Tag Archives: Richard Ranzau

Sedgwick County Commissioner Richard Ranzau

Ranzau petition to Kansas Supreme Court

A filing by a group seeking to recall a county commissioner declares “facts” that can’t possibly be known at this time.

Those hoping to recall Sedgwick County Commissioner Richard Ranzau have filed a petition with the Kansas Supreme Court seeking to overturn the finding of the Sedgwick County District Attorney. That finding was the petition did not meet the grounds and conditions proscribed in Kansas law.

(Many news headlines and reporting use phrases like “District Attorney blocks petition.” That’s not accurate. The DA simply ruled that the petition did not meet the legal requirements.)

In the filing, under a section title “Statement of Facts,” paragraph 2 starts with “It is the will of the electors of Sedgwick County’s District 4 to seek the removal of Richard Ranzau from office …”

I’d like to know how the petitioner knows the will of the electors (voters) of district 4, specifically that they want to remove Ranzau from office. Since August 2008, Ranzau has prevailed in all four elections regarding his current office. In each election the revealed preference — or “will” — of the voters is that they preferred Ranzau to the alternatives, both other Republicans in two primary elections, and Democrats in two general elections. Each election was contested by experienced politicians who had held offices including that of Sedgwick County Commissioner, Wichita City Council Member, Kansas State Representative, and Kansas State Senator.

The only fact we know so far is that there are 100 citizens of Sedgwick County (not just district 4 residents) who have signed up to become recall petition circulators. Should the recall petition be approved, these circulators would have to gather a large number of valid signatures in a short period of time. If that petitioning effort is successful, there will be an election. It is at that time — and only that time — that the electors (voters) of district 4 express their will regarding the recall of Richard Ranzau.

Richard Ranzau on core American values in Sedgwick County

Sedgwick County Commission Chairman Richard Ranzau spoke on the topic “Returning Core American Values to Sedgwick County” before a luncheon audience of the Wichita Pachyderm Club Friday, August 28, 2015. View below, or click here to view at YouTube.

Videography by Paul Soutar.

Sedgwick County WATC funding trajectory following manager’s recommendations

Sedgwick County taxpayers have been generous with funding for Wichita Area Technical College, and the former county manager has recommended reducing its funding.

During the July 16, 2014 meeting of the Sedgwick County Commission, county manager Bill Buchanan presented the recommended budget for 2015. It included a cut in funding for Wichita Area Technical College in the amount of $150,000. In response to a question, Buchanan told the commissioners:

“The new president has been assertive and aggressive in trying to deal with their financial issues. They have, he has turned that financial, that institution around financially. They are in pretty healthy shape. They have a fund balance that’s relatively strong, and it’s in my opinion that our subsidy, although it was critical in the beginning, is less critical in their operations now, and perhaps it would be time for us, when we face our own fiscal issues, to reduce their funding so we can address some of ours.”

Under the leadership of Chair Dave Unruh, this reduction in funding was approved.

At the January 7, 2015 meeting of the commission, again under the leadership of Unruh, the commission heard an off-agenda item to restore $50,000 of the funding for 2015, making the cut $100,000. That item passed. Being an off-agenda item, there is little or no public notice. Commissioner Karl Peterjohn noted this in his remarks: “I frankly would feel much more comfortable if we postponed this issue until we could get it published in the paper and have at least whatever public attention that that would generate provided, as opposed to taking another Off Agenda item that’s going to increase county spending.”

In support of Peterjohn’s motion to delay the decision for a week, Commissioner Richard Ranzau expressed concern over the lack of financial information made available to commissioners. He also repeated the manager’s recommendation that WATC needs less county funding: “Well, I’d like to have more financial information. It’s my understanding that since the state has increased funding for Vocational Ed, they’re doing very well, their reserves increased significantly, and that’s why, I mean, I was told the reason we could reduce it $150,000 was because they were doing so well. I support what they’re doing out there, but if they’ve had an influx of money from the state, a result of Vocational Ed legislation then I think it’s appropriate to adjust our spending, and I’m not prepared to increase it by $50,000 without more financial information, and that’s why I support Commissioner Peterjohn’s motion to postpone this a week so we can get more information and make a more educated decision on this. There is really no reason for hurry through this in my estimation.”

In summary, the Sedgwick County manager recommended that commissioners reduce funding to WATC, as its need for county funding has declined. Under commission chair Unruh, the commission did so, in the net amount of $100,000. The same amount is proposed for cuts this year. In light of this, the criticism of WATC beneficiaries like Spirit Aerosystems is unfounded.

By the way, the commission has been criticized for considering off-agenda items since Ranzau became chair in January, with the Wichita Eagle editorial board describing one off-agenda vote as “abrupt.” In another op-ed, Rhonda Holman complained that “The move came in an off-agenda item, with little opportunity for GWEDC and the business community to argue against it.”

Whether off-agenda items are good or bad public policy seems to depend on the whim of the Eagle editorial board.

WichitaLiberty.TV: Sedgwick County Commissioners Karl Peterjohn and Richard Ranzau

In this episode of WichitaLiberty.TV: It’s budget season for local governments. Sedgwick County Commissioners Karl Peterjohn and Richard Ranzau visit the WichitaLiberty.TV studios to explain the county budget for 2016. View below, or click here to view at YouTube. Episode 89, broadcast July 26, 2015.

Sedgwick County’s page for the 2016 budget is here.

Ranzau, Peterjohn endorse Sam Williams for Wichita mayor

Despite past differences, two members of the Sedgwick County Commission have endorsed Sam Williams for Wichita Mayor.

Citing recent revelations that Jeff Longwell voted to use taxpayer funds that helped his private business profit, County Commissioners Richard Ranzau and Karl Peterjohn called on supporters of ethics reform and transparency to oppose Longwell and support Sam Williams.

“Even though Sam Williams has supported our opponents in the past, we think it is vital that he be elected over Longwell,” Peterjohn and Ranzau said in a joint statement.

“We have known for some time that Jeff Longwell has had a problem with ethics. In fact, the voters rejected his approach to government when he ran against me,” Karl Peterjohn stated. “It was during his race against me that Longwell presented the appearance that his vote was for sale. Now there is evidence that not only did he utilize his position on the City Council to enrich his campaign coffers, but he also has used it for his personal enrichment.”

According to campaign finance reports filed by Longwell, his campaign for County Commission accepted multiple out-of-state donations from the CEO of Walbridge and his spouse the day before he voted to award Walbridge a contract that was millions of dollars higher than another bid being considered. Three days after that vote, Longwell accepted thousands of dollars more from other Michigan-based employees of the company.

It was recently reported that Jeff Longwell made a motion and then supported the use of $10,000 in taxpayer money to sponsor the car show known as The Blacktop Nationals. What Longwell failed to disclose was that his company, Ad Astra Printing, which is registered as an LLC with Jeff Longwell as the only listed owner, received compensations for doing work for the event. Longwell recently admitted his firm did profit from the event. According to Wichita’s Code of Ethics for Council Members (Title 2, Section 2.04.050), council members “shall refrain from making decisions involving business associates, customers, clients, friends and competitors.” Longwell’s motion to use public funds for a project where he would personally profit is clearly a violation of the Code of Ethics for Council Members. The relevant Wichita law can be found here.

“For Wichita to move forward and to grow the jobs we all want, we have to work together in the interest of south-central Kansas — not in the self-interests of politicians,” stated Commissioner Richard Ranzau. “It is well-documented that Sam Williams has actually supported my opponents, as well as those of Karl Peterjohn, in the past, but I know that Sam’s top priority is enriching Wichita, not enriching himself. That’s why I am supporting Sam Williams for mayor. The public needs to have greater transparency and I believe Sam Williams will be an advocate for that. Jeff Longwell has been in office for 20 years and has done nothing to increase transparency or to make local government more accessible to the people,” Ranzau stated.

“Longwell’s consistent ethical lapses will damage economic development opportunities in Sedgwick County. Business leaders will shy away doing business in that manner. Sam Williams is a proven job creator, and I urge voters to support him for mayor,” stated Peterjohn.

Economic development in Sedgwick County

The issue of awarding an economic development incentive reveals much as to why the Wichita-area economy has not grown.

At the December 17, 2014 meeting of the Sedgwick County Commission an economic development incentive was considered. The proceedings are of interest as a window into how economic development works.

The proposal was that Sedgwick County will make a loan to Figeac Aero in the amount of $250,000 as an economic development incentive in conjunction with its acquisition of a local company and a contemplated expansion. It’s likely the county will also participate in forgiving property taxes, although that decision will be made by the City of Wichita on the county’s behalf.

Sedgwick County Chief Financial Officer Chris Chronis presented the item to the commissioners, telling them “the company has been very successful in Europe.”

Chronis also presented the benefit-cost analysis from calculated by the Center for Economic Development and Business Research (CEDBR) at Wichita State University. He said the proposed county property tax abatement has a value of just over $473,000, although the award of the exemption is controlled by the city. The present value of county’s cost over ten years, considering both the property tax abatement and the $250,000 loan, is $687,793. The present value of the benefit is just over $1,000,000, so the county’s net benefit is $317,834. Therefore, the net public financial benefit ratio to the county of 1.46 to one.

The final review of the contract is still to be performed. Chronis asked the commission for authorizing him to execute an agreement “in substantially the same form as the one we have given you, subject to final review by the county counselor.”

Commissioner Richard Ranzau asked if the commission had in its possession the final form of the document. The answer was no. Chronis said that the document is substantially in final form, subject to some tweaking. Later questioning by Ranzau revealed that there are many parts of the contract that are not present. The agreement the commissioners had referenced the missing parts, such as a security agreement.

