Tag Archives: Kansas Policy Institute

VIDEO: KPERS payments and Kansas schools

There is a claim that a recent change in the handling of KPERS payments falsely inflates school spending. The Kansas State Department of Education says otherwise. View below, or click here to view at YouTube.

Click here for more about this topic.

GetTheFactsKansas launched

From Kansas Policy Institute and the Kansas Chamber of Commerce, a new website with facts about the Kansas budget, economy, and schools.

GetTheFactsKansas.com aims to provide Kansans with factual information about our state. Sometimes this is in short supply, so this effort is welcome.

get-the-facts-kansas-logoAs an example, when explaining school spending, the site notes: “At $13,124 per-pupil, 2015 marked the third consecutive year of record-setting funding according to the Kansas Department of Education (KSDE). And if the Department’s estimates hold, another new record will be set when the 2016 final results are reported. Record funding is not the result of accounting changes; emails from KSDE confirm that no accounting changes impacted state or district funding totals for more than ten years. There was a correction effective in 2015 when the state-mandated 20 mills of property tax began being properly recorded as State Aid instead of Local Aid, but there would have been an increase in State Aid without that change.”

Information like this rebuts two arguments that Kansas progressives use. First, that the increase in school spending is due to a recent change in the way KPERS payments are reported. But, there has been no change in ten years. Second, that the shift in the reporting of local property taxes is used to falsely inflate state spending. As KPI notes, even after adjusting for this change, state funding of schools has risen.

Access the website at GetTheFactsKansas.com and follow its Facebook page at Get The Facts Kansas.

Kansas construction employment

Tip to the Wichita Eagle editorial board: When a lobbying group feeds you statistics, try to learn what they really mean.

When investigating the claims of a lobbying group, Kansas Policy Institute found that the statistics — when examined closely — do not support the narrative the group promotes. Unfortunately, the Wichita Eagle editorial board did not examine the group’s claims closely enough to determine their validity.

Kansas Construction Employment, 12-Month Moving Average. Click for larger.
Kansas Construction Employment, 12-Month Moving Average. Click for larger.

At issue is the claim that transfers from the Kansas highway fund have lead to the loss of highway construction jobs. It’s repeated not only by the state’s highway construction lobbyists, but also by others. The statistics that are cited deserve further investigation, which is what KPI did on its article Media and highway contractors mislead again. KPI’s Dave Trabert found:

Had the Eagle bothered to examine Mr. Totten’s claim, they would have learned that only 2 percent of the construction job decline was attributable to highway construction and that the loss of 100 jobs is less than 1 percent of total highway jobs.

In addition to learning that Mr. Totten was grossly exaggerating, they would have learned that employment for construction of new homes and non-residential buildings showed very nice growth and the real problem is in specialty trade contractors for non-highway projects.

Trabert is referring to the Wichita Eagle editorial board citing figures from a self-interested lobbying group — in this case, Bob Totten, executive vice president of the Kansas Contractors Association — without investigating the true nature of the figures.

KDOT spending on major road programs. Click for larger version.
KDOT spending on major road programs. Click for larger version.
I’ve taken the same numbers from the Bureau of Labor Statistics. Because these values are available only in not seasonally adjusted form, I’ve created a chart using the moving average of the past 12 months. A second chart shows the change from the same month of the previous year. The charts confirm what KPI found, which is employment in the “Heavy and Civil” category is not responsible for the decline in Kansas construction jobs. In fact, employment in this category is on an upward trend over the past 18 months. It is employment in the category “Specialty Trade” that has fallen. This isn’t related to highway construction.

This data is available in an interactive visualization which you may access here. For more information on highway spending in Kansas, see Kansas highway spending.

Kansas Construction Employment, Change From Year Before. Click for larger.
Kansas Construction Employment, Change From Year Before. Click for larger.

Kansas City Star as critic, or apologist

An editorial in the Kansas City Star criticizes a Kansas free-market think tank.

Kansas City Star editorial writer Steve Rose penned a column accusing Kansas Policy Institute of lies and distortions in its analysis and reporting on Kansas government.1 Here, we take a critical look at a few accusations.

Rose: “To what end does the institute spew out its gross distortions? Its stated goal is to shrink government and to dramatically lower taxes. I would add: Regardless of the possible negative effect to services.”

friedman-spending-categories-2013-07It is axiomatic that government is the worse way to fund and provide services, with a very few exceptions. Why is this? When government spends money, the spending falls into one of two categories: First, it may be politicians and bureaucrats spending someone else’s money on yet someone else. Or, it may be politicians, bureaucrats, and special interest groups spending someone else’s money on themselves. When goods and services are provided by the private sector, it’s either people spending their own money on themselves, or spending their own money on someone else.

In the two latter cases, people have a strong incentive to get good value for their spending. In the first case, indifference and waste is the rule. In the second case — when spending someone else’s money on yourself — greed is the dominant motivation and consideration.2

We all would be better off if we relied less on the state and if more was provided by the private sector. Education is not one of the exceptions where government is a better alternative to private sector provision.

Rose: “The institute knows the public usually does not have either the time or inclination to get the details of the real story. The headline numbers stick, not the long, boring details of the truth.”

