Tag Archives: Kansas state government

Articles about Kansas, its government, and public policy 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.

Simple tasks for Kansas Legislature

In this excerpt from WichitaLiberty.TV: There are things simple and noncontroversial that the Kansas Legislature should do in its upcoming session. View below, or click here to view at YouTube. Originally broadcast January 3, 2016.

Continue reading Simple tasks for Kansas Legislature

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.

After years of low standards, Kansas schools adopt truthful standards

In a refreshing change, Kansas schools have adopted realistic standards for students, but only after many years of evaluating students using low standards.

The former Kansas school standards for grade four reading, showing Kansas ranking low among the states.
The former Kansas school standards for grade four reading, showing Kansas ranking low among the states.
For years Kansas schools have used low standards to evaluate students. That is, Kansas was willing to say students are “proficient” at a much lower level of performance than most other states. But now the new Kansas standards are more in line with those of other states, and present a more truthful assessment of Kansas schoolchildren.

This is the finding of the EducationNext report After Common Core, States Set Rigorous Standards. EducationNext is a scholarly journal published by the Hoover Institution and the Harvard Program on Education Policy and Governance at the Harvard Kennedy School that is committed to careful examination of evidence relating to school reform.

The report compares the proportion of students considered “proficient” on the states’ own exam with that of the National Assessment of Educational Progress (NAEP), known as “The Nation’s Report Card.” The report explains:

Data from both the NAEP and state tests allow for periodic assessments of the rigor of each state’s proficiency standards. If the percentage of students identified as proficient in any given year is essentially the same for both the NAEP and the state exams, we can infer that the state has established as strict a proficiency standard as that of the NAEP. But if the state identifies a higher percentage of students as proficient than the NAEP, we can conclude that the state has set its proficiency bar lower than that of the NAEP.

From 2003 to 2013 the Kansas standards were weak, earning letter grades ranging from “C” to “D” in the EducationNext reports. In another similar study, the Mapping State Proficiency Standards Onto NAEP Scales series from National Center for Education Statistics, Kansas standards were also found to be low compared to other states. NCES is part of the United States Department of Education and the primary federal entity for collecting and analyzing data related to education. It has not yet examined the 2015 NAEP and state exam scores.

Now, after comparing Kansas state assessments to the 2015 NAEP exam, Kansas earns a grade of “A” from EducationNext for the strength of its standards.

This grade of “A” does not reflect the performance of Kansas schoolchildren on tests. Instead, it means that the state has raised the definition of “proficient” to a higher level. A presentation by Kansas State Department of Education to the Kansas State Board of Education explains the relationship of the new standards to the former:

The Kansas College and Career Ready Standards are more rigorous than the previous Kansas Standards. The Mathematics test is more demanding than even the ACT and taken a year earlier. The assessment is also more demanding than the NAEP assessment. Kansas takes seriously the current issues of college dropout and remediation rates and feels higher standards are necessary to help remedy the problem.

Kansas is not alone in making a change:

The results are striking: The last two years have witnessed the largest jump in state standards since they were established as part of the federal accountability program. Overall, 36 states have strengthened their standards since 2013, while just 5 have loosened them, and 7 have left their standards essentially unchanged. In short, the Common Core consortium has achieved one of its key policy objectives: the raising of state proficiency standards throughout much of the United States.

This is a refreshing change for Kansas. It means that after many years of evaluating students with weak standards and low expectations, Kansas now has reasonable standards.

Kansas schools and other states

A joint statement released by Kansas Association of School Boards, United School Administrators of Kansas, Kansas School Superintendents’ Association, and Kansas National Education Association makes claims about Kansas public schools that aren’t factual.

The Kansas public school establishment is proud of Kansas schools. In a joint statement released at the start of this year’s legislative session, satisfaction with schools is evident: “Our Kansas public schools are great. … The results are there. Working with parents and communities, Kansas schools rank in the top ten nationally on every measure on reading and math tests, high school completion and college preparation.”

According to National Center for Education Statistics, Kansas does have a high percentage of students that graduate from high school. But this is the only bright spot for Kansas students. In many other measures Kansas is near the middle of the states, and in some cases much below the middle.

In the recent report Quality Counts by Education Week, Kansas ranked twentieth overall among the states.

For last year’s ACT scores, Kansas ranked twenty-first in composite score. Kansas ranked twentieth in readiness for college in English, and twentieth also for math readiness.

In U.S. News and World Report’s How States Compare in the 2015 Best High Schools Rankings, we find Kansas ranked forty-fifth among the states, with 1.3 percent of its high schools earning a gold or silver medal. There were no gold medals; only silver.

The National Assessment of Educational Progress (NAEP), known as “The Nation’s Report Card,” reveals the unfortunate weakness in Kansas schools. NAEP is a test that is the same in all jurisdictions. Consider fourth grade math, looking at the percent of students who score “proficient” or better. For all students, Kansas ranks twenty-second, a little above the middle. But when we look at subgroups, something else appears. For black students Kansas ranks thirty-eighth, for Hispanic students the rank is thirty-fourth, and for white students the rank is twenty-ninth. Similar patterns exist for math and reading in grades four and eight. The highest Kansas ranks in any subgroup is fifteenth for grade eight math for Hispanic students. (Click here for a pdf version of these rankings. An interactive visualization of these scores is here.)

NAEP Scores, Kansas and National. Click for larger version.
NAEP Scores, Kansas and National. Click for larger version.
When comparing Kansas NAEP scores to the national average, using appropriate subgroups, we find that often Kansas underperforms the national average. The reason for this anomaly is Simpson’s Paradox, in which aggregated data hides differences between subgroups. Given that white students across the nation score higher than black or Hispanic students, and that Kansas has a high proportion of white students compared to the nation and many states, Simpson’s Paradox makes Kansas NAEP scores — only when considering all students — appear high. But if you are a parent with young black children learning to read, would you rather be in Kansas (thirty-seventh in reading for black students, grade four), Louisiana (twenty-fifth), or Colorado (third)?

It’s unfortunate that Kansas does not rank better in all these measures. What’s worse is the insistence that Kansas schoolchildren are doing well. Notwithstanding this evidence, after listing all the ways Kansas schools and teachers work to make school great, the joint statement says “This is how the Kansas school system operates. We are good at.”

But it isn’t good for Kansas schoolchildren to be in a system that does not recognize the truth.

Must it be public schools?

A joint statement released by Kansas Association of School Boards, United School Administrators of Kansas, Kansas School Superintendents’ Association, and Kansas National Education Association exposes the attitudes of the Kansas public school establishment.