Ranzau also brought up the fact that the commission had changed its policy so that forgivable loans are no longer used. Chromos said this is not a forgivable loan. Ranzau asked “what is it?” Chronis replied it is a loan. Ranzau asked if the company had to repay the loan. Chronis said if they don’t fulfill their end of the agreement, then yes, they will have to pay it back. If the company does not repay the loan, this is because the company has met the employment targets, and the county gets its repayment in the form of economic benefit to the community and to Sedgwick County government, he added.

In the end, Chronis admitted that this agreement has the same elements of past forgivable loans, but is different because now there is better protection in case the company does not satisfy commitments.

In support of the incentive, Wichita Metro Chamber of Commerce president Gary Plummer said he is here in a “positive environment.” He told the commissioners that staff worked very hard. He mentioned how much tax the company has paid to Sedgwick County. He said this is a great moment in Sedgwick County economic development history.

Greater Wichita Economic Development Coalition Chair Gary Schmitt appeared to mention the return to the county in the form of tax revenue.

Greater Wichita Economic Development Coalition president Tim Chase promoted the security that the county is receiving in case the loan needs to be repaid. There is a lien on tangible assets, for example. But the company still must agree to specific provisions for the security of the loan. Chase said this is “not, in any way, shape, or form a done deal.”

French air parts maker Figeac has plans to grow in WichitaCommissioner Karl Peterjohn mentioned a newspaper article from May that quoted Figeac Aero’s vice president of business development as saying “the heart of Figeac North America will be Wichita.” Chase explained there had been personnel changes since then. Also, Chase said that Figeac hired a consultant that advised the company to inquire about “standard” incentives. When GWEDC did not supply an answer the company considered satisfactory, Chase said he was told “that starts the clock over. We’re going to begin looking at other locations.” The article Peterjohn referred to is French air parts maker Figeac has plans to grow in Wichita May 9, 2014 Wichita Eagle.

There was a question about state participation in incentives. Chronis did not know what, if anything, the state would be offering.

In further discussion, Ranzau said that Figeac has already bought a company here and is hiring. They have plans to be here, he said, meaning that the “but for” argument does not apply. By his calculation, if the average salary was reduced by 12 cents per hour, that would amount to the value of the incentive Sedgwick County is offering, $250,000 over five years. He expressed his concern that the contract the commission is being asked to approve is incomplete, and that the City of Wichita has yet to vote on it. Ranzau made a motion that the item be tabled until the agreement is complete. That motion failed, with only Peterjohn voting in support.

In other discussion, Ranzau repeated his concern over approving an incomplete document, telling commissioners that this would not be done in the private sector, adding that this is what it means that you can’t “run government like a business.”

In his remarks, Peterjohn quoted a government official famously who said “you have to pass the document to find out what’s in it.” Peterjohn expressed concern that the analysis provided by CEDBR is based on numbers provided by the company. This qualification is standard, he said, and always a concern.

The measure passed by a vote of three to two, with Peterjohn and Ranzau opposed.


Excerpt from the meeting

Discussion

Capacity
The labor force in the Wichita metropolitan area is about 298,000 people. The 50 jobs to be created in the first year by Figeac represents 0.017 percent of the labor force, or one job for every 5,960 people in the labor force.

Another way to place the 50 Figeac jobs in context is to look at them in comparison to jobs created, not the labor force. In Kansas in recent years, job gains in the private sector are about six percent of employment. (Figures are not available for Wichita alone.) Employment in the Wichita metropolitan area is about 284,000. Six percent of that is 17,040. So the 50 Figeac jobs are now 0.29 percent of all jobs created in a year, or one out of 341 jobs.

It’s good that 50 people will have jobs. Recall, however, that the president of the chamber of commerce told commissioners that staff worked very hard to acquire these jobs. He called this “a great moment.”

This illustrates a problem with targeted economic development incentives. Making deals takes a lot of time and effort. Three top officials attended the commission meeting, and they will likely attend the Wichita city council meeting where the incentive is presented. Much time of county staff was required.

Our economic development agencies and local governments do not have the capacity to strike enough deals to account for significant job growth. A better strategy is to create an environment where business firms can form and expand organically, without requiring or depending on government assistance.

Is the incentive necessary?
The quotation from a newspaper article seven months old that described Figeac’s commitment to grow in Wichita raises suspicions of what is commonly alleged: That companies make location and expansion plans for business reasons. Then, some may seek incentives, even though the decision has already been made. Local economic development officials are eager to accommodate the request for incentives, as they need to justify their existence and notch a few sure wins. Most politicians, of course, are more than willing to take credit for creating jobs.

Are there other incentives?
The Sedgwick County commissioners had to make a judgment on the wisdom of incentives without knowledge of all the incentives the company may receive. The City of Wichita had not acted on a similar loan request and property tax abatements. The State of Kansas would not disclose what incentives it had offered to Figeac.

We don’t know, but a program that Figeac may qualify for is PEAK, or Promoting Employment Across Kansas. This program allows companies to retain 95 percent of the payroll withholding tax of employees. This can be a substantial sum. Tables available at the Kansas Department of Revenue indicate that for a single person with no exemptions earning $40,000 annually, the withholding would be $27 per week, or $1,404 annually. For a married person with two children, withholding would be $676 annually. Under PEAK, the company retains 95 percent of these values.

(Since unmarried workers have higher withholding rates than married workers, and those with fewer exemptions have more withheld than those with many, does this provide incentives for companies in the PEAK program to adjust their hiring preferences?)

Who benefits?
As is common, incentives are justified by a benefit-cost analysis that purports to show that more comes in to government coffers than goes out due to the incentive. But the “benefits” that go into this calculation are quite different from the profits that business firms attempt to earn.

Here’s a question: In his presentation, the county’s chief financial officer said the benefit to the county over ten years is $317,834. What will the county do with that money? Will it reduce taxes by that amount? That is what would benefit the taxpayers that paid to provide the incentive. But that doesn’t happen. Instead, the benefit is spent.

The entire process assumes that these benefit-cost ratios are valid. This is far from certain, as follows:

1. The benefits in the calculation are not really benefits. Instead, they’re in the form of projected higher tax revenues collected by governments. This is very different from the profits that private sector companies earn from their customers in voluntary market transactions.

2. Government claims that in order to get these “benefits,” incentives are necessary. But often the new economic activity (relocation, expansion, etc.) would have happened without the incentives.

3. Even if government collects more tax by offering incentives, it should not be the goal of government to grow just for the sake of growing.

4. Why is it that many companies are able to grow without incentives, but only a few companies require incentives? What is special about these companies? Why do some companies receive incentives year after year?

Diversification
wichita-detroit-job-industry-concentrationWe’ve been told for many years that Wichita needs to diversify its economy. The Wichita economy is highly dependent on one industry — aircraft manufacturing — and Figeac is in the aircraft industry. When citizens have told the Wichita City Council that offering incentives to aircraft companies serves to make it more difficult to diversify, the president and chair of the Wichita Metro Chamber of Commerce complained in an op-ed: “Would the anti-business voices’ diversification strategy be to send aviation jobs to other cities and states, thereby crippling our economy? Where’s the logic in that?” This says a great deal about the problems with economic development in Wichita, namely that our leaders see no difference between business and capitalism, and that the need for diversification is merely a slogan that is not followed to in any meaningful way.

The nature of the game
The explanation by Chase spotlights some of the difficulties in economic development. The negotiations are not complete, but government approval is needed. More broadly, economic development officials are not negotiating the use of their own capital or capital that has been entrusted to them. They’re spending someone else’s money, for which there is little incentive to bargain wisely.

Commissioners were told that Figeac is a successful company. Why, then, does it need incentives?

In Wichita, running government like a business

In Wichita and Sedgwick County, can we run government like a business? Should we even try? Do our leaders think there is a difference?

Sedgwick County Working for YouAs Wichita considers the future of its economy, a larger role for government is contemplated. The views of the people leading the effort to expand government management of the local economy are important to explore. Consider Gary Schmitt, who is an executive at Intrust Bank. Following is an excerpt from the minutes of the May 22, 2013 meeting of the Board of Sedgwick County Commissioners. The topic was a forgivable loan to Starwood Hotels and Resorts Worldwide Inc. These loans are equivalent to a cash grant, as long as conditions are met. At the time of this meeting Schmitt was vice chair of Greater Wichita Economic Development Coalition.

This discourse shows the value of elected officials like Karl Peterjohn, and also Richard Ranzau, as he too contributed to the understanding of this matter. When Michael O’Donnell served on the Wichita City Council, he also contributed in this way.

Here’s what Schmitt told the commissioners, based on the meeting minutes: “I know at the bank where I work, if we had a $1 invested and get a return of over $2.40, we would consider that a very good investment in the future.”

Shortly after that he said “Very similar what we do at the bank when we negotiate loan amounts or rates. So it is very much a business decision to try to figure out how to bring 900 jobs to our community without overspending or over committing.”

Wichita leaders need to understand businessThe problem is that when the bank Schmitt works for makes a loan, there are several forces in play that are not present in government. Perhaps the most obvious is that a bank loans money and expects to be repaid. In the case of the forgivable loan the commission was considering, the goal is that the loan is not repaid. These loans, remember, are a grant of cash, subject to a few conditions. If the recipient company is required to repay the loan, it is because it did not meet conditions such as job count or capital investment. In these circumstances, the company is probably not performing well economically, and therefore may not be able to repay the loan.

Another example of how a bank is different from government is that at a bank, both parties enter the loan transaction voluntarily. The bank’s shareholders and depositors are voluntary participants. Perhaps not explicitly for each loan, but if I do not like the policies or loans my bank has made, I can easily move my shares and deposits to another bank. But for these government loans, I personally have appeared several times before governmental bodies asking that the loan not be made. I did not consent. And changing government is much more difficult than changing banks.

