In this episode of WichitaLiberty.TV: A look at a variety of topics, including an upcoming educational event concerning water in Wichita, more wasteful spending by the city, yard signs during election season, problems with economic development and cronyism in Wichita, and water again. View below, or click here to view at YouTube. Episode 50, broadcast July 6, 2014.
From Club for Growth, whose motto is “Prosperity and Opportunity through Economic Freedom.”
Club for Growth PAC Endorses Mike Pompeo For Congress
Club for Growth President Chris Chocola: “Mike stands on principle to do what’s right for Kansas and America.”
May 29, 2014
Washington, DC — The Club for Growth PAC announced today that it is endorsing Republican Congressman Mike Pompeo for re-election. Congressman Pompeo represents Kansas’s Fourth Congressional District. Former Congressman Todd Tiahrt has announced that he is challenging Congressman Pompeo in the Republican primary.
“Congressman Mike Pompeo is a taxpayer hero with a 90% on the Club for Growth’s congressional scorecard and we hope he is re-nominated by Kansas Republicans,” said Club for Growth President Chris Chocola. “Mike stands on principle to do what’s right for Kansas and America. He’ll never stop fighting the Obama agenda in Washington.”
“Former Congressman Todd Tiahrt, on the other hand, has a liberal voting record that pales in comparison to Mike Pompeo. Congressman Tiahrt was one of the biggest spenders in the Republican Party when he served in Congress,” continued Chocola. “He voted to spend millions on an Exploratorium in San Francisco, a Lobster Institute in Maine, and even to spend millions on a building named after liberal New York Congressman Charlie Rangel. If that wasn’t bad enough, he voted for Obama’s wasteful ‘Cash for Clunkers’ program and to raise his own pay five times. Now that he’s decided to run for Congress, the Club’s PAC will do everything it can to make sure voters in Kansas learn the truth about Todd Tiahrt and his liberal record.”
In honor of our nation’s birthday, a video presentation of photographs of fireworks that I have taken. View below, or click here to view at YouTube.
From Kansas Policy Institute.
3rd Annual Kansas Freedom Index Released
Support of Freedom About More Than Politics, IDs Role of Government and Freedom of Citizens
July 1, 2014 — Wichita — Kansas Policy Institute released a new scorecard tracking votes from the 2014 legislative session. The third annual Kansas Freedom Index takes a broad look at voting records and establishes how supportive state legislators are regarding economic freedom, student-focused education, limited government, and individual liberty. The Index is intended to provide educational information to the public about broad economic and education freedom issues that are important to the citizens of our State. It is the product of nonpartisan analysis, study, and research and is not intended to directly or indirectly endorse or oppose any candidate for public office.
“An informed citizenry is an essential element of maintaining a free society. Having a deeper understanding of how legislation impacts education freedom, economic freedom and the constitutional principles of individual liberty and limited government allows citizens to better understand the known and often unknown consequences of legislative issues,” said KPI president Dave Trabert.”
A Freedom Percentage is calculated for each legislator, representing the relative position of a legislator’s raw score on a number line of the minimum and maximum score, with the percentage indicating proximity to the maximum score.
A positive cumulative score (or a Freedom Percentage above 50%) indicates that a legislator generally supported economic and education freedom, while a negative cumulative score (or Freedom Percentage below 50%) indicates that a legislator was generally opposed. A score of zero or a Freedom Percentage of 50% indicates that a legislator was generally neutral. The cumulative score only pertains to the specific votes included in the Kansas Freedom Index and should not be interpreted otherwise. A different set of issues and/or a different set of circumstances could result in different cumulative scores.
Trabert continued, “Each year it has been clear that support of economic freedom isn’t an issue of political affiliation. Republicans represented at least 70 percent of all House members and all Senate members since 2012. Those counts would produce fairly strong results one way or the other if economic freedom was a partisan issue, but instead, the overall score of both chambers was very near neutral.”
Trabert concluded, “Too often votes come down to parochial or personal issues and the idea of freedom is left on the legislature’s cutting room floor. Hopefully, the Kansas Freedom Index can start to recalibrate citizens and legislators towards supporting the freedoms of everyday Kansans and not be driven by politics.”
2014 Freedom Index by the Numbers
From Kansas Policy Institute.
A proposal before the Wichita City Council would raise the sales tax in the city by 1% to fund several projects. The biggest piece of the proposal would be to fund additional water capacity for users of the city water system.
On Thursday 17 July, come hear from the City of Wichita and others on the scope of the problems, possible solutions, and the perspectives of several experts in the debate.
Date: Thursday 17 July
When: 7:30 a.m. registration and 8:00 a.m. start to presentations
Where: Wichita State University MetroPlex Room 132 ( 29th and Oliver)
Cost: Free with Advance Registration
A light breakfast will be served. The session will conclude by 12:15 p.m.
Speaker Line-up and Agenda:
7:30 a.m. — Registration and Breakfast
8:00 a.m. — Kansas Water Office on scope of water usage/needs in SCKS
9:00 a.m. — City of Wichita Proposal: Alan King, Dir. of Public Works, accompanied by Councilman Pete Meitzner
10:00 a.m. — Are Water Markets Applicable in Kansas?: Dr. Art Hall, executive director of the Center for Applied Economics at the University of Kansas
11:00 a.m. — Wichita Chamber of Commerce Water Task Force Findings: Karma Mason, president of iSi Environmental
KPI is not taking a position of the water proposal before the City Council. This event is to provide a forum for relevant parties to present their perspective on the issue with the public. Each presenter will have 30 minutes for a presentation followed by an Q&A.
This is the first in a series of KPI-sponsored forums of this nature on the different aspects of the sales tax proposal. Future forums will be held on the economic development and street and transit proposals.
For more information about this event contact Kansas Policy Institute at 316.634.0218. To register, click here.
Following is testimony provided to the Wichita City Council on July 1, 2014. Background on this issue may be found at In Wichita, a public hearing with missing information and Wichita city council schools citizens on civic involvement.
Thank you for providing the gap analysis that I requested.
If the gap analysis is credible, if it really is true that projects like this are not financially feasible without taxpayer assistance, what does that tell us about Wichita? Shouldn’t we work on fixing these problems for everyone, rather than parceling out business welfare on a piecemeal basis?
The agenda packet material for this item says there is a need for incentives “based on the current market.” But not long ago this council was told that downtown Wichita is booming. So why won’t the market support a project like this without a handout from city taxpayers? And if downtown is truly booming but we’re still giving out incentives, will we ever be able to wean ourselves off?
Based on my reading of the gap analysis document, I see another problem with the facade improvement program. It shifts costs from landlords to commercial tenants. Instead of paying for the facade improvement costs as part of a mortgage or other financing, these costs become additional property taxes that commercial tenants pay in addition to rent.