In a joint statement by the leaders of the Kansas public school establishment the clear theme is that education must be provided by public schools. Not schools in general, but public schools.

There’s no reason that education must be provided by government, and many reasons to keep government out of education. Across the spectrum of human activity, government provides services at high cost, with low levels of diversity and innovation, and with low accountability. School choice programs allow parents and children to find alternative non-governmental sources of education (although charter schools are public schools).

Defenders of public schools over school choice programs note that parents do have choice. Parents can, they say, enroll their children in private schools. But these parents still must pay for the public schools, which severely reduces their ability to pay private school tuition. That isn’t much choice. And for parents in poor neighborhoods, such as Wichita’s zip code 67214 where the median family income is $29,637, there isn’t much money available for private school tuition, or to move their households to suburban school districts. The latter is a form of school choice available to middle-class and wealthy parents that isn’t available to low-income families.

Across the country 393,467 students participate in school choice programs, in this case defined as vouchers, tax credit scholarships, or education savings accounts. 1 There are around 49 million students in public schools. So for every one student in these school choice programs, 125 students remain in public schools.

Despite the small number of students enrolled in school choice programs, the anti-choice establishment vigorously fights against any school choice program, even the small Kansas tax credit scholarship program. Kansas State Department of Education reports that since the beginning of the scholarship program, there have been 73 students awarded scholarships which totaled $108,384. 2

Seventy-three students. $108,384. The public school establishment describes this as a grave threat, something that drains public schools of funds. For a bit of context, there are executives of Kansas Association of School Boards and Kansas National Education Association that earn more than $108,384 per year. These executives earn these salaries, in part, by blocking the type of school choice programs that benefit children living in Wichita’s zip code 67214 with its median family income of $29,637.

Why is the public school establishment so firmly against school choice? Private schools don’t pay dues to the Kansas Association of School Boards. Teachers not in traditional public schools are not members of Kansas National Education Association, the teachers union. Without this revenue, it might be difficult to pay the high salaries of KASB and KNEA executives and staff.

But there’s more. The ideological bent of these groups is for more government, more taxes, more government spending, and more governmental control over the people of Kansas. Consider this sentence from the joint statement: “Now, we turn our attention this week to the Statehouse in Topeka where the Legislature is gathering to consider how to provide for the people of Kansas.” (emphasis added)

In a nutshell, there is the paternalistic governing philosophy of our state’s public school establishment: Government provides for us.

Kansas legislative resources, external

Besides the official Kansas Legislature resources, there are also these:

Twitter
When tweeting about the legislature, most writers will use the hashtag #ksleg. To see these tweets, search for that. You don’t need a twitter account; just browse to twitter.com and use the search feature. To get the most results, click “Live” from the menu that appears.

OpenStates.org
OpenStates.org, a project of the Sunlight Foundation, makes legislative data available in a variety of formats.

Advocacy groups and lobbyists
Advocacy groups often create and publish much material about the legislature and Kansas government. Often these groups have an ideological stance that may color or influence their material. Some of these groups may report on the daily activity at the Capitol that affects their area of interest. Some leading examples:

Kansas Policy Institute
Kansas National Education Association
Kansas Association of School Boards
Americans for Prosperity

Some lobbyists and organizations publish material that may be helpful. Examples include League of Kansas Municipalities and
the law firm Foulston Siefkin with its weekly newsletter Kansas Legislative Insights (available on this page).

Legislators
Many legislators maintain an active presence online. It may be through an active website, email newsletters, Facebook pages, or Twitter feeds. Probably the best way to find these outlets for legislators is to use Google or your favorite search engine. Examples include Amanda Grosserode (sample newsletter here) and Stephanie Clayton (Facebook page here, Twitter feed here).

Kansas Attorney General Derek Schmidt

Kansas Attorney General Derek Schmidt
Kansas Attorney General Derek Schmidt
Kansas Attorney General Derek Schmidt spoke to members and guests of the Wichita Pachyderm Club on January 22, 2106. He addressed cases before the Kansas and United States Supreme Courts, including the Wichita marijuana case and the Carr Brothers appeal. This is an audio presentation.

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, a rural state?

How does the population in Kansas compare to the nation and other states?

One of the most-often repeated themes in Kansas is that we are a rural state. Therefore, comparisons of Kansas to other states must be tempered and adjusted by this. It seems to be common knowledge.

Rural populations of the states. Click for larger version.
Rural populations of the states. Click for larger version.
There may be several ways to measure the “ruralness” of a state. One way is the percent of the state’s people that live in rural areas. The U.S. Census Bureau has these statistics. In the chart made from these statistics, Kansas is right in the middle of the states. 25.80 percent of Kansans live in rural areas.

That’s not too far from the country as a whole. For the entire United States, 80.7 percent of the population lives in an urban setting, according to the 2010 census. For Kansas, the figure is 74.2 percent.

Over time, Kansas is becoming more of an urban state, just as are most states and the country as a whole.

Do these numbers mean anything? It’s common for Kansas politicians to emphasize — even exaggerate — whatever connections they may have to a family farm. It’s part of a nostalgic and romanticized view of Kansas, the Kansas of Home on the Range. We are the “Wheat State” and “Breadbasket of the World,” and “One Kansas farmer feeds 128 people (plus you).”

So while Kansas is in the middle in the ranking of percent of population living in rural areas, our state’s politicians continue to play the “rural card.”

Voters and policymakers should keep this in mind, although politicians may not.

Click here to view and use an interactive visualization of states and urban population.

Percent urban population by state, with Kansas emphasized. Click for larger.
Percent urban population by state, with Kansas emphasized. Click for larger.

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.

Kansas state and local tax revenue

Tax group definitions.
Tax group definitions.
In order to simplify this chart, I created four groups of taxes. As there are many taxes that are small in amount, I group them together as “Other.” For the group “Sales” I include the general sales and use tax, plus the cigarette and tobacco tax, plus liquor and beer tax, as these are of the same nature as the general sales tax.

Note this is both taxes collected by the state, and also by local governments.

Source of data is Kansas Tax Facts, various years. Values are nominal; not adjusted for inflation. To access the interactive visualization that is the basis of the example shown below, click here.

Kansas State and Local Tax Revenue. Click for larger.
Kansas State and Local Tax Revenue. Click for larger.

Kansas school employment

Kansas school employment declined for the current school year, and ratios of employees to pupils rose.