Another difference between Schmitt’s bank and government is that bank’s goal is to earn a profit. Government doesn’t calculate profit. It is not able to, and when it tries, it efforts fall short. For one thing, government conscripts its capital. It faces no market test as to whether it is making good investments. It doesn’t have to compete with other institutions for capital, as a private bank does. Ludwig von Mises taught us that government can’t calculate profit and loss, the essential measure that lets us know if a business is making efficient use of resources. Thomas DiLorenzo elaborated, writing: “There is no such thing as real accounting in government, of course, since there are no profit-and-loss statements, only budgets. Consequently, there is no way of ever knowing, in an accounting sense, whether government is adding value or destroying it.”

An example of this lack of accounting for capital comes from the same governmental body making this forgivable loan. In Intrust Bank Arena depreciation expense is important, even today, I explain that proper attention given to the depreciation expense of Intrust Bank Arena in downtown Wichita would recognize and account for the sacrifices of the people of Sedgwick County and its visitors to pay for the arena. But the county doesn’t do that, at least not in its most visible annual reporting of the arena’s financial results.

Governments locally do have a measure of what they consider to be “profit.” It’s the benefit-cost ratio calculated by the Center for Economic Development and Business Research (CEDBR) at Wichita State University. This is the source of the “$1 invested and get a return of over $2.40” that Schmitt referenced. But the “benefits” that go into this calculation are quite different from the profits that business firms attempt to earn. Most importantly, the benefits that government claims are not really benefits. Instead, they’re in the form of additional tax revenue paid to government. This is very different from the profits companies earn in voluntary market transactions.

Government usually claims that in order to get these “benefits,” the incentives must be paid. But often the new economic activity (expansion, etc.) would have happened anyway without the incentives. There is much evidence that economic development incentives rank low on the list of factors businesses consider when making investments. A related observation is that if the relatively small investment government makes in incentives is solely or even partially responsible for such wonderful outcomes in terms of jobs, why doesn’t government do this more often? If the Sedgwick County Board of Commissioners has such power to create economic growth, why is anyone unemployed?

Those, like Gary Schmitt, who are preparing to lead Wichita’s efforts in stimulating its economy believe that government should take on a larger role. We need to make sure that these leaders understand the fundamental differences between government and business, and how government can — and can’t — help business grow.

Following is an excerpt from the meeting minutes:

Chairman Skelton said, “Okay, thank you. Anybody else who wishes to speak today? Please state your name and address for the record.”

Mr. Gary Schmitt, (address redacted to respect privacy) greeted the Commissioners and said, “I work at Intrust Bank and I am the Vice-Chair of GWEDC. Thank you for the opportunity to speak to you today. I want to thank all of you also for just saving the county $700,000 by refinancing the bond issue. I think that was a great move. I think that’s exactly what we need to do to help support our county.

Mr. Schmitt said, “Also want to say I think Starwood coming to Wichita with 900 jobs in the very near future is a big win for Wichita, for Sedgwick County and our community. And I just want to encourage you to support the $200,000 investment. I know at the bank where I work, if we had a $1 invested and get a return of over $2.40, we would consider that a very good investment in the future. And I think having 900 people employed in basically starter jobs, or jobs to fill the gap in their financial needs for their families is very important also. So thank you very much for the opportunity to speak. I encourage you to support positive vote on this.”

Chairman Skelton said, “Commissioner Peterjohn.”

Commissioner Peterjohn said, “Mr. Schmidt, I thank you for coming down and speaking today and your efforts on behalf of GWEDC. One of the things I struggle with these issues when they come before the Commission is what is the, how do we come up with an optimum number? I mean, why is $200,000 the right figure for the county’s contribution. And also, I mean, other than the fact that the city approved a similar amount yesterday, and when this comes to us and the calculations are coming from a, I think, a basic input and output model that fluctuates, depending on what assumptions you feed into it, I struggle with, you know, how do we determine, when you get a proposal at the bank, somebody comes in and says, hey, I would like to borrow x number of dollars for this project, we expect a net present value or rate of return of so much, and based on a loan cost of a certain interest rate, we get those very specific calculations. Can you provide any insight, in terms of why $200,000 is the optimal number for this forgivable loan over 5 years, and help me out on that point?”

Mr. Schmitt said, “I’ll try. GWEDC basically is a cooperation between businesses, business community leaders and also the city and the county government. We sort of have all the players at the table. And it’s very similar to what we do at the bank, when somebody comes in and asks for a proposal, we have to understand what our capacity is, what our expectations are, and we analyze all that. By using WSU calculate return on investment, that’s similar to what we do at the bank to calculate our return on investment. Now, I’m sure Starwood would be very excited if we said we will give you $2 million instead of $200,000, but we negotiated a number that we thought was acceptable to Starwood and also us.

“Very similar what we do at the bank when we negotiate loan amounts or rates. So it is very much a business decision to try to figure out how to bring 900 jobs to our community without overspending or over committing. So, Mr. Peterjohn, I think we’ve tried to do everything we can to bring the best deal to the community we possibly can.”

Commissioner Peterjohn said, “Well then help me out, in terms of the point that was raised over, we’ve got a forgivable loan for five years, but the calculation, in terms of return and so on are over 10 years. So basically our clawback provisions don’t exist from year 6 through 10.”

Mr. Schmitt said, “Well…”

Commissioner Peterjohn said, “And then you’ve got that disparity.”

Mr. Schmitt said, “You know, the other interesting thing is they have a 15 year lease out there on the building. So our expectation is they will be a minimum of 15 years. So do we do it on 5, 10, or 15 years. So, I understand your question. I don’t know the answer to that.”

Commissioner Peterjohn said, “Okay. Thank you for coming down and providing…” Mr. Schmitt said, “You are welcome. Thank you.”

WichitaLiberty.TV: Election results, Kansas school employment and spending, and government planning of the economy

In this episode of WichitaLiberty.TV: In Sedgwick County, an unlikely hero emerges after the November election. Then, what is the trend in Kansas school employment and spending, and what do voters think has happened? Finally, do you know how to make a simple lead pencil? View below, or click here to view at YouTube. Episode 66, broadcast November 23, 2014.

Richard Ranzau, slayer of cronyism

In Sedgwick County, an unlikely hero emerges in the battle for capitalism over cronyism.

Now that the result of the 2014 general election is official, Richard Ranzau has notched four consecutive election victories over candidates endorsed by the Wichita Eagle and often by the Wichita Metro Chamber of Commerce. It’s interesting and useful to look back at what the Wichita Eagle wrote during each campaign as it endorsed Ranzau’s opponent.

In its endorsements for the 2010 Republican Party primary, the Eagle editorial board wrote:

In a district reaching from downtown Wichita north to include Maize, Valley Center and Park City, Republican voters would do well to replace retiring Commissioner Kelly Parks with the commissioner he unseated in 2006, Lucy Burtnett. Her business experience and vast community involvement, as well as her understanding of the issues and thoughtful voting record during her two years on the commission, make her the pick in this primary. She would like to see a new life for the Kansas Coliseum site, perhaps including a year-round RV park, and favors the county’s continued role in Fair Fares and the National Center for Aviation Training.

The other candidate is Richard Ranzau , a physician assistant retired from the Army Reserves who believes government is out of control, who would submit all tax increases to voters, and who opposes the county’s investments in air service and aviation training.

The Wichita Metro Chamber of Commerce political action committee contributed to Burtnett.

In this election, Ranzau received 55 percent of the vote.

Then for the general election in November 2010, the Eagle editorial board wrote this:

State Sen. Oletha Faust-Goudeau, D-Wichita, is by far the better choice in the race to replace Republican Kelly Parks, who is stepping down after one term representing the county’s north-central district. Her legislative experience, civic engagement and constituent service have prepared her for a seat on the county commission, where she wants to help attract businesses and jobs and would support efforts such as the new National Center for Aviation Training. “That’s a must,” she said. It’s a concern that Faust-Goudeau has been slow to address code violations at a house she owns, but the fact that neighbors have stepped up to help says a lot about her as a person and public servant. The first African-American woman elected to the Kansas Senate, Faust-Goudeau would make a hardworking and effective county commissioner.

Republican Richard Ranzau, a physician assistant retired from the Army Reserves, holds inflexible anti-tax, free-market views that would be disastrous for the county’s crucial efforts to support economic development and invest in affordable air service and aviation training.

In this election, Ranzau again earned 55 percent of the vote.

In the August 2014 Republican Party primary, the Eagle editorial board wrote:

Carolyn McGinn is the clear choice to represent this district that includes part of north Wichita as well as Maize, Park City and Valley Center. McGinn served on the commission from 1998 through 2004. Since then, she has served in the Kansas Senate, including as past chairwoman of the Senate Ways and Means Committee. As a result, McGinn knows state and local issues well and understands how they intersect. She is concerned about the region’s stagnant economic growth. In order to get businesses to come and grow here, the county needs a stable government structure that provides essential services, she argues. McGinn is a productive problem solver who could have an immediate positive impact on the commission.

Her opponent is incumbent Richard Ranzau, who is completing his first term. He has been a fierce advocate for the Judge Riddel Boys Ranch and for fiscal responsibility. But he also frequently badgers county staff and delivers monologues about federal government problems. He argued that a planning grant was an attempt by President Obama “to circumvent the will of Congress, the states and the people.”

The Wichita Metro Chamber of Commerce also endorsed McGinn.

In this election, Ranzau received 54 percent of the vote.

For the 2014 general election, here’s what the Eagle editorial board had to say:

Democrat Melody McCray-Miller is the clear choice to represent District 4, which includes north Wichita, Maize, Park City and Valley Center. A former county commissioner and four-term state representative and a business owner, McCray-Miller understands government at both the state and local levels and how it affects communities, families and businesses. Her priorities include economic development and community livability and engagement. “I would like to put the public back in public policy,” she said, accusing her opponent of representing his ideological views and not the full district. McCray-Miller believes in a balanced, collaborative approach to dealing with issues and people, focusing on “what’s best for the county.” She also would not turn down federal funds, as her opponent has voted to do, and supports using economic incentives to attract and retain businesses.