This is really a problem, as Kansas and Wichita commercial property taxes are high. Each year The Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence survey property taxes. Considering the largest city in each of the states, Wichita property taxes are ninth highest in the nation for commercial property.
Wichita taxes are not just a little higher, but a lot higher. For example, for a commercial property valued at $100,000, Wichita property taxes are 38.5 percent higher than the national average.
Some of the reason why commercial property taxes are so high is due to the difference in assessment rates for various property classes. That’s not set by the City of Wichita. But the overall level of spending, and therefore the level of taxation, is set by this council. Further, the cost of incentives like this raise the cost of government for everyone else. One thing the city could do is to reduce spending somewhere else to offset the cost of this incentive. This would mean that other taxpayers do not have to bear the cost of this incentive.
If we wonder why the Wichita economy is not growing, commercial property tax rates and this council’s policy of targeted reductions are a large part of the problem.
In this episode of WichitaLiberty.TV: The City of Wichita urges citizens to take steps to stop “vampire” power waste. But before hectoring people to introduce inconvenience to their lives in order to save small amounts of electricity, the city should tackle the real monsters of its own creation. Then proceedings of a recent Wichita City Council meeting are instructive of the factors citizens should consider if they want to interact with the council and city government at a public hearing. Episode 49, broadcast June 29, 2014. View below, or click here to view at YouTube.
Kansas Senator Pat Roberts promotes his fiscal conservatism, but failed to vote in favor of earmark reform in a recent close vote.
In 2012 an amendment to a Senate bill was offered that would have dramatically reformed the earmark process.
The purpose of the amendment, according to Congress.gov, is “to prohibit earmarks.” Although offered in 2012, the short title of the amendment was “Earmark Elimination Act of 2011″
The nub of the amendment was “It shall not be in order in the Senate to consider a bill or resolution introduced in the Senate or the House of Representatives, amendment, amendment between the Houses, or conference report that includes an earmark.”
The amendment was rejected by a vote of 59 to 40. Among Democratic Party members, the vote was 44 to 7 against the amendment. For Republican Party members, the vote was 33 to 13 in favor of the amendment.
One of the 13 Republicans who voted against this reform-minded amendment was Pat Roberts of Kansas.
Appearing today on The Joseph Ashby Show, candidate for United States House of Representatives Todd Tiahrt defended the practice of earmarking federal spending.
He said that Congress should take away the president’s pen, and should do that by allocating funding properly. When pressed by the host, Tiahrt repeated that earmarks do not increase spending.
This is the standard argument: Earmarks simply direct the spending of money that is already authorized to be spent. Earmarking does not increase the amount spent. Which, of course, bypasses the fact that Congress authorizes a certain amount to be spent. If Congress is concerned that too much is being spent, it could authorize less.
There is broad agreement among limited-government conservatives that earmarks are harmful. Taxpayers for Common Sense concludes:
Earmarks reflect a broken budget process. Too often earmarks reward parochial interests at the expense of national needs. The earmarking process also often subverts established merit-based, competitive, or formula-driven budget processes without debate. Ultimately earmarks may fund projects many people consider “good” projects, but the earmark process does not guarantee these are the most beneficial and worthwhile projects.
At The Heritage Foundation, commentary on a Harvard Business school study opened with:
What happens when a state is lucky enough to have one of their Senators ascend to one of the three most powerful committee chairmanships? According to a new study by three Harvard Business School the average state then experiences a 40 to 50 percent increase in earmark spending (the figure is a smaller 20% for powerful House committees). So this new government spending is then a boon to the state right? The public spending stimulates economic growth right? Wrong. Turns out, increased federal spending is connected with a decrease in corporate capital expenditures and employment.
It should be noted that while in Congress, Tiahrt served on the Committee on Appropriations, one of the “powerful House committees” referred to. Further evidence of Tiahrt’s attitude is that today on Ashby’s show he referred to Jim DeMint, the former senator, anti-earmark crusader, and now president of Heritage, as a failure.
At The Cato Institute, Tad DeHaven wrote that earmarks are a symptom of a larger problem:
There just isn’t much difference between the activities funded via earmarking and the activities funded by standard bureaucratic processes. The means are different, but the ends are typically the same: federal taxpayers paying for parochial benefits that are properly the domain of state and local governments, or preferably, the private sector. As a federal taxpayer, I’m no better off if the U.S. Dept. of Transportation decides to fund a bridge in Alaska or if Alaska’s congressional delegation instructs the DOT to fund the bridge.
Therefore, earmarking is a symptom of the problem. The problem is the existence of programs that enables the federal government to spend money on parochial activities.
Also at Cato, Dan Mitchell makes the most important argument:
Last but not least, earmarks are utterly corrupt. The fact that they are legal does not change the fact that they finance a racket featuring big payoffs to special interests, who give big fees to lobbyists (often former staffers and Members), who give big contributions to politicians. Everyone wins … except taxpayers.
While the City of Wichita asks citizens to inconvenience themselves by saving “vampire” electrical waste, the city still lights up its own monsters.
Last Friday afternoon most downtown Wichita street lights were switched off. But not all, as can be seen by the many lights switched on at the Wichita Transit Center. They were on Friday afternoon, just as they are on many days.
While waste like this is not acceptable, it is all the more striking considering that Wichita’s transit system is out of money. The city council has recommended that Wichitans vote for higher sales taxes, part of which would fund the transit system. That would include, I suppose, the wasteful spending on burning street lights in the middle of the day. This is indicative of the attitude of the city as explained in Forget the vampires. Let’s tackle the real monsters.
So before considering any extra funding for Wichita transit, let’s ask that it stop wasteful spending like these lights. Even better, before sending any funding, let’s stop this waste.
The lights illustrated in this photograph 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.
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.
Spending by Kansas state and local governments has grown faster than in most other states.
Using data gathered by Tax Policy Center at Brookings Institution, I’ve prepared an interactive visualization of state spending trends over time. Click here to open the visualization in a new window. You may click on any number of states to highlight them. (Use Ctrl+click to add states after the first.) You may also choose “in or out” of the set of states near Kansas. Finally, you can select a range of years. This data is indexed, meaning that states start at the same level, so that relative changes in spending may be seen.
Data is from State & Local Government Finance Data Query System. http://slfdqs.taxpolicycenter.org/pages.cfm. The Urban Institute-Brookings Institution Tax Policy Center. Data from U.S. Census Bureau, Annual Survey of State and Local Government Finances, Government Finances, Volume 4, and Census of Governments (1977-2011). Date of Access: (29-Jul-2013).
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.”
High 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.
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.