Figures released by the Kansas State Department of Education show the number of teachers and certified employees declined for the 2015-2016 school year.

The number of Pre K through grade 12 teachers fell to 30,413 from 30,868, a decline of 1.48 percent. Certified employees fell to 41,405 from 41,975, or by 1.36 percent.

Enrollment fell too, from 464,395 to 463,504, or 0.19 percent. As a result, the ratios of teachers to students and certified employees to students rose. The pupil-teacher ratio rose from 15.04 pupils per teacher to 15.24. For a school with 1,000 students, this change would be caused by the loss of one teacher.

The relative change in enrollment and employment is not the same in every district. The Kansas City school district saw its pupil-teacher ratio continue to decline, although the certified employee-pupil ratio rose slightly.

Of note, Kansas school fund balances rose slightly this year, both in absolute dollars and dollars per pupil.

I’ve gathered the numbers from KSDE and present them in an interactive visualization. to open it in a new window.

Kansas School Employment State Totals. Click for larger.
Kansas School Employment State Totals. Click for larger.

School choice in Kansas: The haves and have-nots

Kansas non-profit executives work to deny low-income families the school choice opportunities that executive salaries can afford.

Kansas Association of School BoardsKansas Association of School Boards
Executives and annual salaries 1
John Heim, Executive Director $158,809
Donna Whiteman, Assistant Executive Director $105,872

Can afford to send their children to any school.

Kansas National Education AssociationKansas National Education Association Political Action Committee
Executives and annual salaries 2
Karen Godfrey, President $98,234
Claudette Johns, Executive Director $125,052
Kevin Riemann, Associate Executive Director $123,143
David Schnauer, General Counsel $114,886
Marjorie Blaufuss, Staff Counsel $116,731
Mark Desetti, Director of Governmental Relations $115,106
Anthony White, Uniserv Director $112,605
Burle Neely, Uniserv Director $111,199

Can afford to send their children to any school.

All the above lobby vigorously against any form of school choice.

Zip code 67214 in Wichita from Google mapsZip code 67214, Northeast Wichita
Median family income $29,637 3

Can this family afford school choice?

School Choice in Kansas - The Haves and Have Nots b

Notes:

  1. Source: IRS Form 990 for 2013
  2. Source: IRS Form 990 for 2013
  3. Source: U.S. Census, 2014

Kansas legislative resources

Citizens who want to be informed of the happenings of the Kansas Legislature have these resources available.

Legislative documents
The Legislature’s site at kslegislature.org has rosters of members, lists of committees, lists of bills, journals (the daily record of proceedings in each chamber), calendars (the plan for the day, along with topics for upcoming committee meetings).

A useful feature is the “Current Happenings” link for both the House and Senate. This has a link to the bills that have seen movement in some way each day. The page for each bill is generally useful, too, with the steps in the bill’s history, along with links to the bill text, fiscal and supplemental notes, and other material. Fiscal notes — prepared by the Division of Budget — estimate the financial impact of a bill, while the supplemental notes — prepared by Kansas Legislative Research Department — contain background and explanatory information. When attempting to understand legislation, the fiscal and supplemental notes are very useful.

Audio and video
Both the House and Senate broadcast audio of their proceedings. But you must listen live, as the broadcasts are not made available to the public in any other way. It would be exceedingly simple to make these past broadcasts available to the public, as explained here. But the legislature does not retain audio recordings of sessions.

The Kansas Legislature does not make available video of its proceedings.

Documents
Kansas Legislative Research Department (KLRD) has many documents that are useful in understanding state government and the legislature. This agency’s home page is www.kslegresearch.org. Of particular interest:

Kansas Legislative Briefing Book. This book’s audience is legislators, but anyone can benefit. The book has a chapter for major areas of state policy and legislation, giving history, background, and explanations of law. In some years the entire collection of material has been made available as a single pdf file, but not so this year. Contact information for the legislative analysts is made available in each chapter. The most recent version can be found on the Reports and Publications page. The version for 2015 is available here. A version for the 2016 session should be available soon. Update: The 2016 version is now available here.

Of note, versions of the briefing book from years past are useful. KLRD doesn’t provide links to these old documents, but they are available. The search feature of the page (top right corner) will find these documents. It forms a Google site-specific search which looks like this: “site:www.kslegresearch.org summary of legislation.” The same works for old versions of other KLRD documents.

Kansas Fiscal Facts. This book, in 134 pages, provides “basic budgetary facts” to those without budgetary experience. It provides an overview of the budget, and then more information for each of the six branches of Kansas state government. There is a glossary and contact information for the fiscal analysts responsible for different areas of the budget. This document is updated each year. The most recent version can be found on the Reports and Publications page.

Legislative Procedure in Kansas. This book of 236 pages holds the rules and explanations of how the Kansas Legislature works. It was last revised in November 2006, but the subject that is the content of this book changes slowly over the years. The direct link is Legislative Procedure in Kansas, November 2006.

How a Bill Becomes Law. This is a one-page diagram of the legislative steps involved in passing laws. The direct link is How a Bill Becomes Law.

Summary of Legislation. This document is created each year, and is invaluable in remembering what laws were passed each year. From its introduction: “This publication includes summaries of the legislation enacted by the 2015 Legislature. Not summarized are bills of a limited, local, technical, clarifying, or repealing nature, and bills that were vetoed (sustained).” 200 pages for 2015. The most recent version can be found on the Reports and Publications page.

Legislative Highlights. This is a more compact version of the Summary of Legislation, providing the essentials of the legislative session in 12 pages for 2015. The most recent version can be found on the Reports and Publications page.

Kansas Tax Facts. This book provides information on state and local taxes in Kansas. The most recent version can be found on the Revenue and Tax page.

Kansas Statutes. The laws of our state. The current statutes can be found at the Revisor of Statutes page.

Kansas Register. From the Kansas Secretary of State: “The Kansas Register is the official state newspaper. This publication provides a wide range of information such as proposed and adopted administrative regulations, new state laws, bond sales and redemptions, notice of open meetings, state contracts offered for bid, attorney general opinions, and many other public notices.” The Register is published each week, and may be found at Kansas Register.

WichitaLiberty.TV: What the Kansas Legislature should do, and eminent domain

In this episode of WichitaLiberty.TV: There are things simple and noncontroversial that the Kansas Legislasture should do in its upcoming session, and some things that won’t be easy but are important. Also, a look at eminent domain. View below, or click here to view at YouTube. Episode 106, broadcast January 3, 2016.

