and reduce costs. One recommendation was “Reduce Custodial and Maintenance Positions and Salaries” since some salaries were found to be more than 20% higher than paid in the private sector and the district had more staff than comparable districts. The district response is listed in the audit: “The community and staff will resist any reduction in staff or salaries. The custodians might unionize if staff positions or salaries are reduced.”

Here is a sampling of maintenance, custodian and bus driver pay taken from an Open Records request of the 2014 school year payroll. This list reflects the highest paid in these positions and reflects total pay (wages, overtime, bonuses, etc.) but do not include any benefits. The position titles are shown as provided by the district.

The simple solution would be to outsource this type of work to private sector companies as is done by some districts. Private sector companies are fully capable of providing these services at the same or better quality and at a better price.

The LPA audit also recommended reducing administrative salaries to market wages through attrition; the district responded by saying “staff would resist any reduction in salaries.” This table shows pay increases given to the highest paid district employees, all of whom are administrators who mostly received double-digit pay increases over the last two years.

Supt. Lane told the Star “I absolutely believe if you have to cut people, you have got to start at the top.” She was referring to the dismissal of Edwin Hudson, chief of Human Relations, and “… 30 assessment managers hired three years ago to keep track of state assessment scores so teachers and principals could concentrate more on school instruction.” Loading up on managers to track state assessment scores that are released once per year (except last year when no scores were released because of technical issues) is symptomatic of district hiring practices.

Over the last ten years, USD 500 increased its management staff by 18.8 percent; management is a KPI-defined label that includes superintendents, assistant superintendents, principals, assistant principals, directors, managers, supervisors and instruction specialists. Maintenance, transportation and food workers jumped by 45.6 percent, teacher aides more than doubled and a variety of employment categories we lumped into All Other shot up by 42.7 percent. Enrollment, meanwhile, increased by just 7.2 percent.

Non-teaching staff jumped by a third and total employment is 24.4 percent higher. The district has one full time equivalent employee for every 5.9 students.

USD 500 has one manager for every 125 students, which is very inefficient compared to other districts. Shawnee Mission, for example, had one manager for every 210 students last year and has since reduced its administrative footprint because Superintendent Jim Hinson felt it was too large. If Kansas City had the same pupil/manager load as Shawnee Mission (before it was reduced), they would have 66 fewer managers … and those costs could be made available for instruction instead of suing citizens for more money.

Here’s another example of misleading information from USD 500. The employee count in the above table comes from official KSDE personnel reports with data provided by each school district. But USD 500 may have many more employees. The LPA efficiency audit shows that the district was significantly under-reporting employment to KSDE. Lest anyone suggest that the KSDE report doesn’t contain categories that capture all of the district’s staff, it should be noted that the Certified Personnel and Non-Certified Personnel reports each have an “Other” category for such purpose. Consciously and consistently underreporting employment by more than 200 employees fits the district’s pattern of providing misleading information.

Misrepresentation by design

The district’s financial position is much different than represented by management, but it should be noted that staff, students and parents are likely experiencing legitimate resource issues. Frankly, that’s part of a pattern across many school districts, which is intended to gain sympathy and support for higher spending at the expense of others. USD 259 in Wichita, for example, is telling staff and media that they are suffering a $4.8 million “cut” with the block grants this year when in reality, they plan to spend $87 million more this year.

The Kansas City district even takes misrepresentation into the courtroom. I was in the courtroom when Supt. Lane testified that lack of funding was the reason that many of the district’s students weren’t adequately prepared for college and career, but she is on record placing the blame elsewhere, months before she made her court appearance.

When the U.S. Department of Education denied a portion of the district’s proposal to raise standards in a requested waiver from the Kansas Approved Accountability Plan from USDOE, Supt. Lane responded by saying, “The Kansas assessment is not rigorous enough to guarantee that our students are on-track with where they need to be. We have asked to raise standards for our students by administering the MAP, which is a more rigorous assessment, and USDOE is telling us ‘No!'”

The district newsletter in which this quote appears makes no mention of funding; the blame for academic issues is placed solely on sub-standard assessment issues. Supt. Lane may say that funding is also an issue but the point here is that the story routinely is crafted to maximize sympathy for the desired outcome.

That’s a disservice to staff, parents, legislators and most important, to students.

Jay Price on Generations: Shifting Thought Over the Decades

Professor Jay Price of Wichita State University delivered a lecture on the changing nature of generations over the years. You’ve heard about the Silent Generation, Baby Boomers, Generation X, and others. Here, Professor Price defines these terms and tells us about the characteristics of each generation. This is from the Wichita Pachyderm Club, June 5, 2015. Audio is below. The accompanying visual aids are available either as a Powerpoint presentation or pdf file.

WichitaLiberty.TV: Arts funding, property taxes, uninformed officials, tax increment financing, and social security

In this episode of WichitaLiberty.TV: Is Wichita risking a Soviet-style future? A look at Wichita property taxes, uninformed and misinformed elected officials, tax increment financing, and social security. View below, or click here to view on YouTube. Episode 86, broadcast June 7, 2015.

Topeka school figures

The Topeka school district is asking voters for more tax revenue. Here are some figures for this school district. Click charts for larger versions. Data from Kansas State Department of Education.

Spending per pupil in Topeka school district.
Spending per pupil in Topeka school district.
Enrollment and employment in Topeka school district.
Enrollment and employment in Topeka school district.

Spending in the states, a visualization

To see how your state compares with others in spending, use the interactive visualization below. The figures presented are per-person, and not adjusted for inflation.

To use the visualization, click the check boxes to add or remove states and years from the chart. Use the visualization below, or click here to open it in a new window. Data is from National Association of State Budget Officers and U.S. Bureau of Economic Analysis (BEA); visualization created by myself using Tableau Public.

Kansas City school district figures

The Kansas City, Kansas school district has implemented layoffs and salary cuts. Following are some charts of statistics for this district. Data is from Kansas State Department of Education. Click on charts for larger versions.

Spending in Kansas City school district.
Spending in Kansas City school district.
Enrollment and employment in Kansas City school district.
Enrollment and employment in Kansas City school district.
Fund balances for Kansas City school district.
Fund balances for Kansas City school district.

In Wichita, campaigning for a tax, then asking for exemption from paying

Having contributed $5,000 to persuade Wichita voters to raise the sales tax, a company now seeks exemption from paying any sales tax.

This week the Wichita City Council will consider an economic development incentive for Foley Industries, Inc. The company is asking to be relieved from paying nearly all property taxes on a proposed expansion, and also asks to avoid sales taxes on purchases related to the expansion.

The action the council will consider is a “letter of intent,” not the actual granting of the incentive. In practice, these letters are as good as having the actual ordinance in hand. Specifically, Foley asks for industrial revenue bonds, which carry a property tax exemption. (The city is not lending any money and has no responsibility to repay the bonds. In fact, Foley itself will purchase the bonds, according to city documents. The bonds are simply a mechanism for receiving tax exemptions.)

