Tag Archives: Regulation

What else can Wichita do for downtown companies?

With all Wichita has done, it may not be enough.

Within a month, these two headlines appeared in the opinion pages of the Wichita Eagle:

Investment in downtown Wichita is impressive 1

State and local leaders need to help meet Cargill’s needs 2

The second headline was in response to the news story “Cargill plans to move its Wichita headquarters — but where?” 3 In this story, Carrie Rengers reports “Cargill is looking to move its Wichita headquarters, but whether that’s within downtown, where it already is, or outside of it or even outside of Kansas is unclear. … City and state officials are working in full gear to make sure Wichita — downtown specifically — is the option Cargill selects.”

Rengers reports that Wichita city officials say no specific incentives have been offered to Cargill, but “any incentives likely would involve infrastructure help, such as with parking, or assistance with easing the process for a new building, such as with permitting.” Wichita Mayor Jeff Longwell says “cash incentive won’t be an option,” according to Rengers.

A Cargill official says that the company needs to attract millennials and younger people, who are not attracted to “traditional office space and office-type buildings.”

Now, consider the first opinion headline: “Investment in downtown Wichita is impressive.” In this op-ed, Phillip Brownlee writes “It’s encouraging that investment in downtown Wichita is continuing — and that it is mostly privately funded. A vibrant downtown is important to the city’s image and to attracting and retaining young adults. More than $1 billion in private and public investment has occurred downtown in the past decade. About $675 million of that investment has been privately funded, and $411 million has been public projects, according to Wichita Downtown Development Corp.”

Brownlee goes on to note other investments, such as 800 new apartment units “in the works.”

On the importance of downtown, Brownlee writes “City leaders have long recognized the value of a healthy downtown. Besides the symbolic importance of not having a lot of empty buildings, many young adults prefer an urban environment. That makes downtown important even for businesses not located there, because it can help or hurt their ability to recruit and retain young professionals.”

I see a discontinuity. Our city’s leaders — opinion, elected, and bureaucratic — brag about all the investment in downtown Wichita, public and private, yet it doesn’t seem to be enough to retain a major Wichita employer in downtown.

At least editorialist Rhonda Holman recognizes the problem in her column: “It’s concerning that Cargill’s stated intentions to relocate and consolidate have not included a commitment to remain downtown or even in Wichita or Kansas.” What is her solution? “Elected and business leaders need to be creative and assertive in helping Cargill meet its needs.”

I share Holman’s concern. It’s very troubling that with $411 million in private investment over the past decade, downtown Wichita still isn’t attractive enough to retain Cargill, if the company’s intent to move is real and genuine. And advising the same group of people who have been in power during the decline of the Wichita economy to be “creative and assertive” is a solution?

What’s even more disconcerting is that the person who has overseen much of this downtown spending has been promoted. Now Jeff Fluhr of Wichita Downtown Development Corporation is president of Greater Wichita Partnership, with responsibility “to grow the regional economy.”

Forgive me if I’m underwhelmed.

Regulation
One of the things that may be offered to Cargill, according to Rengers, is “assistance with easing the process for a new building, such as with permitting.” This is a big red flag on a very tall flagpole. If the city has regulations so onerous that they are a consideration as to whether to locate in Wichita, this is something that must be fixed immediately. But the instinct of the Wichita City Council and city bureaucrats is to create more regulations covering everything from the striping of parking lots to the personal hygiene of taxi drivers.

Cash incentives
Mayor Longwell says there will be no cash incentives offered to Cargill. Instead, something like help with parking may be offered. This might take the form of building a parking garage for Cargill. We should ask: What is the difference between giving cash to Cargill and building a parking garage for Cargill’s use? There really isn’t a meaningful difference, except for Cargill. That’s because cash incentives are taxable income. Free use of a parking garage isn’t taxable. 4 5

Further, Cargill may qualify for PEAK, or Promoting Employment Across Kansas.6 This program allows companies to retain 95 percent of the payroll withholding tax of employees. The original intent of this program was to lure companies to locate in Kansas, but in recent years the program has been expanded to include incentivizing companies to remain in Kansas. While this is a state program and not a city program under the mayor’s control, PEAK benefits are more valuable than cash.


Notes

  1. Brownlee, Phillip. Investment in downtown Wichita is impressive. Wichita Eagle. March 5, 2016. Available at www.kansas.com/opinion/editorials/article64129977.html.
  2. Holman, Rhonda. State and local leaders need to help meet Cargill’s needs. Wichita Eagle. April 1, 2016. Available at www.kansas.com/opinion/opn-columns-blogs/now-consider-this/article69534982.html.
  3. Rengers, Carrie. Cargill plans to move its Wichita headquarters — but where? Wichita Eagle. March 29, 2016. Available at www.kansas.com/news/business/biz-columns-blogs/carrie-rengers/article68700517.html.
  4. Journal of Accountancy, (2009). Location Tax Incentive Not Federal Taxable Income. Available at: www.journalofaccountancy.com/issues/2009/apr/locationtaxincentive.html.
  5. American Institute of CPAs, (2015). Federal Treatment of State and Local Tax Incentives. Available at: www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2008/CorpTax/Federaltreat.jsp.
  6. Weeks, Bob. In Kansas, PEAK has a leak. Voice For Liberty in Wichita. Available at wichitaliberty.org/kansas-government/kansas-peak-leak/.

In Wichita, revealing discussion of property rights

Reaction to the veto of a bill in Kansas reveals the instincts of many government officials, which is to grab more power whenever possible.

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that justifies it.
— Frederic Bastiat

Kansas Governor Sam Brownback’s veto of a bill that gives cities additional means to take blighted property has produced reaction from local officials in Wichita. The bill is Senate Bill 338.

As has been noted in numerous sources, cities in Kansas have many tools available to address blight. 1 What is the purported need for additional power?

In remarks from the bench, Wichita City Council Member Pete Meitzner (district 2, east Wichita) said there is no intent to be “aggressive in taking people’s property.” 2 But expanding the power of government — aggression, in other words — is what the bill does. Otherwise, why the need for the bill with its new methods and powers of taking property?

And once government is granted new powers, government nearly always finds ways to expand the power and put it to new uses. Even if we believe Meitzner — and we should not — he will not always be in office. Others will follow him who may not claim to be so wise and restrained in the use of government power.