Availability of testimony in the Kansas Legislature

Since statistics were gathered and this article was written in February, several committees have used the commercial file-sharing service Dropbox to make testimony and documents available to everyone. This is a reasonable way to accomplish an important goal.

Availability of testimony in the Kansas Legislature
Despite having a website with the capability, only about one-third of standing committees in the Kansas Legislature are providing written testimony online.

On the Kansas Legislature website, each committee has its own page. On these committee pages there are links for “Committee Agenda,” “Committee Minutes,” and “Testimony.” But in most cases there is no data behind these links.

In particular, the written testimony and informational presentations provided to committees would be of interest and value to citizens. Most committees — perhaps all — require conferees to supply a pdf or Microsoft Word version of their testimony in advance of the hearing. These electronic documents could be placed online before the committee hearing. Then, anyone with a computer, tablet, or smartphone could have these documents available to them.

Having committee testimony online would be extremely useful for those who attend hearings. Often there is only a limited number of printed copies of testimony available, so not everyone gets a copy.
This would not be difficult to accomplish. It would cost very little, perhaps nothing.

Plus, citizens could access these documents. Of note, many organizations that regularly testify before the legislature make their testimony available on their own websites. Examples include Kansas Association of School Boards and Kansas Policy Institute.

Publishing testimony online would be an easy matter to accomplish and would be a great help to those following the legislature. It would cost very little or nothing.

Following is a list of all standing committees of the legislature and whether they have any testimony online for the 2015 session. A notation of “Yes” does not imply that all testimony is available online. It means that I found some testimony. Some committees are not listed as they do not meet for the purpose of receiving testimony. (Calendar and Printing in the House is an example.)

Of the 40 standing committees that I examined, 26 do not provide any testimony online.

Download (PDF, 30KB)

A simple step for transparency in Kansas government

There exists a simple and inexpensive way for the Kansas Legislature to make its proceedings more readily available.

Proceedings of the Kansas Senate and House of Representatives are broadcast on the internet. That’s good. But the broadcasts are carried only live. There is no archive of recordings. Citizens must listen live, or figure out some way to record the audio. It’s possible, but beyond what most people are willing to do. And given the unpredictable schedule of the legislature, you can’t simply set a timer to start at a certain time each day.

There is a desire by some for live video of the proceedings, which would be great. Even better is archived video, where a person doesn’t have to watch live. But these options are expensive. The expenditure would be worthwhile, but there doesn’t seem to be much desire to spend on this.

Audio, however, provides almost all the benefit of video of legislative proceedings. And it’s cheap. For eight dollars per month the legislature could make audio recordings of its proceedings available to listen to at any time.

For eight dollars per month at least one podcast hosting company offers an unlimited plan. Unlimited storage, and unlimited bandwidth. That’s just what is needed 1. Since the audio of the proceedings is broadcast on the internet, it must pass through a computer somewhere. That computer could also be recording the audio. Once recorded, the process of uploading the audio to the podcast host is a trivial procedure. The recording needs no editing. (In fact, any editing other than cutting away silence before the start and after the end of the session must be disallowed.)

But there’s a problem. Neither Kansas legislative chamber records their proceedings, according to the Secretary of the Senate and the Chief Clerk of the House.

Making audio archives or podcasts of legislative session would be so simple. It is almost without cost. It would have great benefit. Interns could do the work, and it would be good experience for them.

But the Kansas Legislature doesn’t do this. We need to ask legislative leaders to make this happen.

  1. For $79 per month the same company offers a plan geared towards business, with features like multiple administrative users. This is probably more appropriate for the Legislature. But the eight dollar plan would work, too.

Kansas Senate President Susan Wagle

Voice for Liberty radio logo square 02 155x116

Todd Johnson, Chair, Sedgwick County Republican Party
Todd Johnson, Chair, Sedgwick County Republican Party
Kansas Senate President Susan Wagle spoke to members and guests of the Wichita Pachyderm Club on Friday December 18, 2015. She addressed challenges the legislature will face when the session starts in January.

Todd Johnson, Chair of the Sedgwick County Republican Party, introduced Senator Wagle.

This is an audio presentation.

WichitaLiberty.TV: Wichita’s attitude towards empowering citizens, tax credits, and school choice

In this episode of WichitaLiberty.TV: The City of Wichita’s attitude towards empowering citizens, government spending through tax credits, and school choice in Kansas. View below, or click here to view on YouTube. Episode 103, broadcast December 13, 2015.

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.

Kansas Legislature and Elections: 2016 Preview

Pachyderm 2015-12-04 Bright Carpenter 02Natalie Bright and Marlee Carpenter of Bright and Carpenter Consulting briefed members and guests of the Wichita Pachyderm Club on the results of the 2015 session of the Kansas Legislature, and what to look for in next year’s session and elections. December 4, 2015.

The accompanying visual presentation may 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.

Kansas cities force tax breaks on others

When Kansas cities grant economic development incentives, they may also unilaterally take action that affects overlapping jurisdictions such as counties, school districts, and the state itself. The legislature should end this.

When Kansas cities create tax increment financing (TIF) districts, the overlapping county and school district(s) have an opportunity to veto its creation.

But for some other forms of incentives, such as tax increment financing district redevelopment plans, property tax abatements, and sales tax abatements, overlapping jurisdictions have no ability to object. There seems to be no rational basis for not giving these jurisdictions a chance to object to the erosion of their tax base.

This is especially important for school districts, as they are often the largest tax consumer. As an example, when the City of Wichita offered tax abatements to a company in June 2014, 47 percent of the abated taxes would have gone to the Wichita school district. But the school district did not participate in this decision. State law gave it no voice.

Supporters of economic development incentives say that the school district benefits from the incentives. The argument is that even though the district gives up some tax revenue now, it will get more in the future. This is the basis for the benefit-cost ratios Wichita uses to justify incentives. For itself, the City of Wichita requires a benefit-cost ratio of 1.3 to one or better, although there are many loopholes the city can use to grant incentives when this threshold is not met. For the June project, city documents reported these benefit-cost ratios for two overlapping jurisdictions:

Sedgwick County 1.18 to one
USD 259 1.00 to one

In this case, the city forced a benefit-cost ratio on the county that the city would not accept for itself, unless it uses a loophole. For the school district, the net benefit is zero.

The Kansas Legislature should look at ways to make sure that overlapping jurisdictions are not harmed when economic development incentives are granted by cities. The best way would be to require formal approval of the incentives by counties, school districts, and any other affected jurisdictions.