Kansas school spending per student, ratio of state aid per pupil to base state aid per pupil, 2014
Kansas school spending per student, ratio of state aid per pupil to base state aid per pupil, 2014
The irony here is that it is our state’s newspapers that have left out the truth. Much reporting and editorializing has focused only on base state aid per pupil.3 While base state aid per pupil did fall, total state spending per pupil rose. Data available from the Kansas State Department of Education shows that the ratio of total state spending to base state aid has generally risen since the adoption of the school finance formula two decades ago. For the school year ending in 1993 the ratio was 0.7, meaning that state aid was less than base state aid. For the school year ending in 2014, the ratio was 1.85, or 2.6 times as much as in 1993. This means that while base state aid per pupil for 2014 was $3,838, total spending by the state was $7,088 per pupil.4

(While the school funding formula has been replaced by the block grants, the weightings were baked into the grant amounts.)

I think that this qualifies as the “long, boring details of the truth” that Rose complains of. I wonder if he understands this. All he has to do is retrieve data from Kansas State Department of Education.

As far as the public’s level of knowledge of school funding, polls commissioned by Kansas Policy Institute show the public grossly uninformed about school finance.5 If you don’t trust a poll administered by Survey USA in which the text of all questions is revealed, know that surveys of the nation produce similar results.6

Rose: “As for the lies about schools, the institute counts in its preposterous $14,000 number non-operating costs such as interest on the debt from bond issues patrons passed in previous elections. It counts contributions to the retirement fund for teachers. It counts pass-through federal money that costs the state nothing.”

I don’t know where Rose gets the $14,000 spending number, but here are some actual per-pupil figures reported by KSDE for some large districts in northeast Kansas:7 Olathe: $12,803. Blue Valley: $13,168. Shawnee Mission: $12,273. Kansas City: $15,936. (For the entire state: $13,124.)

Yes, these numbers include interest on debt incurred from borrowing to build school facilities. Rose seems to say this money should not be counted as part of the ongoing cost of schools. But where should it be counted? Capital costs like these can’t be ignored, yet the Kansas school spending establishment often deflects attention from them, contending these costs “don’t get into the classroom.” Irony alert: These costs are the classroom.

Retirement fund costs for teachers? If not for schools and teachers, would the state have this cost? So where should these costs be charged?

Whether we’re spending too much (or not enough) on these items is another matter. But classifying them properly should not be controversial. Rose’s criticism is characteristic of the political class and its enablers. When the actual cost of government is revealed, the response is to attack the messenger, and truth is cast aside.

But Rose is correct about one thing: Pass-through federal money costs the state nothing. It is the state’s taxpayers that pay the federal government so it can send funds back to Kansas as — according to Steve Rose — money without cost.

NAEP scores for Kansas reading, grade four.
NAEP scores for Kansas reading, grade four.
Finally, Rose defends government services. The public is being “served well,” he says, with “superb services.” I wonder if he’s examined scores for Kansas schoolchildren on the most recent National Assessment of Educational Progress. On this test, which is the same in all states, we find these results: For Kansas white students, 42 percent are proficient in reading at grade four. For Kansas black students, only 15 percent are proficient, and 20 percent of Kansas Hispanic students. Similar gaps appear in reading at grade eight, and in math at grades four and eight.8

I’m not satisfied with this, and I don’t think Steve Rose and the Kansas City Star should be. This is the saddest thing about Rose’s column. It used to be that newspaper editorial writers worked to hold government accountable. Now we have this newspaper making excuses for government and unfactually criticizing those who work for accountability. It’s Kansas schoolchildren, especially poor and minority, that suffer the most.


Notes

  1. Rose, Steve. Phony numbers meant to smear superb services. Kansas City Star, July 2, 2016. Available at www.kansascity.com/opinion/opn-columns-blogs/steve-rose/article87288257.html.
  2. For more on this, see Friedman: The fallacy of the welfare state, available at wichitaliberty.org/economics/friedman-the-fallacy-of-the-welfare-state-2/.
  3. Weeks, Bob. Wichita school spending: The grain of truth. Available at wichitaliberty.org/wichita-kansas-schools/wichita-school-spending-the-grain-of-truth/.
  4. Weeks, Bob. Kansas school weightings and effects on state aid. Available at wichitaliberty.org/wichita-kansas-schools/kansas-school-weightings-and-effects-on-state-aid/.
  5. Weeks, Bob. Survey finds Kansans with little knowledge of school spending. Available at wichitaliberty.org/wichita-kansas-schools/survey-finds-kansans-little-knowledge-school-spending/.
  6. Education Next. Results from the 2015 Education Next Poll. Available at educationnext.org/2015-ednext-poll-interactive/.
  7. Kansas State Department of Education. Total Expenditures by District. Available at www.ksde.org/Agency/Fiscal-and-Administrative-Services/School-Finance/Budget-Information/Total-Expenditures-by-District.
  8. U.S. Department of Education, Institute of Education Sciences, National Center for Education Statistics, National Assessment of Educational Progress (NAEP). This table available at nces.ed.gov/nationsreportcard/subject/publications/stt2015/pdf/2016008KS4.pdf.

Regulation in Wichita, a ‘labyrinth of city processes’

Wichita offers special regulatory treatment for special circumstances, widening the gulf between the haves and have-nots.

