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

Insurance commissioner candidate to speak in Wichita

by Bob Weeks on February 8, 2010

At the Wichita Pachyderm Club this Friday, candidate for the Republican party nomination for Kansas Insurance Commissioner David Powell will speak to members and guests.

All are welcome to attend Pachyderm club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive fifteen minutes early to get your lunch before the program starts.

The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). Park in the garage just across Broadway and use the sky walk to enter the Bank of America building. Bring your parking garage ticket to be stamped and your parking fee will be only $1.00. There is usually some metered and free street parking nearby.

The problem with Sarah Palin

by Bob Weeks on February 8, 2010

in Politics

Not everyone is enthusiastic about the rise in popularity of Sarah Palin. I didn’t vote for her when I had the chance, and nothing has happened since November 2008 that would lead me to change my mind.

Leslie Carbone, author of the recently-published Slaying Leviathan: The Moral Case for Tax Reform says it better than I can myself:

With the popular outrage sparked by the Bush bail-outs, I’ve become more hopeful about the future of economic freedom than I’d been in 20 years. And the tea parties and town-hall protests just buttressed my optimism.

I’m still optimistic, but the reflexive, relativistic, populism-as-the-new-elitism near-worship showered upon Gov. Palin by supposed conservatives and libertarians — people who profess to believe in economic freedom — tempers my optimism.

The full post is The Problem with Palin.

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Randal O’Toole discusses urban planning in Wichita

by Bob Weeks on February 8, 2010

Randal O’Toole in front of WaterWalk Place in Wichita, a monument to the failure of TIF districts, eminent domain, and urban planning by government.

Last week Cato Institute Senior Fellow Randal O’Toole was in Wichita. He delivered a public lecture Thursday evening to a crowd that braved poor weather to attend.

O’Toole said he spent 15 years studying urban planning, and he said he’s learned this: “Urban planners promise us paradise on earth, but first we have to give them the power to create it.”

Imagine an urban planner in 1950 writing a 50-year plan for Wichita. O’Toole showed illustrations of some things we take for granted today but were unknown at that time, such as direct dialing a long-distance telephone call, using a personal computer, and flying on a commercial jet aircraft. But, he said, nearly everyone had rode on trains.

We know that predictions made in the past often turn out to be nowhere near accurate. But urban planners still make these type of long-range plans. The problem, O’Toole said, is that when plans are made, someone is going to benefit from that plan. Those people will lobby to keep the plan in effect so that they continue to benefit. This will be true even if the plan turns out to be totally wrong and a disaster for everyone else.

Cities are too complicated to plan, O’Toole said. There are too many people, and there are too many parcels of land with too many possible uses. Despite this complexity, planners think they should be allowed to dictate the use for each parcel of land.

Since planning is so complicated, planners follow fads. As an example, O’Toole showed an example of a city that created a pedestrian mall downtown, as did some 200 cities across the country. Almost all have since been reopened to traffic.

Another fad was slum clearance, where high-rise housing projects were built to replace slums. These buildings proved to be unlivable, and many have been torn down.

One of the latest fads is “smart growth,” which seeks to increase the density of urban development. O’Toole’s hometown of Portland has embraced this fad. There, an urban growth boundary limits the expansion of developed areas. Instead of growing out, planners want the city to grow up. Minimum density zoning means that high-density housing replaces single family housing.

Row houses in Portland. These replaced a single-family home.

O’Toole showed a photograph of a nice house that he said sells for $160,000 in Houston. In Portland, at the peak of the bubble, a similar house would sell for $380,000. He said that Portland planners are proud of the fact that developers will buy a house on a quarter-acre lot, tear it down, and replace it with four skinny row houses.

Could this happen in Kansas, he asked? O’Toole said that President Obama’s Secretary of Transportation has decided to require all metropolitan areas to write plans to include compact development.

Light rail is another favorite tool of urban planners that hasn’t worked. O’Toole told how Portland built light rail rather than highways. Federal dollars encouraged this. But light rail was so expensive that Portland had to cut back on its thriving bus service. Bus fares were raised and service was cut, so bus ridership plummeted.

A light rail train in front of an apartment building in Moscow …
Light rail in Moscow

… and the same in Portland.

Portland built still more light rail, however, urged on by campaign contributions from rail contractors. Land near the light rail stations was zoned for high-density development. But no one wanted to develop there, because there was a surplus of high-density development and no parking around these light rail stations — except for train riders, and few people rode the trains. So Portland subsidized high-density development along light rail lines.