Republican incumbent Richard Ranzau is completing his first term, which has not been productive. Though he has done some good work watchdogging county spending, Ranzau frequently badgers county staff and other presenters at commission meetings. He also has used his position as an ideological platform to rant about the federal government, including by claiming that a federal planning grant was an attempt by President Obama “to circumvent the will of Congress, the states and the people.” McCray-Miller would be a better, more-constructive commissioner.

The Wichita Metro Chamber of Commerce also endorsed McCray-Miller.

This election was closer, with Ranzau gathering 51 percent of the vote to McCray-Miller’s 49 percent.

As a private entity, the Wichita Eagle is free to print whatever it wants. So too is the Wichita Metro Chamber of Commerce free to contribute to and endorse anyone.

But these two institutions appear to be out of touch with voters.

Do you sense a pattern? Ranzau’s opponents are thoughtful, would make hardworking and effective county commissioners, are productive problem solvers, understand government at both the state and local levels, and have a balanced, collaborative approach to dealing with issues and people.

Ranzau, according to the Eagle, believes government is out of control and holds inflexible anti-tax, free-market views. He frequently badgers county staff. (Believe me, they deserve scrutiny, which the Eagle calls “badgering.”) Oh, and he’s ideological, too. That simply means he has “a system of ideas and ideals, especially one that forms the basis of economic or political theory and policy.” As long as those ideals are oriented in favor of capitalism, economic freedom, and personal liberty, this is good. And that’s the way it is with Richard Ranzau. Would that the Wichita Eagle shared the same ideology.

I know what it is like to be on the losing side of issues year after year. Advocating for free markets and capitalism against the likes of the Wichita Eagle, the Wichita Metro Chamber of Commerce, most members of the Sedgwick County Commission, and all current members of the Wichita city council is a lonely job.

This makes it all the more remarkable that Richard Ranzau has won four consecutive elections running against not only his opponent, but also against the city’s entrenched establishment. Running against the crony establishment, that is, the establishment that campaigns against capitalism in favor of a “business-friendly” environment. The establishment that has presided over decades of sub-standard economic performance. The establishment that insisted on a sales tax that it hoped would gloss over the miserable results produced over the last two decades.

Thank goodness that defenders of capitalism are able to win an election now and then — or four in a row.

Sedgwick County Commission precinct map, November 4, 2014

Here’s a map I created of the vote percentage received by Republican candidates by precinct in the two Sedgwick County Commission districts that were contested. In district 4 (the northern district) the Republican Candidate was Richard Ranzau, with Melody McRae-Miller the Democratic Candidate. In district 5 (the southern district) the Republican and Democrat were Jim Howell and Richard Young, respectively.

To use an interactive version of this map, click here. On the interactive map you may zoom and scroll, and you may click on a precinct for more information about the votes for that precinct.

Precinct Map, Sedgwick County Commission 4 and 5 2014-11-04

WichitaLiberty.TV: Primary election results, and a look forward

In this episode of WichitaLiberty.TV: We’ll take a look at some of the primary elections results this week. What did voters say, and what should we look for in the November general election and the future past that? View below, or click here to view at YouTube. Episode 54, broadcast August 10, 2014.

Sedgwick County elections: Commissioners

In Sedgwick County, two fiscally conservative commission candidates prevailed.

This year three of the five positions on the Sedgwick County Board of Commissioners are up for election. Unlike the Wichita city Council, Sedgwick County commissioners run as members of a party, and compete in both primary and general elections. There can be independent and third-party candidates too. This year for one of the Sedgwick County commission districts the incumbent Republican ran unopposed. But in two other districts, there were spirited contests.

Sedgwick County Commission, district 4In district four, which covers north-central and northwest Wichita, Maize, Valley Center, and Park City, incumbent Richard Ranzau was challenged by Carolyn McGinn. She had held this position in the past, and then served in the Kansas Senate, an office she still holds. Ranzau is well known — notorious, we might say — for his tough line on spending taxpayer dollars. The McGinn campaign had about twice as much money to spend. A lot of that came from the people we know as Wichita’s crony capitalists, that is, people and companies who actively seek handouts from government. The Wichita Metro Chamber of Commerce endorsed McGinn. Now, you may think of your local chamber of commerce as pro-business. And, the chamber is pro-business, no doubt about it. But pro-business is not the same as pro-capitalism. Being pro-business is not the same as being in favor of economic freedom. Being pro-business is not the same as supporting a limited, constitutional, government that protects our freedoms and property rights.

I want to stress this point. Just this week Wichita’s own Charles Koch wrote an op-ed for USA Today. After expressing concern for the weak economy and its effect on workers, he offered a plan forward. He wrote “First, we need to encourage principled entrepreneurship. Companies should earn profits by creating value for customers and acting with integrity, the opposite of today’s rampant cronyism.”

Concluding his article, Koch wrote: “Our government’s decades-long, top-down approach to job creation has failed. Its policies have made our problems worse, leaving tens of millions chronically un- or underemployed, millions of whom have given up ever finding meaningful work. In doing so, our government has not only thwarted real job creation, it also has reduced the supply and quality of goods and services that make people’s lives better and undermined the culture required to sustain a free society. When it comes to creating opportunities for all, we can do much better. It’s time to let people seek opportunities that best suit their talents, for businesses to forsake cronyism, and for government to get out of the way.”

While Charles Koch was writing primarily about the United States government, the same principles apply to local government. And Wichita’s cronies — those who seek profits through politicians and bureaucrats rather than customers — they lined up behind Carolyn McGinn in a big way. By using their generous funding, she ran a negative campaign against Richard Ranzau. He forcefully and truthfully responded to her negative ads, and I’m pleased to say that I helped in that effort.

What was the result of the election? Ranzau won with 54 percent of the vote. He now moves on to face Democrat Melody McRae-Miller in the November general election. She held this county commission seat before McGinn, and she also served in the Kansas legislature, in the House of Representatives.

Sedgwick County Commission, district 5There was also a contest in district 5, which is Derby and parts of southeast Wichita. The one-term incumbent Jim Skelton declined to run for re-election. The two Republican candidates were Jim Howell and Dion Avello. Howell has represented parts of Derby in the Kansas House of Representatives for four years. Avello has been mayor of Derby for many years. The Wichita Chamber endorsed Howell in this race. Campaign funds were close in this race, with Howell having a small edge. The result of the election was Howell winning with 63 percent of the vote. He moves on to face the Democrat in the general election, former Rose Hill Mayor Richard Young.

22-CommissionWhat do the results of these elections mean? First, there may be a shift of power on the Sedgwick County commission. Currently, commissioners Ranzau and Karl Peterjohn are often in a minority of two against the other three commissioners. It’s thought that it Howell is elected, he would often join Ranzau and Peterjohn to form a working majority of three. That could cause a change in policy at the County commission, and that’s something that the Wichita chamber and Wichita’s cronies don’t want. It will be interesting to see who the chamber and the cronies support in the general election, Ranzau or the Democrat. In 2008, when Peterjohn ran for his first term, the Wichita chamber campaigned against him, making it their most important priority in that election.

For this shift to materialize, both Ranzau and Howell must win their November elections.

Wichita Chamber of Commerce 2013-07-09 004Ranzau’s victory is a defeat for the Wichita Chamber of Commerce. Besides endorsing McGinn, it made independent expenditures in her favor. This has broader implications than just one county commission district. This week the Wichita City Council voted in favor of placing a sales tax issue on the November ballot. The Wichita Chamber is strongly behind the sales tax in Wichita, and I would expect to see the chamber devote a lot of resources campaigning for its passage. Richard Ranzau is opposed to the sales tax increase. While his county commission district encompasses a lot of territory that is outside the City of Wichita, and it is only Wichita voters who will decide the sales tax issue, I think we can safely conclude that his victory paints a gloomy forecast for approval of a sales tax.

Looking even farther to the future. Ranzau’s county commission district overlaps part of Wichita city council district 5. That is currently represented by Jeff Longwell. He can’t run again because of term limits. Longwell is firmly in the grasp of Wichita’s cronies. Could Ranzau’s victory pave the way for a fiscally conservative city council candidate in district 5? That election will be next spring.

Also next spring Wichita will elect a new mayor. There are many names mentioned as candidates, including Longwell. What do the victories of Ranzau and Howell mean? What impact will the sales tax campaign and election result have on the spring elections?

24-Carolyn McGinn Key Construction 2014-07-02 01bThe Wichita Chamber and the Wichita cronies campaigned hard for Carolyn McGinn against Richard Ranzau. Well, I should clarify: They spent a lot of money on the campaign. Richard himself, his family, and his volunteers worked hard. The desire for economic freedom by Richard Ranzau and his volunteers was a more powerful force than the greed of the Wichita Chamber of Commerce, Key Construction, David Burk, and Bill Warren.

Keep this in mind. The Sedgwick County Commission has very little power to initiate the type of economic development incentives that the Wichita Chamber and the cronies want. That power rests almost totally at the Wichita City Council and the Kansas Department of Commerce. Also, the county commission has limited power to stop or object to incentives. Their main voice is the ability to cancel the formation of a tax increment financing district.

So if the Wichita Chamber and the cronies are willing to intervene to such extent in the campaign for county commissioner, think what they will be willing to do in city council or mayoral contests, if they see that their grip on the really big cookie jar might be in doubt. Since the departure of Michael O’Donnell for the Kansas Senate there has been no one on the Wichita city council who questions anything the Chamber and the cronies want. Not in any serious manner, that is. We see council members making false displays of pretense now and then, but that’s all they do.