The Wichita Eagle reports that part of what the City of Wichita is offering to Cargill as an inducement to stay in Wichita is regulatory relief.1 In particular:

The city has offered smaller incentives to Cargill as well, including an ombudsman.

[Wichita assistant city manager and director of development Scot] Rigby called the ombudsman something of a project manager.

“They’ll just call one person,” Rigby said of Cargill’s dealings with the city. “It’s a way to eliminate … a business trying to figure out, how do I get through the labyrinth of city processes?”

Rigby said the city has done this with other companies, such as Spirit AeroSystems and JR Custom Metal Products, and would do it for any company with an expansion or project that needs streamlining.

He said the city also is committed to work with the state and the Greater Wichita Partnership to create a talent recruitment position that could help Cargill and other companies recruit employees at all levels.

The city has said it would offer a 15-day turnaround instead of the customary 30 days for plan review and permits, along with a 50 percent reduction in plan review, utility and building permit fees.

Let me repeat the highlights:

labyrinth of city processes

streamlining

15-day turnaround instead of the customary 30 days

50 percent reduction in … fees

All of this is an explicit admission that City of Wichita regulations are burdensome. If not, why would the city devote time and expense to helping Cargill obtain relief from these regulations?

Further: Why do we have these regulations? If the purpose of the regulations is to protect people from harm, how can we relax or streamline them for the benefit of a few companies? Wouldn’t that expose people to the harm the regulations purportedly prevent?

What’s even worse is this: Cargill is a large company with — presumably — fleets of bureaucrats and lawyers trained to deal with burdensome government regulation. These costs can be spread across a large company. Meaning that Cargill can afford to overcome burdensome regulations.

What about the small companies that don’t have fleets of bureaucrats and lawyers? That can’t spread the costs of burdensome regulation across a large volume of business? What will the city do for these companies? This is especially important because the spirit of entrepreneurship the city wants to cultivate is most commonly found in small, young, companies. The type without fleets of bureaucrats and lawyers.

Well, the city says it would do for any company what it is doing for Cargill.

Except: How are companies supposed to know to ask for regulatory relief, streamlining, and a discount on fees?

And is it equitable to offer special companies special regulatory relief when it is not readily available for all?

Business Perceptions of the Economic Impact of State and Local Government Regulation coverLast year Kansas Policy Institute, in collaboration with the Hugo Wall School of Public Affairs at Wichita State University produced a report titled “Business Perceptions of the Economic Impact of State and Local Government Regulations.”2 On the city’s offer of special treatment to one company, KPI Vice President and Policy Director James Franko commented:

This bears out one of the key findings from a paper we did with WSU’s Hugo Wall School: Companies want transparency and simplicity in the local regulatory environment. Businesses are not as concerned about the regulation themselves as they are in navigating what the city admits is a “labyrinth” of regulations and processes.

The regulatory process should be simplified for all businesses, not just a few. Hopefully there is a realization that an “ombudsman,” or better yet a transparent, straightforward regulatory regime, should be available to anyone wanting to start or grow a business in Wichita.

Instead of the city offering regulatory relief on an as-needed, as-requested basis, why not simplify and streamline regulation for everyone? That seems to make a lot of sense. But if you were a city politician or bureaucrat, this isn’t in your best interest. If regulations are burdensome, and you — as a bureaucrat or officeholder — can offer relief, then you have power. You become important. You have the ability to grant favors and make people feel special.

But if regulations were streamlined and reformed for everyone as the city will do for Cargill, then bureaucrats and politicians would not be so powerful and important. But the people would be more free and prosperous. Think about that trade off.

An interview with James Franko of Kansas Policy Institute on the topic of regulation is on WichitaLiberty.TV here.


Notes

  1. Rengers, Carrie. City offers Cargill tax abatement, parking garage financing. Wichita Eagle, June 6, 2016. Available at www.kansas.com/news/business/article82076122.html.
  2. Kansas Policy Institute. Business Perceptions of the Economic Impact of State and Local Government Regulations. Available at kansaspolicy.org/businesses-welcome-transparent-accessible-accountable-state-local-regulations/.

KPERS payments and Kansas schools

There is a claim that a recent change in the handling of KPERS payments falsely inflates school spending. The Kansas State Department of Education says otherwise.

A member of the Kansas State Board of Education has written an article that has received widespread attention. But the member, Jim Porter, is wrong on several accounts.

In his article, Porter stated that a recent change in the handling of Kansas Public Employees Retirement System (KPERS) contributions falsely inflates school spending.1

This is a standard argument of Kansas public school spending advocates, which is that because of a change in the way teacher retirement funds (KPERS contributions) are handled, it looks like the state is spending more on schools, when in fact it is not.

In response, Kansas Policy Institute noted this: “According to Dale Dennis, KPERS funding was last sent directly to KPERS in 2004; it has since been sent directly to school districts included in reported school funding totals.”2

Here, Dale Dennis contradicts Porter. Dennis is Deputy Commissioner at Kansas State Department of Education and head of Fiscal and Administrative Services.

Wichita Public Schools, State Revenue by Source, KPERS ContributionsEven though Dennis is the state’s top education finance official, we don’t have to rely solely on him to illustrate Porter’s error. Information from the Wichita public school district3 shows the same. Here I’ve plotted the funding sent by the state of Kansas to USD 259 for KPERS contributions. As Dennis indicated, in 2005 the Wichita school district started receiving money from the state for KPERS. Prior to that year it received none.