In particular, government finds new ways to expand its powers through enabling concepts like blight. Did you know the entire suburban town of Andover is blighted? 3 Across the country, when governments find they can take property with novel and creative interpretations of blight, they do so. 4

It’s easy to sense the frustration of government officials like Wichita Mayor Jeff Longwell. In his remarks, he asked opponents of SB 338 “what they would do” when confronted with blight. That is a weak argument, but is often advanced nonetheless. Everyone has the right — the duty — to oppose bad legislation even if they do not have an alternate solution. Just because someone doesn’t have a solution, that doesn’t mean their criticism is not valid. This is especially true in this matter, as cities already have many tools to deal with blight.

Proponents of SB 338 also make unfounded accusations about the motivation of opponents of the law. Because someone opposes this law, it doesn’t mean they are in favor of more blight. Those who fight for freedom and liberty are used to this. Advocating for the right to do something doesn’t necessarily mean that one is in favor of actually doing it.

The nature of rights

Much of the discussion this issue concerns the rights of people who live near blighted property. People do have certain rights, but rights have limits. Regarding property, Roger Pilon writes: “Thus, uses that injure a neighbor through various forms of pollution (e.g., by particulate matter, noises, odors, vibrations, etc.) or through exposure to excessive risk count as classic common-law nuisances because they violate the neighbor’s rights. They can be prohibited, with no compensation owing to those who are thus restricted.” 5

Note that Pilon mentions “excessive risk” as something that injures a neighbor. Some of the activities the city wants to control are things like drug dealing, drug usage, and prostitution that may take place on blighted property. And, I suppose it is a risk to have gangs dealing drugs out of the house across the street, blighted or not. But these activities are illegal everywhere, and there are many laws the city can use to control these problems. There is no need for new laws.

It is important to draw a bright line as to where property rights end. Pilon: “By contrast, uses that ‘injure’ one’s neighbor through economic competition, say, or by blocking ‘his’ view (which runs over your property) or offending his aesthetic sensibilities are not nuisances because they violate no rights the neighbor can claim. Nor will it do to simply declare, through positive law, that such goods are ‘rights.'” 6

In today’s world, however, where new rights are seemingly created from thin air, people want to exercise their purported right to control how their neighbor’s property looks. But we have no such right, writes Pilon: “The principle, in fact, is just this: People may use their property in any way they wish, provided only that in the process they do not take what belongs free and clear to others. My neighbor’s view that runs over my property does not belong free and clear to him.” 7

Opposition in the Legislature

When the Kansas House of Representatives and Senate voted on this bill, several House members submitted explanations of their vote. In the Senate, David Haley filed a protest and message explaining his opposition to the bill. These statements follow.

Explanation of vote in the House of Representatives

MR. SPEAKER: I VOTE NO ON SB 338. KANSAS ALREADY HAS SUFFICIENT TOOLS IN PLACE TO ADDRESS BLIGHT. SB 338 circumvents our current eminent domain statutes by redefining “abandoned property” and by allowing our local governments to expeditiously confiscate, seize or destroy law abiding citizens’ private property without compensation, adequate notice, and a legal property title. This is an egregious overreach that deprives some citizens of their private property rights without sufficient due process and it will cause irreparable harm to our most vulnerable citizens that do not have the resources to protect their property.
— GAIL FINNEY, BRODERICK HENDERSON, RODERICK HOUSTON, BEN SCOTT, VALDENIA WINN, JOHN CARMICHAEL, KASHA KELLEY, BILL SUTTON, JERRY LUNN, CHARLES MACHEERS

Protest of Senator David Haley against Senate Bill 338

February 23, 2016

In Accordance with Article 2, Section 10 of the Constitution of Kansas, I, David Haley, a duly elected Senator representing the Fourth District of Kansas, herein PROTEST the action of this Legislature in the promulgation and passage of Senate Bill 338: An Act pertaining to Cities.

In my 23 years as a Kansas Legislator and as but one of only three attorneys in the Senate, this is the first PROTEST I have ever lodged on any measure of the thousands I have considered.

This Chamber now further denigrates real property rights to which every Kansan should be heir.

SB 338 which purports to grant authority to cities and nonprofit organizations to petition courts to possess vacant property for rehabilitation purposes will, simply, but legalize grand theft.

The Senate Commerce committee as is its charge (and not the Senate Local Government committee where, justifiably, similar language as SB 338 had over many years failed time and time again) recognizes and advances business and financial opportunities for our State.

First, the question of a city, redefining definitions of “abandonment” and “blight” as these terms apply to real property, land and or improvements, is the expertise of deliberations of a committee membership dedicated to the auspices of municipalities not the principles of profit.

The principles of real property ownership should always inure to the rights of the citizen not to a developer’s bottom line or even a desire to enhance appraised valuations for tax purposes.

Diabolical in its spawning, methodical and tenacious in its steady lurch forward, SB 338 adheres to two tiered definitions of “abandoned property;” both ingenuous and neither accurate. One definition of “abandoned property”: vacant for 365 days and having a “blighting influence” on surrounding properties; the other definition vacant for 90 days and 2 years tax delinquent.

There are numerous every day scenarios whereby a real property owner has in no way “abandoned” their property though that same property may be vacant for 90 to 365 days, be tax delinquent for 2 years or may have need of rehabilitation to conform to a local standard, real or perceived. But SB 338 alleges “abandonment” and triggers governmental intrusion, harassment and potentially leads to a taking of real property by the government for the benefit of an organization which profits from the taking and kick back higher taxes to the city.

“Commerce,” yes, but a shameful way to run a citizen responsive “Local Government.”

The specious argument in favor of this legislation portends neighborhood beautification, tax viability and repopulation of or demolition and rebuilding of older houses. By eradicating “blight,” the entire community, even the city, is greatly enhanced.

With that premise, I, David Haley, could not agree more.

Today, with no need for warping and putting into statute time-honored definitions of “blight” and “abandonment” or presupposes new postulates for passages of time periods to correlate to real property owners’ interests or genuine concern with their legally owned land(s), there are tools already available to every municipality to address blight. “Code enforcement” departments can post notice and bring to environmental and district court negligent property owners. Subsequent to insufficient response, steep fines and even jail time can be issued now. Today in current statute, a property with two or more years of delinquent property taxes may be sold by the Sheriff of each Kansas County in a “Delinquent Property Tax Sale” also known as a “Sheriff’s” sale or as property “sold on the Courthouse steps.” Again, these are current tools available to curb or cure blight and to put real property into fiscally responsive ownership.