Two examples

In June 2014 the City of Wichita granted tax abatements for a new warehouse. City documents gave the benefit-cost ratios for the city and overlapping jurisdictions:

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

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

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

In November 2014 a project had these dollar amounts of property tax abatement shared among the taxing jurisdictions in these estimated amounts, according to city documents:

City $81,272
State $3,750
County $73,442
USD 259 $143,038

The listing of USD 259, the Wichita public school district, is likely an oversight by the city, as the subject properties lie in the Derby school district. This is evident when the benefit-cost ratios are listed:

City of Wichita 1.98 to one
General Fund 1.78 to one
Debt Service 2.34 to one
Sedgwick County 1.54 to one
U.S.D. 260 1.00 to one (Derby school district)
State of Kansas 28.23 to one

Note that the ratio for the Derby school district is 1.00 to one, far below what the city requires for projects it considers for participation. That is, unless it uses a loophole.

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.

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

Kansas fiscal experiment

Those evaluating the Kansas fiscal “experiment” should consider what is the relevant input variable.

State General Fund Expenditures by Major Purpose chart 2015-11An experiment implies changing inputs (one or more independent variables) and examining outputs (dependent variables). If we are to consider the Kansas budget an experiment — and I’m not sure that analogy is apt — what is the independent variable? Is it tax revenue collected, or government spending?

If we believe the purpose of taxation is to pay for spending, then the independent variable is the level of spending. As can be seen in the nearby table and chart, Kansas spending has risen in recent years. Perhaps it has not risen as fast as some people want. Also, these numbers are not adjusted for inflation (which has been low).

But to conclude the “experiment” is a failure because tax revenue is lower is not looking at the right input variable. We should be looking at spending, which keeps going up.

State General Fund Expenditures by Major Purpose table 2015-11

Bombardier can be a learning experience

The unfortunate news of the cancellation of a new aircraft program can be a learning opportunity for Wichita.

As Wichita seeks to grow its economy, the loss of a new aircraft program at one of the city’s major employers is unwelcome news. Now it is important that our leaders and officials seek to learn lessons from this loss. But first, we must acknowledge the loss. Wichita economic development officials are quick to trumpet successes, but so far there is no mention of this loss from the city or its economic development agencies.

The project received state, local and federal incentives. Lots of incentives. These incentives took the form of cash grants, forgiveness of taxes that would otherwise be due, and the ability to reroute its employee withholding taxes for the company’s exclusive benefit. So one lesson is that when local officials complain of the lack of money available for incentives, they are not being truthful.

A second lesson is the limited ability of incentives to overcome obstacles. In this case, the company said the incentives were necessary to make the project economically feasible. Incentives were awarded, but the project failed.

There are some important public policy issues that should be discussed:

Did the incentives induce Bombardier to take risks that it would not have taken had it been investing its own funds, or funds it had to raise from stockholders and debtholders?

Will the politicians that took credit for landing the Model 85 and its jobs now recognize the futility of their efforts?

Will the government agencies that took credit for creating jobs adjust their records?

Incentives like these are often justified using a benefit-cost ratio. This incident reminds us that these calculations are valid only if the investment works as planned. Will local governments recalculate the benefit-cost ratios based on the new information we now have?

Perhaps most important: Who has to pay the costs of these incentives? Part of the cost of this company’s investment, along with the accompanying risk, is spread to a class of business firms that can’t afford additional cost and risk. These are young startup firms, the entrepreneurial firms that we need to nurture in order to have real and sustainable economic growth and jobs. This action — the award of incentives to an established company — is harmful to the Wichita economy for its strangling effect on entrepreneurship and young companies. As this company and others receive incentives and escape paying taxes, others have to pay.

There’s plenty of evidence that entrepreneurship, in particular young business firms, are the key to economic growth. But Wichita’s economic development policies, as evidenced by this action, are definitely stacked against the entrepreneur. As Wichita props up its established industries, it makes it more difficult for young firms to thrive. Wichita relies on targeted investment in our future. Our elected officials and bureaucrats believe they have the ability to select which companies are worthy of public investment, and which are not. But as we see in the unfortunate news from Bombardier, this is not the case. (See Kansas economic growth policy should embrace dynamism and How to grow the Kansas economy.)

Kansas school support

An interactive visualization of data provided to members of the Kansas 2015 Special Committee on K-12 Student Success.

The Kansas 2015 Special Committee on K-12 Student Success held its first meeting on October 23. As part of the meeting, data on school spending was made available. Of particular interest may be the data on instruction spending.

Dale M. Dennis, Deputy Commissioner of Education, provided committee members these definitions of instruction spending categories:

Instruction — Includes the activities dealing directly with the interaction between teachers and students. This catgory [sic] includes only regular and part-time teachers, teacher aides or assistants, homebound teachers, hospital-based teachers, substitute teachers, and teachers on sabbatical leave.

Student Support Services — Includes the following services: attendance and social work, guidance, health, psychological, speech pathology and audiology.

Instructional Support Services — Includes the following services: improvement of instruction, library and media, instruction-related technology, and academic student assessment.

Example table from visualization.
Example table from visualization.
Committee members were supplied with spreadsheets holding one year’s spending. I’ve gathered the spreadsheets for the three years that were provided and present them in one interactive visualization. One view of the data shows the data items for each school district, with the three years shown together. I added amount per pupil calculations.

Example from visualization.
Example from visualization.
A second view shows the per-pupil values as a line graph over the three years.

This spending data represents Kansas state support only and does not include spending from federal or local funding sources. The provided data was not adjusted for inflation.

Click here to open the visualization in a new window. Visualization created using Tableau Public.

Mike O’Neal, President of Kansas Chamber of Commerce

Voice for Liberty radio logo square 02 155x116Mike O’Neal, President of Kansas Chamber of Commerce, spoke to members and guests of the Wichita Pachyderm Club on October 9, 2015. His topic was “The Kansas Budget and Taxes: The 2015 Legislative Session and Looking Ahead to the 2016 Legislative Session.” This is an audio presentation.

Reporting from the Wichita Eagle on this event is here, but be sure to read the comment by Dave Trabert of Kansas Policy Institute:

The Eagle’s analysis here is just wrong. The statute does not refer to current spending as the Eagle used, but total spending.

72-64c01. Sixty-five percent of moneys to be spent on instruction. (a) It is the public policy goal of the state of Kansas that at least 65% of the moneys appropriated, distributed or otherwise provided by the state to school districts shall be expended in the classroom or for instruction. http://www.kslegislature.org/…/072…/072_064c_0001_k/

Absent a qualification limiting the analysis to current spending or anything else, the statue applies to total spending.