Trabert’s article explains other ways in which Porter is wrong. I have to wonder what is the underlying reason for Porter writing things like this. Is he being told incorrect information or is he simply lying?


Notes

  1. “Deception #2 – Until recently the state contribution to the Kansas Public Employees Retirement System (KPERS) was sent directly to KPERS. Now the funds are transferred to the public school account and then transferred to KPERS on the same day. Again, this was lauded as an increase to public school funding even though it was the same amount of money with just an additional transfer from the State of Kansas to the school to KEPRS.” Jim Porter for Kansas State Board of Education – District 9 Facebook post. Available at www.facebook.com/JimPorterKSBOE9/posts/1001536676582800.
  2. “Jim Porter’s Deception #2 – According to Dale Dennis, KPERS funding was last sent directly to KPERS in 2004; it has since been sent directly to school districts included in reported school funding totals. Again, Mr. Porter doesn’t define “recently” but most people would take it to mean within the time frame he references (the Brownback administration) and that clearly is not the case.” Trabert, Dave. State school board member should practice what he preaches. Available at kansaspolicy.org/state-school-board-member-practice-preaches/.
  3. USD 259 Comprehensive Annual Financial Report for 2015, State Revenue by Source, Governmental Funds, and USD 259 Comprehensive Annual Financial Report for 2007, State Revenue by Source, Governmental Funds.

Kansas state school board member should practice what he preaches

By Dave Trabert, Kansas Policy Institute.

District 9 Kansas State School Board member Jim Porter published the following piece outlining what he considers to be deceptive statements about school funding and state taxes. He urges political leaders to “tell the whole story” but doesn’t practice what he preaches, as we found a dozen deceptive statements in his piece.

We are consistently hearing from those political leaders who are resisting what many of us consider to be the adequate funding of education that Schools are receiving more state support than ever and that support is increasing every year. Typically they say that people need to know the facts. Well, that is part of the story and although not a false statement it is certainly deceptive. I will make an attempt to explain the part of the story that they are not telling.

Continue reading at Kansas Policy Institute.

Kansas Center for Economic Growth

Kansas Center for Economic Growth, often cited as an authority by Kansas news media and politicians, is not the independent and unbiased source it claims to be.

When supporters of more government spending and taxation in Kansas want to bolster their case, they often turn to Kansas Center for Economic Growth (KCEG). Portraying itself as a “nonprofit, nonpartisan organization,” KCEG says its mission is “to advance responsible policies by informing public discussion through credible, fact-based materials.” It says it conducts research and analysis to “promote balanced state policies.” 1

As it turns out, KCEG is not really the nonpartisan, independent think tank it pretends to be. Instead, as shown below, KCEG is a side project of Kansas Action for Children, Inc.. Both organizations are funded by and affiliated with well-known liberal organizations whose goals are always to expand the size and scope of government.

This is of interest to Kansans as groups that support low taxes, efficient government spending, and economic freedom are often maligned as being merely puppets of larger organizations that hide their purportedly nefarious goals. In particular, Kansas Policy Institute is often mentioned in this regard.

On its website KPI says it is “an independent think-tank that advocates for free market solutions and the protection of personal freedom for all Kansans.” 2 Also, KPI says it produces “objective research and creative ideas to promote a low-tax, pro-growth environment.”

Whenever KPI is mentioned, often condemnation of American Legislative Exchange Council follows, scorned for purportedly being a shadowy outfit that forces model legislation on unwitting legislators. But ALEC’s mission is quite clear and transparent. Its website says ALEC is “dedicated to the principles of limited government, free markets and federalism.” Economic freedom is also mentioned. ALEC says it provides a “toolkit for anyone who wants to increase the effectiveness and reduce the size, reach and cost of government.” 3

These mission statements plainly state the purposes of KPI and ALEC. Contrast them with the mission of Center on Budget and Policy Priorities, which is filled with material like this: “We pursue federal and state policies designed both to reduce poverty and inequality and to restore fiscal responsibility in equitable and effective ways.” 4 “Fiscal responsibility” can mean almost anything. To CBPP and its affiliates like KCEG, it means more taxes and more spending.

That dovetails cleanly with the preference of most Kansas newspapers. They — and most other news outlets — call for more spending and more taxation as the solution to all problems, state and local. They do so explicitly on their editorial pages, which is their right and privilege. In their news reporting, by using KCEG as an “objective” source, they rely on a source that isn’t being honest about its independence, its organizational status, and its ingrained policy preferences.

Who — or what — is Kansas Center for Economic Growth?

On its website, Kansas Center for Economic Growth (KCEG) says it is a “nonprofit, nonpartisan organization.” But no records exist for this entity at either the IRS or Kansas Secretary of State. Instead, KCEG uses Kansas Action for Children, Inc. (KAC) as its “fiscal agent” and funding source. KAC is a registered 501(c)(3) tax-exempt organization.