In this case, the city has decided Foley qualifies for a 95.5 percent five-year tax exemption on the IRB-financed real property improvements. After five years, the council may approve an additional five years if Foley meets employment targets. Details of the tax forgiveness are at the end of this article.

Foley is also applying for an exemption from paying sales tax on purchases related to the expansion. No dollar amount is given for the value of this. It could easily be worth over a million dollars.

Contribution by Foley Industries to Yes Wichita, the group that campaigned for a Wichita sales tax.
Contribution by Foley Industries to Yes Wichita, the group that campaigned for a Wichita sales tax.
Of note, Foley contributed $5,000 to the “Yes Wichita” group that campaigned in favor of a one cent per dollar sales tax last year. Now, it asks to avoid paying all sales tax.

Also, city policy is that incentives must have a benefit-cost ratio of 1.3 to one or greater, although there are many loopholes the city can use to grant incentives if this benchmark is not met. For the city, this benchmark is met, just barely. For Sedgwick County the ratio is 1.27 to one, and for the Wichita school district, the ratio is 1.05 to one, barely in positive territory. These two local jurisdictions might ask the city why it forces an incentive on them that violates the city’s own policy. The ratio for the school district is especially relevant, as 46 percent of the taxes that will be abated would go to it.

City documents indicate the expansion will allow Foley to add 12 employees over a five year period and retain 153 positions. This is an example of the city using incentives primarily to retain jobs. (Foley has dangled the threat of building its expanded facility in another city.)

It’s likely that Foley has applied to the Kansas Department of Commerce for benefits from programs such as PEAK (or Promoting Employment Across Kansas), HPIP, and others. Inquiry to the department produced this response: “As the Department does not have signed contracts with Foley Industries, we cannot share information about potential incentives.”

This request for property and sales tax relief reveals a problem: If companies can’t afford to make investments in Wichita unless they receive exemptions from paying taxes, we must conclude that taxes are too high. (An ongoing study reveals that generally, property taxes on commercial and industrial property in Wichita are high. In particular, taxes on commercial property in Wichita are among the highest in the nation. See here.) It’s either that, or this company simply doesn’t want to participate in paying for the cost of government like most other companies and people do.

Civic leaders say that our economic development policies must be reformed. In particular, our leaders say that cash incentives are on the way out. This deal does not include grants of cash, that is true. But forgiveness of taxes is more valuable to business firms than receiving cash. That’s because cash incentives are usually taxable as income, while forgiveness of taxes does not create taxable income. Each dollar of tax that is forgiven adds one dollar to after-tax profits. 1 2

Tax exemptions like this also disrupt the theory of taxation. We’ve often told by civic leaders that we pay taxes in order to receive all the wonderful service the city provides. It’s like paying club dues, they say, or the price of a civilized society. But when someone doesn’t pay, but continues to receive services, is it because they don’t like the services the city provides? Or doesn’t the company like being in the club?

Details

City documents say that the estimated tax value of exempted property for the first full year of the fully completed project would be $448,334, distributed as follows:

City of Wichita: $124,731
Sedgwick County: $112,606
State of Kansas: $5,730
USD 259: $205,267

The benefit-cost ratios are as follows:

City of Wichita General Fund 1.30 to one
City of Wichita Debt Service Fund 1.74 to one
Sedgwick County 1.27 to one
USD 259 1.05 to one
State of Kansas 9.07 to one

  1. Site Selection magazine, September 2009. 2015. ‘INCENTIVES — Site Selection Magazine, September 2009′. Siteselection.Com. Accessed May 1 2015. http://www.siteselection.com/issues/2009/sep/Incentives/
  2. The Continuing Saga of Non-Taxable Grants, Incentives, and Inducements. Americanbar.org,. 2015. http://www.americanbar.org/content/dam/aba/events/taxation/taxiq-fall11-breaks-saga-slides.authcheckdam.pdf.

Kansas public school establishment ought to thank Sam Brownback

Kansas public schools ought to thank the governor and legislature for failing to give parents the power of school choice.

The public school establishment in Kansas is angry with the governor and legislature over school finance. Really, the public schools ought to be grateful for Governor Sam Brownback. In many states with conservative Republican governors, school choice programs have grown. In the summer of 2011 the Wall Street Journal reported on what it called “The Year of School Choice.”

Some governors have been warriors for school choice. Not Kansas Governor Sam Brownback, however. He signed a small school choice bill when it landed on his desk. But he has not vocally advocated for expanded school choice. There are several Kansas legislators who are in favor of school choice, but not enough, certainly not in leadership.

As public schools and their unions despise any form of school choice and the accountability it provides, they should be grateful for our governor and legislature. Kansas public schools operate without much competition, and that’s the way public schools and their unions like it.

School choice in Kansas

How little school choice exists in Kansas? One implementation of school choice that is popular in some states is the charter school. According to National Alliance for Public Charter Schools, Kansas has a poor charter school law. That is, Kansas law makes it difficult to start and maintain a charter school. Of the 43 states that have charter schools, Kansas ranked 42. Kansas public schools are effectively shielded from the diversity and competition that charter schools provide.

Others have also found the Kansas charter school law to be very restrictive. The Center for Education Reform found the Kansas charter school law to be the worst in the nation.

Governor Brownback signed a tax credit scholarship program. The Kansas program is small and restrictive, earning the grade of “D” from Center for Education Reform. Kansas has no school voucher program.

Altogether, Kansas parents have little power to choose schools for their children. The primary power Kansas parents have is to choose where they live. If a family can afford to, it can live in a district where the public schools are not as bad as they are in other districts. Given that these desirable districts almost always cover higher-income areas, poor parents don’t have this possibility.

School choice won’t fix everything, but it goes a long way. Here’s a portion of the 2011 Wall Street Journal article “The Year of School Choice.”

Choice by itself won’t lift U.S. K-12 education to where it needs to be. Eliminating teacher tenure and measuring teachers against student performance are also critical. Standards must be higher than they are.

But choice is essential to driving reform because it erodes the union-dominated monopoly that assigns children to schools based on where they live. Unions defend the monopoly to protect jobs for their members, but education should above all serve students and the larger goal of a society in which everyone has an opportunity to prosper.

This year’s choice gains are a major step forward, and they are due in large part to Republican gains in last fall’s elections combined with growing recognition by many Democrats that the unions are a reactionary force that is denying opportunity to millions. The ultimate goal should be to let the money follow the children to whatever school their parents want them to attend.

Kansas needs low taxes

Two research papers illustrate the need to maintain low taxes in Kansas, finding that high taxes are associated with reduced income and low economic growth.

As Kansas legislators seek to balance the state’s budget, most Kansas opinionmakers are urging higher taxes instead of spending restraint. Many claim that government taxation and spending are the driving forces behind growing the Kansas economy. An example is the motto of the Kansas Economic Progress Council, which is “… because a tax cut never filled a pothole, put out a fire or taught a child to read.”

Two research papers illustrate the need to maintain low taxes in Kansas, finding that high taxes are associated with reduced income and low economic growth. Research such as this rebuts the presumption of government spending advocates that low taxes have killed jobs in Kansas.

