Tag Archives: Government spending

Tax increment financing in Kansas

In this excerpt from WichitaLiberty.TV: How does Tax Increment Financing (TIF) work in Kansas? Is is a good thing, or not? View below, or click here to view at YouTube. Originally broadcast June 7, 2015.

Continue reading Tax increment financing in Kansas

Kansas school districts compliance with transparency law

Some Kansas school districts are not complying with basic transparency, even though there is a law, finds Kansas Policy Institute.

School districts still not complying with transparency law

By Dave Trabert, Kansas Policy Institute

The Kansas Uniform Financial Accounting and Reporting Act — K.S.A. 72-8254 passed in 2013 requires every school district to publish specific budget information for the current school year and actual expenditures for the immediately preceding two school years, and stipulates that the report “shall be published with an easily identifiable link located on such district’s website homepage.” Unfortunately, some districts still fail to comply with this very simple transparency requirement.

This table shows the results of a random sample of 40 districts’ web sites. The five districts in column 1 were found to be in compliance; the required report appears by title on the home page and the link goes directly to the report. Column 2 lists twenty-three districts that don’t link the report as required but do provide a generic link (e.g., “Budget Information”) that goes to a page where the report can be accessed with another link. The twelve districts in column 3 have nothing visible on their home

This ongoing problem was brought to the attention of legislators and the Department of Education several times in 2014, and last year Senate Bill 188 was introduced to add a consequence for non-compliance; if not in compliance within 30 days of written notice, districts would be fined $1,000 per day until doing so. The bill passed the Senate by a vote of 27-13 and was carried over to the House this year where it should be scheduled for a vote.

Democrats and Republicans alike are calling for increased transparency this year. It will be interesting to see how many are willing to hold school districts accountable to existing transparency law.

Kansas school spending: Visualization

An interactive visualization of revenue and spending data for Kansas school districts.

The accompanying visualization holds both nominal dollar amounts and amounts adjusted to reflect 2015 dollars. Data includes state aid, local aid, federal aid, and total spending for each school district, bot total and per pupil. The visualization includes both tables and charts.

Spending and revenue data is from Kansas State Department of Education. Inflation-adjusted data calculated using Consumer Price Index, All items, 1982-84=100 — CUUR0000SA0 from U.S. Bureau of Labor Statistics. Visualization created using Tableau Public.

Click here to open the visualization in a new window.

An example from the visualization. This shows statewide spending, per pupil, adjusted for inflation. Click for larger version.
An example from the visualization. This shows statewide spending, per pupil, adjusted for inflation. Click for larger version.

Empowering and engaging Wichitans, or not

In this excerpt from WichitaLiberty.TV: The Wichita City Manager says “we will continue to empower and engage citizens by providing information necessary to keep them informed on the actions their government is taking on their behalf.” So what actually happens when you ask the city for data, including data that many governmental agencies make freely available? View below, or click here to view at YouTube. Originally broadcast December 13, 2015.

In Sedgwick County, choosing your own benchmarks

The Sedgwick County Commission makes a bid for accountability with an economic development agency, but will likely fall short of anything meaningful.

Greater Wichita Partnership 01The Greater Wichita Partnership is a reorganization of local economic development agencies. It has asked the Sedgwick County Commission for $300,000 to fund a portion of its activities this year. Those on the commission who are skeptical of GWP and its predecessors have asked for measurable outcomes of the progress GWP makes.

Here is a paragraph from the agreement with GWP that commissioners will consider this week:

9. Measurable Outcomes. GWP shall be subject to measureable outcomes as it shall determine, subject to review by the Board of Sedgwick County Commissioners. GWP shall present an annual report to the Board of Sedgwick County Commissioners at a regularly-scheduled Commission meeting no later than December 31, 2016.

I appreciate the attempt by members of the county commission to ask for accountability. But this paragraph is so weak as to be meaningless. The nature of the measurable outcomes is not defined, even in broad strokes. Further, GWP gets to decide, at an unknown time, what constitutes the measurable outcomes. Then the county commission gets to “review” them, which is a weak — really, nonexistent — form of oversight. We ought to ask that the county commission “approve” them, and sooner rather than later.