On its IRS form 990s, KAC lists a grant from AECF and SFAI, the purpose of which is supporting the type of work KCEG performs. AECF is Annie E. Casey Foundation, a non-profit with income of nearly $223 million and an endowment of $2.9 billion, according to most up-to-date IRS form 990 available. SFAI is State Priorities Partnership, originally founded as the State Fiscal Analysis Initiative (SFAI). It lists KCEG as a partner organization. 5 Both organizations promote solutions involving more government spending and taxation.

State Priorities Partnership, in turn, is coordinated by Center on Budget and Policy Priorities (CBPP). 6 CBPP promotes itself as pursuing “federal and state policies designed both to reduce poverty and inequality and to restore fiscal responsibility in equitable and effective ways.” 7 Its recommend policies nearly always call for more government spending and taxation.

In 2013 Bob Weeks was recognized by the Kansas Policy Institute with the John J. Ingalls Spirit of Freedom Award, given annually to a Kansan who uniquely supports the principles of individual liberty and economic freedom.


Notes

  1. Kansas Center for Economic Growth. About Us. Available at realprosperityks.com/about-us/.
  2. Kansas Policy Institute. About. Available at kansaspolicy.org/about/.
  3. American Legislative Exchange Council. About ALEC. Available at www.alec.org/about/.
  4. Center on Budget and Policy Priorities. Our Mission. Available at www.cbpp.org/about/mission-history.
  5. State Priorities Partnership. State Priorities Partners. Available at statepriorities.org/state-priorities-partners/.
  6. State Priorities Partnership. About. Available at statepriorities.org/about/.
  7. Center on Budget and Policy Priorities. Our Mission and History. Available at www.cbpp.org/about/mission-history.

Kansas public education factbook

In debates over school funding and performance in Kansas, facts are often in short supply. Here is a compilation.

Kansas Policy Institute has release a new edition of its annual compilation of data regarding Kansas schools. On the importance of this data, KPI Vice President and Policy Director James Franko wrote, “Numerous scientific surveys show that citizens are grossly misinformed on many pertinent facts of public education in Kansas. Aid and spending per-pupil are much higher than many Kansans believe, and student achievement is lower than understood. This fact book series aims to rectify this situation.”

As to the source of data, KPI writes “Aside from ACT scores, the data in this Fact Book all come from official government sources, including local school districts, the Kansas Department of Education (KSDE) and the U.S. Department of Education.”

Access the factbook here.

Kansas school salaries

Kansas school salaries for superintendents, principals, and teachers presented in an interactive visualization for each district, updated for 2016 data.

Recently Kansas Policy Institute noted the discrepancy in salary increases for Kansas public school management as compared to teachers. See Pay raises to superintendents and principals far outpace those to teachers.

In the article, David Dorsey writes: “A widely-shared solution to improving student outcomes is to put more money in the classroom. What does it say about the importance of student achievement to local school boards and administrations when pay increases are disproportionately higher to those who are not in the classroom?”

And later: “Much has been documented about teacher shortages, especially due to those leaving after only a few years in the profession. One way to reverse that trend would be for districts to make spending choices that would support the commitment to keeping quality teachers.”

Kansas State Department of Education has released salary figures for districts for the current school year, fiscal year 2016. Statewide, since 2008, the KSDE data shows these cumulative salary increases:

Superintendents: 12.2 percent
Principals: 11.8 percent
Teachers: 8.8 percent

If we start the comparison in 2009 the difference is larger, with increases of 8.2 percent for principals and 4.9 percent for teachers.

It’s also useful to look at individual districts. For example, for the Wichita public school district, there are these cumulative salary increases since 2008:

Superintendent: 53.9 percent
Principals: 7.0 percent
Teachers: 2.3 percent

The Wichita district has just one superintendent, so no matter how much the salary rises, it’s still the salary for just a single person and has a negligible effect on total district payroll costs. There are, however, 89 principals, so the increase for this category of employee matters much more.

But you have to wonder: What about the teachers?

I’ve gathered the data and present it in an interactive visualization. You may select any single district, or use district 999 for statewide totals. Click here to open the visualization in a new window. Data is from Kansas State Department of Education. Figures include fringe benefits and are not adjusted for inflation. Visualization created using Tableau Public. There are several missing values which can make the percentage change invalid for a single year.

Kansas school salaries. Click for larger.
Kansas school salaries. Click for larger.

Wichita economic development and capacity

An expansion fueled by incentives is welcome, but illustrates a larger problem with Wichita-area economic development.

Last week a Wichita company received economic development incentives in conjunction with an expansion. This is the third incentive the company has received in four years. The incentives are forgiven property taxes and sales taxes. 1 Simply, the company is allowed to skip paying many of the same taxes that everyone else must pay, including low-income households paying sales tax on groceries.

While the expansion of this company is welcome news, the hoopla surrounding it shows how we can’t rely on government intervention to pull Wichita out of its slump. Here are some figures.

According to the Bureau of Labor Statistics, Wichita metropolitan area employment is 14,500 less than its peak in 2008. Manufacturing jobs are down by 23,600 from the peak in 1998, or down by 15,400 from 2008. 2

In 2012 when this company requested an incentive, its employment was given as 110. 3 Current employment is given as 130, and by 2021, the company is required to employee 188 people. 4

So if everything goes as planned, 5 three economic development incentives programs will boost a company’s employment from 110 to 188. That’s an increase of 78 jobs over nine years, or about nine jobs per year.