One paper is The Robust Relationship between Taxes and U.S. State Income Growth by W. Robert Reed, published in the National Tax Journal in March 2008. The abstract to this paper states:

I estimate the relationship between taxes and income growth using data from 1970 – 1999 and the forty-eight continental U.S. states. I find that taxes used to fund general expenditures are associated with significant, negative effects on income growth. This finding is generally robust across alternative variable specifications, alternative estimation procedures, alternative ways of dividing the data into “five-year” periods, and across different time periods and Bureau of Economic Analysis (BEA) regions, though state-specific estimates vary widely. I also provide an explanation for why previous research has had difficulty identifying this “robust” relationship. (emphasis added)

In his introduction, Reed writes that previous studies had found: “To the extent a consensus exists, it is that taxes used to fund transfer payments have small, negative effects on economic activity.” His paper found a stronger relationship.

Reed issues a caution on the use of his conclusions: “It needs to be emphasized that my claim for robustness should be understood as applying only within the context of U.S. state income growth. It should not be interpreted as being more widely applicable to other contexts, such as employment growth, manufacturing activity, plant locations, etc., or to the relationship between taxes and income growth outside the U.S.”

This illustrates one of the ways we focus on the wrong measure of growth. Politicians focus on jobs. But to business, jobs are a cost. One of the better goals to seek, as Art Hall specifies in his paper Embracing Dynamism: The Next Phase in Kansas Economic Development Policy, is income growth, along with population density and population migration, productivity growth, capital investment, gross business starts and expansions, and customer service and throughput measures of state economic development agencies. Hall writes: “If Kansas performs well in the measures provided, it will also perform well in terms of job count.”

Another example of research finding a negative impact of taxation is State Taxes and Economic Growth by Barry W. Poulson and Jules Gordon Kaplan, published in the Winter 2008 Cato Journal. In the introduction to the paper, the authors write: “The analysis reveals a significant negative impact of higher marginal tax rates on economic growth. The analysis underscores the importance of controlling for regressivity, convergence, and regional influences in isolating the effect of taxes on economic growth in the states.” (emphasis added)

In its conclusion, the paper states:

The analysis reveals that higher marginal tax rates had a negative impact on economic growth in the states. The analysis also shows that greater regressivity had a positive impact on economic growth. States that held the rate of growth in revenue below the rate of growth in income achieved higher rates of economic growth.

The analysis underscores the negative impact of income taxes on economic growth in the states. Most states introduced an income tax and came to rely on the income tax as the primary source of revenue. Jurisdictions that imposed an income tax to generate a given level of revenue experienced lower rates of economic growth relative to jurisdictions that relied on alternative taxes to generate the same revenue. (emphasis added)

Are you in the top 1%?

Most Americans would be surprised to learn that they are, in fact, in the top one percent of income — when the entire world is considered. It is economic freedom in America that has been responsible for this high standard of living. But America’s ranking among the countries in economic freedom has declined, and may fall further.

View the 60-second video at Economic Freedom in 60 Seconds, or click below.

Kansas cuts taxes and expands the economy

Ernie Goss is Jack A. MacAllister Chair in Regional Economics and Professor of Economics at Creighton University and an expert on the Midwest economy. Following is his assessment of the Kansas economy in recent years. The full report is here.

Kansas Cuts Taxes and Expands the Economy: Earnings Growth Four Times That of U.S. and Neighbors Since Passage

From the Mainstreet Economy Report, Creighton University, October 2014.

In 2012, Kansas Governor Brownback pushed the Legislature to whack individual tax rates by 25%, to repeal the tax on sole proprietorships, and to increase the standard deduction. In 2013, the Legislature cut taxes again. Since passage in 2012, how has the Kansas economy responded to these dramatic tax cuts? Post Tax-Cut Earnings: Since QIV, 2012, Kansas grew its personal income by 2.92% which was higher than the U.S. gain of 2.85%, and was greater than the growth experienced by each state bordering Kansas, except Colorado. Additionally in terms of average weekly earnings, Kansas experienced an increase of 4.82% which was almost four times that of the U.S., more than four times that of Missouri, approximately seven times that of Nebraska, and nearly four times that of Oklahoma.

Of Kansas’ neighbors, only Colorado with 4.82% average weekly wage growth outperformed Kansas.

Post Tax-Cut Job Performance: Between the last quarter of 2012 and August 2014, the U.S. and each of Kansas’ neighbors, except for Nebraska, experienced higher job growth than Kansas. However, much of Kansas’ lower job growth can be explained by the fact that during this period, Kansas reduced state and local government jobs by 1.4% while all of Kansas’ neighbors and the combined 50 U.S. states increased state and local government employment. In terms of unemployment, Kansas August 2014 joblessness rate was 4.9% compared to rates of 6.1% for the U.S., 5.1% for Colorado, 6.3% for Missouri, 3.6% for Nebraska, and 4.7% for Oklahoma.

Kansas job and income data since the tax cut show that, except for Colorado, the state economy has outperformed, by a wide margin, that of each of its neighbors and the U.S. To remain competitive, expect Kansas’ neighbors to reduce state and local taxes in the years ahead. Ernie Goss.

Kansas legislators: Don’t raise taxes

Letter from ALEC to Kansas lawmakers. Click to read.
Letter from ALEC to Kansas lawmakers. Click to read.
To balance the budget, there are many things Kansas lawmakers could do other than raising taxes.

In congratulating Kansas lawmakers for passing a pro-growth tax cut, American Legislative Exchange Council (ALEC) reminds everyone that there is more than one way to balance a budget. Spending needs to be addressed:

However, as budget realities need to be addressed, the spending side of the fiscal coin is a good place to start. ALEC has conducted non-partisan research on how states can make government more efficient. In the State Budget Reform Toolkit, case studies and policy options are examined that allow the state to maintain core services of government at a lower cost. One example is to eliminate positions in state agencies that have been vacant for more than six months, or to adopt a sunset review process for state agencies, boards and commissions. These examples and many more can be found on our website for your review.

Some of the ideas in the State Budget Reform Toolkit have been considered and rejected by the Kansas Legislature. Others have not been considered, as far as I know. Most take more than one year to implement. These ideas remind us that when the Kansas Legislature and Governor Brownback cut taxes for everyone, they did not start planning for lower spending.

In Kansas and Wichita, there’s a reason for slow growth

If we in Kansas and Wichita wonder why our economic growth is slow and our economic development programs don’t seem to be producing results, there is data to tell us why: Our tax rates are too high.

In 2012 the Tax Foundation released a report that examines the tax costs on business in the states and in selected cities in each state. Location Matters Tax Foundation coverThe news for Kansas is worse than merely bad, as our state couldn’t have performed much worse: Kansas ranks 47th among the states for tax costs for mature business firms, and 48th for new firms. (Starting in 2013, Kansas income tax rates are lower, and we would expect that Kansas would rank somewhat better if the study was updated.)

The report is Location Matters: A Comparative Analysis of State Tax Costs on Business.