Total spending according to KSDE in 2014 (2015 hasn’t been publised) was $5,975,517,681 and Instruction spending (downloaded and tabulated across all funds in the KSDE Comprehensive Fiscal and Performance System) was $3,293,217,088, which is 55.1% of spending. Mike O’Neal correctly said that Instruction accounted for 55% of total spending.

The difference between actual spent on Instruction and 65% is therefore $591,576,250. That is more than $500 million…and the Eagle is again wrong on the facts.

FYI, the definition of Instruction comes from KSDE and the US Dept of Education…and has not changed over the period.

WichitaLiberty.TV: Sales tax exemptions, criminal justice reform, and charity

In this episode of WichitaLiberty.TV: Does the elimination of sales tax exemptions hold the solution to Kansas budget problems? We have a problem with overcriminalization and the criminal justice system. Then, is there a difference between government and charity? View below, or click here to watch in high definition at YouTube. Episode 96, broadcast September 27, 2015.

Where are our documents?

Government promotes and promises transparency, but finds it difficult to actually provide.

In this excerpt from WichitaLiberty.TV, I give some examples of how little information government actually shares with us, despite its proclamations. Click here to view in high definition at YouTube. Following, the script for this video excerpt.

During the campaign for the one cent per dollar Wichita city sales tax last year, a city document promised this if the tax passed: “The process will be transparent, with reports posted online outlining expenditures and expected outcomes.” The “Yes Wichita” campaign promised “Reports will be measured and reported publicly.”

These are good ideas. The city should implement them even though the sales tax did not pass. We were promised a website if the tax passed. If it’s good for citizens to have this type of information if the sales tax had passed, it’s good for them to know in any circumstance.

Why is this information not available? Is the city’s communications staff overwhelmed and have no time to provide this type of information? During the sales tax campaign Wichita city staff had time to prepare news releases with titles like “City to Compete in Chili Cook-off” and “Jerry Seinfeld Returns to Century II.”

Wichita Facebook page example 2015-09-14 aSince then the city has hired additional communications staff, adding a Strategic Communications Director in March. Now, while the city’s Facebook page has some useful information, there is also time to promote Barry the Bison playing golf.

Now Wichitans have to wonder: Was transparency promised only to get people to vote for the sales tax? Or is it a governing principle of our city? I think I know the answer.

Here’s another example. The Wichita transit system is a matter of interest right now. Funding for the system has been a problem for some years, and money for the bus system was part of the sales tax last year that Wichita voters rejected. So what is the city and the transit system doing to make information available? The answer is: not much. Wichita Transit Advisory BoardSome of the fundamental documents of government agencies are agendas, agenda reports, and minutes of meetings. And there is such a thing as the Wichita transit advisory board. But good luck finding agendas and minutes for this board. They do not exist. Well, I’m sure they exist somewhere. But they’re not available on the city’s website, or on the transit system’s’ own website. I’m sure that if you call or write someone will send these documents to you. But that takes time, both for citizens and government workers.

It is not difficult to do this, making documents available. There are many city agencies that make documents available, like the city council and airport advisory board. Earlier this year a local activist mentioned the lack of agendas and minutes for the transit board, bemoaning that there was no part-time web person to post the documents. Well, you don’t need a web person to do it. It is so simple that anyone can do it for free.

Here’s an example. This summer as Sedgwick County was preparing and debating its budget, I wanted to do some research on past budgets. But on the county’s website, the only budgets available were for this year and last year. There was nothing else.

11-Sedgwick County FinancialsSo I asked for budgets and other financial documents. I received them on CD. Then I created a shared folder using Google Drive and uploaded the documents. Now, these documents are available to the world. They can be found using a Google search. Oh, and here’s something a little ironic. These old budgets had been on the Sedgwick County website at one time. Someone made the decision to remove them.

Creating this depository of budget documents cost nothing except a little bit of time. Well, if you have a lot of data to share, you might have to pay Google a little, like ten dollars per month for each agency or person. But it is so simple that there is no excuse for the failure of agencies like Wichita Transit to make documents like agendas and minutes available. You don’t need specialized personnel to do this work. All you need is the will and desire to make the documents available.

Here’s another example of how simple it can be to achieve transparency. These days live and archived video of governmental meetings is commonplace. Commonplace, that is, except for the Wichita public schools. If you want to see a meeting of the Wichita school board, you must either attend the meetings, or view delayed broadcasts on cable TV. There’s a simple and low-cost way to fix this. It’s called YouTube.

When the Sedgwick County Commission was faced with an aging web infrastructure for its archived broadcasts, it did the sensible thing. It created a YouTube channel and uploaded video of its meetings. Now citizens can view commission meetings at any time on desktop PCs, tablets, and smartphones. This was an improvement over the old system, which was difficult to use and required special browser plug-ins. I could never get the video to play on my Iphone.

Wichita public schools  YouTubeThe Wichita school district could do the same. In fact, the district already has a YouTube channel. Yes, it takes a long time to upload two or three hours of video to YouTube, but once started the process runs in the background without intervention. No one has to sit and watch the process.

Earlier this year I asked why the district does not make video of its meetings available archived online. The district responded that it “has a long-standing commitment to the USD 259 community of showing unabridged recordings of regular Board of Education meetings on Cox Cable Channel 20 and more recently AT&T U-verse Channel 99.” The meetings are broadcast seven times starting the day after each meeting. Two of the broadcasts start at 1:00 am.

Showing meetings delayed on cable TV is okay. It was innovative at one time. But why aren’t meetings shown live? What if you can’t watch the meeting before it disappears from the broadcast schedule after a week? What if you don’t want to pay cable television bills? What if you want to watch meetings on your computer, tablet, or smartphone? I don’t think the fact that meetings are on cable TV means they can’t also be on YouTube.

There are two elements of irony here, if that is the correct term. One is that earlier this year the Wichita school district considered hiring a marketing firm to “gauge its reputation and suggest new branding strategies.” Here’s an idea: Act as though you care about people being able to view the district’s board meetings.

Second: In August the Wichita school district raised property taxes. The mill levy will rise by 2.86, an increase of about five percent from its present level. The projected cost is an additional $33 per year for a home worth $100.000. That is quite a large increase. That’s bad. What’s also bad is the district’s lack of respect for taxpayers. As I’ve just told you, it’s difficult to view a meeting of the school board, which is a sign that the district prefers to operate in the shadows as much as possible. The board will raise your taxes, and at the same time keep it difficult for you to see them do it.