If we look at these jobs in the larger context, we see that these jobs represent 0.5 percent of the jobs lost in the Wichita area since 2008. If we are relying on these jobs to spur a renaissance of manufacturing in Wichita, they represent 0.3 percent of manufacturing jobs lost since its peak.

This company and these three economic development incentives are not the only efforts the city has made. Other incentives to other companies have created jobs. But this company is considered a significant and major success. The awarding of this inventive was evidently such an uncommon event that it merited a large article in the Wichita Eagle. In his remarks, according to meeting minutes, Wichita Mayor Jeff Longwell said “this is how we move Wichita forward” and “this is how we grow our businesses here in Wichita and help them be successful.”

The jobs are welcome. But this incident and many others like it reveal a capacity problem, which is this: We need to be creating nine jobs every day in order to make any significant progress in economic growth. If it takes this much effort to create 78 jobs over nine years, how much effort will it take to create the many thousands of jobs we need to create every year?

A related problem is that we don’t know how many jobs are created by the city’s economic development efforts. As part of a campaign for a city sales tax in 2014, the city promised a web site to track the progress of jobs created. The sales tax didn’t pass, but the city still engages in economic development, and still does not track results. At least not publicly, and when I’ve asked, the results provided have been sketchy and incomplete.

On top of this, we don’t know if the incentives were necessary to enable the company to expand. Usually city documents state that incentives are necessary to make economic activity “viable.” No such claim was made in the documents supporting this incentive.

The large amount of bureaucratic effort and cost spent to obtain a relatively small number of jobs lets us know that we need to do something else in order to grow our local economy. We need to create a dynamic economy, focusing our efforts on creating an environment where growth can occur organically without management by government. Dr. Art Hall’s paper
Embracing Dynamism: The Next Phase in Kansas Economic Development Policy provides much more information on the need for this.

Another thing we can do to help organically grow our economy and jobs is to reform our local regulatory regime. Recently Kansas Policy Institute released a study of regulation and its impact at the state and local level. This is different from most investigations of regulation, as they usually focus on regulation at the federal level.

Business Perceptions of the Economic Impact of State and Local Government Regulation coverThe study is titled “Business Perceptions of the Economic Impact of State and Local Government Regulation.” It was conducted by the Hugo Wall School of Public Affairs at Wichita State University. Click here to view the entire document.

Our civic leaders say that our economic development efforts must be reformed. Will the path forward be a dynamic economy and reformed regulation? Or will it be more bureaucracy, handfuls of jobs at a time?


Notes

  1. Wichita City Council meeting agenda, April 5, 2016, p. 12.
  2. According to the Bureau of Labor Statistics, the peak of nonfarm employment in the Wichita metropolitan area was in 2008, where employment averaged 310,500. For 2015, employment averaged 296,000. That’s a loss of 14,500 jobs. For manufacturing jobs, the peak was 1998, when employment in this field was 75,900. In 2008 the figure was 67,700 jobs, and in 2015, 52,300 jobs. This is a loss of 23,600 jobs from manufacturing’s peak, or of 15,400 jobs from Wichita peak employment in 2008.
  3. Wichita City Council meeting agenda, September 11, 2012, p. 45
  4. Wichita City Council meeting agenda, April 5, 2016, p. 12.
  5. So far, employment is not progressing as planned. In the 2012 agenda item, it was said that employment would rise by 50 jobs over the next five years, which you by 2017. Current employment, according to the current city council agenda, is 130, which is 30 jobs short. The deadline for this projection has not yet arrived.

At Pachyderm: Kansas Legislature education chairs to speak

This week (April 15, 2016) the Wichita Pachyderm Club features Kansas Representative Ron Highland (Chair, House Education Committee) and Kansas Senator Steve Abrams (Chair, Senate Education Committee). Their topic is “A report from the House and Senate Education Chairmen on the 2016 Legislative Session.”

A new school finance bill has been introduced. Undoubtedly it will be a major topic. Background on this bill is here:

Kansas Legislature: HB 2741, Creating the school district finance and student success act. Contains the text of the bill.

Wichita Eagle: New proposal for Kansas school finance formula sparks worries

Kansas Policy Institute: Kansas Legislature Introduces Transformative New School Funding System.

Kansas Association of School Boards: Summary of HB 2741.

The Wichita Pachyderm Club is a friendly club. Everyone is welcome to attend meetings. The meeting cost, which includes a delicious buffet lunch plus coffee and/or iced tea, is $15 ($12 for Pachyderm Club members). This event is held in the Wichita Petroleum Club, located on the top floor of the Ruffin Building at 100 N. Broadway. You may park in the garage on Broadway, and if you do, bring your parking ticket to have it stamped for $1.00 parking.

Math quiz on Kansas spending

The average Kansan is misinformed regarding Kansas school spending, and Kansas news media are to blame, writes Paul Waggoner of Hutchinson.

Math Quiz on Kansas Spending

By Paul Waggoner

Math questions, one would think, are very straight-forward and easy to answer. At least easy to guess the right answer in a simple multiple choice test. Such is not the case however with the average Kansan who follows state issues relying on the headlines in the Kansas press.