The study is unusual in that it looks at the impact of state tax burden on mature and new firms. This, according to report authors, “allows us to understand the effects of state tax incentives compared to a state’s core tax system.” In further explanation, the authors write: “The second measure is for the tax burden faced by newly established operations, those that have been in operation less than three years. This represents a state’s competitiveness after we have taken into account the various tax incentive programs it makes available to new investments.”

The report also looks at the tax costs for specific types of business firms. For Kansas, some individual results are better than overall, but still not good. For a mature corporate headquarters, Kansas ranks 30th. For locating a new corporate headquarters — one that would benefit from tax incentive programs — Kansas ranked 42nd. For a mature research and development facility, 46th; while new is ranked 49th. For a mature retail store the rank is 38th, while new is ranked 45th.

There are more categories. Kansas ranks well in none.

The report also looked at two cities in each state, a major city and a mid-size city. For Kansas, the two cities are Wichita and Topeka.

Among the 50 cities chosen, Wichita ranks 30th for a mature corporate headquarters, but 42nd for a new corporate headquarters.

For a mature research and development facility, Wichita ranks 46th, and 49th for a new facility.

For a mature and new retail store, Wichita ranks 38th and 45th, respectively.

For a mature and new call center, Wichita ranks 43rd and 47th, respectively.

Kansas tax cost compared to neighbors
Kansas tax cost compared to neighbors
In its summary for Kansas, the authors note the fecklessness of Kansas economic development incentives: “Kansas offers among the most generous property tax abatements and investment tax credits across most firm types, yet these incentives seem to have little impact on the state’s rankings for new operations.”

It’s also useful to compare Kansas to our neighbors. The comparison is not favorable for Kansas.

The record in Wichita

Earlier this year Greater Wichita Economic Development Coalition issued its annual report on its economic development activities for 2014. GWEDC says its efforts created or retained 424 jobs.

gwedc-office-operationsThis report shows us that power of government to influence economic development is weak. GWEDC’s information said these jobs were for the geographical area of Sedgwick County. According to the Bureau of Labor Statistics, the labor force in Sedgwick County in 2014 was 247,614 persons. So the jobs created by GWEDC’s actions amounted to 0.14 percent of the labor force. This is a vanishingly small fraction. It is statistical noise. Other economic events overwhelm these efforts.

GWEDC complains of not being able to compete because Wichita has few incentives. This is not true, as Wichita has many incentives to offer. Nonetheless, GWEDC says it could have created or retained another 3,010 jobs if adequate incentives had been available. Adding those jobs to the jobs it claims credit for amounts to 1.39 percent of the labor force, which is still a small number that is overwhelmed by other events.

Our tax costs are high

The report by the Tax Foundation helps us understand one reason why the economic development efforts of GWEDC, Sedgwick County, and Wichita are not working well: Our tax costs are too high.

While economic development incentives can help reduce the cost of taxes for selected firms, incentives don’t help the many firms that don’t receive them. In fact, the cost of these incentives is harmful to other firms. The Tax Foundation report points to this harm: “While many state officials view tax incentives as a necessary tool in their state’s ability to be competitive, others are beginning to question the cost-benefit of incentives and whether they are fair to mature firms that are paying full freight. Indeed, there is growing animosity among many business owners and executives to the generous tax incentives enjoyed by some of their direct competitors.”

It seems in Wichita that the thinking of our leaders has not reached the level of maturity required to understand that targeted incentives have great cost and damage the business climate. Instead of creating an environment in which all firms have a chance to thrive, government believes it can identify firms that are subsidy-worthy — at the exclusion of others.

But there is one incentive that can be offered to all firms: Reduce tax costs for everyone. The policy of reducing tax costs or granting incentives to the selected few is not working. This “active investor” approach to economic development is what has led companies in Wichita and Kansas to escape hundreds of millions in taxes — taxes that others have to pay. That has a harmful effect on other business, both existing and those that wish to form.

Professor Art Hall of the Center for Applied Economics at the Kansas University School of Business is Embracing Dynamism: The Next Phase in Kansas Economic Development Policycritical of this approach to economic development. In his paper Embracing Dynamism: The Next Phase in Kansas Economic Development Policy, Hall quotes Alan Peters and Peter Fisher: “The most fundamental problem is that many public officials appear to believe that they can influence the course of their state and local economies through incentives and subsidies to a degree far beyond anything supported by even the most optimistic evidence. We need to begin by lowering expectations about their ability to micro-manage economic growth and making the case for a more sensible view of the role of government — providing foundations for growth through sound fiscal practices, quality public infrastructure, and good education systems — and then letting the economy take care of itself.”

In the same paper, Hall writes this regarding “benchmarking” — the bidding wars for large employers that Wichita and Kansas has been pursuing and Wichita’s leaders want to ramp up: “Kansas can break out of the benchmarking race by developing a strategy built on embracing dynamism. Such a strategy, far from losing opportunity, can distinguish itself by building unique capabilities that create a different mix of value that can enhance the probability of long-term economic success through enhanced opportunity. Embracing dynamism can change how Kansas plays the game.”

In making his argument, Hall cites research on the futility of chasing large employers as an economic development strategy: “Large-employer businesses have no measurable net economic effect on local economies when properly measured. To quote from the most comprehensive study: ‘The primary finding is that the location of a large firm has no measurable net economic effect on local economies when the entire dynamic of location effects is taken into account. Thus, the siting of large firms that are the target of aggressive recruitment efforts fails to create positive private sector gains and likely does not generate significant public revenue gains either.'”

There is also substantial research that is it young firms — distinguished from small business in general — that are the engine of economic growth for the future. We can’t detect which of the young firms will blossom into major success — or even small-scale successes. The only way to nurture them is through economic policies that all companies can benefit from. Reducing tax rates is an example of such a policy. Abating taxes for specific companies through programs like IRBs is an example of precisely the wrong policy.

We need to move away from economic development based on this active investor approach. We need to advocate for policies — at Wichita City Hall, at the Sedgwick County Commission, and at the Kansas Statehouse — that lead to sustainable economic development. We need political leaders who have the wisdom to realize this, and the courage to act appropriately. Which is to say, to not act in most circumstances, except to reduce the cost of government for everyone.

WichitaLiberty.TV: Kansas legislative failure, newspaper editorials, and classical liberalism

In this episode of WichitaLiberty.TV: The failure of Kansas lawmakers to reform state spending means you will pay. A newspaper editorial excuses bad behavior by government. Then: What do classical liberals and libertarians believe? View below, or click here to view at YouTube. Episode 85, broadcast May 24, 2015.

Kansas Center for Economic Growth: Show us the math

Why won’t Kansas Center for Economic Growth show its calculations and explain its data sources? Dave Trabert of Kansas Policy Institute explains.

KCEG misleads on job growth — again

By Dave Trabert

The latest misleading claim on job growth from the Kansas Center for Economic Growth is loaded with misleading and irrelevant information; they don’t fully disclose their methodology and at this writing they have ignored our request to explain it. Sadly, this is not the first, second or even third time that KCEG has published misleading information and declined to produce documentation.