In this excerpt from WichitaLiberty.TV: To solve water supply problems, the City of Wichita seeks to impose austerity on its citizens and force them to pay for others to install water-efficient appliances that save vanishingly small amounts of water. Plus, what happened to past assurances that we had plenty of water? Originally broadcast on March 9, 2014. View below, or click here to view at YouTube.
For more on this issue, see Where’s Wichita’s water?
By John Todd. A version of this appeared in The Wichita Eagle.
An article in the Wichita Eagle (“City Council OKs four projects for proposed 1-cent sales tax” May 27 Eagle) reports that even with the sales tax water rates would increase 1.3 percent, and without the sales tax, rates would go up 6.2 percent for a net increase of 4.9 percent. This means that my $50 per month average home water bill would increase a total of $2.45 per month to pay for what City Council members have said is the most attractive option for a new water source. I’ll take this type of increase anytime over a 1-cent sales tax on everything I purchase each month including groceries.
It strikes me that people and businesses that use water should pay for the water they use including the costs of needed water resource upgrades in their monthly water bills. A sales tax allows public officials to charge different rates for different groups of water users and is not as transparent and fair. By paying for the water I actually use I can control my individual cost for this valuable resource. Paying for water usage through a sales tax reduces any incentive individual and business users might have to conserve water than if they are writing a monthly check to pay for the water they actually use.
Sedgwick County economic development incentives 2013 status report. View below, or click here to open in new window.
Wichita TIF history and performance Report, 2011. Prepared by Department of Finance and Office of Urban Development, City of Wichita. View below, or click here to open in new window.
Development plan for downtown Wichita as prepared by RTKL Associates, Inc. January, 1989. View below, or click here to open in new window.
Results of all Sedgwick County forgivable loans and economic development exemptions (EDX) approved between 2005 and 2011. Compiled by county staff in October 2011. View below or click here.
In this excerpt from WichitaLiberty.TV: Wichita voters told pollsters they prefer adjusting spending, becoming more efficient, using public-private partnerships, and privatization to raising taxes. View below, or click here to view on YouTube. For more on this topic, see To fund government, Wichitans prefer alternatives to raising taxes.
The Wichita metropolitan area compares well creating jobs in local government, but trails in private sector jobs.
Data from the Bureau of Labor Statistics through 2013 allows us to compare the Wichita metropolitan area with the peers selected by Visioneering Wichita. I’ve gathered BLS data divided by industry sector.
When considering only government jobs, especially local government jobs, Wichita ranks high. When looking at private sector jobs, however, Wichita is in last place, and by a wide margin.
This is a problem. It is the private sector that generates the taxes that pay for government. When government grows faster than the private sector, economic activity is shifted away from productive activities to unproductive. The economist Dan Mitchell has proposed what he calls the “Golden Rule of Fiscal Policy,” which is: “The Private Sector should Grow Faster than Government.”
In Wichita, we see our local government proposing to grow itself even more by recommending that voters approve increased sales taxes to pay for more government programs. Officials tell us the increased spending is needed so that government can correct problems with Wichita’s economy, water supply, transit, and streets.
On these and other issues, the Wichita Eagle recently quoted Mayor Carl Brewer: “We’ve put them off for too long. We didn’t want the challenges. We didn’t want the tax bills. But now, to maintain our quality of life, we’ve got to catch up.”
Wichita’s government has created problems, by the mayor’s admission. Now, Wichita politicians and bureaucrats ask that we rely on government to fix the problems.
The interactive visualization I’ve created from BLS data lets you compare Wichita’s job growth with our Visioneering peers. You can select various industry sectors for display.
Data is from the Bureau of Labor Statistics of the U.S. Department of Labor. Visualization created by myself using Tableau Public. Click here to open the visualization in a new window.
Kansas law overrides neighborhood covenants that prohibit political yard signs before elections.
Some neighborhoods have restrictive covenants that prohibit homeowners from placing any signs in their yard except signs advertising homes for sale. But a 2008 Kansas law overrides these restrictive covenants to allow for the placement of small political yard signs starting 45 days before an election. Still, residents of covenant neighborhoods may want to observe their neighborhood’s restrictions.
For the August 5, 2014 primary election, the 45 day period in which signs are allowed started on June 21. (Although I could be off by a day. Sometimes lawyers count days in strange ways.)
The bill was the product of then-Senator Phil Journey of Haysville. The bill passed unanimously in both the Kansas House and Senate.
According to the First Amendment Center, some 50 million people live in neighborhoods with homeowners associations. And laws like the 2008 Kansas law are not without controversy, despite the unanimous vote in the Kansas Legislature.
While the U.S. Supreme Court has ruled that governmental entities like cities can’t stop homeowners from displaying political yard signs, a homeowners association is not a government. Instead, it is a group that people voluntarily enter. Generally, when prospective homeowners purchase a home in a neighborhood with restrictive covenants, they are asked to sign a document pledging to comply with the provisions in the covenants. If those covenants prohibit political yard signs, but a Kansas law says these covenants do not apply, what should a homeowner do? Should state law trump private contracts in cases like this?
Practically: Should you display signs in your yard?
While Kansas law makes it legal for those living in communities with covenants that prohibit political yard signs, residents may want to observe these convents. Here’s why: If neighbors are not aware of this new Kansas law and therefore wrongfully believe that the yard signs are not allowed in your neighborhood, they may think residents with signs in their yards are violating the covenants. By extension, this could reflect poorly on the candidates that are being promoted.
Those who are not aware of the law allowing yard signs are uninformed. Or, they may be aware of the law but disagree with it and wish their neighbors would not display political yard signs. These people, of course, may vote and influence others how to vote. Whether to display yard signs in a covenant neighborhood is a judgment that each person will have to make for themselves.
The Kansas statute
K.S.A. 58-3820. Restrictive covenants; political yard signs; limitations. (a) On and after the effective date of this act, any provision of a restrictive covenant which prohibits the display of political yard signs, which are less than six square feet, during a period commencing 45 days before an election and ending two days after the election is hereby declared to be against public policy and such provision shall be void and unenforceable.
(b) The provisions of this section shall apply to any restrictive covenant in existence on the effective date of this act.
Or, as described in the 2008 Summary of Legislation: “The bill invalidates any provision of a restrictive covenant prohibiting the display of political yard signs, which are less than six square feet, 45 days before an election or two days after the election.”
In this excerpt from WichitaLiberty.TV: Leaders in Wichita often liken government decision making to running a business, but there are important differences. That Wichita’s leaders in both government and business do not understand this is problematic. View below, or click here to view at YouTube. For more on this, see In Wichita, no differentiation between business and government.
Charges made on the campaign trail by Todd Tiahrt that his opponent is “Boehner’s boy” aren’t supported by Mike Pompeo’s voting record.