In Wichita, no difference between business and government?

In this excerpt from WichitaLiberty.TV: Leaders in Wichita often liken government decision making to running a business, but there are important differences. That Wichita’s leaders in both government and business do not understand this is problematic. View below, or click here to view at YouTube. For more on this, see In Wichita, no differentiation between business and government.

Voice for Liberty Radio: Sedgwick County Commission Candidates

In this episode of Voice for Liberty Radio: Candidates for Republican party nominations in two districts for Sedgwick County Commission spoke at the Wichita Pachyderm Club on June 20, 2014.

In district 4, which is parts of northeast, north and northwest Wichita and the towns of Park City, Valley Center, and Maize, Kansas Senator Carolyn McGinn is challenging the incumbent Richard Ranzau. In district 5, which is parts of south and southeast Wichita and the town of Derby and surrounding area, Derby Mayor Dion Avello is facing Kansas Representative Jim Howell. The format of the meeting was an opening statement by each candidate followed by questions from the audience and a brief closing statement.

Here are candidates for Republican party nominations for Sedgwick County Commission at the Wichita Pachyderm Club on June 20, 2014.

Shownotes

Candidates in district 4:
Carolyn McGinn | Working For Kansas
Vote Richard Ranzau for County Commission

Candidates in district 5:
Dion Avello
State Representative Jim Howell for Sedgwick County Commissioner

In Wichita, no differentiation between business and government

Leaders in Wichita often liken government decision making to running a business, but there are important differences.

Sedgwick County Working for YouAs Wichita considers the future of its economy, a larger role for government is contemplated. The views of the people leading the effort to expand government management of the local economy are important to explore. Consider Greater Wichita Economic Development Coalition Chairman Gary Schmitt, who is also an executive at Intrust Bank. Following is an excerpt from the minutes of the May 22, 2013 meeting of the Board of Sedgwick County Commissioners. The topic was a forgivable loan to Starwood Hotels and Resorts Worldwide Inc. These loans are equivalent to a cash grant, as long as conditions are met. At the time of this meeting Schmitt was vice chair of GWEDC.

This discourse shows the value of elected officials like Karl Peterjohn, and also Richard Ranzau, as he too contributed to the understanding of this matter. When Michael O’Donnell served on the Wichita City Council, he also contributed in this way.

Here’s what Schmitt told the commissioners, based on the meeting minutes: “I know at the bank where I work, if we had a $1 invested and get a return of over $2.40, we would consider that a very good investment in the future.”

Shortly after that he said “Very similar what we do at the bank when we negotiate loan amounts or rates. So it is very much a business decision to try to figure out how to bring 900 jobs to our community without overspending or over committing.”

Wichita leaders need to understand businessThe problem is that when the bank Schmitt works for makes a loan, there are several forces in play that are not present in government. Perhaps the most obvious is that a bank loans money and expects to be repaid. In the case of the forgivable loan the commission was considering, the goal is that the loan is not repaid. These loans, remember, are a grant of cash, subject to a few conditions. If the recipient company is required to repay the loan, it is because it did not meet conditions such as job count or capital investment. In these circumstances, the company is probably not performing well economically, and therefore may not be able to repay the loan.

Another example of how a bank is different from government is that at a bank, both parties enter the loan transaction voluntarily. The bank’s shareholders and depositors are voluntary participants. Perhaps not explicitly for each loan, but if I do not like the policies or loans my bank has made, I can easily move my shares and deposits to another bank. But for these government loans, I personally have appeared several times before governmental bodies asking that the loan not be made. I did not consent. And changing government is much more difficult than changing banks.

Another difference between Schmitt’s bank and government is that bank’s goal is to earn a profit. Government doesn’t calculate profit. It is not able to, and when it tries, it efforts fall short. For one thing, government conscripts its capital. It faces no market test as to whether it is making good investments. It doesn’t have to compete with other institutions for capital, as a private bank does. Ludwig von Mises taught us that government can’t calculate profit and loss, the essential measure that lets us know if a business is making efficient use of resources. Thomas DiLorenzo elaborated, writing: “There is no such thing as real accounting in government, of course, since there are no profit-and-loss statements, only budgets. Consequently, there is no way of ever knowing, in an accounting sense, whether government is adding value or destroying it.”

An example of this lack of accounting for capital comes from the same governmental body making this forgivable loan. In Intrust Bank Arena depreciation expense is important, even today, I explain that proper attention given to the depreciation expense of Intrust Bank Arena in downtown Wichita would recognize and account for the sacrifices of the people of Sedgwick County and its visitors to pay for the arena. But the county doesn’t do that, at least not in its most visible annual reporting of the arena’s financial results.

Governments locally do have a measure of what they consider to be “profit.” It’s the benefit-cost ratio calculated by the Center for Economic Development and Business Research (CEDBR) at Wichita State University. This is the source of the “$1 invested and get a return of over $2.40” that Schmitt referenced. But the “benefits” that go into this calculation are quite different from the profits that business firms attempt to earn. Most importantly, the benefits that government claims are not really benefits. Instead, they’re in the form of additional tax revenue paid to government. This is very different from the profits companies earn in voluntary market transactions.

Government usually claims that in order to get these “benefits,” the incentives must be paid. But often the new economic activity (expansion, etc.) would have happened anyway without the incentives. There is much evidence that economic development incentives rank low on the list of factors businesses consider when making investments. A related observation is that if the relatively small investment government makes in incentives is solely or even partially responsible for such wonderful outcomes in terms of jobs, why doesn’t government do this more often? If the Sedgwick County Board of Commissioners has such power to create economic growth, why is anyone unemployed?

Those, like Gary Schmitt, who are preparing to lead Wichita’s efforts in stimulating its economy believe that government should take on a larger role. We need to make sure that these leaders understand the fundamental differences between government and business, and how government can — and can’t — help business grow.

Following is an excerpt from the meeting minutes:

Chairman Skelton said, “Okay, thank you. Anybody else who wishes to speak today? Please state your name and address for the record.”

Mr. Gary Schmitt, (address redacted to respect privacy) greeted the Commissioners and said, “I work at Intrust Bank and I am the Vice-Chair of GWEDC. Thank you for the opportunity to speak to you today. I want to thank all of you also for just saving the county $700,000 by refinancing the bond issue. I think that was a great move. I think that’s exactly what we need to do to help support our county.

Mr. Schmitt said, “Also want to say I think Starwood coming to Wichita with 900 jobs in the very near future is a big win for Wichita, for Sedgwick County and our community. And I just want to encourage you to support the $200,000 investment. I know at the bank where I work, if we had a $1 invested and get a return of over $2.40, we would consider that a very good investment in the future. And I think having 900 people employed in basically starter jobs, or jobs to fill the gap in their financial needs for their families is very important also. So thank you very much for the opportunity to speak. I encourage you to support positive vote on this.”

Chairman Skelton said, “Commissioner Peterjohn.”

Commissioner Peterjohn said, “Mr. Schmidt, I thank you for coming down and speaking today and your efforts on behalf of GWEDC. One of the things I struggle with these issues when they come before the Commission is what is the, how do we come up with an optimum number? I mean, why is $200,000 the right figure for the county’s contribution. And also, I mean, other than the fact that the city approved a similar amount yesterday, and when this comes to us and the calculations are coming from a, I think, a basic input and output model that fluctuates, depending on what assumptions you feed into it, I struggle with, you know, how do we determine, when you get a proposal at the bank, somebody comes in and says, hey, I would like to borrow x number of dollars for this project, we expect a net present value or rate of return of so much, and based on a loan cost of a certain interest rate, we get those very specific calculations. Can you provide any insight, in terms of why $200,000 is the optimal number for this forgivable loan over 5 years, and help me out on that point?”

Mr. Schmitt said, “I’ll try. GWEDC basically is a cooperation between businesses, business community leaders and also the city and the county government. We sort of have all the players at the table. And it’s very similar to what we do at the bank, when somebody comes in and asks for a proposal, we have to understand what our capacity is, what our expectations are, and we analyze all that. By using WSU calculate return on investment, that’s similar to what we do at the bank to calculate our return on investment. Now, I’m sure Starwood would be very excited if we said we will give you $2 million instead of $200,000, but we negotiated a number that we thought was acceptable to Starwood and also us.

“Very similar what we do at the bank when we negotiate loan amounts or rates. So it is very much a business decision to try to figure out how to bring 900 jobs to our community without overspending or over committing. So, Mr. Peterjohn, I think we’ve tried to do everything we can to bring the best deal to the community we possibly can.”

Commissioner Peterjohn said, “Well then help me out, in terms of the point that was raised over, we’ve got a forgivable loan for five years, but the calculation, in terms of return and so on are over 10 years. So basically our clawback provisions don’t exist from year 6 through 10.”

Mr. Schmitt said, “Well…”

Commissioner Peterjohn said, “And then you’ve got that disparity.”

Mr. Schmitt said, “You know, the other interesting thing is they have a 15 year lease out there on the building. So our expectation is they will be a minimum of 15 years. So do we do it on 5, 10, or 15 years. So, I understand your question. I don’t know the answer to that.”

Commissioner Peterjohn said, “Okay. Thank you for coming down and providing…” Mr. Schmitt said, “You are welcome. Thank you.”

Commissioner’s questions halt county’s plan to remove trees on private land

Sedgwick County Kansas seal

Good job, Sedgwick County Commissioner Richard Ranzau. It’s always good to put the kibosh on unneeded government spending.

At stake was about $47,000, just less than the annual median household income in Sedgwick County.

County Manager William Buchanan had signed off on spending $46,685 to clear out trees on private property along Central Avenue from the entrance of housing development St. Andrew’s Place east to 143rd Street. Work was to start next week.

But questioning by County Commissioner Richard Ranzau put the kibosh on the project, and the Minneha Township now will have to pay the tab if it wants the trees gone.