Sedgwick County Courthouse 2014-03-23But there is a bit of good news. Paragraph 10 of the agreement calls for a separate accounting fund to be created for the money the taxpayers of Sedgwick County will give to GWP. Then: “GWP agrees and understands that, by entering into this funding Agreement, any and all of its records, documents, and other information related to the Fund and the activities financed thereby shall be open and made available to the public upon request, in accordance with the Kansas Open Records Act.”

That’s good news, and a move towards the type of transparency and accountability that local governments — especially the City of Wichita — promote but finds difficult to actually deliver. Although this provision applies to only the county-supplied funds, hopefully GWP will realize that being transparent is better than being secretive.

Spending and taxing in Kansas

Difficulty balancing the Kansas budget is different from, and has not caused, widespread spending cuts.

Across the state Kansas newspapers declare Governor Sam Brownback’s tax cuts a failure. There are two prongs of criticism. One is that the budget is not balanced; that is, the state is spending more than it has received in revenue. That has been true, especially for fiscal years 2014 and 2015. That problem can be fixed by either collecting more revenue, or by cutting spending. Last year the Governor and the Legislature decided to balance the budget by relying, almost entirely, on collecting more revenue. Raising taxes, in other words.

The second prong of attack on the tax cuts is to hold them responsible for spending cuts. This is what really upsets the state’s liberals and moderates. Here’s an example. Former Kansas State Budget Director Duane Goossen recently wrote “The Brownback tax cuts brought the revenue stream down so significantly that truly damaging expense cuts coupled with a sales tax increase have not repaired the budgetary mess.” (emphasis added) (I will agree with Goossen that we have a problem with the budget, a problem that could be fixed with relatively small reforms in spending. But Goossen wants more revenue.)

But have there been severe spending cuts in Kansas? “Truly damaging” cuts? While some programs have been trimmed, overall state spending continues on a largely upward trend (for all funds spending) or remains mostly flat (for general fund spending).

Kansas General Fund spending, showing large deficits of revenue compared to spending in 2014 and 2015.
Kansas General Fund spending, showing large deficits of revenue compared to spending in 2014 and 2015.

So why are Kansas liberals and moderates upset? It is the spending of money by government that is important when considering how well the state is providing the services liberals and moderates (conservatives, too) look for government to provide. Taxation is merely one way to pay for government spending. And spending isn’t declining.

Is this an important distinction?

For the years when Kansas was spending down its bank balance, the state was experiencing the benefit of Washington-style deficit spending. That is, the state was spending more than it collected in revenue. The difference is that Kansas made up the revenue deficit by using savings rather than debt. (At least mostly so.)

(Another difference between Kansas and federal spending is that Kansas can’t continue to borrow to support spending unless it engages in extraordinary measures, some of which may have happened. The federal budget, however, has been in a permanent state of deficit spending since 2000 and appears to remain in deficit for as far as anyone can project.)

The takeaway is that problems with balancing the budget is not the same as spending cuts. We’ve had the former, but not the latter, when considering the entire budget.

Nearby charts show Kansas government spending, from both the general fund and all funds spending. One chart shows total dollars spent, and one shows per-capita spending. Both are adjusted for inflation. On these charts it’s difficult to see where total spending has been cut or slashed in recent years. All funds spending continues its upward trend, with a few exceptions. General fund spending remains level or trending slightly upwards.

Kansas Spending Adjusted for CPI 2016-01

Kansas Spending, Per Capita, Adjusted for CPI 2016-01

Notes for charts:
Data is from Kansas Fiscal Facts 2015
2015 through 2017 are approved figures, not actual spending
2015 and beyond population are my estimates
CPI is Consumer Price Index – All Urban Consumers, CUUR0000AA0

WichitaLiberty.TV: Goals for the Kansas Legislature, school choice in Kansas

In this episode of WichitaLiberty.TV: There are worthy goals the Kansas Legislature should tackle, and the need for school choice in Kansas. Episode 107, broadcast January 31, 2016. View below, or click here to view at YouTube.

Kansas highway conditions

Has continually “robbing the bank of KDOT” harmed Kansas highways?

The long-time practice of transferring money from the state’s highway fund to the general fund — known as “robbing the bank of KDOT” — is criticized as being harmful to the condition of the state’s highways.

Data from Kansas Department of Transportation shows that the condition of Kansas highways improved during the 1980s and 1990s. The highways have remained in a high level of condition since then.

This is not to argue in favor of transferring highway funds, but to show that Kansas highways are not deteriorating as some alledge.