The reality of how poor a job the Kansas press is doing with numbers is found in a December 2015 SurveyUSA study of 500 plus registered voters in Kansas. This scientific study of voters’ knowledge of educational spending in Kansas was virtually ignored by the Kansas media. Most likely because its implications don’t fit the media narrative on education in this Year 5 of the Age of Brownback. Even worse, the poll was commissioned by a conservative think tank, the Kansas Policy Institute.

As to voter (mis) understanding this 15 question poll hit the jackpot. All the questions were multiple choice with only 4 options given.

Question #6 asked how much state funding do you think Kansas school districts receive per pupil? The correct answer is well over $7,000 per student. 39% of Kansas voters thought it was under $4,000, another 22% thought between $4,000 and $5,000. Only 7% of voters guessed properly.

The follow-up, Question #7, was how much total (federal/state/local) funding do you think Kansas school districts receive per pupil? The correct answer in 2015 was over $13,000 per pupil. Only 5% of registered Kansas voters got that one right. 40% thought the total was under $7,000, and 21% said $7,000 to $10,000 which were the two most inaccurate options!

At this point I was even wondering how the accepted wisdom is so far removed from the truth. So I went to ksde.org, the website of the Kansas State Department of Education, to verify the precise figures. At that website every school district in the state is listed.

What our local school districts spend is very close to the state averages. The Hutchinson USD 308 budget was over $60,000,000 in 2014 with 4,836 full-time students or $12,449 spent per pupil. 5 years earlier the USD 308 budget was $57 million, 5 years before that it was about $41 million.

The comparable figures for USD 313 Buhler are $12,360 per pupil in 2014 with a $26,300,000 budget that 5 years earlier was $22,200,00 and 5 years before that was $18,000,000. For USD 313 that meant students were educated for just $9,000 per pupil as recently as 2005.

Kansas school districts total spending is $2.0 billion higher now than just 10 years ago ($6 billion versus $4 billion). That is an incontrovertible fact. Which leads to two immediate questions: How can the Supreme court keep claiming the spending is constitutionally inadequate? And what exactly do taxpayers have to show for the extra $2,000,000,000 every year?

The reality of those numbers are nowhere in the publics’ consciousness currently. For instance, SurveyUSA question #8 was “over the last 5 years how much do you think total per pupil funding has changed?” The correct answer is that it is actually up 9.92%. But fully 47% of Kansas voters confidently said it had dropped over 5%! Another 15% were sure it had dropped but thought the percentage was smaller. Only 7% of voters knew that school spending was up “over 5%’.

The budget trajectory has changed and is on a much flatter curve than ever before. Taxpayers are mostly rejoicing, tax spenders (and their allies) are howling mad.

My revised school spending narrative is frankly the story of the entire Kansas budget (as can be easily accessed at budget.ks.gov “Governors Budget Report FY 2017”).

The state general fund budget first hit $1 billion in 1980 and grew consistently under Governors Carlin/Hayden/Finney at about a 6.5% annual rate.

Under Graves and Sebelius that accelerated growth rate continued until the 2008-09 recession when the state budget dropped dramatically for 1 year under Governor Parkinson. This made a cumulative annual growth average of around 3% for those three administrations.

Under Governor Brownback the general fund budget is still going up, but at a 5 year annual growth rate of 1.8%.

On February 20th one Hutchinson News columnist’s headline blasted the “Deliberate financial starving of the state of Kansas.” I see this as more of a diet, and I say it is about time.

The numbers on the state budget spending (and taxation) are readily available online. The execution of the plan for this new governmental trajectory leave something to be desired, but that is the topic for another day.

Paul Waggoner is a Hutchinson resident and business owner. He can be reached with comments or questions at [email protected]

Kansas school salaries

Kansas school salaries for superintendents, principals, and teachers presented in an interactive visualization for each district.

Recently Kansas Policy Institute noted the discrepancy in salary increases for Kansas public school management as compared to teachers. See Pay raises to superintendents and principals far outpace those to teachers.

In the article, David Dorsey writes: “A widely-shared solution to improving student outcomes is to put more money in the classroom. What does it say about the importance of student achievement to local school boards and administrations when pay increases are disproportionately higher to those who are not in the classroom?”

And later: “Much has been documented about teacher shortages, especially due to those leaving after only a few years in the profession. One way to reverse that trend would be for districts to make spending choices that would support the commitment to keeping quality teachers.”

Statewide, since 2009, KSDE data shows these cumulative salary increases:

Superintendents: 7.9 percent
Principals: 7.4 percent
Teachers: 3.9 percent

It’s also useful to look at individual districts. For example, for the Wichita public school district, there are these cumulative salary increases since 2009:

Superintendent: 39.9 percent
Principals: 4.7 percent
Teachers: -0.8 percent, a decline

The Wichita district has just one superintendent, so no matter how much the salary rises, it’s still the salary for just a single person and has a negligible effect on total district payroll costs. There are, however, 89 principals, so the increase for this category of employee matters much more.

But you have to wonder: What about the teachers?

I’ve gathered the data and present it in an interactive visualization. You may select any single district, or use district 999 for statewide totals. Click here to open the visualization in a new window. Data is from Kansas State Department of Education. Figures include fringe benefits. Visualization created using Tableau Public. There are several missing values which can make the percentage increase invalid for a single year.