The property rights of legal property owners should not be infringed upon by this Legislature.

Marginal or fragile property owners (traditionally average income or poor property owners attempting to hold on to inherited property or an entrepreneurial hope structure as often found in inner cities) will be set upon by keen-eyed, out of county based developers sheltered by an industrious “not-for-profit” which uses the city and district court as the leverage to harass and ultimately take the land, all in the name of “civic pride” or “community betterment.” Theft.

The late Kansas City, Missouri civil rights leader Bernard Powell (1947-1979) envisioned and warned of the transfer of inner city property back into the same hands of those who fled the same a half century or more ago to the sanctity of the suburbs. Bernard Powell predicted the day would come when government, and the tools they elect and hire, will work hand-in-hand with “robber barons” to turn those out; those who have despaired in neglected, under represented, often high crime, poorly educated neighborhoods, those who have weathered poverty, hard times, civic and civil harassment but yet held a real property interest, a “piece of the pie” … to force them out. Bernard Powell spoke of prosperity returning to the inner city and nothing being tendered to the people who had paid the price for the most sought after of land.

He called it government assisting the turning of the “ghetto into a goldmine.” How prophetic.

Here I sit, practically alone in my opposition to this expansion of eminent domain targeted at poorer property owners ill equipped to “fight City Hall,” in this Kansas Senate and watch this unfold. Again, SB 338 came out of the Commerce committee as well it should.

Government has redefined terms before to shape shift often dastardly need to justify ill deeds.

I remember efforts to redefine “blight” for economic purposes in another eminent domain taking for use in building the Kansas Speedway and Legends in Wyandotte County. Succinctly, the new definition of “blight” was the ability for exponentially more taxes to be levied against the future use of the land than that which the owner who it was being taken from could be expected to pay in its current use. Remnants of that economically fascist philosophy resonate in SB 338. As more people flee the “golden ghettos” of suburbia, the inner city “ghettos” will be repopulated and turned into “goldmines” at the expense I fear, once again, of the poor and unsuspecting. Ironically, we celebrated and honored some of our Korean and Vietnam War heroes today in the Senate Chamber. Was the freedom to own real property without fear of unwarranted government intrusion something for which they fought?

I protest the passage of Senate Bill 338 as is my Constitutional right as a Kansas State Senator under Article Two, Section 10 of the Kansas Constitution for reasons, beliefs afore-listed as well as others not so and hereby vow to continue to assist unnecessarily embattled real property owners in my home District as we together will face the challenges that this bill, when signed into law, will undoubtedly bring.


Notes

  1. Todd, John. Power of Kansas cities to take property may be expanded. Voice For Liberty in Wichita. Available at wichitaliberty.org/kansas-government/power-kansas-cities-take-property-may-expanded/.
  2. Video. Wichita City Council speaks on blight. Available at wichitaliberty.org/wichita-government/wichita-city-council-speaks-blight/.
  3. Weeks, B. (2012). Andover, a Kansas city overtaken by blight. Voice For Liberty in Wichita. Available at wichitaliberty.org/economics/andover-a-kansas-city-overtaken-by-blight/.
  4. Nicole Gelinas, Eminent Domain as Central Planning. (2015). City Journal. Available at www.city-journal.org/html/eminent-domain-central-planning-13253.html.
  5. Pilon, Roger. Protecting Private Property Rights from Regulatory Takings. (1995). Cato Institute. Available at www.cato.org/publications/congressional-testimony/protecting-private-property-rights-regulatory-takings.
  6. ibid
  7. ibid

Wichita City Council speaks on blight

Wichita City Council members speak in opposition to Kansas Governor Sam Brownback’s veto of Senate Bill 338, which would have given cities additional power to take property. April 12, 2016. View below, or click here to view at YouTube. For more on this issue, see Governor Brownback, please veto this harmful bill.

Wichita on verge of new regulatory regime

The Wichita City Council is likely to create a new regulatory regime for massage businesses in response to a problem that is already addressed by strict laws.

During a presentation to the Wichita City Council on February 23, 2016, police officials reported on a number of investigations and arrests. In 2015, there were 22 arrests for human trafficking and other violations. The presentation did not include what comprised “other violations,” nor did it contain any information about the disposition of these cases.

If the city is concerned about prostitution and child trafficking, the latter being a serious crime, we already have strong laws concerning this. As far as the two crimes being related: Prostitutes and pimps are already criminals, according to the law. Committing more crimes like child trafficking is just another step down the path they’ve already chosen.

A solution is to bring prostitution out of the shadows. Stop making consensual behavior between adults a crime. Then police can focus on actual and serious crime, like child trafficking.

But the zeal of the Wichita City Council for creating new regulatory regime is likely to overwhelm any rational thought about the problem. Now Wichita massage business owners and therapists are likely to be saddled with onerous licensing requirements. To become a newly-licensed therapist, you must possess one of several educational credentials, one of which is 500 hours of training. Existing therapists must meet similar requirements.

City officials note that the existing local massage industry requested this regulation. That’s not surprising. The purpose of nearly all occupational licensure laws is to restrict entry to the industry so that existing practitioners can charge higher rates. That is a scam, especially against low-income people that need a masseuse or a plumber. It is also a burden to people who want to become plumbers, barbers, massage therapists, or one of the many other licensed occupations.

It is both shocking and disappointing to realize that Wichita city bureaucrats and council members do not realize these economic realities. Another economic reality is that when licensing requirements are strict, the quality of service that many people receive declines. When investigating the demand for licensed plumbers, researchers found this:1

This proxy assumes that the more stringent are the barriers the higher will be the cost of licensed service and the smaller will be its quantity. These two effects increase the motivation of consumers to substitute their own services for those of trained professionals. This substitution process should show up in rising retail sales of plumbing supplies in more tightly restrictive states since licensed plumbers will generally purchase supplies wholesale. The implicit assumption is this causal chain is that self-service is on the average of lower quality than could be obtained from even a marginally trained journeyman plumber.