At a recent event in Wichita candidate for the Republican Party nomination for U.S. Congress for the Kansas fourth district Todd Tiahrt spoke about his opponent, incumbent Mike Pompeo. Tiahrt told the audience: “Now, Mr. Pompeo was also tied very closely to John Boehner. In fact he’s the only congressman in Washington D.C. that’s been appointed to two select committees. No other Member of Congress has been. But Boehner’s boy has.”
This criticism is meant to appeal to conservatives, many who believe Speaker of the House John Boehner is not conservative, at least on some issues. By linking Pompeo to the Speaker, Tiahrt suggests that Pompeo is not conservative.
There could be a variety of ways to judge how closely linked two politicians may be. One way would be through their voting record, and someone has done that.
Last July writers for the Washington Post looked at what they called “fault lines within the House Republican conference.” The group selected six votes that they thought illustrated where the fault lines cut. They concluded there are five “relatively well-defined factions among House Republicans” based on how regularly members vote in concert with leadership — namely, Speaker John Boehner. (See The Fix’s complete guide to understanding House Republicans.)
You might think that someone who is “Boehner’s boy” — that’s the charge leveled against Pompeo by Tiahrt — would be in the group the Post writers called “the Boehner base.” Or maybe the group next to that.
But Mike Pompeo’s votes placed him in a group far away from the Boehner base. Not the group farthest away, but the group next to farthest away.
Public service announcements on Facebook and Wichita City Channel 7 urge Wichitans to take steps to stop “vampire” power waste. But before hectoring people to introduce inconvenience to their lives in order to save small amounts of electricity, the city should tackle the real monsters of its own creation.
People are probably vaguely aware that many modern electrical and electronic devices consume electricity even when switched off. One source estimates that a cell phone charger consumes 0.26 watts of electrical power even when a phone is not plugged in. While in sleep mode, a flat panel computer display consumes 1.39 watts. A clock radio uses 2.01 watts. A microwave oven while not in use and with its door closed uses 3.08 watts. (These are average values.) A large Samsung smart television on standby uses 0.3 watts.
While appearing to be wasteful, this “vampire” power consumption often has a benefit. If you unplug your clock radio when you leave for work in the morning, you save a few dozen watts of power. But, you have to reset the clock when you want to use it again. If I unplug my Samsung smart television, I’ll probably have to reprogram it to my preferences. If I want save the power my microwave oven wastes, I’ll have to wrench my back lifting it out of the way so I can reach the outlet it plugs in to. That action, naturally, unleashes a cloud of dust bunnies to dirty my counters and floor.
Nonetheless, the City of Wichita uses its Facebook page and cable television network to urge its citizens take steps like these in order to save small amounts of electricity.
How much electricity do you suppose a city street light consumes? It depends on the type of light, but common street lights use from 100 to 200 watts. During the hours when the sun does not shine, we’re generally willing to pay for that in order to obtain the benefits of lighted streets and sidewalks.
But when street lights are burning in the middle of a day, they provide absolutely no value. Street lights turned on during the day provide none of the convenience of “vampire” power usage, such as not needing to reset your clocks and move your microwave oven every day.
So while the City of Wichita uses its television channel to hector citizens into adding inconvenience to their lives in order to save vanishingly small amounts of electricity, the city apparently has no misgivings about using large amounts of electricity to needlessly illuminate the noonday sky, week after week.
As I’ve shown, the city often has street lights turned on at noon on days with no clouds in the sky. (See here for examples.) Yesterday dozens of city street lights were turned on at 2:30 in the afternoon on a sunny day for many blocks in downtown Wichita. This is not an isolated mistake. It is a pattern. (Even if it is cloudy and raining, the street lights add no discernible illumination during daylight.)
There’s something else. Each of us can choose the balance between “vampire” power waste and inconvenience based on our own values. If we choose to use “vampire” power in order to add convenience to our lives, we have to pay for it.
But the Wichita city hall bureaucrats who burn street lights in the noonday sun week after week are spending your money, not theirs.
(Yes, city hall bureaucrats pay taxes to the city just like you and I, so their tax money is also wasted. But because the cost of this waste is spread over the entire city, the motivation for any one person to take steps to eliminate the waste is small. Especially if, like a city hall bureaucrat would, you’d have to actually work in order to achieve savings. But these same bureaucrats and politicians urge you to work harder in your home in order to save small amounts of “vampire” electricity.)
The wasteful expenditures on street lights I’ve been illustrating for several weeks are located in districts of the city represented by Janet Miller and Lavonta Williams. Both express concern for the environment and criticize the purported harm man has caused the earth by emitting greenhouse gases. Here’s an opportunity for them to act on their beliefs.
In this episode of Voice for Liberty Radio: Candidates for Republican party nominations in two districts for Sedgwick County Commission spoke at the Wichita Pachyderm Club on June 20, 2014.
In district 4, which is parts of northeast, north and northwest Wichita and the towns of Park City, Valley Center, and Maize, Kansas Senator Carolyn McGinn is challenging the incumbent Richard Ranzau. In district 5, which is parts of south and southeast Wichita and the town of Derby and surrounding area, Derby Mayor Dion Avello is facing Kansas Representative Jim Howell. The format of the meeting was an opening statement by each candidate followed by questions from the audience and a brief closing statement.
Here are candidates for Republican party nominations for Sedgwick County Commission at the Wichita Pachyderm Club on June 20, 2014.
Candidates in district 5:
State Representative Jim Howell for Sedgwick County Commissioner
The City of Wichita says it wants policies to be predictable and reliable, but finds it difficult to live up to that goal.
From 2009, an example of how the City of Wichita makes policy on the fly to suit the current situation. The policy change benefited a building developed by “The Minnesota Guys,” who, since the time of this article, fell into disfavor with pretty much everyone in Wichita, including the city council.
Regarding public policy, this episode illustrated the city broadening the application of special assessment financing. Traditionally special assessment financing has been limited to instances such as the city building streets and sewers in new areas of town, allowing commercial and residential property owners to repay the costs over 15 years. But the item approved by the council at this meeting was for repair of existing buildings, not construction of new infrastructure. Additionally, the work financed by the special assessment taxes will be owned by the private property owners. When the city uses special assessment financing to build streets and sewers in new neighborhoods the city owns this infrastructure, even though it is paid for by nearby property owners.
To approve this financing, the city had to bend or waive two policies. That’s problematic, as the city tells citizens it wants policies and council behavior to be consistent and predictable. Although this incident is from five years ago, not much has changed since then. See Wichita: No such document for an example from last year. Following is Wichita special assessments for repairs is bad policy. Other articles on this topic are In Wichita, waiving guidelines makes for bad policy and At Wichita city council, special pleading of selfish interests.