Just for the sake of completeness, let’s not let the state of Kansas off the hook. Currently, the proceedings of the Kansas Senate and House of Representatives are not available on video. The audio is broadcast on the internet, but it’s live only. No archiving. You must listen live, or figure out some way to record it on your own.

But for eight dollars per month the legislature could make its audio proceedings available to listen to at any time. For eight dollars per month at least one podcast hosting company offers an unlimited plan. Unlimited storage, and unlimited bandwidth. That is just what is needed. And since the audio of the proceedings of the House and Senate is broadcast on the internet, it must pass through a computer somewhere. That computer could also be recording the audio. Once recorded, the process of uploading the audio to the podcast host is a trivial procedure.

But neither Kansas legislative chamber records their proceedings, according to the Secretary of the Senate and the Chief Clerk of the House. I asked. Recordings of sessions are not available because they are not made. It would be simple to record audio of the Kansas House and Senate and make it available for anyone to listen to at any time. It is almost without cost. It would have great benefit.

Oh, and I can’t forget the federal government. In January I requested a document from the United States Department of Energy. I had several conversations and emails with a records clerk. We came to agreement as to what I would receive, or at least what I am requesting to receive. But I’ve received nothing so far. I don’t know if the document will be made available to me at no charge, or will I have to pay thousands of dollars. The Department of Energy is working on my request, they say. Our congressman Mike Pompeo and his office have intervened on my half. But after nine months: nothing.

All these levels of government — city, county, school district, state, and federal — say they value open records and transparency. But let me ask you: Do you think they really mean it?

Kansas private nonfarm employment by county

Here is an interactive visualization of private nonfarm employment in Kansas, for each county. Data is from Bureau of Economic Analysis, part of the U.S. Department of Commerce. Click here to open the visualization.

The sample below shows job growth for the state as a whole, along with the five largest counties. Click it for a larger version.

Kansas private nonfarm employment by county, five largest counties, 2015-09

WichitaLiberty.TV: Lack of information sharing by government, community improvement districts, and the last episode of “Love Gov”

In this episode of WichitaLiberty.TV: Do our governmental agencies really want to share data and documents with us? Community Improvement Districts and homeowners compared. And, the last episode of “Love Gov” from the Independent Institute. View below, or click here to view in high definition at YouTube. Episode 95, broadcast September 20, 2015.

Kansas Center for Economic Growth and the truth

Why can’t Kansas public school spending advocates — especially a former Kansas state budget director — tell the truth about schools and spending, wonders Dave Trabert of Kansas Policy Institute.

Kansas Center for Economic Growth abuses the truth on school funding … again

Dave Trabert, Kansas Policy Institute

Duane Goossen, former Kansas state budget director
Duane Goossen, former Kansas state budget director
The Kansas Center for Economic Growth and Duane Goossen steadfastly refuse to publicly debate school finance and state budget issues with us, as their work is so easily shown to be false, misleading and otherwise distorted (see here, here, here, and here for examples). Mr. Goossen’s most recent piece is another fine example of how they abuse the truth.

He has a table called State Aid and Enrollment that is sourced to page 60 of Kansas July Comparison Report, but much of the information in his table does not appear on page 60. The total amount of $4.059 billion is there and two of the smaller items but not the rest. A few items — KPERS payments, Local Option Budget Aid and Capital Outlay Aid — are close to what we found in other documents but not the $2.639 billion he calls General Classroom Aid. And you can’t find that anywhere because there is no such thing as “General Classroom Aid.

KCEG and other “just spend more” proponents often make reference to “classroom aid” in ways to make it appear that the Legislature is not providing enough “classroom aid” but here’s the dirty little secret you (and especially teachers) aren’t supposed to know: only local school boards and superintendents decide how much money is spent on instruction. The Kansas State Department of Education has an official definition of “Instruction” spending which is often used interchangeably with “classroom” but there is no official aid classification for “classroom.” Mr. Goossen and friends are just making it up for political purposes.

Under both the old school formula and the temporary block grant system, districts get several different types of aid but they alone decide how much of the multiple discretionary amounts received are used for Instruction, Administration, Student Support, Maintenance and other cost centers. Even Capital Outlay Aid (contrary to Goossen’s implication) can used for Instruction purposes (and is) as set forth in the KSDE Accounting Manual.

Here are a few more examples of the truth being tortured by Mr. Goossen:

  • “The Kansas Supreme Court ordered lawmakers to increase [equalization] aid …” Not true. The Supreme Court said the legislature could increase equalization funding or they could write a new equalization formula and not spend more money. Legislators chose to spend $109 million more. Even the District Court, which didn’t get much right about Gannon, acknowledged this point.
  • State Special Education Aid is shown as a decline of $6 million but it is really an increase of $46 million.  The original posting of the July Comparison Report didn’t include $52 million in Federal ARRA pass through but a former state budget director should know that the total was more than the amount listed for state aid. He also understated the increase in state aid by another $53 million for Federal ARRA money included in General State Aid.
  • KPERS is included in the amounts listed under block grants and while it has gone up, he says “… school districts must still pay the bill.”  That’s true, but some of that money goes for KPERS benefits of current employees, and local school boards chose to increase employment more than 8% over the last ten years while enrollment grew by just 4%. That forces money to be diverted from regular aid to pay the higher KPERS cost, which also happens when school boards choose to have district employees perform functions that could be done in the private sector.
  • Capital Improvement Aid helps some districts “… with bond payments for buildings but [does] nothing to cover enrollment increases.” That’s true, but again, Goossen fails to mention that district choices to construct new buildings … sometimes larger or sooner than needed … diverts money that could otherwise be used for general aid.
  • “State aid for classrooms has actually gone down…” That is a false statement because there is no such thing as “state aid for classrooms” but actual Instruction spending increased by $214 million or 7.3% between 2011 and 2014 even without counting a dollar of KPERS. Of course, Instruction spending could have gone up even more if districts had chosen to direct some of the increased spending on other operating areas to Instruction, chosen to operate other areas more efficiently and spent the savings on Instruction or used some of their unused aid from prior years instead of holding it in cash reserves.

Goossen says the block grant system is “not a recipe for creating world-class schools” as though that is some sort of revelation. The block grant system is only a temporary funding mechanism put in place to allow time to build a new student-focused funding system, replacing a dysfunctional, institution-focused system that most certainly was not a recipe for creating world-class schools.