When presented with a convincing but fake credential, how diligently with Wichita officials investigate?
When presented with a convincing but fake credential, how diligently with Wichita officials investigate?
In other words, when strict licensure requirements make plumbers expensive, more people do their plumbing work themselves, and this work is likely to be of lower quality. It’s quite a stretch (literally and figuratively) to apply this reasoning to do-it-yourself massage, but here’s another economic reality: The more difficult it is to achieve a credential, the greater is the incentive to cheat. You don’t have to search very far before you find vendors advertising their services like this:

We are one of the oldest and most trusted seller of fake diplomas on the web. We use real diploma paper, the same paper that most major universities and high schools use. We also use professional security paper for our fake transcripts. We have more than 12 years experience in printing fake diplomas. You can rest assured that your fake diploma or fake transcript will look very authentic. We offer many different types of fake diplomas and fake certificates such as, FAKE GEDs, fake college diploma, fake university degree, fake high school diploma, fake college degree, or fake high school transcripts and fake skill certificate.

How diligently will Wichita’s bureaucratic machinery investigate when presented with a fake diploma certificate and transcript? The city’s record is not good. After the city passed new taxicab regulations, somehow the regulation that prohibited convicted sex offenders from receiving licenses was not implemented effectively. The city granted a taxi driver license to a man who was on the state sex offender registry. He raped a passenger.

The city council should reject these regulations and devote the city’s resources to protecting people from actual crime.

Limiting economic opportunity

Kansas occupational license requirements, with proposed Wichita massage therapists. Click for larger.
Kansas occupational license requirements, with proposed Wichita massage therapists. Click for larger.
The Wichita City Council is concerned about human trafficking for the purposes of prostitution. That’s good. But the response the council is considering — which is licensing massage therapists — is not needed. We have strict laws already on the books that make human trafficking a serious criminal offense, which it is. The proposed Wichita regulations will simply make it more difficult for honest people to become massage therapists. Criminals will operate illegally. They are criminals, after all. Or, they will easily obtain false credentials.

Kansas already has many burdensome occupational licensure requirements that limit economic opportunity and protect entrenched interests. Nearby is a chart of the number of days training or experience required to obtain a license to work in various fields, according to Institute for Justice in 2012. 2 I’ve added the proposed Wichita massage therapist requirements. As you can see, it will require more than twice as much education to become a massage therapist as is required to become an emergency medical technician. How does that make sense?

Comparing the proposed Wichita requirements to the nation, we find that the Wichita standard is quite lax. 39 states license massage therapists, with the average education or training requirement being 139 days, with the range being from 117 days to 327 days3. Wichita is proposing 83 days, which might inspire one to ask this question: If the Wichita City Council is truly concerned about protecting Wichitans from getting a bad massage, why is it proposing such minimal requirements, compared to other states?

In reality, the high barriers to becoming a massage therapist in many states is testimony to the massage industry’s success in erecting barriers to entry. By making it difficult to become a massage therapist, the supply is lower than it could be, and prices are higher. Consumers lose. Upward economic opportunity is lost.

The purpose of nearly all occupational licensure laws is to restrict entry to the industry so that existing practitioners can charge higher rates. That is a scam, especially against low-income people that need a masseuse or a plumber. It is also a burden to people who want to become plumbers, barbers, massage therapists, or one of the many other licensed occupations.


Notes

  1. Carroll, Sidney L., and Robert J. Gaston. “Occupational Restrictions and the Quality of Service Received: Some Evidence.” Southern Economic Journal 47.4 (1981): 959–976.
  2. Institute for Justice, (2012). License to Work. Available at: ij.org/report/license-to-work/ Accessed 29 Feb. 2016.
  3. ibid

Governor Brownback, please veto this harmful bill

Kansas Governor Sam Brownback should veto a bill that is harmful to property rights, writes John Todd. For more about this issue, see Power of Kansas cities to take property may be expanded.

Senate Bill 338 has been passed by the Legislature and is now on its way for Governor Sam Brownback to consider. The Governor should veto this bill. This bill gives cities, in conjunction with their preferred nonprofit organizations, the ability to take possession of unoccupied residential houses that the property taxes are currently paid in full. This bill will clearly place vulnerable senior citizens and less affluent property owners in the position of being victimized.

Cities in Kansas have all the powers they need to deal with property issues through current law. Over the past few years, the City of Wichita has bulldozed hundreds of houses for housing code violations. Enhancing the power of cities and their appointed nonprofit redevelopment organizations to take privately owned properties they do not own without compensation is wrong.

I urge Governor Brownback to veto this bill!

John Todd
Wichita

WichitaLiberty.TV: Bob’s shaking his head, Wichita water woes, and the harm of teachers unions

In this episode of WichitaLiberty.TV: There are a few things that make Bob wonder. Then, a troubling episode for Wichita government and news media. Finally, the harm of teachers unions. View below, or click here to view at YouTube. Episode 114, broadcast March 27, 2016.

In Wichita, the phased approach to water supply can save a bundle

In 2014 the City of Wichita recommended voters spend $250 million on a new water supply. But since voters rejected the tax to support that spending, the cost of providing adequate water has dropped, and dropped a lot.

The events surrounding the need for a new water supply is a troubling episode in the history of Wichita government. During the prelude to the November 2014 election, citizens were presented with a gloomy scenario that could be fixed only with a sales tax and the spending of $250 million. After voters said no to that, new plans emerged that are much less expensive. Lily Tomlin once said “No matter how cynical you become, it’s never enough to keep up.” This episode shows Wichita city leaders — both in and out of government — reinforcing the truth of Tomlin’s observation.

On December 1, 2015, the Wichita City Council held a workshop on the topic “Phased Approach for New Water Supply.”1 Alan King, Director of Public Works and Utilities, was the presenter. King emphasized that the impetus for a new water supply was for drought protection: “We presently have enough water with our current water resources to last us through our planning period of 2060, without drought.”

He continued: “When we come and talk to you about additional water resources, it is really only for one purpose, and that is drought protection. If there was no drought, we have no need. The water resources that we come in and are talking to you about, the only value they have for us is in drought protection.”

But a city document leading up to the sales tax election presented a different scenario. It threatened a lack of water for even residential use: “Building a new supply, along with conservation efforts, is the lowest cost option for providing sufficient water through 2060. Significant conservation will be needed if the current supplies are the sole sources of water for the coming decades; sever [sic] conservation requirements could be harmful to local businesses and quality of life. Adding a new water supply would provide enough water for future growth for the community’s residential, commercial, and industrial base.”2

This is an important point. We have sufficient water except for a period of extended drought. Even in that case, there is sufficient water for residential, commercial, and industrial use. The purpose of a new water supply is to avoid restrictions on outdoor watering, and in the most extreme drought, a savings of 15 percent of indoor water usage.