Here are the questions we posed to Annie McKay, executive director at KCEG:

We received a ‘read’ receipt but no reply, so we attempted to replicate their methodology to arrive at what they call “private sector job growth since tax changes” which they measure between January 2013 and March 2015. Based on tests of Kansas and national data, it appears that KCEG is using seasonally adjusted jobs but we couldn’t find a 6-state region including all of Kansas’ neighbors to match their number.

KCEG has the national average increasing 5.2% and Kansas 3.8%, so we assume they are comparing January 2013 to March 2015. This is not a true measure of post-tax reform activity, however; the base month of a point-to-point comparison should be the last month of the old tax system, which was December 2012. Comparing Kansas to the 5-state region does show that Kansas is slightly behind (4.0% vs. 4.2%) but by not showing the performance of individual states, KCEG hides the fact that Kansas beat three of its four neighbors.   

While Kansas is outperforming three of its neighboring states on this measurement, point-to-point comparisons are problematic; one or both points can be unusual spikes or declines, making the data less reliable.  The Bureau of Labor Statistics also publishes average annual employment, which minimizes the impact of any single data point.

The more stable comparisons of average annual employment show job growth trends for Kansas to be much more competitive since tax reform. Private sector jobs grew just 2.2% between 1998 and 2012, which ranked Kansas at #38, but Kansas moved up to #27 in 2013 and last year moved up again to #21. That’s still not good enough and it will take perhaps another decade to fully understand the impact of tax reform, but the early trend is very encouraging. Kansas still trails Colorado, but has improved its competitive position. The table below shows Kansas trailed Colorado by a factor of five (2.2% vs. 10.6%) between 1998 and 2012 but has since closed the gap to a factor of two.

KCEG noted that Utah and Idaho have higher taxes on “the wealthy” and better job growth than Kansas, but of course they don’t tell the whole story. Kansas does have a lower marginal rate than both states but that is a recent development; Kansas was higher than Utah until 2013 and much closer to Idaho when the marginal was 6.45%. Kansas’ lower rates are helping to reverse trends but it will take much more time to catch up to states that historically grew much faster – like Utah and Idaho.

Here’s the rest of the story that KCEG doesn’t want you to know. According to the Tax Foundation, the corporate income tax rate in Kansas is 40% higher than Utah’s and just slightly below Idaho’s.  State sales tax rates are comparable but Kansas has much higher local sales tax rates. 

Utah and Idaho also have much lower property taxes on commercial and industrial real estate. Kansas has the 10th highest effective tax rate on urban property and the worst in the nation on rural property!   Part of the reason that Kansas has very high effective tax rates is baked into the State Constitution, where Commercial and Industrial property is assessed at 25% of appraised value but Residential is assessed at 11.5%.

The other major factor driving up property taxes is that Kansas has too much government.  Kansas and Utah have about the same population but Kansas has 1,997 cities, counties and townships whereas Utah has only 274.  Idaho has just 244.  Extra government means extra government employees (and higher taxes to pay for all of that government); Kansas is ranked #47 in government employees per 10,000 residents (i.e., the 3rd worst in the nation) but Utah is ranked #15 and Idaho is #9.

These truths about private sector job growth and relevant competitive issues with Utah and Idaho are typical of KCEG efforts to mislead citizens and legislators – and probably explain why they refuse to engage KPI in public debates on tax, spending and education issues.

In Topeka, to raise taxes, scare the voters

The Topeka public school district is using scare tactics to persuade voters to raise taxes. David Dorsey of Kansas Policy Institute explains.

Topeka schools use scare tactics to justify LOB election

By David Dorsey

The USD 501 school board voted unanimously on April 29 to hold an election to increase the district’s local option budget (LOB). They claim the $3 million that could be raised with voter approval is necessary “in the face of state budget cuts.”  The district held three public meetings to discuss how to deal with what they called a $1.6 million cut in state funding this year and $2 million over the next two years. KPI has shown in this blog that Topeka Public Schools will actually get a total increase in state aid of 6.5% over the three years of the new block grant funding law.

But that’s not how a school district sees things. To the educrats, a cut means getting a smaller increase than they had planned.

If I were the suspicious type, I might think the meetings were just a ruse, using the implicit threat of cutting school programs in order to scare the public into supporting an override election to raise more money.

The purpose here is not to revisit the increase vs. decrease debate. The purpose here is to discuss the spending side of the equation and show just how easy it would be for USD 501 to meet their self-defined shortfalls – and without having any impact on students.

First, here’s a little perspective on the realities between what is budgeted and how much is actually  spent. The adjoining table shows the millions that have gone unexpended for the last four years. Given this recent history, it’s hard to imagine that a $1.6 million “cut” from the budgeted $203 million 2014-15 budget is even a concern, let alone cause for an election.

Even if one concedes the point of a revenue shortfall, should the taxpayers of USD 501 (in the name of full disclosure, I do not live in the district, so I don’t have a dog in this hunt) shell out more money to the district? Or could the district find ways to reduce spending and operate more efficiently (a concept foreign to any government organization)? As a former employee of USD 501 I can attest that finding a savings of what amounts to $114 per pupil should be pretty easy to accomplish.

I offer these three opportunities that would reduce spending far in excess of what the district calls a cut and save local taxpayers the burden of providing more financial support to a district that won’t look seriously at reducing spending.

Reduce a bloated administration

As the table shows, Topeka Public Schools has the highest per pupil administrative costs of the 25 largest districts in the state. A glance at their own budget document reveals the costs are trending significantly higher. The 2013-14 costs were a 14% increase from the previous year. The USD 501 2014-15 budget for administration and support of $28,301,407 is a whopping 25% higher than 2013-14! That’s an increase from two years ago of 41.8% when administration costs were just under $20 million.

Some of that increase can be explained by the decision made by the USD 501 school board to drastically increase salaries of the administrative staff by $435,400 in the summer of 2013 in the name of being competitive with other districts. Perhaps if USD 501 was “competitive” in terms of administrative costs per pupil, there would be no issue.

 I’m guessing these facts didn’t come up at the public meetings.

Put literacy and math coaches back in the classroom

Little-known to the public is that in every USD 501 school there are licensed teachers who do NOT teach students. They are known as math coaches and literacy coaches. Each school has at least one coach and most have more than one. What is their job, you ask? They are in the buildings to help classroom teachers do a better job. Furthermore, USD 501 forbids the coaches from directly teaching students, except in special circumstances. They are there to teach the teachers.

There are several reasons the practice of having licensed teachers be coaches should end.

  • “Teaching the teachers” is what professional development is supposed to do.
  • Dealing with ineffective teachers should be the job of the principals, not other teachers.
  • Since coaches have no contractual authority over teachers, teachers do not have to utilize coaches. In practice, that means teachers who are least effective don’t solicit assistance from the coaches, so the coaches end up spending most of their time with the most effective teachers.
  • Many coaches use the position as a stepping-stone toward getting into administration.
  • Most of the coaches are among the best teachers in the district and should be with students, not other teachers.