Kansas percentage of pavement in good or very good condition 2015

Kansas efficiency study released

An interim version of a report presents possibilities of saving the state $2 billion over five years.

This week the Kansas Legislature received an interim version of the efficiency report it commissioned last year. Said by its creators to involve a team of more than 40 professionals who devoted over 6,000 hours, it is described as an “in-depth analysis of the operations of [participating state] agencies.”

The bottom line is this: “This report includes 105 recommendations which cumulatively would provide $2.04 billion in benefits to the State over the next five years.”

Undoubtedly this report will be the subject of discussion and debate over the next few years. It is through that process we will discover which recommendations are feasible, and more importantly, which are within the realm of political possibilities.

It’s important to place this report in context. In 2012 the legislature reduced tax rates. While some, perhaps many, do not like the way the tax cuts were distributed, a central fact remains: The cuts were designed to leave more money in the private sector. Therefore, state government needed to shrink in order to match the lower revenue. But that did not happen. The governor and legislature were unwilling to make meaningful spending cuts. Instead, the state used its positive bank balance to support increased spending, and then in 2015 raised taxes.

The question is this: Why didn’t the legislature initiate this efficiency study in 2012? Why did it wait until 2015? The authors of the study claim there is much savings to be had, more than what was needed to reconcile spending with revenue the past few years. But the last three years are now lost to time. If it’s true that the efficiency study will yield real savings, then the governor and legislature were three years late starting the process. There is no excuse for that, and all parties deserve criticism. The savings could have been used to reduce the burden of the state’s high sales tax on groceries for low-income families. The savings could have been used to tackle the waiting lists for social services. But these opportunities have been squandered.

More context is that Kansas liberals and moderates almost universally condemn the study and its $2.6 million price tag. But if the study produces real savings, they can be used to fund items like the two mentioned in the previous paragraph, or for other spending programs liberals and moderates want.

Finding a copy of the report online is not straightforward. Click here to view.

Survey finds Kansans with little knowledge of school spending

As in years past, a survey finds that when Kansans are asked questions about the level of school spending, few have the correct information. From Kansas Policy Institute.

Survey Finds Kansans Misled on School Spending

December 14, 2015 — Wichita — Kansas Policy Institute released a new Survey USA Poll of 509 registered voters in Kansas showing a significant disconnect between voters’ perception of Kansas school spending and true expenditures.

The survey found 47% of Kansans believe per-pupil funding has dropped more than 5% in the last 5 years. Another 15% believe it has dropped less than 5%. In fact, school funding has increased by 6.4%. Only 7% of those surveyed believe there have been such increases.

“The narrative coming out of school districts is intentionally misleading,” said Kansas Policy Institute President Dave Trabert. “District officials aided by their government funded lobbyists are telling parents and students that because they didn’t receive increases as big as they want, they are being ‘cut’. This is patently false.”

Citizens have also been misled about actual funding amounts. The survey found 61% of Kansans believe per-pupil funding from the state is less than $5,000 when in reality, it was $8,567 last year; 61% also believe total funding is less than $10,000, while actual funding was $13,124 per pupil. Less than 10% of Kansans identified true funding levels. “Knowing the extent to which school districts have misled Kansans, it’s no wonder that so many are upset about school funding,” said KPI President Dave Trabert.

However, when voters are faced with the factual data of per pupil spending and cash reserve balances, a majority reject the idea of paying more taxes to fund schools, 50% somewhat or strongly disagree to 41% somewhat or strongly agree.

“Every Kansan wants to do what is best for their child’s education. Unfortunately, too many Kansans haven’t been trusted with the complete truth and won’t have the opportunity to make sure their children are in the best possible situation to succeed,” said KPI Vice President and Policy Director James Franko.

The survey also found that 66% agree, somewhat or strongly, that spending on out-of-the-classroom expenses should be provided on a more efficient, regional basis to divert savings back into classroom spending. only 21% are somewhat or strongly opposed.Support for this common-sense concept extends across all geographic and ideological boundaries, yet local school boards remain fiercely opposed.

“Kansans need to know the truth about record-setting school funding”, said Dave Trabert. “Only through an informed citizenry can we create sound economic policy and improve education outcomes for our students.”

The survey was of 509 registered voters with a 4.4% margin of error. Full results of the survey can be viewed here.