In his December presentation to the council, King presented several phases that the city can take. The first three have no cost, and King said these are underway.

After that, the city can spend $23 million for new wells and rehabilitation of existing wells at the ASR site.

After that, there is the possibility of “operational credits,” which involve a change to state regulations. If the state approves, the city can receive credits for sending ASR water directly to Wichita instead of recharging it in the Equus Beds. If not approved, the city could spend $47.2 million for new recharge wells in 2022. If these wells are built, the cost rises to $70.2 million. (On January 22 King made a presentation to the Equus-Walnut Regional Advisory Committee on this topic.3)

Phased Approach for New Water Supply. Click for larger.
Phased Approach for New Water Supply. Click for larger.
There is also the matter of the parallel pipeline. The existing pipeline from the Equus Beds and ASR to the city’s downtown water plant is old and won’t support higher rates of water transmission. The proposed parallel pipeline provides not only redundancy of a major part of our water infrastructure, but also increased capacity. The cost of this, estimated in 2014 at $86 million, was included in the $250 million price tag for ASR expansion. If the parallel pipeline cost is added to the previous phase costs, the cost rises to either $109 million or $156.2 million, depending on the fate of the operational credits regulation reform.

Either way, the cost is much less than the $250 million the city asked voters to consider in November 2014. And I think I’m being charitable of motives when I say “consider.” The clear and revealed preference of the city council and the city’s political class was passage of the sales tax, meaning the city would spend $250 million to achieve something the city now says can be provided for $109 million or $156.2 million. (Well, everyone except then-city council member and now-mayor Jeff Longwell, but his vote against placing the sales tax on the ballot was a naked political calculation.)

In information the city presented to voters in the run up to the November 2014 election, the city promised large water bill increases if the sales tax vote failed, writing: “If a new water supply is funded only through water rate increases, the capital cost portion of the rate will increase an estimated 24%. This is in addition to anticipated annual rate increases.”4

Possible water bill increases. Click for larger.
Possible water bill increases. Click for larger.
King’s 2015 presentation to the council showed increases of nine percent for residential, commercial, and industrial customers.5

Citizens ought to wonder what lessons may be learned from this. Furthermore, I don’t believe there has been any coverage of this in the city’s mainstream news media. That is a problem, too. For more on this problem, see Wichita Eagle, where are you?


Notes

  1. City of Wichita workshop. Phased Approach for New Water Supply. Video available at https://youtu.be/mNQ26-VZBSA.
  2. Building A Better Future: A Proposed Sales Tax for Basic Services, City of Wichita, June 13, 2014. Available at http://www.wichita.gov/Government/Departments/Finance/FinancialDocuments/Sales%20Tax%20Proposal%20for%20Basic%20Services.pdf.
  3. Equus-Walnut Regional Advisory Committee Meeting Notes. Available at http://www.kwo.org/RACs/2016_RAC%20Notes/doc_EQW_Min_January_012216_mu.pdf.
  4. Plans & Background on Proposed 1¢ Sales Tax, City of Wichita, 2014. Available at https://drive.google.com/file/d/0B97azj3TSm9MS0lCQncxQkp4ODg/.
  5. Phased Approach for New Water Supply, Presentation to Wichita City Council, December 1, 2015, page 30. Available at http://wichita.gov/Government/Council/Agendas/2015-12-01%20Phased%20Approach%20for%20New%20Water%20Supply.pdf.

Power of Kansas cities to take property may be expanded

A bill working its way through the Kansas Legislature will give cities additional means to seize property.

The bill is SB 338, titled “Rehabilitation of abandoned property by cities.” This bill has passed the Senate by a vote of 32 to eight. It has had a hearing in the House of Representatives.

Wichitan John Todd is opposed to this bill and provided oral and written testimony this week to a House committee. In his testimony, Todd made these points, among others:

  • Senate Bill 338 appears to provide local governmental units with additional tools that they don’t need to “take” properties in a manner that circumvents the eminent domain statutes that private property rights advocates fought so hard to achieve in 2006.
  • The total lack of compensation to the property owner for the deprivation or taking of his or her property is missing in the bill.
  • Allowing a city or their third party take possession of vacant property they do not own and have not obtained legal title to is wrong.
  • Please take a look at a comparison between a free-market private sector solution as contrasted to a government mandated program to achieving affordable housing and the impact highly subsidized government housing solutions are having on adjacent home owners.

Instead of being a problem, houses like these can present economic opportunity, says John Todd.
Instead of being a problem, houses like these can present economic opportunity, says John Todd.
In closing his testimony, Todd remarked: “In summary, cities in Kansas clearly have all the powers they need to deal with property issues through current law. By enhancing the power of cities and their appointed non-profit community redevelopment organizations to ‘take’ privately owned properties without compensation in an involuntary manner violates the individual private property rights that are essential for the rule of law and liberty to prevail.”

Click here to view Todd’s written testimony and visual exhibits.

Empty lots in northeast Wichita. Click for larger version.
Empty lots in northeast Wichita. Click for larger version.
Separately, Todd supplied a map of a portion of northeast Wichita. He remarked:

I am told that there are over 100 vacant lots in this neighborhood represented by green color. It also shows “Poor” and “Very Poor to Unsound” properties in tan and yellow. SB 338 was touted to provide a tool to deal with blight. The point of this map is to demonstrate how the City of Wichita has been using existing law to deal with blighted properties, and how this law has facilitated the destruction of huge numbers of houses. Many had economic value, but there was no compensation to the property owners. My conclusion was that given the existing law, coupled with tax foreclosure sales, there was no need to give cities additional tools.

What we have under existing law is actually a regulatory taking of private property with no compensation to property owners. Passage of SB 338 would expand those tools to allow cities or their chosen non-profit entities to seize vacant properties they do not have legal title to. The result for a property owner is a “regulatory taking,” ordered by the Kansas Courts with no compensation, allowing the city or the non-profit time to seek title through a mandated court order and judicial deed. Both are methods of forced government transfer and are wrong.

In Kansas, doctors may “learn” just by doing their jobs

A proposed bill in Kansas should make us question the rationale of continuing medical education requirements for physicians.

The bill is HB 2615, titled “Charitable healthcare providers; continuing education credits for gratuitous care of eligible patients.”