To be fair to USD 501, math and literacy coaches are an educational trend and most districts now employ them. However, it doesn’t stray from the fact that money spent on coaches doesn’t directly benefit students. In fact, students lose out anytime a quality teacher chooses to become a coach and leaves the classroom.

Putting just one coach per building back in the classroom through attrition would go a long way toward dealing with the budget “cut.”

Cash reserves

The district could easily deal with any short-term budget issue simply by using their current operating cash reserves. The following table shows USD 501’s cash reserves for the past ten years. The table not only shows the district had in excess of $24 million from which to draw at the beginning of this school year, but that is 56.2% more than a decade ago. I doubt they explained that fact to the patrons at the public meetings.

I now present a rather conservative approach to dealing with the “budget cut.” A 5% reduction in administration, returning just one coach in each building to the classroom, and tapping 10% from the operating cash reserves, hardly Draconian measures, would generate nearly twice as much as they could take from the voters.

Savings Category Spending reduction
5% reduction in administration costs $1.41 million
Returning 1 coach to the classroom (through attrition) in each traditional public school building – 26 X $60,000 (salary/benefits)  

$1.56 million

10% from operating cash reserves $2.47 million

Total reduction

 $5.44 million

Board member Patrick Woods was quoted as saying K-12 funding is a “state responsibility.” Maybe it’s time the state starts taking responsibility for how the money gets managed.

Wichita water statistics update

Updated statistics show that the Wichita ASR water project has not been producing water at the projected rate, even after projections were halved.

An important part of Wichita’s water supply infrastructure is the Aquifer Storage and Recovery program, or ASR. This is a program whereby water is taken from the Little Arkansas River, treated, and injected in the Equus Beds aquifer. That water is then available in the future as is other Equus Beds water.

With a cost so far of $247 million, the city believes that ASR is a proven technology that will provide water and drought protection for many years. Last year the city recommended that voters approve $250 million for its expansion, paid for by a sales tax. Voters rejected the tax.

According to city documents, the original capacity of the ASR phase II project to process water and pump it into the ground (the “recharge” process) was given as “Expected volume: 30 MGD for 120 days.” That translates to 3,600,000,000 (3.6 billion or 3,600 million) gallons per year. ASR phase II was completed in 2011.

At a city council workshop in April 2014, Director of Public Works and Utilities Alan King briefed the council on the history of ASR, mentioning the original belief that ASR would recharge 11,000 acre feet of water per year. But he gave a new estimate for production, telling the council that “What we’re finding is, we’re thinking we’re going to actually get 5,800 acre feet. Somewhere close to half of the original estimates.” The new estimate translates to 1,889,935,800 (1.9 billion) gallons per year.

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative
Based on experience, the city has produced a revised estimate of ASR production capability. What has been the actual experience of ASR? The U.S. Geological Survey has ASR figures available here. I’ve gathered the data and performed an analysis. (Click charts for larger versions.)

I’ve produced a chart of the cumulative production of the Wichita ASR project compared with the original projections and the lower revised projections. The lines for projections rise smoothly, although it is expected that actual production is not smooth. The second phase of ASR was completed sometime in 2011, but no water was produced and recharged that year. So I started this chart with January 2012.

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013
Some have said that since 2013 was a drought year, we shouldn’t evaluate the production of ASR during a drought. So to present ASR in the best possible light, I’ve prepared a chart starting in July 2013. That was when it started raining so much we had floods, and data from USGS shows that the flow in the Little Arkansas River was much greater. Still, the ASR project is not keeping up with projections, even after goals were lowered.

Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II
Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II
On the chart of monthly production, the horizontal line represents the revised (lowered) annual production projection expressed as a constant amount each month. This even rate of production is not likely, as rainfall and river flow varies. In the three years that ASR phase II has been in production, that monthly target been exceeded in just one month.

Flow of the Little Arkansas River at Valley Center.  The ASR project is able to draw from the river when the flow is above 30 cfs, which is the dark line.
Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs, which is the dark line. Source of data is here.
At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.
At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.

WichitaLiberty.TV: Initiative and referendum

In this excerpt from WichitaLiberty.TV: What recourse do citizens have when elected officials are not responsive? Initiative and referendum are two possibilities. View below, or click here to view at YouTube. Originally broadcast May 3, 2015.

For more about this issue, see Wichita has examples of initiative and referendum and Initiative and referendum.

Kansas school weightings and effects on state aid

In making the case for more Kansas school spending, the focus on base state aid per pupil leaves out important considerations.

Kansas school finance formula at-risk weighting history tableMuch of the discussion surrounding school funding in Kansas has centered around base state aid per pupil. It’s the starting point for the Kansas school finance formula, and therefore an important number. But base state aid is not the only important number. Action taken by the Kansas Legislature has led to increases in state funding for schools at the same time that base state aid has fallen. Much of the increase is due to the conditions that schools say are costly, such as teaching students from low-income families or non-English speaking students.

School districts are compensated for these costs through weightings. If a district has a student who falls into certain categories — like qualifying for free or reduced-price lunches — that adds a weighting in that category. The number of pupils plus the number of weightings are multiplied by base state aid to determine total state aid. 1

A large weighting — in terms of its magnitude — is the bilingual education weighting, intended to cover additional costs of non-English speaking students. This weighting was originally 20 percent. Starting with the 2005-2006 school year it was raised to 39.5 percent.

Kansas school finance formula at-risk weighting history. Click for larger version.
Kansas school finance formula at-risk weighting history. Click for larger version.
Another large weighting is the at-risk weighting, intended to cover the additional costs of teaching students from low-income families. This started at five percent. As shown in the nearby chart, it has risen by a factor of nine, reaching 45.6 percent starting with the 2008-2009 school year. This chart doesn’t include the high-density at-risk weighting. Starting with the 2006-2007 school year districts with a high concentration of at-risk students could receive an extra weighting of four percent or eight percent. Two years later the weightings were raised to six percent and ten percent. This formula was revised again in 2012 in a way that probably slightly increased the weightings.

The weightings have a large effect on school funding. For the 2004-2005 school year, base state aid was $3,863 and the at-risk weighting was ten percent. An at-risk student, therefore, generated $4,249 in funding. Other weightings might also apply.

Ten years later base state aid is $3,852 and the at-risk weighting is 45.6 percent. This generates funding of $5,609. If in a district that qualifies for the maximum high-density at-risk weighting, an additional $404 in funding is generated. (These numbers are not adjusted for inflation.)

Kansas school spending per student, compared to base state aid, adjusted for CPI, 2014. Click for larger version.
Kansas school spending per student, compared to base state aid, adjusted for CPI, 2014. Click for larger version.
As can be seen in the charts produced from data available from the Kansas State Department of Education, the ratio of total state spending to base state aid has generally risen since the adoption of the school finance formula two decades ago. For the school year ending in 1993 the ratio was 0.7, meaning that state aid was less than base state aid. For the school year ending in 2014, the ratio was 1.85, or 2.6 times as much as in 1993. This means that while base state aid per pupil for 2014 was $3,838, total spending by the state was $7,088 per pupil.