“We got out in front of ourselves without doing much critical thinking, and I take full responsibility for that,” Buchanan said.

Continue reading at the Wichita Eagle.

Readers may remember my op-ed in that same newspaper from 2009:

Last year a political science professor who is a keen observer of Kansas politics told me that city or county managers shouldn’t be in their jobs more than four or five years. After that, he said, they gain too much power.

If managers are to serve their councils or commissions — instead of the other way around — sometimes a change needs to be made, just for the sake of change.

This alone is enough reason for change in the Sedgwick County manager’s office after 18 years of County Manager William Buchanan.

Continue reading this at Commission has cause to want a new manager.

Sedgwick County votes for harmful intervention

man-digging-coinsIt’s harmful when citizens are not armed with information and research. But when government officials and bureaucrats with the power to tax and plan our economies are uninformed, people suffer as our economy becomes less prosperous than it could be.

Today, in the name of creating jobs, the Sedgwick County Commission voted in favor of granting an economic development incentive to an expanding Wichita manufacturing firm. Commissioners Karl Peterjohn and Richard Ranzau voted against the award.

The action taken today is in addition to an award by the State of Kansas, and another likely to be awarded by the Wichita City Council. See Why is business welfare necessary in Wichita? for more background.

Intervention in the economy such as this does more harm than good, as we’ll see in a moment. It’s important that we learn the facts about incentives like these, as the Wichita area has the potential to become even more dependent on incentives and subsidies as a way of economic development.

For example, the president of Greater Wichita Economic Development Coalition recently broadcast an email with the subject heading “Investor Alert: WBJ outlines Mars Deal Development Incentives as one example of Aggressive Competition.” The email read as follows:

Dear Investors,

You are well aware of the Mars deal in Topeka and you are likely aware that no city outside the greater Kansas City Metro Area was given the opportunity to bid this project.

In my mind the take away from this Wichita Business Journal article is that our competition — local, state and international — have enormous tools to ensure economic development success.

The Mars project has the potential to receive $9.1 million in local incentives over the next five years not including the property tax abatement estimated at $10.0M.

Tim Chase

Messages like this — that we don’t have enough tools to compete — are common in Wichita. Politicians like Wichita Mayor Carl Brewer call for devoted revenue streams to fund economic development incentives.

What, though, is the track record of incentives? Those who, like myself, call for an end to their use: Don’t we want people to have jobs?

We need to decide what to believe. Should we believe our own eyes — that is, what we can easily see or are being told by our leaders — or something else?

Here’s a summary of the peer-reviewed academic research that examines the local impact of targeted tax incentives from an empirical point of view. “Peer-reviewed” means these studies were stripped of identification of authorship and then subjected to critique by other economists, and were able to pass that review.

Ambrosius (1989). National study of development incentives, 1969 — 1985.
Finding: No evidence of incentive impact on manufacturing value-added or unemployment, thus suggesting that tax incentives were ineffective.

Trogan (1999). National study of state economic growth and development programs, 1979 — 1995.
Finding: General fiscal policy found to be mildly effective, while targeted incentives reduced economic performance (as measured by per capita income).

Gabe and Kraybill (2002). 366 Ohio firms, 1993 — 1995.
Finding: Small reduction in employment by businesses which received Ohio’s tax incentives.

Fox and Murray (2004). Panel study of impacts of entry by 109 large firms in the 1980s.
Finding: No evidence of large firm impacts on local economy.

Edmiston (2004). Panel study of large firm entrance in Georgia, 1984 — 1998
Finding: Employment impact of large firms is less than gross job creation (by about 70%), and thus tax incentives are unlikely to be efficacious.

Hicks (2004). Panel study of gaming casinos in 15 counties (matched to 15 non-gambling counties).
Finding: No employment or income impacts associated with the opening of a large gambling facility. There is significant employment adjustment across industries.

LaFaive and Hicks (2005). Panel study of Michigan’s MEGA tax incentives, 1995 — 2004.
Finding: Tax incentives had no impact on targeted industries (wholesale and manufacturing), but did lead to a transient increase in construction employment at the cost of roughly $125,000 per job.

Hicks (2007a). Panel study of California’s EDA grants to Wal-Mart in the 1990s.
Finding: The receipt of a grant did increase the likelihood that Wal-Mart would locate within a county (about $1.2 million generated a 1% increase in the probability a county would receive a new Wal-Mart), but this had no effect on retail employment overall.

Hicks (2007b). Panel study of entry by large retailer (Cabela’s).
Finding: No permanent employment increase across a quasi-experimental panel of all Cabela’s stores from 1998 to 2003.

(Based on Figure 8.1: Empirical Studies of Large Firm Impacts and Tax Incentive Efficacy, in Unleashing Capitalism: Why Prosperity Stops at the West Virginia Border and How to Fix It, Russell S. Sobel, editor. Available here.)

In discussing this research, the authors of Unleashing Capitalism explained:

Two important empirical questions are at the heart of the debate over targeted tax incentives. The first is whether or not tax incentives actually influence firms’ location choices. The second, and perhaps more important question, is whether, in combination with firms’ location decisions, tax incentives actually lead to improved local economic performance.

We begin by noting that businesses do, in fact, seem to be responsive to state and local economic development incentives. … All of the aforementioned studies, which find business location decisions to be favorably influenced by targeted tax incentives, also conclude that the benefits to the communities that offered them were less than their costs.

So yes, business firms are influenced by incentives. But the cost of the incentives is greater than the benefit. This research shows, over and over, that the cost-benefit ratio analysis that decision makers use is not meaningful or reliable.

So why do we use incentives? Why do so few in government or the public understand? Continuing from Unleashing Capitalism:

Given serious doubts about the efficacy of tax incentives, why are they so popular? The answer is that businesses looking to expand their plants or to move to new locations have strong incentives to lobby for tax breaks and other subsidies that add to owners’ profits and, moreover, encouraging a bidding war between two or more state or local governments promises to increase the value of the incentives they can extract from any one of them. Politicians interested in re-election, in turn, have strong incentives to respond to private firms’ self-serving subsidy demands in order to take credit for enticing a high-profile company to town or to avoid blame for the jobs that would be lost if an existing employer moved to another location. The politicians will be supported on the tax-incentive issue by other groups having immediate financial stakes in the process, including local real estate developers, investment bankers (who float public bond issues and arrange financing for the incoming firm), and economic development officials whose livelihoods depend on success in chasing after ornaments to add to the local or state economy.

The special interests of subsidy-seeking private firms dominate the political process because voter-taxpayers are only weakly motivated to become informed about the costs of tax incentive programs and to organize in opposition to them. They see the jobs “created” at a new plant; they do not see the jobs that are lost elsewhere in the economy as a result of the higher tax burden imposed on other businesses and as a result of the economic resources reallocated from productive activities toward lobbying government to obtain these favors. Nor can they readily see the higher future tax bill they themselves will be required to pay in order to amortize and service the public debt issued to finance the subsidies diverted into the pockets of the owners of politically influential private companies.

“Politicians interested in re-election.” This describes almost all elected officials.

“Economic development officials whose livelihoods depend on success in chasing after ornaments.” This is Tim Chase and the other members of the economic development regime in Wichita.

Today, in explaining his vote in favor of granting a target economic development incentive, Sedgwick County Commissioner Dave Unruh recognized a “certain pragmatism that is required here.” He said we’re really concerned about jobs, and that jobs is the number one priority. Sometimes creating jobs requires us, he said, to compete in the practical world. It would be better if there were no incentives, he said. “But the truth of the matter is that we have to sometimes provide incentives, subsidies, abatements, whatever category it falls in, in order to compete and secure the jobs and company that we’re trying to win.”

This is the standard argument, even of politically liberal members of commissions and councils. Jobs, jobs, jobs. We don’t like to use incentives — they all say this, especially conservatives — but we learned that we must use incentives if we want jobs. This embrace of pragmatism is called “maturing in office.”

But I would ask these officials like Unruh this question: What about all the research that says incentives do more harm to jobs than good?

What do Commissioners Unruh, Skelton, and Norton believe phrases like these mean?

No evidence of incentive impact on manufacturing value-added or unemployment”

Small reduction in employment by businesses which received Ohio’s tax incentives”

No evidence of large firm impacts on local economy”

No permanent employment increase across a quasi-experimental panel of all Cabela’s stores”

“Employment impact of large firms is less than gross job creation (by about 70%)”

These research programs illustrate the fallacy of the seen and the unseen. It is easy to see the jobs being created by economic development incentives. I do not deny that jobs are created at firms that receive incentives, at least most of the time. But these jobs are easy to see, and government makes sure we see them. We’re going to endure the groundbreaking and ribbon-cutting ceremonies. It’s easy for news reporters to find the newly-hired and grateful workers, or to show video footage of a new manufacturing plant.

But it’s very difficult to find specific instances of the harm that government intervention produces. It is, generally, dispersed. People who lose their jobs usually don’t know the root cause of why they are now unemployed. Businesses whose sales decline often can’t figure out why.

But uncontroverted evidences tells us this is true: These incentives, along with other forms of government interventionism, do more harm than good.

We can understand the average citizen being susceptible to arguments make by the likes of GWEDC’s Chase and the three Sedgwick county commissioners that voted for this incentive. Citizens generally don’t have the education, the time, and the initiative to evaluate these matters.

But for economic development professionals and elected officials with the power to tax and spend? Not knowing this research is inexcusable, and ignoring it is deplorable.

Sedgwick County tower sale was not in citizens’ best interest

The sale of a radio tower owned by Sedgwick County reveals another case of local government not looking out for the interests of citizens and taxpayers, with the realization that the stain of cronyism is alive and well.