Here’s what the old system produced after the injection of nearly $2 billion over the last ten years:

  • Only 32% of the 2015 graduating class who took the ACT test are considered college-ready in English, Reading, Math and Science. ACT test scores have barely changed.
  • Only 38% of 4th grade students are Proficient in Reading on the National Assessment of Educational Progress (NAEP), a test that the Kansas Department of Education declared to be valid and reliable in a November 1, 2011 press release.
  • Low Income 4th graders are almost 2 years’ worth of learning behind others in Math (NAEP).
  • Only 24% of Low Income 8th graders are Proficient in Math (NAEP) and at the current pace, it will take 240 years for them to catch up to other students, only 54% of whom were Proficient on the last exam.
  • 27% of students who graduated from Kansas high schools in 2013 and attended university in Kansas signed up for remedial training (Kansas Board of Regents); no data is available on students who went out of state or attended a private college.

It will always cost a lot of money to fund public education but it’s how the money is spent that makes a difference — not how much. For example, Instruction spending accounts for just 55% of total education spending; $2 billion and ten years ago it was 54%. Here’s another discouraging fact: enrollment increased by 4% over the last ten years, while classroom teacher employment increased by 5% and non-teacher employment increased by 10%.

Outcomes apparently don’t really matter to KCEG and others (including many school districts and their taxpayer-paid lawyers) who continue to say there was nothing wrong with the old system … it just needed more money! Just look at what happened when more money was poured into the system.

Scores barely changed while per-pupil spending jumped from $6,985 per pupil to an estimated $13,343 last year, which is $3,223 more per-pupil than if funding had been increased for inflation since 1998. Reading proficiency remains below 40% and Math Proficiency is still less than 50%.

This is not an indictment of the many good people working hard in schools but an indictment of the old funding system. It is no one’s fault that achievement is unacceptable but it is everyone’s responsibility to acknowledge that fact and work toward a funding mechanism that puts students and outcomes first and uses efficiency savings to drive more resources to instruction and increase pay for effective teachers.

Sales tax exemptions in Kansas

Can eliminating sales tax exemptions in Kansas generate a pot of gold?

Advocates of eliminating sales tax exemptions in Kansas point to the great amount of revenue that could be raised if Kansas eliminated these exemptions, estimated at some $5.9 billion per year. Analysis of the nature of the exemptions and the amounts of money involved, however, leads us to realize that the additional tax revenue that could be raised is much less than spending advocates claim, unless Kansas was to adopt a severely uncompetitive, and in some cases, unproductive and harshly regressive tax policy.

A recent advocate for eliminating some sales tax exemptions is Phillip Brownlee of the Wichita Eagle editorial board. In a previous op-ed on this topic he wrote ” And with each added exemption, the state is losing out on more revenue — $5.9 billion this fiscal year, according to the Kansas Department of Revenue. That’s money the state could be using to cover its budget shortfalls, increase funding to public schools or further reduce its income-tax rates.” At least he mentioned reducing other tax rates. Usually advocates of closing sales tax exemptions simply want more tax money to spend.

Kansas sales tax exemptions, simplified. Click for larger version.
Kansas sales tax exemptions, simplified. Click for larger version.
$5.9 billion dollars, by the way, is a lot of money, almost as much as the state’s general fund spending. But we need to look at the nature of these exemptions. I’ve prepared a simplified table based on data from the Kansas Department of Revenue. I simplified because there are many deductions that probably should be eliminated, but they represent very small amounts of money.

Some sales tax exemptions are for categories of business activity that shouldn’t be taxed, at least if we want to constrain the state to a retail sales tax only. An example is exemption 79-3606 (m), described as “Property which becomes an ingredient or component part of property or services produced or manufactured for ultimate sale at retail.” The tax that could be collected, should the state eliminate this exemption, is given as $3,083.24 million ($3,083,240,000).

But this exemption isn’t really an “exemption,” at least if the sales tax is a retail sales tax designed to be levied as the final tax on consumption. That’s because these goods aren’t being sold at retail. They’re sold to manufacturers who use them as inputs to products that, when finished, will be sold at retail. Most states don’t tax this type of sales. If Kansas decided to tax these transactions, it would place our state’s manufacturers at a severe disadvantage compared to almost all other states.

There are two other exemptions that fall in this category of inputs to production processes, totaling an estimated $632 million in lost revenue. Another similar exemption is “Machinery and equipment used directly and primarily in the manufacture, assemblage, processing, finishing, storing, warehousing or distributing of property for resale by the plant or facility.” Its value is nearly $159 million.

Together, these exemptions account for $3,874 million of the $5,900 million in total exemptions.

Another big-dollar exemption is “items already taxed” such as motor fuel. This is an estimated $318.90 million loss in revenue. Other exemptions are purchases made by government, or purchase made by contractors on behalf of government. These account for an estimated $624.90 million in lost revenue. If these two exemptions were eliminated, the government would be taxing itself.

Not taxing prescription drugs means lost revenue estimated at $96.49 million. If the state started taxing residential and agricultural use utilities, it could gain an estimated $169.98 million. These taxes, like the sales tax on food and the motor fuel tax, fall hardest on low-income families. As Kansas is one of the few states to tax food, do we want to make life even more difficult for low-income households?

Adding these exemptions comes to about $5,084 million. There are other exemptions for which we could make similar arguments for their retention. What’s left over — the exemptions that really should not exist — isn’t much at all. The entire category of “Exemptions to Charitable Organizations by Name.” amounts to $3.05 million in exempted sales tax. These represent the organizations where a lawmaker has crafted an exemption like “Property and services purchased by Jazz in the Woods and sales made by or on behalf of such organization.”

So when the Eagle’s Brownlee writes “As is, favored groups are saving billions of dollars a year, worsening the tax burden for everybody else” he must be including broad categories of business like “All Kansas manufacturing companies” as a “favored group.” Or maybe he means prescription drug users are a “favored group.” Or families struggling to pay utility bills.

But there are more problems. Brownlee describes these sales tax exemptions as a “cost in lost revenue of $5.9 billion last fiscal year.” The only way this makes sense is if one thinks that our property (our money) first belongs to the state, and that in order to spend it, we have to give the state its cut. That’s an opinion — ideology, if you will — that you may agree with, or you may oppose. What’s remarkable — shocking, really — is that in his previous career Brownlee was a Certified Public Accountant. He ought to understand the nature of sales taxes meant to be applied to retail sales, not components of manufactured goods.