Kansas school spending per student, ratio of state aid per pupil to base state aid per pupil, 2014
Kansas school spending per student, ratio of state aid per pupil to base state aid per pupil, 2014
  1. AMENDMENTS TO THE 1992 SCHOOL DISTRICT FINANCE AND QUALITY PERFORMANCE ACT AND THE 1992 SCHOOL DISTRICT CAPITAL IMPROVEMENTS STATE AID PROGRAM (FINANCE FORMULA COMPONENTS), Kansas Legislative Research Department, May 20, 2014
    http://ksde.org/Portals/0/School%20Finance/amends_to_sdfandqpa_2015.pdf

WichitaLiberty.TV: Kansas legislative failure means you pay

In this excerpt from WichitaLiberty.TV: The Kansas Legislature has had several years to come up with plans for reforming government spending. But it didn’t do that. Now, it is most likely you will be asked to pay more taxes to compensate for the legislature’s failure. View below, or click here to view on YouTube. Originally broadcast May 3, 2015.

For more on this issue, see: In Kansas, a lost legislative opportunity and Efficiency has not come to Kansas government.

Soviet-style society seen as Wichita’s future

If local governments don’t fund arts, we risk a Soviet-style existence. This line of thought is precisely backwards.

Facing the possible loss of funds from Sedgwick County, the Wichita Arts Council paints a bleak future for Wichita, as reported in the Wichita Eagle:

The Wichita Arts Council receives approximately $14,000 from the county, which it uses to provide seed money for start-up art projects, president Arlen Hamilton said. It also receives about $6,000 from the city, he said.

“Without us being there to provide that start, many of these things would never get off the ground, and we’d end up with more of a Soviet-style society than the bright, colorful and educational environment that we get to live in instead,” Hamilton said. (Sedgwick County to warn organizations of possible funding cuts)

This line of reasoning is precisely backwards. When government taxes us and turns over the funds to a group of elitists to make decisions about which art is desirable and which is not, that is characteristic of totalitarian, socialist societies. In a civil society people don’t expect others to be forced to pay for things like this.

Defenders of government spending on arts say it’s a small amount of money. It’s just seed money. This “seed money” effect is precisely why government should not be funding arts. David Boaz explains:

Defenders of arts funding seem blithely unaware of this danger when they praise the role of the national endowments as an imprimatur or seal of approval on artists and arts groups. Jane Alexander says, “The Federal role is small but very vital. We are a stimulus for leveraging state, local and private money. We are a linchpin for the puzzle of arts funding, a remarkably efficient way of stimulating private money.” Drama critic Robert Brustein asks, “How could the [National Endowment for the Arts] be ‘privatized’ and still retain its purpose as a funding agency functioning as a stamp of approval for deserving art?” … I suggest that that is just the kind of power no government in a free society should have.

The leveraging effect of seed money means that elitists like the members of the Wichita Arts Council have great power in deciding who will succeed in the arts in Wichita. We give up a lot when we turn over this power to government bureaucrats and arts commission cronies. Contrary to the argument of the Arts Council president, arts thrive in markets where people are free to choose, and stagnate under taxation and bureaucracy.

If you don't like this statue, just don't go there, says Wichita City Council member Lavonta Williams. But, you must pay for it.
The attitude of Wichita elected officials regarding art: If you don’t like this statue, just don’t go there, says Wichita City Council member Lavonta Williams. But, you still must pay for it.

Kansas state aid to schools is increasing

The top school finance official in Kansas says that says that state aid for schools has risen for the current year. From Kansas Policy Institute.

KSDE confirms that state aid to schools is increasing this year

By Dave Trabert

While some school districts and special interests claim state aid to schools is declining this year, Kansas State Department of Education Deputy Commissioner for Finance Dale Dennis confirms that state aid to schools is increasing.

KSDE published spreadsheets comparing block grant equivalent funding for the 2013-14 school year with block grant funding for this year and the next two school years. SF15-092 shows total funding last year was $3.263 billion including KPERS and $2.951 billion without KPERS. SF15-109 shows total funding this year of $3.408 billion including KPERS and $3.093 billion without.  Even excluding KPERS, state aid to schools under the block grants will increase by $142 million.

In Wichita, bad governmental behavior excused

A Wichita newspaper op-ed is either ignorant of, or decides to forgive and excuse, bad behavior in Wichita government, particularly by then-mayoral candidate Jeff Longwell.

In a column just before the April 2015 Wichita election, Bill Wilson, managing editor of the Wichita Business Journal, reported on fallacies during the mayoral campaign, fallacies he called “glaring.” 1 But only a juvenile interpretation of the facts surrounding the events could find them fallacious. This is especially troubling since Wilson covered city hall as a reporter for the Wichita Eagle.

The first reported fallacy concerns the award of the contract for the new Wichita airport terminal. Jeff Longwell, then a city council member, had received campaign contributions from executives of Key Construction, the local company bidding on the contract. He also received contributions from Walbridge, the Michigan partner of Key. The Walbridge contributions are problematic, as they were made just a few days before the vote. More arrived a few days after Longwell’s vote. 2

In his column Wilson had an explanation as to why the council voted the way it did. That explanation was a matter of dispute that the council had to resolve. But the validity of the explanation is not the point. The point is something larger than any single issue, which is this: The Wichita city council was asked to make decisions regarding whether discretion was abused or laws were improperly applied. It is not proper for a council member to participate in decisions like this while the ink is still wet on campaign contribution checks from a party to the dispute. Jeff Longwell should not have voted on this matter.

For that matter, several other council members should not have voted. Wichita City Council Member James Clendenin (district 3, southeast and south Wichita) received substantial campaign contributions from Key Construction executives several months before he voted on the airport contract. So too did Wichita City Council Member and Vice Mayor Lavonta Williams (district 1, northeast Wichita) . In fact, the only contributions Williams received in 2012 were from Key Construction interests. 3

Wichita Mayor Carl Brewer with major campaign donor Dave Wells of Key Construction.
Wichita Mayor Carl Brewer with major campaign donor Dave Wells of Key Construction. Brewer has voted to send millions to Key, including overpriced no-bid contracts.
Then we have Former Wichita Mayor Carl Brewer. Here he’s pictured fishing with his friend Dave Wells of Key Construction. Do you think it is proper for the mayor to have voted in a quasi-judicial role on a matter worth millions to his fishing buddy? How do you feel about the mayor voting for no-bid construction contracts for his friend? Contracts that later were found to be overpriced? 4

In Wichita, city council members receive campaign contributions while participating in a quasi-judicial proceeding involving the contributors. This doesn’t seem to be improper to the Wichita Business Journal. But it isn’t alone. The Wichita Eagle doesn’t object to any of this. Well, maybe once in a while it does, but not very strenuously or for very long.