Kansas school reform

A Wichita economist and attorney offers advice to a committee of the Kansas Legislature on reforming Kansas schools for student achievement.

This week saw the third meeting of the 2015 Special Committee on K-12 Student Success for the Kansas Legislature. Of special interest was the short testimony of Robert Litan, a Wichita economist and attorney. His testimony summarized some of the important problems with Kansas public schools and points to ways that Kansas can move forward in providing education to schoolchildren. His written testimony may be viewed here.

In arguing for starting with a “clean sheet” instead of merely tweaking the current formula, Litan wrote: “The reason is quite simple. Despite continued increases in real spending per pupil in the state, educational outcomes in Kansas are not improving nor are the gaps between the performance of students from low-income families and all other students.”

He also touches on several ways that Kansas schools could improve efficiency in their operations without consolidating school districts. The savings could be several hundred million dollars per year, a significant sum in Kansas.

Kansas needs to improve the performance of schools, focusing particularly on closing the achievement gap between students from low-income families and others, said Litan. A possible problem, he writes, is that the additional money allocated for “at-risk” students may not be spent in ways specifically targeted to those students. A problem is lack of tracking systems to see how this money is spent. (The at-risk weighting is substantial. For its first few years, starting in 1992, the weighting added five percent to state funding for each student classified as “at-risk.” It rose over the years, reaching 45.6 percent in 2008.)

Litan also touches on the importance of having good teachers and the controversies surrounding how to evaluate teachers. But it is important to reward good teachers, he writes.

Cost savings might also be used to reward school districts that provide more student attendance time: “Other things being equal, more schooling time should enhance student performance.” Of note, this year’s agreement with the teachers union for the Wichita school district reduces the school year by two days.

Finally, the importance of school choice, which is nearly non-existent in Kansas. A new funding formula needs to allow for school choice:

Finally, there are limits to how much any change in the way funding for schools is allocated among districts can affect student performance. That is because today parents’ and students’ ability to choose their public education provider is very limited, or non-existent.

That is not true in some other states, where parents and their children have more choices, as they do in other spheres of life for other goods and services. While broader choice is not directly on the table of today’s hearing, hopefully any changes this Committee and the Legislature may make in funding will not penalize any new schools that may be formed in the wake of any possible future change in Kansas law governing charter schools.

Are we winning the war on poverty?

For about 50 years we’ve been fighting a war on poverty. Initially, the poverty rate declined, before the start of the war on poverty. But over the last four decades the poverty rate has gone up and down, but is largely unchanged over this period. Spending on welfare programs, however, has continually risen, and rapidly in the past few years. The accompanying chart shows the poverty rate and welfare spending. The spending is per person in the U.S., adjusted for inflation, and doesn’t include spending on health care.

poverty-rate-welfare-spending-2013-12

For more on this topic, see:
The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty — and Fail (Cato Institute)
Examining the Means-tested Welfare State: 79 Programs and $927 Billion in Annual Spending (Heritage Foundation)
The Failure Of The War On Poverty (FreedomWorks)
Does Welfare Diminish Poverty? (Foundation for Economic Education)

Wichita checkbook register

A records request to the City of Wichita results in data as well as insight into the city’s attitude towards empowering citizens with data.

I asked the City of Wichita for checkbook spending records and received data for 2015 through September 25, as I asked. I’ve made the data available in a visualization using Tableau Public. Click here to access the visualization. (A visual guide for using the visualization is at the end of this article.)

Analyzing this data requires a bit of local knowledge. For example, there is a vendor named “Visit Wichita” that started to receive monthly payments in March. What about payments for January and February? Those were made to a vendor named “Go Wichita,” which then changed its name to “Visit Wichita.”

Similarly, there are payments made to both “Westar Energy” and “Westar Energy — EDI.” These are the same entities, just as “Visit Wichita” and “Go Wichita” are the same entity. To the city’s credit, the matching pairs have the same vendor number, which is good. But resolving this requires a different level of analysis.

There are interesting entries. For example, the city usually sends a few hundred dollars per month to the Kansas Turnpike Authority. Then in July, the city paid $3.7 million to KTA. A quick search of city council agenda packets didn’t reveal any reason for this.

Of note, it looks like there were 474 checks issued in amounts $20 or less. Bank of America has estimated that the total cost of sending a business check ranges from $4 to $20.