At Tuesday’s meeting (August 18, 2009) of the Wichita City Council, a privately-owned condominium association is seeking special assessment financing to make repairs to its building. In order for the association to succeed in its request, the council will have to waive two guidelines of Wichita’s facade improvement program.
Special assessment financing means that the cost of the repairs, up to $112,620 in this case, will be added to the building’s property taxes. Actually, in this case, to each of the condominium owners’ taxes. They’ll pay it off over the course of 15 years. (A conversation with the president of the homeowners association brought out the possibility that the actual assessment may be in the neighborhood of $75,000.)
So the city is not giving this money to the building’s owners. They’ll have to pay it back. The city is, however, setting new precedent in this action.
Special assessment financing has traditionally been used to fund infrastructure such as streets and sewers, and new infrastructure at that. The city, under its facade improvement program, now allows this type of financing to be used to make repairs and renovations to existing buildings. That’s if the building is located in one of the politically-favored areas of town.
By using special assessment financing in this way, the city seeks to direct investment towards parts of town that it feels doesn’t have enough investment. This form of centralized government planning is bad public policy. The city should stop doing this, and let people freely choose where to invest.
Besides this, two guidelines in the city’s facade improvement program must be waived for this project to obtain special assessment financing.
The first is the private investment match. This is designed to ensure that the property owners have “skin in the game” and that the taxes will be paid back.
Here, the city is proposing that since the building’s owners have made a past investment in this property, there’s no need to require a concurrent investment. It hardly needs to be noted that anyone who has purchased property has made a past investment in that property.
Second, facade improvement projects are required to undergo a gap analysis to “prove” the need for public financing. According to the city’s report: “This project does not lend itself to this type of gap analysis; however, staff believes that conventional financing would be difficult to obtain for exterior repairs to a residential condominium property like this.”
So the city proposes to waive this requirement as well.
There seems to me to be a defect in the manner of ownership of this building. While the homeowners association and the condominium owners might not have anticipated that repairs would be needed so soon after the building’s opening, they must have contemplated that repairs and maintenance — to either exterior or interior common areas — would be needed at some time. How does the association plan to pay for these?
So what will happen if the city council doesn’t approve the special assessment financing? The agenda report states “Each individual condo owner would be required to fund a share of the cost.”
Isn’t that what private property owners do: fund the cost of repairs to their property?
According to the Sedgwick County Treasurer’s office, the appraised values of these condos range from $103,000 to $310,200, with an average value of $201,943. The maximum amount being added to each condo’s assessment is $4,022, although the actual amount may be closer to $3,000.
That’s along the lines of what it might cost to perform a few repairs and paint a house that’s worth what these condos are worth.
Let’s ask that these owners do just what thousands of homeowners in Wichita do every year: take responsibility for the maintenance of their own property without looking to city hall for help.
In this episode of WichitaLiberty.TV: Does Wichita have a problem with cronyism? The mayor, city council, and bureaucrats say no, but you can decide for yourself. Then, from LearnLiberty.org, the harm of cronyism at the national level. Episode 48, broadcast June 22, 2014. View below, or click here to view at YouTube.
Proceedings of a recent Wichita City Council meeting are instructive of the factors citizens should consider if they want to interact with the council and city government at a public hearing.
At the June 17, 2014 meeting of the Wichita City Council, one agenda item was a public hearing to consider adding a property to the city’s facade improvement program. Susan Estes of Americans for Prosperity-Kansas appeared before the council during the hearing to express concern that a member of AFP (me) had made a request for information on the item, but had not received the information by the time of the public hearing. Background on my request and its importance to public policy can be found at In Wichita, a public hearing with missing information. Video of this meeting is below, or click here to view at YouTube.
From the bench, Council Member Pete Meitzner (district 2, east Wichita) said that this item had been “discussed in length last week,” referring to what would be the June 10, 2014 meeting. A reading of council agendas and minutes shows that it was actually at the June 3 meeting when the item was presented. Further, the June 3 matter was a different item. It’s a small detail, but the purpose of the June 3 item was to approve and accept the property owners petition and set the date for a public hearing. That public hearing was held on June 17.
At the June 3 meeting, contrary to Meitzner’s assertion, there was no substantive discussion on this item except for the presentation by city staff. There really was no need for discussion at that time, as the purpose of the agenda item was to accept the petition and set a date for a public hearing. If the petition is valid in its form, I don’t believe the council has any choice but to accept it and set a date for a public hearing. The purpose of the public hearing is to, naturally, hear from the public.
At the June 17 meeting during the public hearing, Meitzner questioned Estes and city staff. He asked if there was a “gap analysis” performed on all special assessments the city establishes. When told no, he asked why is the gap analysis needed for this project and not for others. The assistant city manager explained that it is required for economic development projects like the one under consideration today, but not for others.
Questioning at the meeting also revealed that there are legal issues regarding whether the gap analysis can be disclosed to the public. The city has told me it will respond to my request for the document by June 20. The city is treating my friendly request for the document as a request made under the Kansas Open Records Act. That law is permeated with loopholes and exceptions that give government many pretexts to avoid disclosure of documents.
The meeting also featured an impassioned attack on Estes and her allies from a citizen speaker. The attack was based on incorrect information, as was explained to the citizen in the meeting.
What citizens can learn from this meeting
If you don’t ask for information on a schedule that pleases the city council, you may be criticized by multiple council members.
Council members may criticize you based on incorrect facts.
Council members may grill you based on their lack of knowledge of — or incorrect understanding of — city policy.
If you ask for information from the City of Wichita, but don’t also ask for the same from other jurisdictions, a city council member may seek to discredit you.
Does Wichita have a problem with cronyism? The mayor, city council, and bureaucrats say no, but you can decide for yourself. View below, or click here to view in high definition at YouTube.
The Wichita City Council is holding a public hearing, but citizens don’t have information that would be useful if they’re interested in conducting oversight.
Wichita’s facade improvement program provides for the financing of the exterior faces of buildings in certain areas of the city. The money that is advanced to the developers, along with interest charges, are added to the property tax bills for the property, spread over 15 years. In this respect the program is similar to when the city builds streets and sewers in new areas of town and allows homeowners to pay these costs over 15 years. Except, the facade improvement program is for repair of existing buildings, not construction of new infrastructure. Additionally, the work financed by the facade improvement program is owned by the private property owner. When the city constructs streets and sewers in new neighborhoods, the city owns them.
There’s another difference. In the item to be considered today, there is a grant of $20,000. This is a gift of cash with few strings attached, except that it be spent on something the owner must spend anyway.
City documents indicate this is a project with a cost of $2,500.000.