Another problem: Wilson dismisses the claim that Longwell was able to exert much influence over the other six council members in order to benefit a project in his council district. But during the campaign, Longwell eagerly took credit for the good things that the city council did. Though Longwell was but one of seven votes, his commercials made it seem like he performed these deeds all by himself. But when things go wrong, well, he’s just one of seven votes.

The last fallacy Wilson objects to is this: “The idea that a $500 campaign contribution buys a vote, a specious claim by Americans for Prosperity that inexplicably lives on. If a council member’s vote is for sale for $500, their stupidity trumps their corruption. And yet some of these false claims remain in political advertising, despite being debunked by two media outlets — and here.”

A few points: First, it’s not just a $500 contribution. We find many examples of individual $500 contributions from executives of the same company, along with spouses and other family members. The contributions are effectively stacked. Second, sometimes campaigns are funded to a large extent by these stacked contributions from just one or two firms. 5 Third, if these contributions are not seen as valuable to those who make them, why do the same small groups of business interests make the maximum contributions year after year?

As far as the claims being debunked: A few weeks ago I showed you the inexplicably bad reporting from the Wichita Eagle. 6 The Business Journal didn’t do any better.

Wilson’s op-ed seems more like an audition for a job at city hall than a critical look at the campaign and its issues. Making a move from news media to a government job in communications is a common career move. There are three former journalists working in Wichita city hall. One former Wichita Eagle reporter went to work for the Wichita school district. There are many examples in Topeka. It’s a problem when journalists who are supposed to be exercising watchdog duty over government agencies end up working for them. We can also recognize when journalists are auditioning for jobs in government.

In Kansas, a lost legislative opportunity

Kansas legislators are struggling to balance the state’s budget. In 2012 the legislature passed a tax cut, although it was unevenly applied. But in the intervening years, the legislature has not taken serious steps to cut state spending to match. Legislators failed to consider bills to streamline and outsource government functions, although the bills had passed in a previous session. The legislature has also failed to consider budgetary process reform as explained below in an article from May 2012.

Leaders in the Kansas legislature and executive branch tell us the only way to balance the Kansas budget this year is by raising more revenue through taxation. That may be true, as reforming spending and budgeting takes time to accomplish. We had the time. But our legislature and executive branch squandered that opportunity. Now, they ask you for more tax revenue.

This year Kansas made a leap forward in reducing income tax rates. The next step for Kansas is to reduce its spending, both to match the reduced revenue that is forecast, but also to improve the efficiency of Kansas government and leave more money in the hands of the private sector. Specifically, Kansas needs to improve its budgeting process and streamline state government.

In Kansas, like in many states, the budgeting process starts with the previous year’s spending. That is then adjusted for factors like inflation, caseloads, and policy changes that necessitate more (or rarely, less) spending. The result is that debates are waged over the increment in spending. Rarely is the base looked at to see if the spending is efficient, effective, or needed.

There are several approaches Kansas could take to improve on this process. One is zero-based budgeting. In this approach, an agency’s budget set to zero. Then, every spending proposal must have a rationale or justification for it to be added to the budget.

Zero-based budgeting can be successful, but, according to the recent paper Zero-base Budgeting in the States from National Conference of State Legislatures, it requires a large commitment from the parties involved. It also can take a lot of time and resources. Kansas could start the process with just a few agencies, and each agency could go through the process periodically, say once every five or six years. Some states have abandoned the zero-based budgeting process.

In its State Budget Reform Toolkit, American Legislative Exchange Council advocates a system called priority-based budgeting. This process starts with deciding on the core functions of state government. That, of course, can be a battle, as people have different ideas on what government should be doing.

ALEC reports that “In 2003, Washington state actually implemented priority based budgeting to close a budget deficit of $2.4 billion without raising taxes.”

The spending cuts Kansas needs to balance the budget are not large. Kansas Policy Institute has calculated that a one-time cut of 6.5 percent next year would be sufficient to bring the budget to balance.

The problem that Kansas will face in reducing state spending and streamlining its government is that there are those who are opposed. Streamlining often means eliminating programs that aren’t needed, aren’t performing as expected, or are very costly. These programs, however, all have constituencies that benefit from them — the concept of concentrated benefits and dispersed costs that public choice economics has taught us. These constituencies will be sure to let everyone know how harmful it will be to them if a program is scaled back or ended.

Streamlining also means that there may be fewer state employees. Some will say that the loss of state employees means a loss for the economy, as the state workers will no longer be receiving a paycheck and spending it. This reasoning, however, ignores the source of state workers’ pay: the taxpayers of Kansas. With fewer state employees, taxpayers will have more money to spend or invest. The problem is that it is easier to focus on the employees that may lose their jobs, as they are highly visible and they have vocal advocacy groups to watch out for them. This is an example of the seen and unseen, as explained by Henry Hazlitt.

Brownback derangement syndrome on display

A newspaper op-ed illustrates some of the muddled thinking of Kansas newspaper editorialists, not to mention Brownback derangement syndrome.

Recent discussion about restricting the ability to spend welfare benefits has lead one newspaper editorialist to compare elected politicians with welfare recipients. The writer is Dave Helling of the Kansas City Star, and his target is Kansas Governor Sam Brownback. Attempting to paint the governor as a government-paid freeloader, Helling wrote: “He’s earned his living from taxpayers almost all his life. He’s worked in state government, the U.S. House and U.S. Senate and now as governor, where he earns around $100,000 a year.” (Dave Helling: It’s time to break lawmakers’ ‘cycle of dependency’)

Except: Helling’s own words undermine his point. He wrote that Brownback earned his living. Welfare recipients are not earning their benefits.

Helling also wrote that Brownback worked in government. Welfare recipients aren’t working for their benefits.

Also: “Taxpayers long have provided Brownback money to buy shelter, food, health care, safety and transportation.” I don’t know how this is relevant. If Brownback worked and earned his pay, it’s of concern to no one how he spends it.

Helling also wrote: “Brownback’s long ride on the public dime is supposed to come to an end in 2019, when term limits force him to finally find a private-sector job.” He follows with speculation that Brownback may run again for the U.S. Senate. Of interest is that Sam Brownback is a rare example of a politician who self-imposed term limits on himself and actually kept the promise, leaving the U.S. Senate after two full terms. As far as serving in the Senate again, most advocates of term limits agree that if officeholders sit out a term, they may run again.

This op-ed was mentioned by the Wichita Eagle, where editorialist Rhonda Holman added “Brownback has held a government job since he became state agriculture secretary in 1986, at age 30.” It’s curious that the Eagle editorial board would criticize someone for working for government. Its usual stance is that there should be more government workers doing more things and spending more money.

There is legitimate criticism of governor Brownback. He has not been an advocate for school choice. He has not been interested in setting Kansas on a path to controlling state spending. (These are some of the reasons why I did not vote for Browback.) But these are not the goals of the Star or Eagle editorial boards, or for that of most newspapers. Instead they pick at the governor with nonsensical arguments. That’s derangement syndrome.

Individual liberty, limited government, economic freedom, and free markets in Wichita and Kansas