The records request

Wichita spending data from 2013.
Wichita spending data from 2013.
The city supplied this data in an Excel spreadsheet, in an arrangement that can easily be analyzed in Excel or loaded into other programs. This is a step forward. Two years ago, Wichita could supply data of limited utility. What was supplied to me was data in pdf form, and as images, not text. It would be difficult to translate the image data into machine-readable text, and even more difficult to reorganize it to a useful arrangement or format for analysis.

Denver open checkbook.
Denver open checkbook.

I had to pay $24.00 to the city for this data. That’s a problem. It is by now routine for governmental agencies to post spending data like this, but not at the City of Wichita. When I inquired, city officials told me that the present financial management system “does not include many modern system features such as an ‘open checkbook.’” An “open checkbook” refers to a modern web interface where citizens can query for specific data and perhaps perform other analysis. An example is Denver’s open checkbook.

While the next-generation Wichita financial system will probably have such a feature, there’s no reason why citizens can’t experience some of the benefits now. The spreadsheet of spending data like that I paid for could easily be posted on the city’s website on a monthly basis. People like myself will take that data and make it more useful, as I did. There is no reason why this should not be happening.

When I learned of the fee for these records, I asked for a waiver, sending this to the city’s records official:

I’d like to ask for a waiver of the requested fee. I ask this because check register data is an example of records that many governmental agencies make freely available on their websites. The Wichita Public School District and Sedgwick County are two local examples.

I’d like to also call attention to the U.S. Freedom of Information Act, which allows for fee waivers in some circumstances: “…fee waivers are limited to situations in which a requester can show that the disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations and activities of the government and is not primarily in the commercial interest of the requester.”

I suggest that the records I am requesting will indeed “contribute significantly to public understanding of the operations and activities of the government,” and that it is in the public interest of the people of Wichita that these records be freely available.

I received an answer:

Mr. Weeks,

Your request for waiver of fees is denied. KORA allows fees to be collected prior to finding and producing the document you seek. KSA 45-218(f). The extensive statute setting out how fees are to be determined, KSA 45-219, does not contain any provision for waiver in the manner you suggest.

The City will provide the document to you upon payment as invoiced.

Sincerely,
Jay C. Hinkel,
Deputy City Attorney

Mr. Hinkel is absolutely correct. Governmental agencies in Kansas have the right to charge for records, and the Kansas statutes do not mention the waiving of fees as do the federal statutes. But the Kansas Open Records Act does not require cities to charge for providing records, especially for records that the city should already be providing. Especially when citizens are willing to take that data and make it better, at no charge to the city.

Hinkel provided a lawyer’s answer. Here, however, is the public policy the city promotes, from a Wichita city news release from 2013:

“The City Council has stressed the importance of transparency for this organization,” City Manager Robert Layton said. “We’re honored to receive a Sunny Award and we will continue to empower and engage citizens by providing information necessary to keep them informed on the actions their government is taking on their behalf.”

The importance of transparency. The city wants to empower and engage citizens by providing information. Well. I offered to “contribute significantly to public understanding of the operations and activities of the government,” but had to pay to do so.

When I asked city officials for clarification of why I had to pay to receive these records, communications staff told me: “I should note that the City has won multiple awards for openness and citizen participation, but City leaders recognize this work is never done. They strive each and every day to become more open and transparent and will continue to do so.”

I must disagree. This is not “open and transparent.” This is not how to “empower and engage” the people of Wichita. Not even close.

Wichita checkbook register visualization instructions.
Wichita checkbook register visualization instructions.

Cash grants still in use

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

We’ve been told that the city is not going to use cash incentives for economic development. But an item the Wichita City Council will consider this week includes a cash grant of $10,000.

125 N. Emporia, scheduled to receive economic development incentives.
125 N. Emporia, scheduled to receive economic development incentives. Courtesy Google.
This grant is part of the city’s facade improvement program. Under it, properties in certain parts of the city can apply to use special assessment financing to pay for the improvement of their outside appearance. The city borrows the funds and advances them to the property owner. The bonds are repaid through special assessment taxes that are added to the property’s tax bill.

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

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

There is perhaps an even more important question the city needs to recognize and answer, which is this: Why are incentives like this necessary? The city says that without the incentive the project is not economically feasible: “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 case council members make the argument that the facade improvement is not an incentive, remind them that city economic development officials disagree.)

What is it that makes this project economically unfeasible? Why is investment not possible without taxpayer assistance? These are the questions the city needs to answer before asking taxpayers to make a cash grant to this building’s owners.

Historic preservation tax credits, or developer welfare?

A Wichita developer seeks to have taxpayers fund a large portion of his development costs, using a wasteful government program of dubious value.

When you hear of a program titled “historic preservation tax credits” you might find yourself in agreement. Preserving history: Who can be against that? And tax credits: Aren’t those just technical adjustments on someone’s tax form?

The Colorado-Derby Building, now renamed and used by the Wichita public school district.
The Colorado-Derby Building, now renamed and used by the Wichita public school district.
If you look closely, however, you’ll find that the historic preservation tax credits program can include buildings with only the slightest historic significance, and has great cost to taxpayers.

The Colorado-Derby Building at 201 N Water Street in Wichita has been nominated for placement on the Register of Historic Kansas Places. It’s a nondescript building which currently houses administrative offices for the Wichita public school district and is known by a different name. Still, it is eligible for placement on the register for being an “example of this private investment trend,” that being the building of office buildings midcentury. A laudable accomplishment, but hardly notable.

The real reason for seeking placement on the register of historic places is money. By using historic preservation tax credits the developer of this building can get taxpayers to pay for much of the costs of rehabilitation. Almost half, which will be millions in this case.

Under the program this building is entering, its owners will receive 25 percent of rehabilitation expenses. The federal government provides tax credits of 20 percent. It’s likely that the owners of this building will also seek these credits.

So with both tax credit programs, 45 percent of the cost of rehabilitating this building could be paid for by taxpayers. And, given the history of the developer, it’s likely he will find other ways to get taxpayers to pay for even more.

Tax credits

USD 259 Alvin E. Morris Administrative Center 2008-04-07 11Tax credits may be a mystery to many, but there is no doubt as to their harmful effect on state and federal budgets. When using tax credits, the government, conceptually, issues a slip of paper that says something like “The holder of this document may submit it instead of $500,000 when making a tax payment.” So instead of paying taxes with actual money, the holder of the credit pays with, well, a slip of paper worth nothing to the government treasury.

This is a direct cost to the government, according to both reason and the Kansas Division of Legislative Post Audit. Last year, after conducting an audit of Kansas tax credit programs, auditors explained: “Tax credits, which the government offers to try to induce certain actions by the taxpayer, reduce income tax revenues because they are subtracted directly from the amount of taxes due.” (emphasis added)

The confusing nature of tax credits leads citizens to believe that they have no cost to the state or federal government. But tax credits are equivalent to government spending. The problem is that by mixing spending programs with taxation, some are lead to believe that tax credits are not cash handouts. But not everyone falls for this seductive trap. In an article in Cato Institutes’s Regulation magazine, Edward D. Kleinbard explains:

Specialists term these synthetic government spending programs “tax expenditures.” Tax expenditures are really spending programs, not tax rollbacks, because the missing tax revenues must be financed by more taxes on somebody else. … Tax expenditures dissolve the boundaries between government revenues and government spending. They reduce both the coherence of the tax law and our ability to conceptualize the very size and activities of our government. (The Hidden Hand of Government Spending, Fall 2010)

The use of tax credits to pay for economic development incentives leads many to believe that what government is doing is not a direct subsidy or payment. In order to clear things up, perhaps we should require that government write checks instead of issuing credits.

Back to Kansas: The audit of the historic preservation tax credits program found that in 2001, when the program was started, the anticipated cost to the state was about $1 million per year. By 2007, the actual cost to the state was reported at almost $8.5 million.

Further, the audit found what many already knew: tax credit aren’t an efficient way of transferring subsidy to developers. Most of the time, the developers sell the credits to someone else at a discount, as the audit explains: “The Historic Preservation Tax Credit isn’t cost-effective. That credit works differently than the other three because the amount of money a historic preservation project receives from the credit is dependent upon the amount of money it’s sold for. Our review showed that, on average, when Historic Preservation Credits were transferred to generate money for a project, they only generated 85 cents for the project for every dollar of potential tax revenue the State gave up.”

It would be more efficient for everyone if the state would simply write checks to the developers instead of issuing tax credits. But then the actual economic meaning of the transaction would be laid bare for all to see.

Then, what qualifies as historic can change as political conditions require. Earlier this year the Wichita city council reversed a decision by the Historic Preservation Board and allowed a property owner to proceed with the demolition of three formerly historic buildings in southern downtown Wichita.

The historic preservation tax credit program is a government handout mechanism we no longer need. Today, most of the money goes to wealthy developers or corporations that can afford to redevelop downtown hotels and lofts with their own money — instead of asking low-income families to pay sales tax on their groceries to fund their tax credits.

Material from the Kansas State Historical Society
Nomination for listing on Register of Historic Kansas Places

Colorado-Derby Building – 201 N Water St., Wichita, Sedgwick County

Constructed in 1959-1960, the nine-story Colorado-Derby Building is an early example of a Modern Movement speculative office tower erected within a pattern of development that shaped Wichita’s downtown at midcentury. New buildings erected as icons on the skyline were intended to refresh, modernize, and revitalize the downtown core through public and private investment in civic and commercial improvements. Frank and Harvey Ablah recognized the onset of this trend and constructed the Colorado-Derby Building to provide speculative office space, redeveloping the site of the Ablah Hotel Supply Company. Named for its largest and most prominent tenant, the Colorado-Derby Building was fully occupied when it opened in 1960 and maintained high occupancy rates over the following decade. The construction and subsequent occupancy of this building illustrates the continuing importance of manufacturing industries to the economy of Wichita at midcentury and the ability of these industries to contribute to the economic and physical revitalization of downtown. The blocks immediately surrounding the building continued to develop in a similar fashion over the following decade with large-scale modern buildings and parking lots replacing smaller commercial and industrial buildings built a half-century earlier. All of this development activity culminated in a formal Urban Renewal project utilizing federal funds in the late 1960s. In Wichita, private investment focused on providing office space for industrial companies, rather than public funding initiated the revitalization that transformed downtown. The Colorado-Derby Building is nominated under Criterion A an important early example of this private investment trend.

Raises for Wichita mayor, council proposed

This week (Tuesday November 10, 2015) the Wichita City Council will consider pay raises for the mayor and council members. City documents give the details in agenda item IV-6:

Currently, salaries for Council Members vary from $36,167 to $36,998. Had salaries been consistently adjusted each year since 2009 to reflect the CPI-U Index, all Council Members would have salaries at $38,723. The Mayor’s salary also reflects voluntary deferrals and is currently $87,712. Staff is recommending setting base salaries at $40,000 for Council Members and $90,000 for the Mayor. This would approximate the same General Pay Adjustment afforded to City Employees in 2015 and 2016.

The effect of this is pay raises ranging from 8.1 percent to 10.6 percent for council members, and 2.6 percent for the mayor.

Also:

Adjustments for City Council members’ salaries will no longer be tied to the CPI-U. This index was cumbersome for staff to implement. The amendments provide that City Council members will receive the same yearly general pay adjustment granted to exempt City employees.

The effect of the latter amendment is that the mayor and council members will receive annual pay increases without having to bother to vote to raise their salary.

WichitaLiberty.TV: Jonathan Williams of American Legislative Exchange Council

In this episode of WichitaLiberty.TV: Jonathan Williams of American Legislative Exchange Council (ALEC) explains the goals of ALEC, changes to Kansas tax policy and the results, and the effects of state taxes on charitable giving. View below, or click here to view in high definition at YouTube. Episode 100, broadcast November 8, 2015.

Shownotes

Spending in the states, per capita

An interactive visualization holding per-capita spending in several categories for each state.

Tableau sort icon
Tableau sort icon
In the visualization you may select one of more spending categories, select any combination of states and regions, select years, and view data as a table or chart. By hovering near column titles and clicking on a sort icon, you may sort in ascending or descending order.

Of note: Some of the spending categories should not be selected at the same time, as the stacked bar chart adds them. For example, you would not want to select anything else if “Total Spending” is selected, as the other items are already included in “Total Spending.” Similarly, you would not want to select “Population” along with any items that are money amounts.

Data is from State & Local Government Finance Data Query System. 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 (2012). Date of Access: (07-Jan-2015). Visualization created using Tableau Public.

Click here to use the visualization.

Using the visualization. Click for larger version.
Using the visualization. Click for larger version.
A table from the visualization. Click for larger version.
A table from the visualization. Click for larger version.