The bill’s supplemental note explains the bill “… would allow charitable healthcare providers and dentists to fulfill one hour of continuing education credit for performance of two hours of gratuitous service to medically indigent persons.”

In an op-ed published in the Wichita Eagle Representative Dan Hawkins explained “we believe that this system has the potential of generating more than $18 million in free care for the neediest Kansans.” (Rep. Dan Hawkins: Plan increases access to health care, reduces cost, March 7, 2016)

Contrary to Hawkins, the care won’t be free. It may not cost the state anything, but it will have a cost to the doctors who supply the “free” care.

Perhaps more importantly, this bill should make us question the purpose of continuing medical education requirements for physicians and dentists. In Kansas, physicians must participate in 50 hours of continuing medical education annually. This education requirement is satisfied by participating in “activity designed to maintain, develop, or increase the knowledge, skills, and professional performance of persons licensed to practice a branch of the healing arts.”

But HB 2615 will let physicians satisfy 20 hours of this requirement by providing 40 hours of health care to needy people. Having doctors perform routine medical care — doing their daily job, in other words — doesn’t seem likely to advance the “knowledge, skills, and professional performance” of doctors, which is the stated goal of the regulation.

We have, therefore, a regulation that seems reasonable — ensuring that doctors are up-to-date in professional knowledge — instead being used by the state to “encourage” doctors to provide free labor.

Episodes like this should be a lesson in the powers and abuses of the regulatory state.

The Kansas regulations

According to the Kansas Board of Healing Arts, physicians must participate in continuing medical education each year, earning “50 hours with a minimum of 20 hours of Category I and a maximum of 30 hours of Category II.”

In more detail, the regulations state the continuing education is “activity designed to maintain, develop, or increase the knowledge, skills, and professional performance of persons licensed to practice a branch of the healing arts.” 1 Category I continuing education is “presented by a person qualified by practical or academic experience” and may consist of lectures, panel discussions, workshops, seminars, symposiums, and other formal learning opportunities. 2 The requirements are 20 hours of this education annually.

Category II continuing education comprises activities that are less formal, such as “clinical consultations with other healing arts practitioners that contribute to a practitioner’s education, participation in activities to review the quality of patient care, instructing healing arts and other health care practitioners, patient-centered discussions with other health care practitioners, participating in journal clubs, using searchable electronic databases in connection with patient care activities. and
using self-instructional materials.” 3 The requirements are 30 hours of this education annually.

Of note, HB 2615 doesn’t seem to specify into which category will fall the hours of continuing medical education earned by providing service to needy patients.


Notes

  1. K.A.R. 100-15. (2016). Ksbha.org. Available at: http://www.ksbha.org/regulations/article15.shtml#kar100154.
  2. ibid.
  3. ibid.

WichitaLiberty.TV: The caucus and the presidency, Wichita prepares a new regulatory regime

In this episode of WichitaLiberty.TV: Looking back at the Kansas presidential caucus and should it matter who becomes president. A new regulatory regime in Wichita probably won’t help its stated purpose, but will be harmful. Then, more about regulation. View below, or click here to view at YouTube. Episode 113, broadcast March 13, 2016.

Wichita to impose burdensome occupational requirements

The proposed massage therapist regulations in Wichita are likely to be ineffective, but will limit economic opportunity and harm consumers.

Kansas occupational license requirements, with proposed Wichita massage therapists. Click for larger.
Kansas occupational license requirements, with proposed Wichita massage therapists. Click for larger.
The Wichita City Council is concerned about human trafficking for the purposes of prostitution. That’s good. But the response the council is considering — which is licensing massage therapists — is not needed. We have strict laws already on the books that make human trafficking a serious criminal offense, which it is. The proposed Wichita regulations will simply make it more difficult for honest people to become massage therapists. Criminals will operate illegally. They are criminals, after all. Or, they will easily obtain false credentials.

Kansas already has many burdensome occupational licensure requirements that limit economic opportunity and protect entrenched interests. Nearby is a chart of the number of days training or experience required to obtain a license if various fields, according to Institute for Justice in 2012. 1 I’ve added the proposed Wichita massage therapist requirements. As you can see, it will require more than twice as much education to become a massage therapist as is required to become an emergency medical technician. How does that make sense?

Comparing the proposed Wichita requirements to the nation, we find that the Wichita standard is quite lax. 39 states license massage therapists, with the average education or training requirement being 139 days, with the range being from 117 days to 327 days2. Wichita is proposing 83 days, which might inspire one to ask this question: If the Wichita City Council is truly concerned about protecting Wichitans from getting a bad massage, why is it proposing such minimal requirements, compared to other states?

In reality, the high barriers to becoming a massage therapist in many states is testimony to the massage industry’s success in erecting barriers to entry. By making it difficult to become a massage therapist, the supply is lower than it could be, and prices are higher. Consumers lose.

As has been observed by myself: “City officials note that the existing local massage industry requested this regulation. That’s not surprising. The purpose of nearly all occupational licensure laws is to restrict entry to the industry so that existing practitioners can charge higher rates. That is a scam, especially against low-income people that need a masseuse or a plumber. It is also a burden to people who want to become plumbers, barbers, massage therapists, or one of the many other licensed occupations.” 3


Notes

  1. Institute for Justice, (2012). License to Work. Available at: ij.org/report/license-to-work/ Accessed 29 Feb. 2016.
  2. ibid
  3. Weeks, B. (2016). Massage business regulations likely to be ineffective, but will be onerous. Voice For Liberty in Wichita. Available at: wichitaliberty.org/wichita-government/massage-business-regulations-likely-ineffective-but-will-be-onerous/ .

WichitaLiberty.TV: Heritage Foundation’s Bryan Riley on free trade

In this episode of WichitaLiberty.TV: Foreign trade is an important issue in this year’s presidential campaign. Heritage Foundation economist and Senior Policy Analyst Bryan Riley explains concepts that voters can use in making an informed decision. View below, or click here to view at YouTube. Episode 111, broadcast February 28, 2016.

Shownotes

Massage business regulations likely to be ineffective, but will be onerous

The Wichita City Council is likely to create a new regulatory regime for massage businesses in response to a problem that is already addressed by strict laws.

During a presentation to the Wichita City Council on February 23, 2016, police officials reported on a number of investigations and arrests. In 2015, there were 22 arrests for human trafficking and other violations. The presentation did not include what comprised “other violations,” nor did it contain any information about the disposition of these cases.

If the city is concerned about prostitution and child trafficking, the latter being a serious crime, we already have strong laws concerning this. As far as the two crimes being related: If you are a prostitute or promoter of such, you are already a criminal, according to the law. Committing more crimes, therefore, is just another step down the path you’ve already chosen.

A solution is to bring prostitution out of the shadows. Stop making consensual behavior between adults a crime. Then police can focus on actual and serious crime, like child trafficking.

But the zeal of the Wichita City Council for creating new regulatory regime is likely to overwhelm any rational thought about the problem. Now Wichita massage business owners and therapists are likely to be saddled with onerous licensing requirements. To become a newly-licensed therapist, you must possess one of several educational credentials, one of which is 500 hours of training. Existing therapists must meet similar requirements.

City officials note that the existing local massage industry requested this regulation. That’s not surprising. The purpose of nearly all occupational licensure laws is to restrict entry to the industry so that existing practitioners can charge higher rates. That is a scam, especially against low-income people that need a masseuse or a plumber. It is also a burden to people who want to become plumbers, barbers, massage therapists, or one of the many other licensed occupations.

It is both shocking and disappointing to realize that Wichita city bureaucrats and council members do not realize these economic realities. Another economic reality is that when licensing requirements are strict, the quality of service that many people receive declines. Investigating the demand for licensed plumbers, researchers found this:1

This proxy assumes that the more stringent are the barriers the higher will be the cost of licensed service and the smaller will be its quantity. These two effects increase the motivation of consumers to substitute their own services for those of trained professionals. This substitution process should show up in rising retail sales of plumbing supplies in more tightly restrictive states since licensed plumbers will generally purchase supplies wholesale. The implicit assumption is this causal chain is that self-service is on the average of lower quality than could be obtained from even a marginally trained journeyman plumber.

When presented with a convincing but fake credential, how diligently with Wichita officials investigate?
When presented with a convincing but fake credential, how diligently with Wichita officials investigate?
In other words, when strict licensure requirements make plumbers expensive, more people do their plumbing work themselves, and this work is likely to be of lower quality. It’s quite a stretch (literally and figuratively) to apply this reasoning to do-it-yourself massage, but here’s another economic reality: The more difficult it is to achieve a credential, the greater incentive to cheat. You don’t have to search very far before you find vendors advertising their services like this:

We are one of the oldest and most trusted seller of fake diplomas on the web. We use real diploma paper, the same paper that most major universities and high schools use. We also use professional security paper for our fake transcripts. We have more than 12 years experience in printing fake diplomas. You can rest assured that your fake diploma or fake transcript will look very authentic. We offer many different types of fake diplomas and fake certificates such as, FAKE GEDs, fake college diploma, fake university degree, fake high school diploma, fake college degree, or fake high school transcripts and fake skill certificate.

How diligently will Wichita’s bureaucratic machinery investigate when presented with a fake diploma certificate and transcript? The city’s record is not good. After the city passed new taxicab regulations, somehow the regulation that prohibited convicted sex offenders from receiving licenses was not implemented effectively. The city granted a taxi driver license to a man who was on the state sex offender registry. He raped a passenger.

I urge the city council to reject these regulations and devote the city’s resources to protecting people from actual crime.


Notes

  1. Carroll, Sidney L., and Robert J. Gaston. “Occupational Restrictions and the Quality of Service Received: Some Evidence”. Southern Economic Journal 47.4 (1981): 959–976.

Property rights in Wichita: Your roof

The Wichita City Council will attempt to settle a dispute concerning whether a new roof should be allowed to have a vertical appearance rather than the horizontal appearance of the old.

1500 N. Park Place in Wichita, August 2015. From Google Maps. Click for larger version.
1500 N. Park Place in Wichita, August 2015. From Google Maps. Click for larger version.
Tomorrow the Wichita City Council will be asked to uphold a decision of the Historic Preservation Board (HPB) regarding the characteristics of a roof someone installed on their house. Here’s material from the agenda packet for the meeting:

Analysis: By a 4-0-1 vote, the HPB found the installation of the metal panel roof does encroach upon, damage and destroy the Park Place Fairview Historic District by installing a non-traditional roofing material and altering the horizontal pattern of the roof shingles which is a character-defining feature of the house. Secretary of the Interior’s Standards #2 and #3 specifically deal with the character of the building itself. There is no evidence in historic Sanborn Fire Insurance Maps, historic aerial photographs of the property, or historic building permit records that 1500 North Park Place ever had a metal panel or standing seam metal roof. There is no evidence of the property’s roof structure that this house ever had anything other than cedar shingles or composite singles. The issue is not with the metal material, it is with the metal sheet which gives a vertical appearance given to a roof that had a horizontal appearance. The design guidelines adopted by City Council for this historic district do not mention metal panel roofing material as appropriate material for this district (Section 2.12.1021.1 of the Wichita Code of Ordinances). The applicant did not provide an option to use metal shingles that would have the same appearance as the existing shingle roof.

Since the property is a contributing structure in the WRHP, the RHKP and the NRHP, the metal panel roof cannot proceed without the City Council finding that there are not any “feasible and prudent alternatives” to the metal panel roofing material. (Emphasis added.)

WichitaLiberty.TV: Wichita’s regulations and economic development

In this episode of WichitaLiberty.TV: Do Wichita’s many laws and regulations accomplish their goals? Then, are Wichita’s economic development policies likely to work? Episode 98, broadcast October 18, 2015. View below, or click here to view in high definition at YouTube.

Despite growth of sharing economy, Wichita relies on centralization

The sharing economy provides for the decentralization and privatization of regulation, but the City of Wichita clings to the old ways.

Letter in Wichita Eagle, excerpt
Letter in Wichita Eagle, excerpt
In May the Wichita Eagle printed a letter from a Wichitan describing his recent cab ride from the airport: “I got in the cab to go home, and that turned out to be the most offensive encounter of my trip. The driver was dressed perfectly for slopping hogs. The cab plainly stank. There were spills, trash, crumbs, scuzzy windows, sticky door panels. Ugh.”

Not having been in a taxicab in Wichita for some years, I was surprised to learn of this person’s experience. There is a law, after all. Section 3.84.140 of the Wichita municipal code provides that “Any vehicle used as a taxicab shall be kept clean, of good appearance … ” Section 3.84.320 mandates that no taxicab driver shall “Fail to maintain their personal appearance by being neat and clean in dress and person.” Also, no driver shall “Fail to keep clothing in good repair, free of rips, tears and stains” or “Operate any taxicab which is not in a clean and/or sanitary condition.”