Here’s the public policy angle. City documents state, regarding this item:
In 2009, the Facade Improvement Program was revised to require that private funding for overall project costs be at least equal to public funding and that applicants show a financial need for public assistance in order to complete the project, based on the owner’s ability to finance the project and assuming a market-based return on investment.
Later on, the same document states
The Office of Urban Development has reviewed the economic (“gap”) analysis of the project and determined a financial need for incentives based on the current market.
In other words, without the benefit of the facade improvement loan and grant, the project would not be economically feasible. Which, to me, seems curious. A $20,000 grant for a $2,500,000 project is 0.8 percent of the project. The lower interest rate for the $156,034 being financed under the program provides some small additional benefit. These values are small compared to the scope of the project. It is not possible to forecast future revenues and expenses with the precision necessary to conclude that the facade improvement program boosts this project over the bar of economic feasibility, whatever that is.
We’ll probably not know what that bar is. I asked for the “gap” analysis. It doesn’t appear that it will be available before today’s meeting. I asked for it Thursday evening, and the city’s public information officer has followed up with me to see if I received the document, but I do not have it. The public doesn’t have it. I doubt if city council members have it.
The item today is a public hearing. The law requires it to be held so that the council can receive input from the public. Whether the public is informed — that’s a different matter.
Who reads the agenda
The agenda packet for the previous week contained a mistake. It was a mistake that is easy to make and not of any serious consequence. The wrong pages appeared for an item, and the correct pages were not in the packet. When I inquired about this late Monday afternoon — not long before the Tuesday meeting — the city’s public information office thanked me for bringing this to the city’s attention. A correction was promptly published.
Which leads me to wonder: Had anyone else read the agenda with sufficient attention to notice that mistake?
In February 2012 the City of Wichita held an election, but you wouldn’t have learned of the results if your only news source was the city’s website or television station. In the following article from March 2012, I wonder why news of the election results was overlooked by the city.
After last week’s election results in Wichita in which voters canceled an ordinance passed by the city council, I noticed there was no mention of the election results on the city’s website. So I dashed off a note to several responsible authorities, writing this:
“I notice that the city’s website carries no news on the results of the February 28th election. Is this oversight unintentional? Or does the city intend to continue spending its taxpayer-funded news producing efforts on stories with headlines like ‘Valentine’s at Mid-Continent Airport,’ ‘Rain Garden Workshops in February,’ and ‘Firefighter Receives Puppy Rescued at Fire Scene’?”
It’s not as though city staff doesn’t have time to produce a story on the election. The city’s public affairs department employs 15 people with an annual budget of some $1.3 million. While some of these employees are neighborhood assistants, there are still plenty of people who could spend an hour or two writing a story announcing the results of the February 28th election.
Except: That doesn’t fit in with the city’s political strategy. That strategy appears to be to ignore the results of the election, or to characterize the election as a narrowly-focused referendum on one obscure economic development tool.
At one time, however, the attitude of city hall was that the election was over the entire future of downtown Wichita. Mayor Carl Brewer said the election would cause “turmoil inside the community, unrest.” Council member Pete Meitzner (district 2, east Wichita) said we needed to have an early election date so “avoid community discourse and debate.” He later backpedaled from these remarks.
But now that city hall and its allies lost the election, the issue is now cast as having been very narrow, after all. Citizens aren’t against economic development incentives, they say. They’re just against hotel guest tax rebates.
This narrow interpretation illustrates — again — that we have a city council, city hall bureaucracy, and allied economic development machinery that is totally captured by special interests. Furthermore, the revealed purpose of the city’s public affairs department, including its television channel, is now seen as the promotion of Wichita city government, not Wichita and its citizens. These are two very different things.
Commercial retail space owned by the City of Wichita in a desirable downtown location was built to be rented. But most is vacant, and maintenance issues go unresolved.
At one time it was thought that the Wichita city-owned parking structure in the 400 block of East William Street would house retail shops along the street. But the present state of the property should cause us to be wary of government economic development efforts.
As reported by the Wichita Eagle twenty years ago on Wednesday, October 20, 1993:
The council also approved a plan to spend about $76 a square foot to construct roughly 6,000 square feet of retail space on the first floor of the parking garage. The space would lease for an estimated $8.70 a square foot.
Council member Sheldon Kamen questioned that part of the plan. ”I just can’t visualize spending $76 a square foot,” he said. “If I was a developer I wouldn’t spend $76 a square foot for retail space on William street.”
Council member Joan Cole disagreed with Kamen, calling $8.70 a “very good price” that would attract tenants. ”It is my feeling there are small operations that would find this kind of small space very attractive,” she said.
(Adjusted for inflation, these prices would be $122 and $14 today)
What has been the results of the city’s venture into commercial real estate? As can be seen in this video from September, a Wichita city government office occupied some of the space, but the office had moved to another location. Now, Wichita Festivals occupies some of the space, but much is still empty.
Inspecting the building last September, I found that this city-owned property had maintenance issues that might, in some circumstances, be considered as contributing to blight. Based on a recent walk-by, maintenance hasn’t improved in the ten months since then. Maybe that’s why there’s apparently little demand to rent this space.
It’s not as though the building has many of advantages that city planners tell us are needed for a vital downtown Wichita. It’s adjacent to the block with the Eaton Hotel and the Wichita Downtown Development Corporation, the agency charged with promoting downtown. This retail space is right across the street from the city’s bus transit center. It’s also one block away from the Intrust Bank Arena, which was promoted as a driver of commerce and activity for the surrounding area. Its Walk Score — a measure promoted by city planners — is 71, which is deemed “Very Walkable. Most errands can be accomplished on foot.”
Considering all the advantages this government-owned property has, it’s failing. It’s becoming blighted. The best thing the city could do is sell this property so that the benefits of markets and the profit-and-loss system can replace management by Wichita city hall bureaucrats.
In this episode of Voice for Liberty Radio: Candidate for United States Senate Dr. Milton Wolf spoke to the Wichita Pachyderm Club on Friday June 13. He spoke about the issues he feels are important today in America and took questions from the audience. Dr. Wolf was introduced to the Pachyderm Club members and guests by myself.
When Wichita city leaders tell us that the budget and spending have been cut to the bone, that everything that can be done to save money has already been done, remember my Friday trips to downtown for lunch.
With two of the four sidewalk bench lights illuminating the sidewalk despite the cloudless midday sky, there is good news: The street light in the background was not switched on. Neither were other nearby street lights. This is progress for Wichita.
The lights illustrated in this photograph 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 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.
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.
In this episode of WichitaLiberty.TV: A few tips on using your computer and the internet. Then, how to be informed. Finally, a look at a recent episode of economic development in Wichita, and what we can we learn from that. Episode 47, broadcast June 15, 2014. View below, or click here to view on YouTube.
Before Wichita city hall asks its subjects for more tax revenue, it needs to regain the trust of Wichitans. Following, from February, an illustration of the problems city hall has created for itself. And, how it would be helpful if the editorial board of the state’s largest newspaper acted as though it cared about ethics, cronyism, government transparency, and corruption.
When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.
– P.J. O’Rourke
Your principle has placed these words above the entrance of the legislative chamber: “whosoever acquires any influence here can obtain his share of legal plunder.” And what has been the result? All classes have flung themselves upon the doors of the chamber crying:
“A share of the plunder for me, for me!”
– Frederic Bastiat
Tomorrow the Wichita City Council considers a policy designed to squelch the council’s ability to issue no-bid contracts for city projects. This policy is necessary to counter the past bad behavior of Wichita Mayor Carl Brewer and several council members, as well as their inability to police themselves regarding matters of ethical behavior by government officials.
The proposed policy is problematic. For some projects the developer will have to pay for “a third party expert to verify construction estimates and contracts with respect to reasonable market costs and appropriate allocation of costs between public and private funding.”
Why are measures like this necessary? The impetus for this policy is the no-bid contract awarded to Key Construction for the construction of the garage near the Ambassador Hotel, originally called Douglas Place, now known as Block One.
A letter of intent passed by the council on August 9, 2011 gives the cost of the garage: “Douglas Place LLC will administer the construction of the garage and urban park on behalf of the City and the City will pay the cost of designing and constructing the same at a cost not-to-exceed $6,800,000.” Of that, $770,000 was for the urban park, leaving about $6 million cost for the garage. The motion to approve the letter of intent passed with all council members except Michael O’Donnell voting in favor.
By the time the item appeared for consideration at the September 13, 2011 city council meeting, city documents gave the cost of the constructing the garage structure at an even $6 million. The motion to spend that amount on the garage passed with all members except O’Donnell voting in favor, except Brewer was absent and did not vote.
Then the city manager decided that the project should be put to competitive bid. Key Construction won that competition with a bid of about $4.7 million. Same garage, same company, but $1.3 million saved.
The Wichita Eagle tells the story like this: “The Ambassador garage at Douglas Place, awarded at $4.73 million to Key Construction — a partner in the hotel project and the project’s contractor — came in about 20 percent under estimates provided the City Council, on the heels of some city-financed downtown parking garages that spiraled over budget.” (“Wichita City Council to consider bidding policy extension”, Wichita Eagle, Sunday, February 2, 2014)
Reading the Eagle story, citizens might conclude that due to excellent management by Key Construction, the garage was built at a 20 percent savings under “estimates.”
But that’s not at all what happened. It’s not even close to what really happened.
Without the intervention of O’Donnell, the city manager, and — according to press reports — city council member Pete Meitzner, the garage would have been built for $6 million. That was the intent of a majority of the council. The $6 million price tag for the no-bid contract was in the ordinance that passed, and in the letter of intent that passed a month before. There were no “estimates” as the Eagle reported. There was only the expressed desire of the council to spend $6 million.
So there were no “estimates” that Key Construction bested. But there was an objectionable no-bid contract that the council agreed to. Fortunately for Wichita, a few people objected and overrode the council’s bad decision.
We’re left to wonder why the Eagle retold the story with Key Construction in the role of hero. That’s about 180 degrees away from the role this company plays.
Key Construction is intimately involved in city politics. Its principals and executives contribute heavily to mayoral and city council election campaigns. Company president David Wells is a personal friend of the mayor.
Did Key’s political involvement and campaign contributions play a role in the council awarding the company a no-bid garage contract? Key Construction executives and their spouses are among a small group who routinely make maximum campaign contributions to candidates. These candidates are both liberal and conservative, which rebuts the presumption that these contributions are made for ideological reasons, that is, agreeing with the political positions of candidates. Instead, Key Construction and a few companies are political entrepreneurs. They seek to please politicians and bureaucrats, and by doing so, receive no-bid contracts and other taxpayer-funded benefits. This form of cronyism is harmful to Wichita taxpayers, as shown by the Ambassador Hotel garage.
The harm of pay-to-play
When it is apparent that a “pay-to-play” environment exists at Wichita City Hall, it creates a toxic and corrosive political and business environment. Companies are reluctant to expand into areas where they don’t have confidence in the integrity of local government. Will I find my company bidding against a company that made bigger campaign contributions than I did? If I don’t make the right campaign contributions, will I get my zoning approved? Will my building permits be slow-walked through the approval process? Will my projects face unwarranted and harsh inspections? Will my bids be subjected to microscopic scrutiny?
Wait a minute: Doesn’t Wichita have a newspaper that keeps a watchful eye on cronyism and corruption? With an editorial board that crusades against these ills?
The answer is no. No such newspaper exists in Wichita.
We need laws to prohibit Wichita city council members from voting on or advocating for decisions that enrich their significant campaign contributors. The Ambassador Hotel garage contract is just one example. Citizens are working on this initiative on several fronts. Some find the actions of these candidates so distasteful and offensive that they are willing to take to the streets to gather thousands of signatures to force the Wichita City Council to act in a proper manner.
That huge effort shouldn’t be necessary. Why? The politicians who accept these campaign contributions say it doesn’t affect their voting, and those who give the contributions say they don’t give to influence votes.
If politicians and contributors really mean what they say, there should be no opposition to such a “pay-to-play” law. Citizens should ask the Wichita City Council to pass a campaign finance reform ordinance that prohibits voting to enrich significant campaign contributors.
There is a law, sort of
Citizens who believe that city council members ought not to vote on matters involving their friends and business associates, we already have such a law. Sort of. Here’s a section from the Wichita city code as passed in 2008 (full section below):
“[Council members] shall refrain from making decisions involving business associates, customers, clients, friends and competitors.”
Mayor Carl Brewer voted for this law, by the way. When asked about a specific application of this city law, the Wichita city attorney supplied this interpretation:
Related to the Mayor’s participation in the item, yes, City Code advises Council members to “refrain from making decisions involving business associates, customers, clients, friends and competitors. … ” but the Code does not provide definitions or limits to these broad categories of constituents. Further, the City Code clearly requires Council members to “vote on all matters coming before the City Council except in those particular cases of conflict of interest. …” The city Code does not define what constitutes a conflict but the Council has historically applied the State law for that definition.
Applying that State law specific to local municipalities, the Mayor does not have any substantial interest in Douglas Place LLC, and therefore no conflict. Under the State ethics law, there was no requirement that the Mayor recuse himself from voting on the Ambassador Project.