Portland also created tax increment financing (or TIF districts) along the light rail lines. O’Toole referred to the money allocated to TIF districts as stolen from police and fire services, and from public schools. But still more TIF districts were created along even more light rail train lines.

Cars parked illegally at a high-density, transit-friendly development in Portland. Management knows that if parking regulations are enforced, tenants will leave.

The claim by government officials is that light rail promotes economic development. But it’s a zero-sum game, O’Toole said. Development is promoted in one place at the expense of development elsewhere. The added tax burden of TIF makes it a negative-sum game, as the cost of TIF financing slows the economic growth of cities that use TIF compared to those that don’t.

O’Toole showed a photograph of a mixed-use development in Portland with three floors of apartments upstairs, with shops on the bottom floor. But all the stores are empty, because there is no parking for shoppers.

All the spending on light rail in Portland has led to a decrease in the share of commuting trips taken using transit, O’Toole said.

So what is the result of following urban planning fads in Portland? O’Toole said: “If your goal is to make housing unaffordable, make your streets more congested, increase taxes or reduce the quality of urban services, then by all means follow the kind of fads that Portland is doing.”

O’Toole said that cities should follow the type of planning efforts that Anaheim, California has followed in the Platinum Triangle. Instead of using TIF financing to sell bonds and take land by eminent domain, cities should not rely on eminent domain and subsidy. Government should get out of the way, he said.

Randal O’Toole’s appearance on the KPTS Television public affairs program Kansas Week may be viewed at Urban planning discussed on Kansas Week.

Urban planning discussed on Kansas Week

by Bob Weeks on February 8, 2010

Economist, author, and Cato Institute Senior Fellow Randal O’Toole discusses urban planning and redevelopment on the KPTS Television public affairs program Kansas Week. Tim Brown is the host.

Coverage of O’Toole’s visit to Wichita is at Randal O’Toole discusses urban planning in Wichita.

State budget ‘gap’ is all about perspective

by Bob Weeks on February 8, 2010

By Dave Trabert, Kansas Policy Institute

When businesses or individuals talk about cutting their expenses, it means they are going to spend less money that they did in the past. But when governments talk about budget cuts they often have a different perspective: they are spending less than they had hoped to but not necessarily less than the year before. For example, we often heard how Kansas schools had to cut their budgets last year but they still spent $12,660 per pupil, or 3.9% more than the previous year.

“Gap” is another example of how the meaning of words differs depending upon one’s perspective. When it’s said that a tax increase is needed to close a $400 million budget “gap” in the 2011 state budget, one might reasonably assume that that means recession-driven revenue declines have created a “gap” that needs to be filled to maintain the same level of spending.

But that is not the case. The Consensus Revenue Estimate calls for general fund revenues to decline by $122.2 million. Governor Parkinson’s budget proposal calls for spending to increase $380 million; that’s 7% more than we’ll spend this year and $1.1 billion more than we spent in FY 2005. From a revenue, or taxpayer, perspective, the gap is $122.2 million — not $400 million.

It really does come down to perspective. Most of the proposed expenditure increase is to replace declines in federal stimulus money, so from the government’s perspective there is less money to spend unless taxes are increased. (Another way to replace those federal tax dollars is to become more efficient and reduce spending without cutting services, but the bureaucracy doesn’t seem interested in that option.)

Governor Parkinson is proposing a significant spending increase but he deserves no blame for redefining the meaning of “gap;” his budget proposal was very forthright in explaining his rationale for spending more money. (OK, maybe he could have corrected those who are overstating the amount of the “gap” but at least he didn’t start it.)

Whether we should raise taxes to increase spending as the governor and others are proposing is a legitimate topic of debate that needs to be held out in the open, but taxpayers need to know the truth about the details in order to make informed decisions.

You can download more commentaries, news and publications at www.kansaspolicy.org.

Government spending does not create prosperity

by Bob Weeks on February 8, 2010

in Free markets

In his op-ed Don’t buy canard about spending, Alan Cobb of Americans for Prosperity writes about the illusion that government spending creates economic growth.

It’s an important topic, as we’ve just been through nearly a year of Obama stimulus spending, and people are wondering if the effort has paid off. Locally in Kansas, spending advocates argue that reducing Kansas state spending will cause economic growth to suffer. Even more locally in Wichita, city council members and city hall bureaucrats argue that government is responsible for managing economic development in Wichita, some going so far to proclaim that free people and free markets have failed and can’t be trusted.