These laws were implemented in 2012 as a result of former mayor Carl Brewer’s frustration with the complaints he received regarding Wichita taxicabs. The instinct of politicians and bureaucrats is that if there’s a problem, a new or tougher law can provide the solution. The regulations mentioned above are part of the city’s solution, as are mandatory customer service training classes.

But as we learn from May of this year, these regulations aren’t working, according to at least one person whose judgment the Wichita Eagle trusted enough to print.

At the time, the city’s actions in creating tougher regulations had a whiff of plausibility. But right about the time that Wichita implemented new regulations the market for personal rides started to change. That change was the increasing popularity, availability, and refinement of Uber and other similar services. Uber started operations in Wichita in 2014.

What is different about Uber from regular taxicabs? For one, drivers are rated each time they serve a passenger. (Passengers are rated too, by the drivers.)

Which form of regulation do you suppose is most effective? Regulation by government, or regulation by consumers? The letter in the Eagle tells of the failure of government regulation. But no one except that passenger likely knows how bad was the experience of riding in that cab. (Well, that passenger and the driver’s others passengers, probably. A cab doesn’t get that grungy in just a day.)

But a bad Uber trip contributes to a driver’s public reputation. (Bad passengers also develop a reputation that drivers can see.) It’s a powerful system of regulation of each and every time service is provided.

Further evidence of the failure of laws and regulations — or the city’s application and enforcement of them — is that the letter writer begged the city to pass laws that are already on the books: “Wichita, please enact standards for dress, cleanliness and vehicle condition to protect our reputation. Don’t let the impression of the nation’s best airport be sullied by taxicabs.”

Decentralize and privatize

Jeffrey Tucker
Jeffrey Tucker
Last week the author Jeffrey Tucker appeared on WichitaLiberty.TV. As we talked about Uber and other services in the sharing economy, I mentioned that this is the decentralization of regulation. Tucker repeated the idea, calling it the privatization of regulation. Both terms apply.

But Wichita’s 2012 taxicab regulations are still the law. As the Wichita Eagle reports, drivers are being trained by bureaucrats. Cabs are still dirty and drivers slovenly. It seems to me that the Wichita regulations are contrary to how Uber operates, leaving the company operating in the shadows, vulnerable to a clampdown at any time. That is something the city needs to change.

WichitaLiberty.TV: Jeffrey Tucker and ‘Bit by Bit: How P2P Is Freeing the World’

In this episode of WichitaLiberty.TV: Jeffrey Tucker talks about his most recent book “Bit by Bit: How P2P Is Freeing the World” and how Bitcoin and other distributed technologies are affecting the world. View below, or click here to watch in high definition at YouTube. Episode 97, broadcast October 4, 2015.

Tucker’s website is www.jeffreytucker.me. The book’s page at Amazon is Bit by Bit: How P2P Is Freeing the World. Liberty.me is here.

WichitaLiberty.TV: Congressman Mike Pompeo

In this episode of WichitaLiberty.TV: Congressman Mike Pompeo talks about passing legislation like the Safe and Accurate Food Labeling Act, the Iran nuclear deal and his role in discovering the secret side deals, and other topics. View below, or click here to view at YouTube. Episode 94, broadcast August 30, 2015.

WichitaLiberty.TV: The Sedgwick County budget and more episodes of “Love Gov”

In this episode of WichitaLiberty.TV: As Sedgwick County proposes small spending cuts, those who benefit are vocal in their displeasure. Then, two more episodes from “Love Gov” covering health care and the housing market. View below, or click here to view at YouTube. Episode 91, broadcast August 9, 2015.

Federal rules serve as ‘worms’ buried in promises of ‘free money’

An often unappreciated mechanism throughout the Kansas budget severely limits the ability of legislators and governors to adapt to changing state priorities. A new paper from Kansas Policy Institute explains.

Federal Rules Serve as “Worms” Buried in Promises of “Free Money”

Mandates remove state control of budgets, exemplify increasing federal overreach

July 30, 2015 — Wichita — An often unappreciated mechanism throughout the Kansas budget severely limits the ability of legislators and governors to adapt to changing state priorities. These Maintenance of Effort (MOE) requirements are highlighted in a new paper by Kansas Policy Institute and is authored by former state budget director Steve Anderson. MOE stipulations force state and local governments to maintain a constant level of funding for several federal grant programs, most notably Medicaid and the Elementary and Secondary Education Act, two major components of Lyndon Johnson’s “Great Society;” in FY 2014 these two programs accounted for over two-thirds of Kansas general fund expenditures.

Maintenance of Effort cover Kansas Policy InstituteDave Trabert, president of Kansas Policy Institute, offered the following in conjunction with the release of the paper, “Maintenance of Effort requirements are an end-run on the U.S. Constitution, which prohibits the federal government from dictating how states operate.  The feds use MOE to create contractual obligations that effectively control large chunks of states’ budgets and limit legislators’ ability to make appropriate decisions for their constituents.”

Unfortunately, policy makers are bound by MOEs regardless of the state’s budget situation, changing priorities, or new-found efficiencies. A previous legislature can effectively tie the hands of future elected officials. Sometimes it is even agency bureaucrats who sign up for “free federal dollars” apart from the normal appropriations process with little legislative input.

Steve Anderson, author of the “Maintenance of Effort: The Federal Takeover of State Budgets” and current Senior Fiscal Policy Fellow with KPI, said, “The constitutional right of a state to control the appropriation of their citizens’ tax dollars is too often being abrogated by the federal government’s MOE requirements. This takeover of the state budgets is like an addictive drug from which withdrawal is painful. Unlike a drug, this addiction can be created by prior legislatures, governors or even bureaucrats.  The pervasiveness of MOE goes to almost every function of state government.”

The report outlines several strategies that can be utilized by state governments to mitigate the negative effects of MOEs. One proposal may prove difficult with existing programs but brings some common sense to policy making moving forward — avoid federal funds as much as possible. Conversely, a similar recommendation would be that all new grant programs be approved by the state legislature.

In conclusion KPI President Trabert said, “MOE requirements are not about improving outcomes, but dictating how states operate. Until Congress puts a stop to this practice state legislators must say no to the promise of ‘free money’ from the feds and avoid the problems brought by MOEs.”