Kansas school salaries and change, statewide, through 2015. Click for larger version.
Kansas school salaries and change, statewide, through 2015. Click for larger version.

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.

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.

CBPP pushes political viewpoint as economic analysis

The Center on Budget & Policy Priorities (CBPP) is at it again, pushing their political viewpoint disguised as economic analysis, writes Dave Trabert of Kansas Policy Institute.

CBPP pushes political viewpoint as economic analysis

By Dave Trabert, Kansas Policy Institute

Well, the Center on Budget & Policy Priorities (CBPP) is at it again … pushing their political viewpoint disguised as economic analysis. CBPP’s November 30 blog post attempts to use Gross Domestic Product (GDP) data to warn other states that Kansas’ tax reform is failing.

CBPP’s simplistic look at annual changes in GDP seems merely designed to support their political preference for higher taxes and spending, as a look at the underlying data throws a lot of cold water on their contention.

First of all, CBPP is talking about total real GDP, which includes government and is adjusted for inflation. The intent of tax reform was to grow the private sector, not government, so an honest analysis would at least show the difference. The CBPP chart shows 2013 growth at -0.3% for Kansas and 1.9% for the nation; Kansas also trailed (1.8% to 2.2%) in 2014. The adjacent table shows private sector growth is closer to the national average, but that is just the beginning.

Tax policy certainly has an impact on economic growth but some change is unrelated to tax policy. For example, Kansas is much more reliant on aerospace that most states and changes in that industry are driven by global demand more than anything else. The Kansas economy is also more reliant on oil and gas than most states, so declining oil prices have disproportionate economic impact on extraction and refining.

Each of those three areas declined in 2013 (aerospace is a sub-sector of Other Transportation Equipment Manufacturing) in Kansas but they increased in the nation as a whole. But Kansas outperformed the nation on everything else (97% of the U.S. economy, 95.4% in Kansas), growing 2.5% to the nation’s 2.2%.

That’s not to say that tax reform is a success — it’s far too early to judge — but it does show that factors other than tax reform had a very significant negative impact in 2013.

Let’s now look at 2014. BEA has not yet published sub-sector data for 2014 but we can look at the sectors that include them. Mining (oil & gas extracting) increased in Kansas and the nation, but much less so in Kansas. Non-Durable Goods (petroleum manufacturing) did slightly better in Kansas than across the nation but Durable Goods (aerospace) declined in Kansas while the nation as a whole increased. But once again, everything else grew faster in Kansas (2.5%) than the nation overall (2.3%).

We won’t know for certain until the sub-sector data is published, but there is a reasonable possibility that, aside from those three relatively small sub-sectors, Kansas again outperformed the rest of the nation in private sector GDP.

This is really easy information to find if one bothers to look, but CBPP apparently isn’t interested in real economic analysis; they distort data to support their political perspective as we have shown here and here.

The 2015 projection comes from Kansas Legislative Research and appears to include government rather than just reflect the private sector. Their underlying rationale has been requested and will be addressed here once they provide the data.

Kansas at-risk school funding report released

KPI releases landmark at-risk education report

By David Dorsey, Kansas Policy Institute

The Kansas at-risk program, which spent $3.6 billion over the past 23 years, failed its mission to improve the performance of the very students it was designed to serve. Achievement gaps in academic performance (in this case the difference between low-income and not-low-income students) are universal, significant and persistent despite the incredible growth in funding, in particular the increases since 2005.

From Kansas Policy Institute: "At-risk funding: Increased funding failed to increase achievement"
From Kansas Policy Institute: “At-risk funding: Increased funding failed to increase achievement”
That and other findings and recommendations are in Kansas Policy Institute’s just released research report At-Risk Funding: Increased Money Fails to Increase Achievement.

Four basic reasons the program failed in its mission are: dollars were not targeted exclusively to at-risk students, some funds were actually targeted directly to non-at-risk students, school districts were not held accountable, and scant information about the at-risk program was made available to the legislature and the public.

Despite the shortcomings, an at-risk component should be included in the new education finance law, with these fundamental changes: at-risk students must be clearly identified and dollars targeted directly to them, the method of funding the program should be changed, and school districts must be held accountable to the public.

It is important to note that there is no recommendation for reducing the amount of funding for at-risk students, but a call for a more effective use of the dollars.

Eric Hanushek, Senior Fellow at the Hoover Institution of Stanford University and education policy authority, made these concurring remarks:

This report on at-risk funding in Kansas accurately identifies what is a national problem.  While we directly fund a number of programs to improve the education of at-risk students, we never follow-up to see that the money is used effectively.  If we are going to solve this problem of achievement gaps, we need to fund programs to support at-risk students but to hold schools accountable for results.

As the Kansas legislature crafts a new K-12 finance law, it is the perfect opportunity to overhaul the approach in addressing inequities in achievement based on economic status. It’s time to put all Kansas students first.

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

Arthur Brooks in Wichita

Arthur C. Brooks, author of The Conservative Heart, spoke about being a happy warrior in the conservative movement during the keynote speech of the Annual Awards Dinner of the Kansas Policy Institute on October 20, 2015, in Wichita. Brooks was introduced by KPI President Dave Trabert. Videography by Paul Soutar. View below, or click here to view at YouTube.