In yesterday’s Wichita Eagle, Wichita businessman Fred Berry takes issue with Cobb, and this disagreement provides a useful illustration of the difference between government and private action.

Cobb wrote this: “If I take $20,000 from my neighbor and hire a gardener, the economy certainly hasn’t grown by $20,000. It’s simply been a shift of money.” Cobb is illustrating the effect of government spending.

Berry wrote: “But let me use Cobb’s example in a different way. Suppose he and his neighbor decided to share a gardener, because neither needed one full time. Because Cobb’s garden was twice as large as his neighbor’s, he agreed to pay two-thirds of the cost.”

What’s the difference between the two examples? It’s simple: Cobb is illustrating a government-coerced transaction, while Berry uses a voluntary transaction.

There’s a world of difference between the two. Voluntary transactions are the way that wealth and prosperity are generated. These transactions happen because both parties believe they will be better off if the transaction takes place.

This leads to what John Stossel has termed the “weird double thank you moment” when people engage in voluntary trade: One party says “thank you,” and so does the other. This happens at the grocery store and nearly everywhere people are making voluntary exchanges that benefit both parties.

But when you pay your taxes, do you say “thank you?”

Milton Friedman has written and lectured extensively on the topic of free markets. Here’s an example from his monumental work Capitalism and Freedom:

Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion — the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals — the technique of the market place.

The possibility of co-ordination through voluntary co-operation rests on the elementary — yet frequently denied — proposition that both parties to an economic transaction benefit from it, provided the transaction is bi-laterally voluntary and informed.

Exchange can therefore bring about co-ordination without coercion. A working model of a society organized through voluntary exchange is a free private enterprise exchange economy — what we have been calling competitive capitalism.

It’s surprising to me that a businessman — here I specifically do not use the word “capitalist” — like Fred Berry would fail to recognize the distinction between free markets and government coercion. I guess I should not be surprised, as Berry made large campaign contributions to the Wichita school bond campaign in 2008, and the public schools are definitely unfriendly to capitalism. In addition, he has made contributions to enemies of capitalism like Wichita Mayor Carl Brewer and city council member Janet Miller.

For more explanation of how free markets work from Milton Friedman, view the video below.

Don’t buy canard about spending

by Bob Weeks on February 8, 2010

in Free markets

By Alan Cobb

“Canard” is a funny word.

It keeps popping into my head anytime I read another self-anointed do-gooder who claims that government spending leads to economic growth.

“Canard” means a false report — and we’ve got lots and lots of them about these claims.

If I take $20,000 from my neighbor and hire a gardener, the economy certainly hasn’t grown by $20,000. It’s simply been a shift of money. Rearranging the furniture in your living room doesn’t increase the number of easy chairs or TVs.

That’s what happens when your taxes pay for someone else’s salary, build a government building or pave a road.

We value good roads and good government. But that doesn’t mean those things cause economic growth. Arguments otherwise are either deceitful or horribly misinformed.

Many say that we don’t need to do anything but spend more government money and — voila — a land of milk and honey.

Given the Kansas highway lobby’s assertions, Kansas should do nothing but build roads and the Sunflower State will become the promised land.

Oh, if it were so.

As Margaret Thatcher said, big government doesn’t work because eventually you run out of other people’s money.

There’s also something never discussed by those wanting to line their pockets with what used to be in your pocket. The money doesn’t drop from the sky and it isn’t in your grandmother’s basement. It’s our money, and we taxpayers might do something more productive with it — though that is never measured. The citizens of Kansas might spend the billions the road lobby wants to spend on more roads (in a slow-growing state with great roads already) on something else, like starting new businesses, which would lead to growth.

The multipliers used by those pushing the canard, cooked up in a fantasy lab, make it look even better. Multiply the $20,000 gardener salary by three — sprinkled with fairy dust — and all of the sudden the transfer of $20,000 magically becomes $60,000. So anything is justified. Want $3 million in economic growth? Just raise taxes by $1 million. You don’t need Billy Mays to sell this stuff.

Add up all the multiplier studies and poof! Kansas’ economy is the size of Texas’.

In a recent Wall Street Journal commentary, a Stanford University economics professor dismissed this notion and said the government-spending multipliers are actually negative. Outlays by the government crowd out private spending and require future taxes.

Measuring the economic value of shorter commutes and fewer car repairs, accidents and fatalities is doable, but never done. Similarly measurable are the benefits of an educated populace, but the benefit is not the sum of teachers’ salaries plus the cost of the bricks in a school addition. Taking the input (tax dollars) and applying a castle-in-the-sky multiplier is not magical; it’s wrong.

Saying the Pizza Hut that moved from downtown to the new bypass outside town is “growth” is equally wrong — and dishonest. But that’s what we hear from those pushing the canard that government spending is growth.

There’s that word again.

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Goal of Kansas tax reform is economic growth

by Bob Weeks on February 4, 2010

Dr. Art Hall, who is Director of the Center for Applied Economics at the University of Kansas has proposed a radical change and simplification to the Kansas tax system. Besides simplification of the way the state collects taxes, the major goal of the proposal is to encourage economic growth in Kansas.

The goal of tax policy should be to raise the funds necessary to run government, and to do so in a way that provides the most incentive for economic growth. The accumulation of capital, which comes from savings, is the best way to promote future economic growth. Capital allows companies to expand productive capacity through making investments in machinery and technology. This leads to more jobs and higher-paying jobs. As the economist Walter E. Williams has discussed: “Ask yourself this question: who earns the higher wage: a man digging a ditch with a shovel, or a man digging a ditch using a power backhoe? The difference between the two is that the man with the backhoe is more productive. That productivity is provided by capital — the savings that someone accumulated (instead of spending on immediate consumption) and invested in a piece of equipment that helped workers to increase their output.”

It’s important, then, that tax policy in Kansas generates revenue for the state in a way that doesn’t harm the accumulation of capital. As Hall writes: “Taxation of the resources used for future production may well lead to less future production.”

The solution Hall proposes is a consumption tax — a comprehensive statewide sales tax — that would replace all state-level taxes in Kansas, including the personal and corporate income tax: “Because saving and investment are key elements of the growth process, consumption taxes can better promote economic growth, all else equal.”

He explains in more depth:

A well-crafted retail sales tax has positive attributes from the perspective of economic growth. It represents one form of a consumption tax, a form familiar to most people. Generally, consumption taxes represent a class of taxes that do not tax money used for saving and investment, regardless of the source of that money. This feature of consumption taxation differs from traditional types of income taxation. Income taxes effectively double tax the money used for saving and investment (but tax only once the money used for consumption), thereby producing a tax bias against saving and investment, which generates a disincentive to dedicate money toward future production.

Hall writes that “A well-crafted retail sales tax would also tax all goods and services uniformly.” His proposal even includes taxing the consumption of rented and owner-occupied housing. While true to the goal of uniformity, Hall recognizes the “novelty (and probable unpopularity) of applying the retails sales tax to rented and owner-occupied housing.”

Hall’s paper is comprehensive and includes discussion of technical issues such as “tax cascading,” where taxes on the inputs used by businesses are taxed again as intermediate goods and services make their way through production processes. There is also discussion of what Kansas could do to make the consumption tax progressive, if that is desired. Border considerations are discussed, too.

Currently the statewide sales tax in Kansas is 5.3%. (Counties and cities may impose additional sales tax on top of that. In Wichita the combined rate is 6.3%, for example.) Depending on the details of the consumption tax that Kansas might implement, the rate could range from 6.77% to 9.99% (those figures calibrated to produce the same revenue that the state collected in 2008).

What would be the impact on economic growth in Kansas? Simulations conducted by Hall indicate that growth in private-sector employment could be in the neighborhood of seven to eight percent per year, depending on the type of plan and phase-in period. This is tremendous growth, especially in light of the fact that private-sector job growth in Kansas has been stagnant or declining for many years. Private-sector investment and take-home pay would rise less rapidly, but at a strong rate.

Currently there is no bill in the Kansas Legislature that would implement a plan like this. It’s thought that an amendment to the Kansas Constitution would be necessary to soundly implement this policy. The amendment, ideally, would prohibit any income tax. Without this constitutional protection, lawmakers could reimpose either personal or corporate income taxes at any time.

Dr. Hall’s paper may be read at A Comprehensive Retail Sales Tax as a Single Tax for the State of Kansas.

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Kansas model budget released

by Bob Weeks on February 4, 2010

The Kansas Chapter of Americans for Prosperity has released its model Kansas budget for fiscal year 2011. Titled Commonsense Budget Proposal, it contains “a roadmap for legislators seeking to make Kansas government more efficient — and less costly — without turning to Kansas taxpayers,” according to AFP Kansas state director Derrick Sontag.