As a result of system upgrades, the county no longer needs a radio tower located near 77th Street North and Interstate 135. Pixius Communications, LLC made an offer to purchase the tower and the five acre tower site for $280,000. The county proceeded making arrangements for the sale, preparing a sales agreement contract between Sedgwick County and Pixius with a sales price of $280,000, along with several other legal documents necessary to support the sale. These documents are available at the agenda file for this item.

According to sources, County Manager William Buchanan supported the Pixius offer. So did commissioners Dave Unruh and Jim Skelton.

But commissioners Richard Ranzau and Karl Peterjohn felt that the best way to sell the tower was through an auction.

Commission Chair Tim Norton, because of his receipt of campaign contributions from Pixius, Jay Maxwell (owner of Pixius), and Penny Maxwell (spouse of owner), was going to abstain from voting. (Skelton has accepted contributions from the Maxwells, but he was going to vote nonetheless.)

So there was not a majority of three votes to accept the Pixius offer. Buchanan suggested the auction. All commissioners agreed.

Now we know the results of the auction: A Florida company offered $610,000. After a sales commission ($55,000) and half of closing costs ($1,128), the county will net $553,872. That’s almost twice the price the county manager and two commissioners were willing to sell the tower for.

There’s something else: What will be the appraised value of the tower and site for tax purposes? The selling price of a property is strong evidence of its value. As a result of the auction, therefore, this property is likely to be appraised at $610,000 instead of $280,000. That’s good for those who think it’s good for government to bring in more tax revenue.

This episode is another instance where no-bid contracts and cronyism cost taxpayers. Maxwell, the almost-beneficiary of this sweetheart no-bid contract, has been the recipient of many benefits at taxpayer expense, such as tax increment financing and community improvement district taxes. He’s tried for more, but even the Wichita City Council has a limit to its cronyism, now and then. Although cronyism and no-bid contracts have been a problem at Wichita City Hall.

Interestingly, a recent KSN Television news story characterized Ranzau and Peterjohn as “hardline fiscal conservatives.” The story went on to report “Incumbent Democrat Tim Norton often sides with the two more moderate members of the commission with many votes being decided by a 3-2 margin.” Those moderate members are, of course, Unruh and Skelton.

Norton didn’t have to take sides — at least publicly — on this issue, but I’m confident that if this was not an election year for Norton, he would have voted for the original Pixius deal that we now see was a disaster for taxpayers.

In the KSN story Norton was quoted as saying “I’m a business man of many years in Wichita. I understand the business climate and job retention.”

Unruh and Skelton are also businessmen. I hope these commissioners look after their personal business with more care and concern than they have shown for the business of taxpayers.

Special interests will capture south-central Kansas planning

Special interest groups are likely to co-opt the government planning process started in south-central Kansas as these groups see ways to benefit from the plan. The public choice school of economics and political science has taught us how special interest groups seek favors from government at enormous costs to society, and we will see this at play over the next few years.

Sedgwick County has voted to participate in a HUD Sustainable Communities Regional Planning Grant. While some justified their votes in favor of the plan because “it’s only a plan,” once the planning process begins, special interests plot to benefit themselves at the expense of the general public. Once the plan is formed, it’s nearly impossible to revise it, no matter how evident the need.

An example of how much reverence is given to government plans comes right from the U.S. Supreme Court in the decision Kelo v. New London, in which the Court decided that government could use the power of eminent domain to take one person’s property and transfer it to someone else for the purposes of economic development. In his opinion for the Court, Justice Stevens cited the plan: “The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community.” Here we see the importance of the plan and due reverence given to it.

Stevens followed up, giving even more weight to the plan: “To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.”

To Stevens, the fact that the plan was comprehensive was a factor in favor of its upholding. The sustainable communities plan, likewise, is nothing but comprehensive, as described by county manager Bill Buchanan in a letter to commissioners: “[the plan will] consist of multi-jurisdictional planning efforts that integrate housing, land use, economic and workforce development, transportation, and infrastructure investments in a manner that empowers jurisdictions to consider the interdependent challenges of economic prosperity, social equity, energy use and climate change, and public health and environmental impact.”

That pretty much covers it all. When you’re charged with promoting economic prosperity, defending earth against climate change, and promoting public health, there is no limit to the types of laws you might consider.

Who will plan?

The American Planning Association praised the Court’s notice of the importance of a plan, writing “This decision underscores the importance for a community to have a comprehensive development plan formulated through a democratic planning process with meaningful public participation by everyone.”

But these plans are rarely by and for the public. Almost always the government planning process is taken over and captured by special interests. We see this in public schools, where the planning and campaigning for new facilities is taken over by architectural and construction firms that see school building as a way to profit. It does not matter to them whether the schools are needed.

Our highway planning is hijacked by construction firms that stand to benefit, whether or not new roads are actually needed.

Our planning process for downtown Wichita is run by special interest groups that believe that downtown has a special moral imperative, and another group that sees downtown as just another way to profit at taxpayer expense. Both believe that taxpayers across Wichita, Kansas, and even the entire country must pay to implement their vision. As shown in Kansas and Wichita need pay-to-play laws the special interests that benefit from public spending on downtown make heavy political campaign contributions to nearly all members of the Wichita City Council. They don’t have a political ideology. They contribute only because they know council members will be voting to give them money.

In Wichita’s last school bond election, 72 percent of the contributions, both in-kind and cash, was given by contractors, architects, engineering firms and others who directly stand to benefit from new school construction, no matter whether schools are actually needed. The firm of Schaefer Johnson Cox Frey Architecture led the way in making these contributions. It’s not surprising that this firm was awarded a no-bid contract for plan management services for the bond issue valued at $3.7 million. This firm will undoubtedly earn millions more for those projects on which it serves as architect.

The special interest groups that benefit from highway construction: They formed a group called Economic Lifelines. It says it was formed to “provide the grassroots support for Comprehensive Transportation Programs in Kansas.” Its motto is “Stimulating economic vitality through leadership in infrastructure development.”

A look at the membership role, however, lets us know whose economic roots are being stimulated. Membership is stocked with names like AFL-CIO, Foley Equipment Company, Heavy Constructors Association of Greater Kansas City, Kansas Aggregate & Concrete Associations, Kansas Asphalt Pavement Association, Kansas Contractors Association, Kansas Society of Professional Engineers, and PCA South Central Cement Promotion Association. Groups and companies like these have an economic interest in building more roads and highways, whether or not the state actually needs them.

The planners themselves are a special interest group, too. They need jobs. Like most government bureaucrats, they “profit” from increasing their power and sphere of influence, and by expansion of their budgets and staffs. So when Sedgwick County Commissioner Jim Skelton asks a professional planner questions about the desirability of planning, what answer does he think he will get? It’s not that the planners are not honest people. But they have a vested economic and professional interest in seeing that we have more government planning, not less.

And we have evidence that planners watch out for themselves. It is not disputed that this planning grant benefits Regional Economic Area Partnership (REAP). Sedgwick County Commissioner Richard Ranzau says that John Schlegel, Wichita’s Director of Planning, told him that “acceptance of this grant will take REAP to another level, because right now they are struggling, and this will help plot the course for REAP.” He said that REAP, which is housed at the Hugo Wall School of Public Affairs at Wichita State University, needs to expand its role and authority in order to give it “something to do.”

We see that REAP is another special interest group seeking to benefit itself. In this case, our best hope is that REAP engages in merely make-work, that the plan it produces is put on a shelf and ignored, and that the only harm to us is the $1.5 million cost of the plan.

By the way, did you know that Sedgwick County Commissioner Dave Unruh, who voted in favor of the plan that benefits REAP, is now chairman of REAP? Special interest groups know how to play the political game.

Open records again an issue in Kansas

Responses to records requests made by Kansas Policy Institute are bringing attention to shortcomings in the Kansas Open Records Act.

Those who have made records requests in Kansas are probably not surprised that KPI has had difficulty in having its records requests respected and filled. In 2007 Better Government Association and National Freedom of Information Coalition gave Kansas a letter grade of “F” for its open records law. Last year State Integrity Investigation looked at the states, and Kansas did not rank well there, either. See Kansas rates low in access to records.

This week KPI president Dave Trabert appeared before the Sedgwick County Commission to express his concerns regarding the failure of Greater Wichita Economic Development Coalition to fulfill a records request made under the provisions of the Kansas Open Records Act. Video is at Open government in Sedgwick County Kansas.

While commissioners Karl Peterjohn and Richard Ranzau spoke in favor of government transparency and compliance with records requests, not all their colleagues agreed.

Dave Unruh asked Trabert if GWEDC had responded to his records request. Trabert said yes, and the response from GWEDC is that the agency believes it has complied with the open records law. This, he explained, is a common response from agencies.

Commission Chair Tim Norton expressed concern that any non-profit the commission gives money to would have to hire legal help, which he termed an unintended consequence. He made a motion to receive and file Trabert’s remarks, which is routine. His motion also included taking this matter under advisement, which is what politicians do in order to bury something. Unruh seconded the motion.

Peterjohn made a substitute motion that a representative from GWEDC would appear before the commission and discuss the open records act. This motion passed four to one, with Unruh in the minority. Even though Norton voted in favor of Peterjohn’s motion, it’s evident that he isn’t in favor of more government transparency. Unruh’s vote against government transparency was explicit.

Wichita school district records request

USD 259, the Wichita public school district, also declined to fulfill a records request submitted by KPI. In a press release, KPI details the overly-legalistic interpretation of the KORA statute that the Wichita school district uses to claim that the records are exempt from disclosure.

In a news report on KSN Television, school board president Lynn Rogers explained the district’s reason for denying the records request: “But some school board members with USD 259 in Wichita say, the numbers brought up in court are preliminary numbers. That’s the reason they are not handing them over to KPI. ‘We have worked very hard over the years to be very forthright and we’ve tried to disclose the information when we have it,’ says Lynn Rogers.'”