So we have statutory language that reads “shall refrain,” but the city attorney interprets that to mean “advises.”
We also have statutory language that reads “business associates, customers, clients, friends and competitors.” But the city attorney feels that these terms are not defined, and therefore the mayor and city council members need not be concerned about compliance with this law. We’re left to wonder whether this law has any meaning at all.
Be advised: If you ask the mayor to adhere to this law, he may threaten to sue you.
If the city attorney’s interpretation of this law is controlling, I suggest we strike this section from the city code. Someone who reads this — perhaps a business owner considering Wichita for expansion — might conclude that our city has a code of ethics that is observed by the mayor and council members and enforced by its attorneys.
Giving that impression, through, would be false — and unethical.
Here’s the Wichita city code:
Sec. 2.04.050. — Code of ethics for council members.
Council members occupy positions of public trust. All business transactions of such elected officials dealing in any manner with public funds, either directly or indirectly, must be subject to the scrutiny of public opinion both as to the legality and to the propriety of such transactions. In addition to the matters of pecuniary interest, council members shall refrain from making use of special knowledge or information before it is made available to the general public; shall refrain from making decisions involving business associates, customers, clients, friends and competitors; shall refrain from repeated and continued violation of city council rules; shall refrain from appointing immediate family members, business associates, clients or employees to municipal boards and commissions; shall refrain from influencing the employment of municipal employees; shall refrain from requesting the fixing of traffic tickets and all other municipal code citations; shall refrain from seeking the employment of immediate family members in any municipal operation; shall refrain from using their influence as members of the governing body in attempts to secure contracts, zoning or other favorable municipal action for friends, customers, clients, immediate family members or business associates; and shall comply with all lawful actions, directives and orders of duly constituted municipal officials as such may be issued in the normal and lawful discharge of the duties of these municipal officials.
Council members shall conduct themselves so as to bring credit upon the city as a whole and so as to set an example of good ethical conduct for all citizens of the community. Council members shall bear in mind at all times their responsibility to the entire electorate, and shall refrain from actions benefiting special groups at the expense of the city as a whole and shall do everything in their power to ensure equal and impartial law enforcement throughout the city at large without respect to race, creed, color or the economic or the social position of individual citizens.
In this excerpt from WichitaLiberty.TV: The Wichita economy has not performed well. Could cronyism be a contributing factor? Mayor Carl Brewer says it’s time to put politics and special interests aside. Is our political leadership capable of doing this? View below, or click here to view at YouTube.
In this excerpt from WichitaLiberty.TV: Wichita voters give their opinions on city spending, subsidies for economic development, and their willingness to pay higher taxes for certain services. Since this episode was recorded, the Wichita City Council has given tentative approval for a one cent sales tax to be used for water supply, street maintenance, economic development, and transit. View below, or click here to view on YouTube.
For more from this survey, see
Today the Wichita City Council may decide to revive a program to issue rebates to persons who purchase water-saving appliances. The program was started last summer, but less than half the allocated rebate money was claimed. The city will argue that this program has no cost, as the funds are left over from last year’s program. Except: The city could use the money not spent on rebates to either reduce water rates or retire water system debt. Following is an article from last year on this topic.
Wichita begins rebates and regulation
Instead of relying on market forces, Wichita imposes a new tax and prepares a new regulatory regime.
At today’s meeting of the Wichita City Council, the city decided to spend up to $1 million this year on rebates to encourage people to buy water-efficient appliances. This will save a vanishingly small amount of water at tremendous cost.
The worst realization from today’s city council meeting is how readily citizens, politicians, and bureaucrats will toss aside economic thinking. The antimarket bias that Bryan Caplan explains in The Myth of the Rational Voter: Why Democracies Choose Bad Policies was in full display — even by the conservative members of the council.
It’s also clear that some council members want to go down the road of austerity rather than abundance.
What did we learn today? Many speakers used the terms “conservation” and “judicious.” Conservation is good. Judicious use is good. But each person applies different meanings to these concepts. A great thing about living in a (relatively) free economy is that each person gets to choose to spend their time and money on the things that are important to them, and in the amounts they want. We make these choices many times each day. Sometimes we’re aware of making them, and sometimes we’re not.
For example: If you’re watching television alone in your home, and you go to the kitchen to get a snack, do you turn off the television for the moment that you’re not watching it? No? Well, isn’t it wasting electricity and contributing to global warming to have a switched-on television that no one is watching, even for just a moment?
Some people may turn off the television in this scenario. But most people probably decide that the effort required to save a minute’s worth of electricity consumption by a television isn’t worth the effort required.
(By the way, the type of television programs you watch each evening: Is it worth burning dirty coal (or running precious water through dams, or splitting our finite supply of uranium atoms, or spoiling landscapes and killing birds with wind turbines) just so you can watch Bill O’Reilly or Rachel Maddow rant? Or prison documentaries? Or celebrity gossip? Reruns of shows you’re already seen? And I’ve seen you fall asleep while watching television! What a monumental waste. We should require sleep sensors on all new televisions and rebates to retrofit old sets.)
But when people leave their homes empty to go to work, almost everyone turns off the television, lights, and other appliances. Many may adjust their thermostats to save energy. People make the choice to do this based on the costs of leaving the lights on all day versus the cost of turning them on and off. No one needs to tell them to do this. The relative prices of things do this.
(You may be noting that children have to be told to turn off televisions and lights. That’s true. It’s true because they generally aren’t aware of the prices of things, as they don’t pay utility bills. But adults do.)
In most areas of life, people use the relative prices of things to make decisions about how to allocate their efforts and consume scarce resources. Wichita could be doing that with water, but it isn’t.
The conservation measures recommended by speakers today all have a cost. Sometimes the cost is money. In some cases the cost is time and convenience. In others the cost is a less attractive city without green lawns and working fountains. In many cases, the cost is shifted to someone else who is unwilling to voluntarily bear the cost, as in the rebate program.
At least we’ll be able to measure the cost of the rebate program. For most of the other costs, we’re pretending they don’t exist.
Instead of relying on economics and markets, Wichita is turning to a regulatory regime. Instead of pricing water rationally and letting each person and family decide how much water to use, politicians and bureaucrats will decide for us.
All city council members and the mayor approved this expansion of regulation and taxation.
(Yes, it’s true that the rebates will be funded from the water department, but that’s a distinction without meaningful difference.)
The motion made by Mayor Carl Brewer contained some provisions that are probably good ideas. But it also contained the appliance rebate measure. Someone on the council could have made a substitute motion that omitted the rebates, and there could have been a vote.
But not a single council member would do this.
It’s strange that we turn over such important functions as our water supply to politicians and bureaucrats, isn’t it?
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.
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.
City 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.
While 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.