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Kansas bill would forbid taxpayer-funded pleas for tax increases

by Bob Weeks on February 4, 2010

A bill just introduced in the Kansas Legislature by Representative Joe Patton, a Topeka Republican, would bar taxpayer-funded lobbying for tax increases. The bill is House Bill 2622, captioned “an act concerning the use of public funds for lobbying.”

The bill is very short, the important part being: “No taxpayer funds shall be used for the purpose of employing or contracting for the services of any person whose duty and responsibility includes lobbying for a tax increase.”

Taxpayer-funded lobbying is a problem. In 2008 Alan Cobb — at that time Americans For Prosperity Kansas State Director — wrote an op-ed explaining the harm of taxpayer-funded lobbying. In it he wrote: “It’s proper for private citizens and groups to petition their government, but should one government be ‘petitioning’ another? Do you agree with the things they are lobbying for? Do you even know?”

I’d guess that most citizens don’t know about this, and that many would not agree with what their tax dollars are being used to push on the legislature.

While the bill uses the word “person,” many organizations that are funded by taxpayers lobby for tax increases. An example would be the Kansas Association of School Boards (KASB), which is funded primarily by dues paid by member school boards. Those payments come from tax dollars. This bill would block those lobbying activities by those organizations, because it is people that do the actual lobbying, and the bill forbids that.

Other articles about this topic include Testimony against taxpayer-funded lobbying, Wichita school bond issue not the only proposed tax increase, and Tax funded lobbyists spending revealed.

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Wichita downtown development survey released

by Bob Weeks on February 3, 2010

Last week Wichita businessman Craig Gabel created a survey for citizens to express their input to the Wichita City Council. Here are the results that Gabel sent me:

We had literally hundreds of people that took the time to take our survey about downtown development and the Water Walk hotel. Once again our City Council chose to ignore what taxpayers want and side with rich developers.

Here are the results from the survey:

Question 2: The City of Wichita has proposed giving $2.5 million to 4G LLC to build a Fairfield Hotel at Kellogg & Main. Do you agree with this action?
Yes: 5% No: 95%

Question 3: Assuming the City is going to provide funding for a downtown hotel would you rather have a:
Fairfield Hotel: 5%
A hotel similar to a Great Wolf Lodge: 80%
Neither: 15%

Question 4: Do you think that any proposed project asking for City of Wichita funding, or tax incentives should be let for bid?
Yes: 60%
No: 30%

Question 5: Would you support a 1% sales tax at the City and County level to reduce your property taxes by approximately 50%?
Yes: 95%
No: 5%

Question 6: Having spent approximately $390 million on downtown redevelopment, would you support a 1% sales tax for additional redevelopment?
Yes: 10%
No: 90%

Update: Question 1 asked whether the respondent is a registered voter. I don’t have the results for that question at this time. Also, I should have noted that this is not a scientific survey. It represents the opinions of those selected to participate and those who decided to participate. This may or may not be representative of Wichita.

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Kansas sales tax increase would cost jobs

by Bob Weeks on February 3, 2010

Kansas School Consolidation History

The Goldwater Institute has issued a report on the lost jobs that an increase in the Arizona sales tax would cause. According to projections by the Beacon Hill group, the one cent increase in the sales tax would bring in $1 billion annually to Arizona state government. But the cost of this sales tax would be 14,400 private sector jobs.

Arizona has about 2.3 times the population of Kansas, so a similar analysis would probably show fewer jobs lost in Kansas. But the number would still be high, we can be sure.

Taxes on transactions — that’s what a sales tax is — drive a wedge between buyer and seller. The result is that fewer transactions occur. That leads to a loss of jobs.

Additionally, more money in the hands of government means less in the hands of the private sector. Wealth is lost as inefficient and ineffective government spending replaces private spending and investment.

We should also be accurate in reporting the magnitude of the proposed sales tax increase in Kansas. Proponents often say it’s just one percent. In reality, it’s an increase of one cent on every dollar spent. As the current Kansas statewide sales tax is 5.3 cents on each dollar spent, increasing that by one cent to 6.3 cents is a tax increase of 18.9%.

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Kansas school consolidation: it won’t be the first time

by Bob Weeks on February 3, 2010

in Wichita and Kansas schools

An issue that some promote as a way to make Kansas schools more efficient and save money is school consolidation. If it happens, it won’t be the first time schools in our state have gone through consolidation.

Kansas Senator Chris Steineger, who is a Democrat representing Kansas City, recently asked the Kansas Legislative Research Department for information about school consolidation in Kansas. The memo that KLRD produced is below, and here are some interesting facts.

In 1958 Kansas had 2,794 school districts. That number shrunk to 311 in 1969. (Today there are 296 districts.) The goal during the 1960s was to produce school districts that had at least 400 students in grades 1-12, or at least 200 square miles and an assessed valuation of at least $2 million. Some of the intent of the legislation in 1963 was “the general improvement of the public schools,” “equalization of the benefits and burdens of education,” and to use state funds more wisely.

A previous attempt at consolidation in 1961 was rejected by the courts, but public interest in the bill was high, according to material found by KLRD. One remark was “Most of the opposition [to consolidation] was due to a large majority of small school not wanting their little kingdom disrupted, even at the expense of educational standards.” We see similar remarks made today.

A note in the memo mentions a 1992 report of school consolidation efforts in other states, finding that “consolidating school districts led to a minor savings in administrative costs but major savings would result only from closing schools, reducing the number of teachers, and increasing class sizes.”

Kansas school spending advocates tell us that reducing teachers and increasing class sizes would be a disaster for children. But see this article and also this to learn how teacher effectiveness is much more important than class size.

The history of school consolidation in Kansas nearly 50 years ago is also interesting for this reason: Currently a coalition of Kansas school districts are suing the state, asking for more money to be spent on schools. The state’s been sued for this reason before, and the remedy was probably not what the school spending advocates of the day wanted. Here’s correspondence from Sen. Steineger:

This past summer, I met former Senator Glee Smith who served in the Legislature from the late 50’s into the mid 60’s. I asked him what prompted the unification movement, and he replied, “A bunch of school districts got together and filed a lawsuit against the State claiming not enough state aid,” and the Legislature responded by establishing a mechanism requiring unification of smaller weaker school districts.

The standard remedy that school districts ask for in lawsuits is more money. Perhaps the courts will impose a different remedy.

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WaterWalk hotel subsidy passes

by Bob Weeks on February 2, 2010

Not that it matters much now since the measure has passed, but here are a few things that haven’t been discussed much regarding the subsidy to a proposed hotel in Wichita’s WaterWalk development.

Good public policy requires tax fairness

When people pay taxes, they feel that their tax payments go towards funding the general operation of government, including paying for some services that benefit them specifically as well as everyone else. Police and fire protection, for example.

There’s also the idea of joint sacrifice. Citizens may not like paying taxes, but most are comforted in the knowledge that everyone else pays, too.

The tax policy surrounding this proposed hotel, however, violates sound principles of public policy. On January 12 the developer of this proposed hotel told this council that the hotel would pay property taxes. That’s true, but only on the surface. The property taxes this hotel will pay for many years will go towards retiring bonds that provided benefits exclusively for the WaterWalk development, not the general operation of government.

So when citizens pay their property tax — knowing that some goes to provide public safety protection for their home and neighborhood — that doesn’t apply to the proposed hotel. But will it consume fire and police protection, and other city services? Of course it will, but it won’t be sharing in the cost of providing those services, as do regular citizens and businesses that don’t operate in this special tax-privileged environment.

The same goes for the transient guest tax, or bed tax, that guests of this hotel will pay. That money, according to city budget documents, is designed to be used for certain specific purposes. “The Tourism and Convention Fund, financed through a six percent transient guest tax on hotel and motel rooms in Wichita, provides monies to support tourism and convention, infrastructure, and promotion of the City.” Further, from the same document: “Fund priorities are: 1) debt service for tourism and convention facilities, 2) operational deficit subsidies and 3) care and maintenance of Century II.” But in the case of this proposed hotel, the transient guest tax generated by the hotel will be used to pay off bonds that benefit only this hotel. Is this consistent with the city’s stated policy for use of the transient guest tax?

Who can we trust?

There’s a big issue of trust at stake here. Several members of this council, along with the mayor and city manager, last month heard a consultant from Goody Clancy (the firm that’s helping plan the revitalization of downtown Wichita) tell Wichita that downtown hotel occupancy rates are high, above the level that indicates a need for new hotels. In the consultant’s own words: “There’s a market for additional hotel rooms downtown.”

The finding that there’s a market for hotel rooms should mean that there’s no need to pay someone to build a hotel downtown.

We can’t have it both ways. We can’t have our planning consultant telling us there’s a market at the same time we’re ready to believe a hotel developer who tells us it’s unprofitable to build a hotel downtown.

In light of the Goody Clancy findings, we need to examine the assumptions used to produce the “gap” in financing that the hotel developer claims makes it unprofitable to develop this hotel. It’s not sufficient to check the arithmetic, as Mr. Bell tells us his department does. We need to seriously examine those assumptions, remembering that they are provided by someone who has a multi-million dollar motive to show the existence of a financing gap that the city will fill.

We need to also remember that as long as this city is willing to fill financing gaps, no one will submit a proposal to this city without showing a gap. This sets the template for the development of the remaining empty parcels in WaterWalk, and for all of downtown, for that matter.

This issue of trust extends to Jack DeBoer, the WaterWalk owner, telling us that he doesn’t want any more city money. In response to citizen inquiry, the city has produced a statement of sources and uses of funds that shows that the money to be paid to DeBoer won’t come from the city’s contribution to the project.

This contention would be laughable if it wasn’t disingenuous and self-serving. It’s not credible to tell citizens that money from one source is used only for one purpose. The fact that the city is making a contribution to the hotel developer makes the payment to DeBeor possible. It doesn’t matter whose pocket the dollars come from. As far as public policy is concerned, all dollars are the same.

Leveling the playing field?

Some on this council have said that the subsidy provided to this proposed hotel actually levels the paying field instead of distorting it. What is the source of the burden that downtown developers face? Often it is said that land assembly issues are troublesome, but that isn’t the case for the proposed hotel.

What, exactly, are the difficulties that this proposed hotel faces that require city subsidy?

Pursuit of conventions: good public policy?

One of the reasons Wichita city leaders say we need to provide subsidy to a proposed hotel in the downtown WaterWalk development is that the rooms are needed to support the city’s effort to gain convention business.

But the convention business is in a structural decline that has been declining for many years. At the same time many cities — both large and small — have built vast conventions centers and related infrastructure. The promised economic development impact of this public investment rarely materializes, but cities continue to pour in public investment, chasing something that just isn’t there.

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Kansas scores poorly in initiative and referendum rights

February 2, 2010

Citizens in Charge Foundation — a transpartisan national voter rights group focused on the ballot initiative and referendum process — has released its 2010 Report Card on Statewide Voter Initiative Rights. Those familiar with Kansas will not be surprised to learn that our state scores poorly, as do many other states.

Some Kansas Democrats are reluctant to show their party affiliation

February 1, 2010

Over the weekend the Wall Street Journal had an online piece (Kansas GOP Could Be Its Own Worst Enemy) that mentioned how Raj Goyle, candidate for United States Congress from the fourth district, doesn’t mention his party affiliation on his website or campaign materials. It’s not only Goyle that omits this information.

Wichita’s pursuit of convention business: a wise strategy?

February 1, 2010

On its face, this pursuit of convention business seems like a noble effort by city leaders. Vast streams of economic development will follow if they are successful, they say. Providing subsidy to a hotel in support of this effort, they say, should be a simple decision. Especially when supporters like Wichita city council member Jeff Longwell tell us that much of the subsidy to the hotel will be paid by visitors to Wichita.

At Kansas Days, the fourth district Congressional campaign is on

January 31, 2010

At the annual Kansas Days festival in Topeka, the Kansas fourth district Republican candidates all hosted hospitality suites, looking to boost their chances with Kansas Republican voters. On Saturday, the Wall Street Journal ran an online piece titled Kansas GOP Could Be Its Own Worst Enemy, giving a run-down of the current political scene in Kansas.

Kansas teachers union makes it easy to ask for money

January 29, 2010

Thanks for Kansas Liberty for uncovering an effort of the Kansas National Education Association (or KNEA, the teachers union) to make it easy for school spending advocates to ask for more tax money.

Arizona case rules on economic development subsidy

January 29, 2010

In its press release titled Arizona Supreme Court Strikes Down Future Taxpayer Subsidies, the Goldwater Institute reports on a ruling by the Arizona Supreme Court that dealt a blow to government subsidies for the purpose of economic development.

Spalding lecture examined liberty, progressivism

January 29, 2010

This Tuesday in Emporia, constitutional scholar Matthew Spalding
delivered a lecture titled “Liberty and the Constitution.” An important topic presented in this lecture is that modern American progressivism is in opposition to the principles of liberty as expressed in the founding of the United States.

Kansas taxes have impact

January 28, 2010

Do Kansas taxes have an impact on business location decisions? Are Kansas taxes lower than surrounding states, as claimed by supporters of raising Kansas taxes?

Urban planning to be explored in Wichita

January 28, 2010

As Wichita is presently engaged in a downtown planning process that holds the promise of more centralized planning, more government spending, and tax increases, Wichitans need to be aware of alternatives.

Noted author and Cato Institute Senior Fellow Randal O’Toole will be in Wichita next week for several events. O’Toole is author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future and more recently Gridlock: Why We’re Stuck in Traffic and What to Do About It.

Kansas tax alert system launched

January 28, 2010

The Kansas chapter of Americans for Prosperity has created an information system to help keep Kansans notified when legislators propose to increase taxes.

Cause of Kansas budget gap is spending

January 28, 2010

Kansas Governor Mark Parkinson says Kansas has a $400 million budget gap, and he’s proposed increasing sales and cigarette taxes to close it. … If we could hold spending steady for next year — and remember that inflation is running at very low levels — we could get by without a tax increase. If the governor and the legislature would consider tapping some of the available Kansas fund balances, we could even increase spending without tax increases.

With downtown Wichita hotels doing well, why the need for subsidy?

January 28, 2010

At a recent presentation by Wichita’s downtown revitalization planning firm Goody Clancy, data was presented that is at odds with the city’s plans.

Real estate development to be topic at Pachyderm Club

January 28, 2010

At the Wichita Pachyderm Club this Friday, Wichita real estate developers Steve Clark and Johnny Stevens will speak on “The Waterfront, A History of a Private Development.”

Wichita hotel survey input requested

January 27, 2010

Wichita businessman Craig Gabel has created a survey form for citizens to express their input to the Wichita City Council

‘Keeping Kansas Conservative’ forum with Joe the Plumber, Todd Tiahrt, Mary Pilcher-Cook

January 25, 2010

On Friday, January 29, 2010, the Great American Forum Steering Committee will host its fifth public forum.

At Wichita city council, does the field tilt?

January 25, 2010

At the January 12 meeting of the Wichita City Council, several citizens and one council member addressed the “unlevel playing field” and its implications for development in downtown Wichita.

Kansas news digest

January 25, 2010

News from alternative media around Kansas for January 25, 2010.

Concerning Wichita’s WaterWalk, I have a few questions

January 24, 2010

As the City of Wichita decides whether to offer subsidy to a hotel in the downtown WaterWalk development, there are a few questions that deserve answers. Most of these questions are my own, but some are questions that people have told me I should ask.

Kansas Senate blocks new journalism

January 24, 2010

Does the application for press credentials to the Kansas Senate contain questions designed to limit or restrict the types of organizations that apply?

Kansas alternative media discussed on Kansas Week

January 23, 2010

Access to the Kansas Senate by alternative media is discussed on the KPTS Television public affairs program Kansas Week. Bob Weeks is the guest. Tim Brown is the host.

Dale Swenson on Kansas tax exemptions

January 22, 2010

Do Kansas business tax exemptions benefit only business at great cost to the state? Member of the Kansas House of Representatives Dale Swenson thinks so, according to a recent letter written by him that appeared in the Wichita Eagle.

He cites a Kansas sales tax exemption on the purchase of hearing aids, something Swenson says helps “regular folks.” The way it helps folks — and only those folks with hearing problems, by the way — is by making these purchases less expensive.

But right after this Swenson complains about tax exemptions for business, that, he claims, benefit only business to the detriment of everyone else: “This means average citizens are paying more and more to fund public services, while business pays less and less.”

Global Warming: Hoax or Reality?

January 22, 2010

Wichita’s Dennis Hedke will appear at two forums at Johnson County Community College that will explore the topic of climate change. The documentary film Not Evil Just Wrong — the antidote to Al Gore and global warming extremism — will be shown, too. My review of this film is at ‘Not Evil Just Wrong’ a powerful refutation of Al Gore, environmental extremism. Following is a pres release announcing the event.

Kansas alternative media senate access discussed on WIBW

January 21, 2010

Kansas Watchdog reporting at Kansas Senate decides who is press and who is not may have caught the eye of Topeka radio talk show hosts Raubin Pierce and Megan Mosack, as they invited me to appear on their show today to talk about my inability to obtain press credentials at the Kansas Senate.

For Kansas teachers union, fund balances are an illusion, not a solution

January 21, 2010

Today’s edition of Under the Dome Today — that’s the house organ of the Kansas National Education Association or (KNEA, the teachers union) — contains a story with the headline “Anti-Government Group launches another attack on public education.”

A more accurate headline might read “School spending advocacy group refuses to acknowledge budget solution that Kansas Deputy Education Commissioner Dale Dennis says could be used.” But that’s a tad wordy.