This claim by Rogers — if sincere — is a break from the past. In 2008 Rogers told me that it is a burden when citizens make requests for records.

Until recently the Wichita school district had placed its monthly checkbook register on its website each month, and then removed it after a month had passed. Rogers explained that the district didn’t have space on its servers to hold these documents. That explanation is total nonsense, as the pdf check register documents are a very small fraction of the size of video files that the district hosted on its servers. Video files, by the way, not related to instruction, but holding coverage of groundbreaking ceremonies.

City of Wichita

KPI has made records requests to other local governmental agencies. Some have refused to comply on the basis that they are not public agencies as defined in Kansas statutes. This was the case when I made records requests to Wichita Downtown Development Corporation, Greater Wichita Economic Development Coalition, and Go Wichita Convention and Visitors Bureau.

In 2009 I addressed the Wichita City Council and asked that the city direct that WDDC follow the law and fulfill my records requests. (Video is at Video: City of Wichita and the Kansas Open Records Act.)

In my remarks, I told Mayor Carl Brewer and the council this:

The Kansas Open Records Act (KORA), in KSA 45-216 (a) states: “It is declared to be the public policy of the state that public records shall be open for inspection by any person unless otherwise provided by this act, and this act shall be liberally construed and applied to promote such policy.”

But in my recent experience, our city’s legal staff has decided to act contrary to this policy. It’s not only the spirit of this law that the city is violating, but also the letter of the law as well.

Recently I requested some records from the Wichita Downtown Development Corporation. Although the WDDC cooperated and gave me the records I requested, the city denies that the WDDC is a public agency as defined in the Kansas Open Records Act.

This is an important issue to resolve.

In the future, requests may be made for records for which the WDDC may not be willing to cooperate. In this case, citizens will have to rely on compliance with the law, not voluntary cooperation. Or, other people may make records requests and may not be as willing as I have been to pursue the matter. Additionally, citizens may want to attend WDDC’s meetings under the provisions of the Kansas Open Meetings Act.

Furthermore, there are other organizations similarly situated. These include the Greater Wichita Economic Development Coalition and the Go Wichita Convention and Visitors Bureau. These organizations should properly be ruled public agencies as defined in the Kansas Open Records Act so that citizens and journalists may freely request their records and attend their meetings.

Here’s why the WDDC is a public agency subject to the Open Records Act. KSA 45-217 (f)(1) states: “‘Public agency’ means the state or any political or taxing subdivision of the state or any office, officer, agency or instrumentality thereof, or any other entity receiving or expending and supported in whole or in part by the public funds appropriated by the state or by public funds of any political or taxing subdivision of the state.”

The Kansas Attorney General’s office offers additional guidance: “A public agency is the state or any political or taxing subdivision, or any office, officer, or agency thereof, or any other entity, receiving or expending and supported in whole or part by public funds. It is some office or agency that is connected with state or local government.

The WDDC is wholly supported by a special property tax district. Plain and simple. That is the entire source of their funding, except for some private fundraising done this year.

The city cites an exception under which organizations are not subject to the Kansas Open Records Act: “Any entity solely by reason of payment from public funds for property, goods or services of such entity.”

The purpose of this exception is so that every vendor that sells goods and services to government agencies is not subject to the Kansas Open Records Act. For example, if a city buys an automobile, the dealer is not subject simply because it sold a car to the city.

But this statute contains an important qualifier: the word “solely.” In this case, the relationship between the City of Wichita and the WDDC is not that of solely customer and vendor. Instead, the city created a special tax district that is the source of substantially all WDDC’s revenue, and the existence of the district must be renewed by the city soon. The WDDC performs a governmental function that some cities decide to keep in-house. The WDDC has only one “customer,” to my knowledge, that being the City of Wichita.

Furthermore, the revenue that the WDDC receives each year is dependent on the property tax collected in the special taxing district.

The only reasonable conclusion to draw is that in terms of both funding and function, the WDDC is effectively a branch of Wichita city government.

The refusal of the city’s legal department to acknowledge these facts and concede that the WDDC is a public agency stands reason on its head. It’s also contrary to the expressly stated public policy of the state of Kansas. It’s an intolerable situation that cannot be allowed to exist.

Mr. Mayor and members of the council, it doesn’t take a liberal application of the Kansas Open Records Act to correct this situation. All that is required is to read the law and follow it. That’s what I’m asking this body to do: ask the city legal department to comply with the clear language and intent of the Kansas Open Records Act.

The following year when WDDC’s contract was before the council for renewal, I asked that the city, as part of the contract, agree that WDDC is a public agency as defined in Kansas law. (Video is at Kansas Open Records Act at Wichita City Council.) Then-council member Paul Gray, after noting that he had heard all council members speak in favor of government transparency, said that even if WDDC is not a public agency under the law, why can’t it still proceed and fulfill records requests? This is an important point. The Kansas Open Records Act contains many exclusions that agencies use to avoid releasing records. But agencies may release the records if they want.

Any council member could have made the motion that I asked for. But no one, including Gray, former council member Sue Schlapp, former member Jim Skelton (now on the Sedgwick County Commission), Mayor Carl Brewer, and council members Jeff Longwell (district 5, west and northwest Wichita), Janet Miller (district 6, north central Wichita), and Lavonta Williams (district 1, northeast Wichita) would make a motion to increase government transparency and citizens’ right to know. Wichita city manager Robert Layton offered no recommendation to the council.

Last year I appeared again before the council to ask that Go Wichita agree that it is a public agency as defined in the open records act. Randy Brown, who is chair of the Kansas Sunshine Coalition for Open Government and former opinion page editor of the Wichita Eagle was at the meeting and spoke on this matter. In his remarks, Brown said “It may not be the obligation of the City of Wichita to enforce the Kansas Open Records Act legally, but certainly morally you guys have that obligation. To keep something cloudy when it should be transparent I think is foolishness on the part of any public body, and a slap in the face of the citizens of Kansas. By every definition that we’ve discovered, organizations such as Go Wichita are subject to the Kansas Open Records Act.”

Brown said that he’s amazed when public officials don’t realize that transparency helps build trust in government, thereby helping public officials themselves. He added “Open government is essential to a democracy. It’s the only way citizens know what’s going on. … But the Kansas Open Records Act is clear: Public records are to be made public, and that law is to be construed liberally, not by some facile legal arguments that keep these records secret.”

He recommended to the council, as I did, that the contract be contingent on Go Wichita following the Kansas Open Records Act.

Discussion on this matter revealed a serious lack of knowledge by some council members regarding the Kansas Open Records Act. In remarks from the bench James Clendenin (district 3, southeast and south Wichita) asked the city manager a series of questions aimed at determining whether the city was satisfied with the level of service that Go Wichita has provided. He then extended that argument, wondering if any company the city contracts with that is providing satisfactory products or service would be subject to “government intrusion” through records requests. Would this discourage companies from wanting to be contractors?

First, the Kansas Open Records Act does not say anything about whether a company is providing satisfactory service to government. That simply isn’t a factor, and is not a basis for my records request to Go Wichita. Additionally, the Kansas Open Records Act contains a large exception, which excepts: “Any entity solely by reason of payment from public funds for property, goods or services of such entity.” So companies that sell to government in the ordinary course of business are not subject to the open records law. Go Wichita is distinguished, since it is almost entirely funded by taxes and has, I believe, just a single client: the City of Wichita.

Finally, we should note that the open records law does not represent government intrusion, as Clendenin claimed. Open records laws offer citizens the ability to get an inside look at the working of government. That’s oversight, not intrusion.

Pete Meitzner (district 2, east Wichita) asked that there might be a workshop to develop a policy on records requests. He expressed concern that departments might be overwhelmed with requests from me that they have to respond to in a timely fashion, accusing me of “attempt to bury any of our departments in freedom of information acts [sic].” Such a workshop would probably be presented by Wichita City Attorney Gary Rebenstorf. His attitude towards the open records law is that of hostility, and is not on the side of citizens.

In making this argument, Mr. Meitzner might have taken the time to learn how many records requests I’ve made to the city. The answer, to the best of my recollection, is that I made no requests that year to the city citing the open records act. I have made perhaps a half-dozen informal requests, most of which I believe were fulfilled consuming just a few moments of someone’s time.

As to Meitzner’s concern over the costs of fulfilling records requests: The law allows for government and agencies to charge fees to fulfill requests. They often do this, and I have paid these fees. But more important than this, the attitude of council member Meitzner is troubling. Government should be responsive to citizens. As Randy Brown told the council, government should welcome opportunities to share information and be open and transparent.

Michael O’Donnell (district 4, south and southwest Wichita) made a motion that the contract be approved, but amended that Go Wichita will comply with the Kansas Open Records Act. That motion didn’t receive a second.

Brown and I appeared on the KAKE Television public affairs program This Week in Kansas to discuss this matter. Video is at In Wichita, disdain for open records and government transparency.

Enforcement of Kansas Open Records Act

In Kansas, when citizens believe that agencies are not complying with the Kansas Open Records Act, they have three options. One is to ask the Kansas Attorney General for help. But the policy of the Attorney General is to refer all cases to the local District Attorney, which is what I did. The other way to proceed is for a citizen to pursue legal action at their own expense.

After 14 months, Sedgwick County DA Nola Foulston’s office decided in favor of the governmental agencies. See Sedgwick County DA Response to KORA Request to Wichita Downtown Development Corporation.

When newspapers have their records requests refused, they usually give publicity to this. The Wichita Eagle is aware of my difficulties with records requests in Wichita, as their reporters have attended a number of meetings where my records requests were discussed, sometimes at length. But so far no coverage of an issue that, were the newspaper in my shoes, would undoubtedly covered on the front page. Something tells me that KPI won’t get any coverage, either.

Additional information on this topic is at: