Tag Archives: Sam Brownback

Kansas school finance reporting and opinion

school-crayons-colored-pencils-168392There’s a range of opinion, that’s for sure.

Republicans concede bill would let teachers be fired without cause (Wichita Eagle)
“Statehouse Republicans are having to abandon a key talking point in their effort to defuse teacher anger over an anti-tenure bill the Legislature passed a week ago, conceding the bill would allow school districts to fire veteran teachers without having to give a reason why. If Gov. Sam Brownback signs the bill into law, teachers would essentially be at-will employees of their school districts and able to challenge termination only if they allege the firing violates their constitutional rights.” Click here to read.

Kansas bill renews debate about how easy it should be to fire teachers (Kansas City Star)
There is a diversity of opinion, much conflicting, it seems: “It’s not too damn hard to fire a teacher,” said Marcus Baltzell, the director of communications for the Kansas National Education Association. “It’s just that the teacher has a redress of due process, a hearing officer, (a chance to say) ‘Here’s my take. Here’s what we’ve done to address the area of concern, and I believe this is unfair.’” … “Lawmakers who backed the change — it becomes law if Gov. Sam Brownback signs it — argued that dumping dead weight from the faculty has become harder than it ought to be.” … “I don’t like tenure. I never have,” said Rep. Ward Cassidy, a Republican from northwest Kansas who worked as a high school principal for 20 years. “Good principals have a whole lot of other things to do besides going through all you need to fire a teacher.” Click here to read.

In Wichita, Brownback neither praises nor criticizes measure stripping K-12 teacher tenure rights (Wichita Eagle)
“… most questions he was asked after his short talk concerned a provision to strip veteran K-12 teachers of tenure rights in the recently passed public school financing bill, which he said he has not decided whether to sign. And while he didn’t criticize that provision, he didn’t endorse it either.” Click here to read.

In Kansas, education is all about money and politics for UMEEA (Kansas Policy Institute)
“Media reaction to the school finance legislation has been pretty predictable. It focuses almost exclusively on institutions and ignores the impact on students. As usual, it’s all about money and politics. Unions, media and their allies in the education establishment (UMEEA) oppose tax credit scholarships for low income students. They rail against taxpayer money going to private schools and how that might mean a little less money for public institutions but ignore the very real purpose and need for the program. (FYI, the scholarship program is capped at $10 million; schools are expected to spend almost $6 billion this year.) Achievement gaps for low income students are large and getting worse, despite the fact that At Risk funding intended to improve outcomes increased seven-fold over the last eight years. So predictably, a program to give an alternative to low income students in the 99 lowest-performing schools is attacked by UMEEA as being unfair to institutions. Media and their establishment friends don’t even make a token mention of the serious achievement problem. It’s all about money and politics.” Click here to read.

Far-Right Kansas Legislature Sells Out Kansas Schools (Kansas Democratic Party)
“But none of these stories could compete with what the Kansas Legislature did to Kansas public schools. Under the cover of night and with virtually no debate or hearings, the Kansas Legislature forced through an education “reform” bill that stripped teachers of due process rights, passed out even more tax breaks to corporations, and potentially widened the disparity between rich schools and poor schools. School districts say new school finance bill will widen disparities.” Click here to read.

Opinion: Public education under attack (Lawrence Journal-World)
“The inclusion of these so-called “policy” provisions in the school finance bill passed by the Legislature are a mistake and will actually harm the very schools that the Kansas Supreme Court sought to assist. This is just one more step in the Legislature’s assault on public K-12 education in Kansas.” Click here to read.

Teachers are sacrificial lambs in school finance (Iola Register via High Plains Daily Leader and Southwest Daily Times)
A confused editorial. The writer says that teachers are held accountable to, among others, school administrators, but usually it is claimed that teachers need defense from this accountability. “The defense of tenure is at its best when you consider a teacher is accountable to hundreds of ‘bosses’ — parents and school boards as well as administrators.” Click here to read.

Selling education (Hutchinson News)
“Two elements of the bill are particularly troubling. One creates a $10 million-a-year corporate welfare program in support of private education. It allows large companies to enjoy a 70-percent credit against their state tax liability if they offer scholarships to at-risk students who move to private schools. This has nothing at all to do with public education equity; rather it creates a mechanism to damage the finance structure for public schools. The second concerning component redefines “teacher” as a way to eliminate due process protections. And the concept of teacher tenure is a myth. The current due process for teachers simply ensures a written termination notice and the right to challenge the decision through review by a hearing officer. In fact the Kansas Association of School Boards reported that the state sees about 10 due process claims each year – hardly a number that indicates a systemic problem that requires legislative action. The measure is little more than a way to break the teachers’ union and silence those teachers who honestly educate and advocate for their students.” Click here to read.

Richard Crowson: We Need Some Education (KMUW)
“And that guy who was smiling and joking with me in the checkout line at the grocery last Saturday? He lit a firebomb, taped a tax credit for private school supporters on it, and flung it through the window of a first grade classroom in the wee hours of Sunday morning.” Click here to read.

Rep. Rooker ‘heartsick’ over results of education finance bill (Prairie Village Post)
Small steps towards Kansas education reform are “immoral” and make this representative “heartsick.” Click here to read.

Shame, says Wichita Eagle editorial board (Voice for Liberty)
The Wichita Eagle editorial board, under the byline of Rhonda Holman, issued a stern rebuke to the Kansas Legislature for its passage of HB 2506 over the weekend. Click here to read.

apple-chalkboard-books

Kansas school finance lawsuit reaction

apple-chalkboard-booksFollowing is news coverage and reaction to the Kansas school finance lawsuit Luke Gannon, et al v. State of Kansas.

Press release from Kansas Supreme Court
The court declared certain school funding laws fail to provide equity in public education as required by the Kansas Constitution and returned the case to Shawnee County District Court to enforce the court’s holdings. The court further ordered the three-judge panel that presided over the trial of the case to reconsider whether school funding laws provide adequacy in public education — as also required by the constitution. … The court set a July 1, 2014, deadline to give the Legislature an opportunity to provide for equitable funding for public education. If by then the Legislature fully funds capital outlay state aid and supplemental general state aid as contemplated by present statutes, i.e., without withholding or prorating payments, the panel will not be required to take additional action on those issues. But if the Legislature takes no action by July 1, 2014, or otherwise fails to eliminate the inequity, the panel must take appropriate action to ensure the inequities are cured.

The full opinion

Court Orders Kansas Legislature to Spend More on Schools New York Times
Kansas’s highest court ruled on Friday that funding disparities between school districts violated the state’s Constitution and ordered the Legislature to bridge the gap, setting the stage for a messy budget battle in the capital this year. … Most of the attention in the case, Gannon v. Kansas, had been focused on the trial court’s order to raise base aid per student to $4,492, a 17 percent increase over the current level, to provide an adequate education for all Kansas students. On Friday, the Supreme Court held that the district court had not applied the proper standard to determine what constituted an adequate funding level and asked the lower court to re-examine that issue. “Regardless of the source or amount of funding, total spending is not the touchstone for adequacy in education” under the State Constitution, the decision read.

Kansas must heed court’s call for fairer school funding Kansas City Star.
The Kansas Supreme Court’s school finance ruling Friday cast a bright light on the Legislature’s willful failure to meet its funding obligations to poorer school districts and their students. The state’s duty to promote equity in public education is well established. A previous court ruling ordered legislators to provide payments to districts with low tax bases to help lessen the gap between them and districts that can more easily raise money through property taxes. But in 2010 the Legislature cut off equalization money meant to help poorer districts with capital needs. A year later, lawmakers even amended a statute to excuse themselves from providing money for that purpose through 2017. They also reduced and prorated supplemental payments to help less wealthy districts meet day-to-day needs.

Court declares Kansas’ school funding levels unconstitutional Los Angeles Times
The Kansas Supreme Court has ruled that the state’s current levels of school funding are unconstitutional, and ordered the Legislature to provide for “equitable funding for education” by July 1. The long-anticipated ruling was a victory for education advocates in the state, but it may be a short-lived one as the Legislature has vowed to defy court orders on the subject. … According to an analysis by the Center on Budget and Policy Priorities, Kansas is spending 16.5% less per student, or $950 per pupil, on education in 2014 than it did in 2008.

Kansas Supreme Court finds inequities in school funding, sends case back to trial court Wichita Eagle
The Kansas Supreme Court found some unfairness — but not necessarily too few dollars — in the state’s funding of schools and sent a mammoth school-finance case back to a lower court for further action. The court found disparities between districts to be unconstitutional and set a July 1 deadline for lawmakers to address that. But it stopped short of saying the state is putting too few dollars in the pot, leaving that issue for another day. … Both school advocates and Republican lawmakers declared partial victory in the wake of the ruling in the lawsuit brought by the Wichita school district and others against the state. But they offered strikingly different interpretations of the decision.

Kansas Supreme Court on school finance: A summary of the ruling Lawrence Journal-World

Court decision gives little clarity on adequacy of K-12 funding Topeka Capital-Journal
Plaintiffs and interested third parties articulated different interpretations of Friday’s school finance ruling, with some saying it is a call for more K-12 funds and conservative groups saying there is no rush.

KS Supreme Court: Legislators made ‘unconstitutional’ school funding choices Kansas Watchdog
In a long-awaited decision, the Kansas Supreme Court on Friday ruled that state lawmakers created “unconstitutional” and “unreasonable wealth-based disparities” by withholding certain state aid payments to public schools. … While the Supreme Court unanimously upheld a lower court decision regarding the state’s failure to equitably disburse capital outlay and supplemental general payments to Sunflower State schools, it stopped short of issuing a decree for specific funding to meet the Legislature’s constitutional requirement to provide an “adequate” education.

Governor Sam Brownback and legislative leadership outline opportunity for progress following Kansas Supreme Court Ruling on Education Funding (full press release)
Today Governor Sam Brownback, joined by Attorney General Derek Schmidt, Senate President Susan Wagle and House Speaker Ray Merrick and other legislators responded to the Kansas Supreme Court ruling on the Gannon vs Kansas case. “We have an opportunity for progress,” Governor Brownback said. “My commitment is to work with legislative leadership to address the allocation issue identified by the court. We will fix this.” The court has set out steps for the legislature to end the lawsuit by July 1, 2014. It affirms the Constitutional requirement for education to be “adequate” and “equitable.” “Our task is to come to resolution on capital outlay funding and local option budgets before July 1,” said Senate President Wagle. “We now have some clarity as we work toward resolution of issues that began years ago under prior administrations.”

Davis comments on Gannon ruling
The court today made it clear that the state has not met its obligation to fund Kansas schools in equitable way. It is time to set it right and fund our classrooms.

Kansas Policy Institute
Statement from Dave Trabert, the president of Kansas Policy Institute, in response to Gannon v. State of Kansas:
“We’re encouraged that the Court ruled that total spending cannot be used to measure adequacy. This is especially important because spending is currently based on deliberately-inflated numbers in the old Augenblick & Myers report. To this day, no one knows what it costs for schools to achieve required outcomes while also making efficient use of taxpayer money. “The next step in helping each student succeed while acting responsibly with taxpayer money is to model a K-12 Finance Commission on the KPERS Study Commission. The Legislature and Governor Brownback should determine what schools need to achieve required outcomes while organized and operating in a cost-effective manner, including appropriate equity measures, and fund schools accordingly.”

Americans for Prosperity-Kansas
The Kansas chapter of the grassroots group Americans for Prosperity released the following statement in response to the Kansas Supreme Court’s school finance decision handed down today:
“For years, those demanding more education spending have ignored anything other than the base state aid per pupil which is only part of overall education funding,” said AFP-Kansas State Director Jeff Glendening. “We are pleased that the Supreme Court has specifically directed that ‘funds from all available resources, including grants and federal assistance, should be considered,’ and that ‘total spending is not the touchstone for adequacy.’
“In light of the Court’s ruling that ‘adequacy’ of education is determined by student outcomes rather than spending, and adopted standards similar to those adopted by the legislature in 2005, now is the time to consider how we are spending education dollars.
“Kansans are spending more than an average of $12,700 per student, and K-12 education currently makes up more than half of our state budget. Despite that, less than 60 percent of education dollars actually make it into the classroom. To meet the educational standards set out by the Legislature and Supreme Court, and give every Kansas child the opportunity they deserve, we must do better.
“We know that the discussion of school finance is not over, and will continue to play out in the courts as the Supreme Court sent the issue of ‘adequacy’ back to the District Court. It’s our hope that the lower court will carefully look at student outcomes and local spending decisions, rather than automatically demanding more state spending, and recognize its role in the constitutionally-defined separation of powers.”

Kansas National Education Association
We are disappointed that today’s announcement by the Kansas State Supreme Court prolongs a resolution of the school finance issue. It didn’t deal directly with the current critical need in Kansas public schools. Together, the citizens of Kansas made sacrifices at a time when the state and national economy were in crisis. During that time Kansans came together and dealt with staggering cuts to education, believing the promise of full restoration to public school funding once the state economy had rebounded.

Kansas Supreme Court rules in school finance case Kansas Health Institute
Kansas’ top court today released its long-awaited decision in the school finance case and while the ruling settled little for now, both sides in the litigation said they found things to like about it.

Attorney General Derek Schmidt, whose office defended the state in Gannon v. State of Kansas, said he didn’t believe the mixed decision would necessarily require the Legislature to spend more on K-12 schools, though that would be one option for making the state’s school finance formula constitutional again. … But representatives of the school districts that took to court claiming state aid dollars have been unequal and inadequate said they felt confident they would win the remainder of their points at retrial and that the Legislature would need to authorize an added $129 million in K-12 spending by July 1 to meet the standards spelled out in the unanimous decision. “We are not concerned about this. All of our proof at trial was presented using the correct standard that the court now directs to be used,” at retrial, said John Robb an attorney for the four public school districts that sued the state.

Kansas Supreme Court issues ruling on school finance Wichita Public Schools
The Kansas Supreme Court issued its ruling on the school finance lawsuit on March 7. It upholds the concept that the legislature must adequately fund schools in Kansas and that the funding must be distributed equitably. It requires the Kansas Legislature to fund capital outlay and Local Option Budget equalization by July 1, 2014. That means immediate increases in some state funding for education. … “Overall, we think this is a great ruling for Wichita and Kansas kids,” said Lynn Rogers, BOE member. “It upholds the concept that the State of Kansas is responsible for adequately and equitably funding our students’ education.” Rogers said that the lawsuit is for all Kansas students and that they deserve a quality education regardless of where they live in the state. “The education we provide is the foundation for our workforce and the future of Kansas,” said Superintendent John Allison. “If we don’t give our students a quality education now, we will pay for it in the future.”

Kansas school employment

Kansas school employment: The statistics and the claims

School

Claims made about Kansas schools don’t match the state’s statistics.

Responding to the State of the State Address delivered by Kansas Governor Sam Brownback, Kansas House of Representatives Minority Leader and gubernatorial candidate Paul Davis provided figures regarding Kansas public schools, telling Kansans: “On top of that, public school class sizes are growing, [and] teachers have been laid off by the thousands.”

Statistics from Kansas State Department of Education, however, show that school employment has rebounded, both in terms of absolute numbers of teachers and certified employees, and the ratios of pupils to these employees.

Kansas school employment

The story is not the same in every district. But considering the entire state, two trends emerge. For the past two years, the number of teachers employed in Kansas public schools has risen. Correspondingly, the pupil-teacher ratio has fallen. (This ratio is not the same statistic as average class size, but it’s the data we have. Plus, if schools are hiring teachers at a rate higher than the increase in students, we should expect class sizes to fall.)

Kansas school employment ratios

The trend for certified employees is a year behind that of teachers, but for the last year, the number of certified employees has risen, and the ratio to pupils has fallen.

I’ve created interactive visualizations that let you examine the employment levels and ratios in Kansas school districts. Click here for the visualization of employment levels. Click here for the visualization of ratios (pupil-teacher and pupil-certified employee). Data is from Kansas State Department of Education. Visualization created by myself using Tableau Public.

There’s also this to consider about class size. In 2011 the Center for American Progress released a report about class size reduction in schools and the false promise it holds for improving student achievement. (The False Promise of Class-Size Reduction)

It’s quite astonishing to see CAP cite evidence from Eric Hanushek of the Hoover Institution and Caroline Hoxby of Stanford and Hoover. These two researchers are usually condemned by the public education establishment and bureaucracy, including teachers unions. These are some of the key constituents CAP usually caters to.

In a nutshell, class size reduction produces very little benefit for students. It’s also very expensive, and there are other things we should be doing instead if we really want to increase student achievement.

The report summarizes the important studies in class size reduction. The upshot is that there is only one study showing positive results from class size reduction, and that effect was found only among the early grades. The effect decreased after a few years, even though small class sizes were still used.

The report also notes that class size reduction is very expensive to implement. Because it is, the report says we should look to other ways to increase student achievement, such as policies relating to teacher effectiveness: “The emerging consensus that teacher effectiveness is the single most important in-school determinant of student achievement suggests that teacher recruitment, retention, and compensation policies ought to rank high on the list.”

On teacher quality and teacher effectiveness: When Sandi Jacobs of National Council for Teacher Quality appeared in Kansas a few years ago, we learned that Kansas ranks below average on its policies that promote teacher quality.

In the example she illustrated, third graders who had teachers in the top 20 percent of effectiveness for the next three years went from the 50th percentile in performance to the 90th. For students with teachers in the lowest 20 percent for the same period, their performance dropped from the 50th percentile to the 37th percentile. More on this topic is at Kansas ranks low in policies on teacher quality.

Kansas school spending, according to the Telegram

newspaper-154444_150
Another Kansas newspaper editorial shows that when writing about Kansas school spending, facts are sometimes not observed.

The Garden City Telegram analyzed the recent State of the State address delivered by Kansas Governor Sam Brownback. In an editorial, the newspaper wrote: “In his speech, Brownback mentioned the quest for ‘world-class education’ in Kansas. But during his time in office, he presided over the largest overall cut in public education funding in the state’s history.” (School daze, January 18, 2014)

kansas-school-spending-per-student-2013-10-chart-01

Nearby is a chart of Kansas school spending (click it for a larger version). It’s adjusted for inflation. Spending is not as high as it was at its peak, but the newspaper’s claims of “largest overall cut” don’t match the facts. The Telegram editorial writers might also care to note who was governor when spending did decline.

Those who claim school spending has been cut or is inadequate usually cite only base state aid per pupil, which has fallen. But it’s only the starting point for all the other spending. In totality, spending on schools in Kansas is over three times the level of base state aid. Also, comparisons are often made to what the Kansas Supreme Court said base state aid should be to its actual value. But the court doesn’t know how much should be spent on schools.

It’s important to consider the totality of spending and not just base state aid. It’s important because total spending is so much greater than base state aid. Also, total spending accounts for some of the difficulties and expenses that schools cite when asking for higher spending.

For example, schools often point to non-English speaking students and at-risk students as being expensive to educate. In recognition of this, the Kansas school finance formula makes allowances for this. According to the Kansas Legislator Briefing Book for 2013, the weighting for “full-time equivalent enrollment in bilingual education programs” is 0.395. This means that for each such student a school district has, an additional 39.5 percent over base state aid is given to the district.

For at-risk pupils, the weighting is 0.456. At risk students, according to the briefing book, “are determined on the basis of at-risk factors determined by the school district board of education and not by virtue of eligibility for free meals.”

Taken together, bilingual students considered to be at-risk generate an additional 85.1 percent of base state aid to be sent to the district, per student.

These weightings are the reason why that while base state aid per pupil was $3,838 last year, total state aid per pupil was $6,984. Total state spending was 1.82 times base state aid.

Kansas school test scores, the subgroups

To understand Kansas school test scores, look at subgroups.

Kansans are proud of their public schools. The public school education establishment refers with pride to top-ten rankings among the states on the National Assessment of Educational Progress (NAEP), known as “The Nation’s Report Card.”

In his recent State of the State Address, Kansas Governor Sam Brownback made a similar claim, stating “According to the most recent National Assessment of Educational Progress, Kansas fourth graders are in one of the 10 best states for reading proficiency.”

naep-data-explorer-logo
If we’re going to rely on the NAEP test as evidence of the goodness of Kansas public schools, we should take a critical look at the scores. I’ve gathered NAEP test score data from the NAEP Data Explorer at the National Center for Education Statistics and made the data available in an interactive visualization.

competition-ranking-example
This visualization uses “competition” ranking in the way it handles ties. In this example, the first three states have the same score, so they are all ranked “1.” The next state is ranked “4.”

This means that the rank values will always reach to 50, except for instances where there is missing or incomplete data. Actually, this data set extends to rank 52, as it contains the District of Columbia and the national average. I’ve also rounded the reported scores to integer values.

To look at the governor’s claim: For all students in 2013, Kansas ranked 9 in grade 4 math, and 7 in grade 8 math. In reading, Kansas ranked 22 for grade 4, and 26 for grade 8. In his speech, the governor claimed Kansas was top 10 in reading. But it’s in math that Kansas students did that well. Reading scores are more toward the middle of the states.

The importance of subgroups

If we really want to gain understanding of how Kansas compares to other states on the NAEP, we need to take a look at subgroups of students, particularly subgroups based on race/ethnicity. The visualization of NAEP scores lets us do that.

naep-rankings-states-example-2014-01
Start with math for grade 4. We see these rankings for the major subgroups:
All students, 9
Black, 8
Hispanic, 11
White, 17

For math, grade 8:
All students, 7
Black, 10
Hispanic, 13
White, 14

For reading, grade 4:
All students, 22
Black, 20
Hispanic, 26
White, 19

For reading, grade 8:
All students, 26
Black, 24
Hispanic, 37
White, 33

Kansans should not be proud of some of these results. For grade 8 reading, the scores for Hispanic and White students rank lower than the national average.

Another dimension for creating subgroups is based on poverty. NAEP uses eligibility for the national school lunch program as a proxy for poverty. If a student is eligible for the lunch program, the student is considered to be poor.

Starting again with math grade 4, here are the rankings among the states for Kansas:
All students, 9
Eligible, 4
Not eligible, 12

For math, grade 8:
All students, 7
Eligible, 8
Not eligible, 6

For reading, grade 4:
All students, 22
Eligible, 20
Not eligible, 13

For reading, grade 8:
All students, 26
Eligible, 28
Not eligible, 15

Some of the grade 8 reading rankings are lower than the national average.

As you can see, sometimes Kansas ranks very well among the states. In other instances, Kansas ranks much lower, even below the national average. It’s important for Kansans — be they citizens, schoolchildren, parents, education professionals, or (especially) politicians of any party — to understand these scores. If we don’t, we risk failing to recognize both the good things about Kansas schools and the areas that need improvement. Especially for the latter case, it’s Kansas schoolchildren who will suffer if we are not honest.

There are two visualizations that you may use. Click here to open the visualization for race/ethnicity in a new window. Click here to open the visualization for national lunch program eligibility in a new window.

Kansas school employment

Kansas school employment: The claims compared to statistics

School

Claims made about Kansas schools don’t match the state’s statistics.

Responding to the State of the State Address delivered by Kansas Governor Sam Brownback, Kansas House of Representatives Minority Leader and gubernatorial candidate Paul Davis provided figures regarding Kansas public schools, telling Kansans: “On top of that, public school class sizes are growing, [and] teachers have been laid off by the thousands.”

Statistics from Kansas State Department of Education, however, show that school employment has rebounded, both in terms of absolute numbers of teachers and certified employees, and the ratios of pupils to these employees.

Kansas school employment

The story is not the same in every district. But considering the entire state, two trends emerge. For the past two years, the number of teachers employed in Kansas public schools has risen. Correspondingly, the pupil-teacher ratio has fallen. (This ratio is not the same statistic as average class size, but it’s the data we have. Plus, if schools are hiring teachers at a rate higher than the increase in students, we should expect class sizes to fall.)

Kansas school employment ratios

The trend for certified employees is a year behind that of teachers, but for the last year, the number of certified employees has risen, and the ratio to pupils has fallen.

I’ve created interactive visualizations that let you examine the employment levels and ratios in Kansas school districts. Click here for the visualization of employment levels. Click here for the visualization of ratios (pupil-teacher and pupil-certified employee). Data is from Kansas State Department of Education. Visualization created by myself using Tableau Public.

There’s also this to consider about class size. In 2011 the Center for American Progress released a report about class size reduction in schools and the false promise it holds for improving student achievement. (The False Promise of Class-Size Reduction)

It’s quite astonishing to see CAP cite evidence from Eric Hanushek of the Hoover Institution and Caroline Hoxby of Stanford and Hoover. These two researchers are usually condemned by the public education establishment and bureaucracy, including teachers unions. These are some of the key constituents CAP usually caters to.

In a nutshell, class size reduction produces very little benefit for students. It’s also very expensive, and there are other things we should be doing instead if we really want to increase student achievement.

The report summarizes the important studies in class size reduction. The upshot is that there is only one study showing positive results from class size reduction, and that effect was found only among the early grades. The effect decreased after a few years, even though small class sizes were still used.

The report also notes that class size reduction is very expensive to implement. Because it is, the report says we should look to other ways to increase student achievement, such as policies relating to teacher effectiveness: “The emerging consensus that teacher effectiveness is the single most important in-school determinant of student achievement suggests that teacher recruitment, retention, and compensation policies ought to rank high on the list.”

On teacher quality and teacher effectiveness: When Sandi Jacobs of National Council for Teacher Quality appeared in Kansas a few years ago, we learned that Kansas ranks below average on its policies that promote teacher quality.

In the example she illustrated, third graders who had teachers in the top 20 percent of effectiveness for the next three years went from the 50th percentile in performance to the 90th. For students with teachers in the lowest 20 percent for the same period, their performance dropped from the 50th percentile to the 37th percentile. More on this topic is at Kansas ranks low in policies on teacher quality.

Job claims in Kansas addresses

Kansas Capitol

How can conflicting jobs claims made by two Kansas leaders and candidates for governor be reconciled?

Listening to the State of the State Address and the official response might cause Kansans to become confused, or worse. The claims made by Sam Brownback and Paul Davis appear to contain conflicting views of Kansas employment.

In the State of the State Address, Brownback said “Since December 2010, Kansas has added on average, more than a thousand private sector jobs every month.”

Davis, in the official response, said “According to the latest jobs report — released just a few weeks ago — there are 16,000 fewer Kansans working than when Governor Brownback took office.”

bureau-labor-statistics-logoWho is correct? The answer is not easy to provide. That’s because there are two series of employment data provided by the Bureau of Labor Statistics. The two series don’t measure exactly the same thing, and each of these candidates for Kansas governor has chosen to use the series that benefits their campaign. Nearby is an example of just how different the two series can appear.

cps-ces-difference-example-2013-12

A document from BLS titled Employment from the BLS household and payroll surveys: summary of recent trends explains in brief: “The Bureau of Labor Statistics (BLS) has two monthly surveys that measure employment levels and trends: the Current Population Survey (CPS), also known as the household survey, and the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey. … These estimates differ because the surveys have distinct definitions of employment and distinct survey and estimation methods.”

Another BLS document explains in detail the differences between the CPS and CES data. For example: CES: “Designed to measure employment, hours, and earnings with significant industrial and geographic detail” CPS: “Designed to measure employment and unemployment with significant demographic detail.”

Another difference: CES: “Self-employed persons are excluded.” CPS: “Self-employed persons are included.” (See Understanding the employment measures from the CPS and CES survey.)

I’ve prepared a table showing the claims made primarily by the Davis campaign in December (since it provided the most detail) and gathered data from both the CES and CPS series. I’ve also showed the seasonally adjusted data compared to the raw data when available. Sometimes the numbers match exactly with the claims made by the campaigns, and sometimes the numbers are a little different. Click here for the full table.

cps-ces-jobs-compared-2013-12
I’ve also created an interactive visualization of the CPS and CES data for Kansas. Click here to open it in a new window.

Each campaign uses the data that best makes its case. Generally speaking, the CES data shows larger employment gains.

We still have this question: Who is correct? Here’s something to consider. On the national level, a widely-watched number each month is the count of new jobs created. This number, which is universally considered to be important, comes from the CES survey. That’s the number that shows quite a bit of job growth in Kansas.

Download (PDF, 42KB)

Kansas schoolchildren shortchanged by Kansas City Star

kansas-city-star-opinion

Another newspaper editorialist ignores the facts about Kansas schools. This is starting to be routine.

In a collection of toasts and roasts, Kansas City Star columnist Steve Rose criticizes Kansas Governor Sam Brownback on a variety of fronts, especially on school funding:

A ROAST to Kansas Gov. Sam Brownback, who led the charge for the most radical and irresponsible tax cuts in the history of Kansas and, perhaps, the entire country. One of the unfortunate victims of these cuts is education, both K-12 and higher education. The damage will be gradual, but it will be felt to be sure. Brownback says he is investing in more jobs. But he is dis-investing in education. What could be more vital to the Kansas economy and attracting businesses than a high quality educational system? (Roasts and toasts suitable for the new year, January 11, 2014)

kansas-school-spending-per-student-2013-10-chart-01

Dis-investing in education.: Nearby is a chart of Kansas school spending. It’s adjusted for inflation. Spending is not as high as it was at its peak, but claims of “slashing” or “dis-investing” don’t apply, either.

Those who claim school spending is inadequate usually cite only base state aid per pupil, which has fallen. But it’s only the starting point for all the other spending. In totality, spending on schools in Kansas is over three times the level of base state aid. Also, comparisons are often made to what the Kansas Supreme Court said base state aid should be to its actual value. But the court doesn’t know how much should be spent on schools.

Those who make claims of cutting schools should note this: Considering the entire state, two trends have emerged. For the past two years, the number of teachers employed in Kansas public schools has risen. Correspondingly, the student-teacher ratio has fallen. The trend for certified employees is a year behind that of teachers, but for the last year, the number of certified employees has risen, and the ratio to pupils has fallen.

Kansas school employment

I’ve created interactive visualizations that let you examine the employment levels and ratios in Kansas school districts.

Kansas school employment ratios

Click here for the visualization of employment levels. Click here for the visualization of ratios (pupil-teacher and pupil-certified employee).

What could be more vital to the Kansas economy and attracting businesses than a high quality educational system? Rose is right. Good schools are vital to our future. If only Kansas had them.

The focus on school spending — that’s all writers like Rose write about — keeps attention away from some unfortunate and unpleasant facts about Kansas schools. Kansas needs to confront these facts for the sake of Kansas schoolchildren. Editorials like this are very harmful to Kansas schoolchildren, because if spending is increased, not much is likely to improve, but the public school establishment and editorialists like Steve Rose will say that everything that’s wrong has been fixed.

Here’s what Kansas needs to confront. Regarding Kansas school performance, we have to confront two unpleasant realities. First, Kansas has set low standards for its schools, compared to other states. Then, when the Kansas Supreme Court ordered more spending in 2005, the state responded by lowering school standards further. Kansas school superintendents defend these standards.

When referring to “strong public school system,” here’s what Kansans need to know. On the National Assessment of Educational Progress (NAEP), known as “The Nation’s Report Card.” Kansas ranks pretty high among the states on this test. It’s important, however, to examine the results from a few different angles to make sure we understand the entire situation. An illustrative video is available here.

Kansas and National NAEP Scores, 2011, by Ethnicity and Race

If we compare Kansas NAEP scores to those of Texas, we have what seems to be four contradictory statements, but each is true.

  • When considering all students: Kansas scores higher than Texas.
  • Hispanic students only: Kansas is roughly equal to Texas.
  • Black students only: Kansas scores below Texas.
  • White students only: Kansas scores below Texas in most cases.

What explains this paradox is that the two states differ greatly in the proportion of students in ethnic groups. In Kansas, 69 percent of students are white. In Texas it’s 33 percent. This large difference in the composition of students is what makes it look like Kansas students perform better on the NAEP than Texas students.

But looking at the scores for ethnic subgroups, which state would you say has the most desirable set of NAEP scores? It’s important to know that aggregated data can mask or hide underlying trends.

Here’s a question for you: Have you heard Kansas school leaders talk about this? Do Steve Rose and the Kansas City Star editorial board know this?

Kansas trails surrounding states in economic freedom

Kansas trails surrounding states in economic freedom

By , Kansas Watchdog

AVERAGE: In a recent study of economic freedom in North America, Kansas ranked in the middle of the pack nationwide, but trails most surrounding states.

OSAWATOMIE, Kan. — The Sunflower State scored middle of the pack in a recent study of economic freedom in North America, and while policy analysts sayKansas is trending in the right direction, the state still has some ground to cover.

Breaking down the data released last month by the Canada-based Fraser Institute, an independent, nonpartisan research and educational organization, Dave Trabert, president of the conservative Kansas Policy Institute, said the state’s black eye is starkly presented in the numbers.

“In terms of what Kansas needs to do to improve, it’s pretty clear, you start from the bottom,” Trabert said. “The biggest thing it can do is deal with the fact that we have a lot more government in Kansas than we need, and this is just one of the latest (studies) to point that out.”

The Fraser report looked at things such as how much the government contributes to the overall state economy and workforce, levels of tax revenue, minimum wage laws and labor union density, among other factors.

Kansas ranked in the second-highest quartile in terms of economic freedom based on data collected from 2011. While that’s encouraging, the fact loses some of its luster when you consider that the only surrounding state to rank lower was Missouri Oklahoma ranked 17th out of all states, compared to Kansas’ 23rd place ranking. Nebraska and Colorado joined Delaware, Texas, Nevada, Wyoming, South Dakota, Georgia, Utah and Illinois to be named the 10 “most free” states.

Trabert said based on a review of census data provided by the Bureau of Labor Statistics, Kansas saw a 21.5 percent increase in population between 1980 and 2011, while at that same time local government employment has increased 62.7 percent.

Dave Trabert, Kansas Policy Institute

“It’s kind of across the board,” he said. “Kansas, the structure itself, we have a lot more government than most states.”

Only looking at cities, counties and townships, Trabert said, nationwide the average is about 8,066 residents per government. In Kansas, that figure is significantly lower, clocking in at around 1,445 state residents per government — and that’s not even counting school districts or numerous other, smaller government entities. Kansas’ figures are five times the national average.

While the study knocks Kansas for its 2011 tax rates, Gov. Sam Brownback’s tax plan signed into law the following year, which decreases income tax rates, will likely improve the state’s placement in future studies.

Still, the rankings of surrounding states give Trabert cause for concern.

“People have been voting with their feet for a long time, and that’s going to continue to happen,” he told Kansas Watchdog.

It’s a trend that was revealed in even greater clarity last year, when an analysis of IRS and U.S. Census Bureau data revealed that Texas, Florida, Colorado and other low-tax states were veritable magnets for cash exiting Kansas.

“It all comes down to how much you spend,” Trabert said. “The more government you have, the more government spends, the more you have to tax people.”

The least free states, according to the Fraser Institute study, are Vermont, New Mexico, West Virginia, Mississippi, Maine, Kentucky, Montana, Arkansas, Hawaii and Rhode Island.

Related: Texas, Florida are top destinations for Kansas cash

Contact Travis Perry at travis@kansaswatchdog.org, or follow him on Twitter at@muckraker62. Like Watchdog.org? Click HERE to get breaking news alerts in YOUR state!

2013 year in review: Top 10 stories from the Sunflower State

2013 year in review: Top 10 stories from the Sunflower State

By Travis Perry, Kansas Watchdog

OSAWATOMIE, Kan. — It’s over, done, finalized, finito. With the final days and hours of 2013 ticking to a close, we figured it’s a good time for reflection on what the last 12 months have brought the Sunflower State.

So, without further delay, Kansas Watchdog presents its Top 10 stories of 2013.

Strip Club

1. Wayward welfare dollars

An in-depth investigation into howKansans spend hundreds of thousands of dollars in government welfare money came to a shocking conclusion: a striking number of transactions appear to be going toward anything but the basic necessities. From casinos and liquor stores to smoke shops and even strip clubs, Kansas Watchdog uncovered more than $43,000 in transactions at shady ATM locations around the state. To make matters worse, all this only took place over a three-month period.

Read It:
Kansans spent welfare cash on strippers, smokes and sour mash

Video camera

2. Camera-shy state lawmakers

Fun fact: Did you know the Kansas Capitol is capable of broadcasting live video online of some of the Legislature’s most important committee meetings? Don’t beat yourself up over it. A striking number of lawmakers don’t know, either. It’s the end result of years of apathy that has led the state to be one of only 11 nationwide that do not stream some form of live video. If some kid in the middle of nowhere can attract global eyeballs with nothing more than a camera phone, what’s keeping the Kansas Legislature off the air?

Read it:
Camera shy: Kansas legislators sidestep transparency
Eye in the sky: Kansas legislative leader won’t require streaming video

3. Judicial selection gymnastics

Here’s a shocking revelation: politics sway candidate commentaries, and Kansas is no exception. Gov. Sam Brownback’s pick for the Kansas Court of Appeals is a prime example of this, after the situation prompted his Democratic gubernatorial challenger to switch sides on his stance to oppose the new nominee. And how could we forget that, in their rush to criticize the conservative governor, Kansas Democrats conveniently forgot thatKathleen Sebelius did almost the exact same thing only a few years earlier.

Read it:
Democratic leader flip-flops on Kansas judicial nominee
Partisan politics fuel Kansas Democrat’s change of heart
Kansas Democrats use double standard on judicial nomination criticism

4. Follow the money

And as long as we’re on the topic of judicial nominees, how about we turn the spotlight on a few other critics of Brownback’s decision? Namely theLeague of Women Voters and Justice At Stake, both of which claim to be nonpartisan organizations while simultaneously accepting large sums of cash from George Soros’ liberal nonprofits, the Tides Foundation and Open Society Institute.

Read it:
Soros bankrolls ‘nonpartisan’ critics of Kansas governor
‘Nonpartisan’ critic says Soros cash hasn’t caused political bias
money-limit

5. Fiscal follies

Ever wonder just how much work goes into calculating the cost of a legislative proposal? Not that much, apparently. While state agencies claim they don’t pad their figures, government critics charge them with doing just that, and a close inspection of a few cost estimates only bolsters the case. Should it cost $17,000 for the state to put online a spreadsheet of data it already has? What about $20,000 for a program agency officials say could have been absorbed in-house? Yea, we thought so too.

Read it:
Fiscal follies: Kansas cost estimates draw criticism

 
money jail

6. Your money, behind bars

How much should Kansas spend to lock up individuals whose only crime is drug related? While lawmakers are struggling to figure out what that figure should be, the reality is that Kansas drops about $42 million annually to keep these men and women in prison. To make matters worse, state law enforcement statistics suggest it’s overwhelmingly because of Kansas continues to wage war against marijuana.

Read it:
Kansas spends millions to keep non-violent drug offenders behind bars
Twinkies-2

7. Raking-in the dough

Remember the media flurry surrounding the implosion of Hostess, one of America’s most iconic snack food manufacturers? Well here’s something you probably missed. According to the government, former employees were knocked out due to foreign trade pressure, and for that deserve extra benefits above and beyond standard unemployment insurance. But everything uncovered by Kansas Watchdog seems to point to the contrary. Curious? So were we.

Read it:
Former Hostess workers land sweet deal, taxpayers foot bill
Did foreign trade really cause Hostess’ demise?
Couch fire

8. Couch crackdown

If you’re looking for the nuttiest story of the year, look no further. The City ofLawrence, Kansas’ liberal bastion, only months ago brought us the headache-inducing mandate that city residents are not, in fact, capable of policing their own safety. Rather, officials passed a ban on front porch couches, despite the fact that local and nationwide statistics suggest it’s less of an issue than advocates would have folks believe.

Read it:
Kansas community cracks down on couches
Islam Display

9. Islamic fervor

Wichita-area school came under fire earlier this year after students and parents were greeted on the first day of school with a large display outlining the five pillars of the Islamic faith. The matter prompted emotions of all scope and size, and landed the school squarely in the national spotlight.

Read it:
Kansas lawmaker ‘appalled’ by Islamic display in school
KansasSeal

10. Counting for attendance

The legislative session is a busy time for any elected official, but some are less (or more) busy than others, it seems. After Kansas lawmakers headed for home in June, Kansas Watchdog took an in-depth peek at how they faired in the preceding months, and what we found was jaw-dropping. In all, seven members of the House of Representatives had missed more votes than all other members of the House combined.

Read it:

Handful of Kansas lawmakers outpace all others for missed votes

Contact Travis Perry at travis@kansaswatchdog.org, or follow him on Twitter at@muckraker62. Like Watchdog.org? Click HERE to get breaking news alerts in YOUR state!

Job growth, Kansas and other states

Kansas Capitol 2013-11-11 14.58.34Critics of Kansas Governor Sam Brownback and his economic growth plans say Kansas hasn’t been creating jobs. A look at the statistics tells us that Kansas has produced substandard performance in job growth for a long time.

job-growth-states-compound-annual-rate-2013-12

The nearby chart (click for a larger version) shows the compound annual rate of growth of jobs in the states, with Kansas highlighted in blue.

From 1992 to 2012, Kansas created jobs at the rate of 1.022 percent per year, compounded. Arkansas managed 1.096 percent over the same period. That seems like a small difference, just 0.074 percentage points. But over time, compounding adds up, so to speak. If both states started with one million jobs and continued growing at these rates, in ten years Arkansas would have 8,136 more jobs than Kansas. In 20 years, the difference would be 18,080 jobs. That’s about as many people as work in each of Finney and Ford Counties, home to Dodge City and Garden City, respectively.

Or, consider Texas, the state Kansas progressives love to hate. It’s has created jobs at the rate of 2.001 percent. If both states started with one million jobs and grew at these rates, in ten years Texas would have 112,083 more jobs than Kansas would have. In 20 years the difference would be 260,722 jobs. That’s almost as many people as work in the Wichita metropolitan area.

Using the visualization.

Using the visualization.

If you’d like to use the interactive visualization of state employment data, you may click here to open it in a new window. Data is from Bureau of Labor Statistics, U.S. Department of Labor. Visualization created using Tableau Public.

Kansas jobs: Who do we believe?

bownback-davis-logo-02

Earlier this week we saw that candidates for Kansas governor have released statements on recent job figures in Kansas. The news releases from Sam Brownback and Paul Davis appear to contain conflicting views of Kansas employment.

But we saw that the Bureau of Labor Statistics has two monthly surveys that measure employment levels and trends. There’s the Current Population Survey (CPS), also known as the household survey, and there is also the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey. BLS explains: “These estimates differ because the surveys have distinct definitions of employment and distinct survey and estimation methods.”

cps-ces-jobs-compared-2013-12Both the Davis and Brownback campaign appear to cite the data correctly. So which is the better measure to use? Which gives the best indication of the performance of the Kansas economy in creating jobs?

Here’s something to consider. On the national level, a widely-watched number each month is the count of new jobs created. This number, which is universally considered to be important, comes from the CES survey. That’s the number that shows quite a bit of job growth in Kansas. But in order to belittle the Brownback effort, the Davis campaign cites the other data series.

So let’s be fair. The next time Davis and Democrats praise good job creation figures at the national level as evidence of the goodness of Barack Obama, let’s ask them to give the same credit to Sam Brownback.

In Kansas, dueling job claims

bownback-davis-logo-01Candidates for Kansas governor last week released statements on recent job figures in Kansas. The releases from Sam Brownback and Paul Davis appear to contain conflicting views of Kansas employment.

Brownback released a statement containing this, in part: “In the past year, we have seen more than 20,000 new jobs in Kansas and a total of 45,600 new jobs created from January 2011 through October 2013.” (Click here for the full statement.)

Davis released a statement containing this, in part: “From January 2011 – Oct 2013: Period during which Brownback cites 46,500 new jobs … Employed: +3,634 (not 46,500, which is what was claimed by Brownback)” (Click here for the full statement.)

So which campaign is correct? The answer is not easy to provide. That’s because there are two series of employment data provided by the Bureau of Labor Statistics. The two series don’t measure exactly the same thing, and each campaign has chosen to use the series that benefits their campaign. Nearby is an example of just how different the two series can appear.

cps-ces-difference-example-2013-12
A document from BLS titled Employment from the BLS household and payroll surveys: summary of recent trends explains in brief: “The Bureau of Labor Statistics (BLS) has two monthly surveys that measure employment levels and trends: the Current Population Survey (CPS), also known as the household survey, and the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey. … These estimates differ because the surveys have distinct definitions of employment and distinct survey and estimation methods.”

Another BLS document explains in detail the differences between the CPS and CES data. For example: CES: “Designed to measure employment, hours, and earnings with significant industrial and geographic detail” CPS: “Designed to measure employment and unemployment with significant demographic detail.”

Another difference: CES: “Self-employed persons are excluded.” CPS: “Self-employed persons are included.” (See Understanding the employment measures from the CPS and CES survey.)

I’ve prepared a table showing the claims made primarily by the Davis campaign (since it provided the most detail) and gathered data from both the CES and CPS series. I’ve also showed the seasonally adjusted data compared to the raw data when available. Sometimes the numbers match exactly with the claims made by the campaigns, and sometimes the numbers are a little different. Click here for the full table.

cps-ces-jobs-compared-2013-12
I’ve also created an interactive visualization of the CPS and CES data for Kansas. Click here to open it in a new window.

Each campaign uses the data that best makes its case. Generally speaking, the CES data shows larger employment gains.

Download (PDF, 42KB)

Spinning for fundraising, Kansas-style

Kansas liberals accuse Republicans of “spinning” statistics on school funding. Can we look at some actual numbers?

Candidate for Kansas Governor Paul Davis sent this fundraising email:

paul-davis-facebook-2013-11-20

This weekend another independent advocate for our schools called attention to Sam Brownback’s attempt to mislead Kansans about his real record on education. The fact is, Sam Brownback made the largest cut to our schools in Kansas history — leading to larger class sizes, school closings, and increased fees for parents.

But being the politician that he is, Sam Brownback is trying to spin his record. We won’t be fooled.

Kevin McWhorter of the Goddard School Board said it plainly, “State funding for education will continue to decline, and state officials will continue to twist the numbers to ask you to believe otherwise. Don’t fall for it. It’s just spin.”

Davis is referring to an op-ed in the Wichita Eagle written by a Goddard school board member. (Kevin R. McWhorter: Don’t fall for spin on school funding, November 17, 2013)

In his op-ed, McWhorter complains that present funding from the state is not as high as statute requires. He calls that a cut. He concludes that the “governor’s economic policy is a train wreck” and that “state funding for education will continue to decline.”

goddard-school-spending-2013-11

Nearby you may find charts of data for the Goddard school district. (Click for larger versions.) You may draw your own conclusions. Recall that Sam Brownback became governor in 2011. The charts are derived from visualizations of data obtained from the Kansas State Department of Education. You may click here to access the visualization for school spending. Information about school employment, including a video and interactive visualization is at Kansas school employment trends.

goddard-school-employment-2013-11

Charts for the entire state look similar: Employment going down, then rising. Ratios of employees to students improve correspondingly. This is not the case in every school district, however.

But not everyone believes the statistics. When the Kansas Republican Party posted a chart of statewide school employment on its Facebook page, someone remarked “Where do I find the facts supporting this graft [sic]? Where did the numbers come from? How are these more than 400 additional teachers and 500 certified employees being paid when school funding has been reduced?”

Sounds like someone’s been spun.

Kansas school logic, Goddard-style

Goddard logic school employment

Fiscal 2010, according to figures from Kansas State Department of Education, was the recent low in school funding for Goddard, reflecting spending cuts made during the recession of the Sebelius/Parkinson era. Since then, in actual dollars, this has happened:

State aid per pupil increased from 6,343 to 7,260.
Federal aid per pupil declined from 720 to 269.
Local aid per pupil increased from 3,650 to 4,813.
Total spending increased from 10,713 to 12,342.

Data from KSDE also shows that the Goddard school district has increased the number of teachers and other certified employees in recent years, and the corresponding ratios of these employees to students has fallen.

Kansas job loss claims seem not to add up

kansas-city-star-2013-10-10

The Kansas City Star carried a story about Kansas jobs and unemployment. The claim was made that “Put another way: Kansas has lost more than 8,800 jobs this year.”

paul-davis-facebook-2013-10-10

Kansas Representative Paul Davis, a Democrat who has said he will run for governor next year, linked to the article on his Facebook page and made a statement based on the job loss claim, writing “Kansas has lost nearly 9,000 jobs in 2013.”

I don’t know what data the Star reporter relied on, or what computations he made. I gathered statistics from the Kansas Department of Labor. I’ve made them available here, and a chart is below.

Job levels can be seasonally adjusted, or not. Using the seasonal data, total non farm employment in Kansas rose from 1,366,900 in January to 1,372,000 in August, the last month for which data is available.

Using the not seasonally adjusted data, jobs rose from 1,347,800 in January to 1,361,900 in August.

Maybe the reporter used a different range of dates. I don’t know. If we use the not seasonally adjusted job count from December 2012, which is 1,376,300, the job count in August is less, but by a number not close to the number in the story. Using the seasonally adjusted number for December 2012 produces a gain of jobs since then.

kansas-job-levels-2013-10-10

Wichita performs a reference check, the video

Citizens of Wichita are rightly concerned about whether our elected officials and bureaucrats are looking out for their interests, or only for the interests and welfare of a small group of city hall insiders. The video below explains, or click here to view in HD on YouTube. For an article on this topic, see Wichita performs a reference check, sort of.

Wichita performs a reference check, sort of

Wichita city hall logo

For a video presentation of this material, click on Wichita performs a reference check, the video.

Citizens of Wichita are rightly concerned about whether our elected officials and bureaucrats are looking out for their interests, or only for the interests and welfare of a small group of city hall insiders. Cronies, if you will.

A recent application filed with Wichita City Hall regarding the West Bank Development Project raises two questions: Did the government officials listed as references give their permission, and were any of the references contacted to learn what they knew about the applicants?

The application filed by the River Vista development team shows this: The team, consisting of George Laham, Dave Wells, Dave Burk, and Bill Warren listed numerous local, state, and federal officials as references. Here’s the list of officials that appeared one or more times:

Wichita city manager Robert Layton
Wichita Mayor Carl Brewer
Wichita City Council Member Jeff Longwell (district 5, west and northwest Wichita)
Wichita City Council Member and Vice Mayor Pete Meitzner (district 2, east Wichita)
Sedgwick County District Attorney Marc Bennett
Sedgwick County Sheriff Jeff Easter
Sedgwick County Commissioner Dave Unruh
Sedgwick County Commissioner Tim Norton
Kansas Governor Sam Brownback
U.S. Representative Mike Pompeo

Except for Jeff Easter, none of these officials gave permission for their names to be used in this way. (We didn’t get a response regarding Tim Norton.)

Furthermore, none of these officials were contacted by the evaluation committee whose job it is to vet these potential city partners.

A few questions: First, do you think it is appropriate for the city manager to be listed as a reference, given that anyone who reads this document would take it as an endorsement? No, of course it is not appropriate.

Related: Do you think it’s appropriate for the city manager to endorse one of the applicants? We don’t know if the presence of the city manager’s name as a reference implies an endorsement, because George Laham did not ask the city manager if he could be listed as a reference. We know this because we asked.

Further, the committee that evaluated the development teams did not call the city manager to inquire about George Laham. We asked about this, too. But making inquiries of references: Isn’t that what an evaluation committee or vetting team should do? But we know that the evaluation committee did not contact even one of these officials that were listed as references.

These applicants likely knew that the evaluation committee would not contact these references. Therefore, they freely listed these government officials. Which makes us wonder — what is the point of having an evaluation committee?

Even further: Is it appropriate for the city to partner with people who think it’s proper to list the city manager as a reference without asking if that was permissible, knowing that the manager wouldn’t be contacted? Same question regarding the mayor, governor, our U.S. Congressman, and district attorney?

In light of this — numerous government officials listed as references without their permission or knowledge, an evaluation committee that never contacted these officials, and the information that these references could have provided: Do you think the evaluation committee fulfilled its duty to perform due diligence on behalf of the interests of the people of Wichita?

What the evaluation committee might have learned

If the evaluation committee had contacted these references, here’s what might have been learned.

Dave Wells: Wells is president of Key Construction. Last year the Wichita Eagle reported on “city-financed downtown parking garages that spiraled well over budget.” Noting the cost overruns, reporter Bill Wilson wrote: “The most recent, the 2008 WaterWalk Place garage built by Key Construction, an original partner in the WaterWalk project, came in $1.5 million over budget at almost $8.5 million. That’s the biggest parking garage miss, according to figures from the city’s office of urban development, although the 2004 Old Town Cinema garage built by Key Construction came in almost $1 million over budget at $5.225 million.” (Wichita city manager proposes eliminating no-bid construction projects.)

Also, two years ago Key Construction proposed — and was awarded by the city council — a no-bid contract for a parking garage. But the city later put the contract to competitive bid. Key, which first bid $6 million, later bid $4.7 million. If the desire of the majority of the city council, including Mayor Carl Brewer, had been realized, Wichita taxpayers would have sent an extra — and unnecessary — $1.3 million to a politically-connected construction company.

By the way, the mayor’s relationship with Wells means he should not have voted on this matter.

Dave Burk, Dave Wells: These two were original partners in WaterWalk, which has received over $40 million in subsidy, with little to show for results.

Dave Burk: He’s received many millions from many levels of government, but still thinks he doesn’t get enough. This is what we can conclude by his appeal of property taxes in a TIF district. Those taxes, even though they are rerouted back to him for his benefit, were still too high for his taste, and he appealed. The Wichita Eagle reported in the article (Developer appealed taxes on city-owned property): “Downtown Wichita’s leading developer, David Burk, represented himself as an agent of the city — without the city’s knowledge or consent — to cut his taxes on publicly owned property he leases in the Old Town Cinema Plaza, according to court records and the city attorney.”

rebenstorf-quote-dave-burkA number of Wichita city hall officials were not pleased with Burk’s act. According to the Eagle reporting, Burk was not authorized to do what he did: “Officials in the city legal department said that while Burk was within his rights to appeal taxes on another city-supported building in the Cinema Plaza, he did not have authorization to file an appeal on the city-owned parking/retail space he leases. … As for Burk signing documents as the city’s representative, ‘I do have a problem with it,’ said City Attorney Gary Rebenstorf, adding that he intends to investigate further.”

Council member Jeff Longwell was quoted by the Eagle: “‘We should take issue with that,’ he said. ‘If anyone is going to represent the city they obviously have to have, one, the city’s endorsement and … two, someone at the city should have been more aware of what was going on. And if they were, shame on them for not bringing this to the public’s attention.’”

In a separate article by the Eagle on this issue, Wichita city manager Robert Layton said that anyone has the right to appeal their taxes, but he added that ‘no doubt that defeats the purpose of the TIF.’”

The manager’s quote is most directly damaging. In a tax increment financing (TIF) district, the city borrows money to pay for things that directly enrich the developers, in this case Burk and possibly his partners. Then their increased property taxes — taxes they have to pay anyway — are used to repay the borrowed funds. In essence, a TIF district allows developers to benefit exclusively from their property taxes. For everyone else, their property taxes go to fund the city, county, school district, state, fire district, etc. But not so for property in a TIF district.

This is what is most astonishing about Burk’s action: Having been placed in a rarefied position of receiving many millions in benefits, he still thinks his own taxes are too high. Now he wants more city taxpayer subsidy.

warren-bailout-poses-dilemma

Bill Warren: In 2008 the Old Town Warren Theater was failing and its owners — Bill Warren being one — threatened to close it and leave the city with a huge loss on a tax increment financing (TIF) district formed for the theater’s benefit. Faced with this threat, the city made a no-interest and low-interest loan to the theater. Reported the Wichita Eagle: “Wichita taxpayers will give up as much as $1.2 million if the City Council approves a $6 million loan to bail out the troubled Old Town Warren Theatre this week. That’s because that $6 million, which would pay off the theater’s debt and make it the only fully digital movie theater in Kansas, would otherwise be invested and draw about 3 percent interest a year.”

Besides Warren, you may — or may not — be surprised to learn that the theater’s partners included Dave Wells and Dave Burk, the same two men mentioned above. Also, Mayor Brewer’s relationship with Warren means he should not have voted on this matter.

ObamaCare chart updated

obamacare-chart

Republicans of the Joint Economic Committee of the U.S. Congress have released an update of a chart to help us navigate ObamaCare. (Click on it for a larger version.) From the July 2010 press release accompanying the original chart: “Four months after U.S. House Speaker Nancy Pelosi famously declared ‘We have to pass the bill so you can find out what’s in it,’ a congressional panel has released the first chart illustrating the 2,801 page health care law President Obama signed into law in March. Developed by the Joint Economic Committee minority, led by U.S Senator Sam Brownback of Kansas and Rep. Kevin Brady of Texas, the detailed organization chart displays a bewildering array of new government agencies, regulations and mandates.”

Read all about it at Health Care Chart — Updated Chart Shows Obamacare’s Bewildering Complexity.

Anderson, former Kansas budget director, speaks

Last Friday former Kansas budget director Steve Anderson spoke to members and guests of the Wichita Pachyderm Club. Two videos are available, a highlights version and full version. View below, or to view on YouTube, click here for highlights or here for full version.

Also, it was announced on Friday that Anderson would be joining Kansas Policy Institute in the role of senior adjunct fiscal policy fellow. For more on this from KPI, see Former state budget director Steve Anderson joins Kansas Policy Institute.

Highlights video

Full speech

In Kansas, politics may now cure its own harm

I don’t care who does the electing so long as I do the nominating.
– William “Boss” Tweed, political boss of Tammany Hall

Critics of Kansas Governor Sam Brownback point to his nomination of a confidant to the Kansas Court of Appeals as evidence of politics trumping the — purportedly — merit-based selection process formerly in place.

The previous process, however, was nothing if not political. Its defenders — the state’s legal profession — denied that, but they were in charge of the process.

In fact, the reason that Caleb Stegall, the current nominee, is not already on the bench is politics.

Stegall’s recommendation from Felita Kahrs, a member of the Supreme Court Nominating Commission, highlights both his judicial qualifications and the political challenge he may face as a nominee. Ms. Kahrs previously reviewed Stegall’s application for the Kansas Court of Appeals, and her recommendation says that she found that his “outstanding academic background, his excellent writing ability, and the experience he brings to this position, exceeded and in some cases far surpassed the other applicants.” Even though she believed that he “was one of the top candidates that appeared before the Commission,” she explained, “due to politics, his name was not submitted.”

That’s from National Review Online’s Bench Memos.

And if you’re wondering why so many will criticize this appointment and the new process, well, “hell hath no fury like a lawyer scorned.”

Wichita income is not keeping up

Visioneering Wichita uses per capita income growth as one benchmark of economic progress. What do the numbers say about the city’s progress? The following video illustrates. View below, or click here to view in higher resolution at YouTube, which may work better for some people.

For more in this, and to access the interactive visualization, see Wichita personal income growth benchmark.

Kansas school standards and other states

Do those who call for more Kansas school spending defend the standards Kansas applies to these schools?

Row of lockers in school hallway

As Kansas attempts to position its economy for growth by reducing taxes, we’re told that Kansas risks letting its public schools decay. Consider the editorial Legislators, Brownback renege on promises to get done with session in the Hutchinson News: “And so Kansas continues down a path to fulfill Brownback’s vision of a no-income-tax state. Meanwhile, we also will accept mediocre public schools and universities and inadequate services to disadvantaged Kansans who at the same time will shoulder more of the tax burden.”

This is typical of the defense of Kansas school spending: Kansas schools have been doing a good job compared to other states, and under difficult circumstances because we don’t spend near enough. We must spend more, we are told by the school spending interests, and soon the Kansas Supreme Court may add its voice.

But before we decide to invest more in our state’s public schools, shouldn’t we learn whether Kansas has been holding its schools to high standards?

Kansas school standards

NAEP scale equivalents of state grade 4 reading standards for proficient performance, by state: 2009

When talking about the quality of Kansas schools, the first thing to realize is that Kansas has set low standards for its schools, compared to other states. The nearby illustration (click for larger version) maps state test scores onto the National Assessment of Education Progress, a test that is the same in all states. Fourth grade reading is presented in this illustration. States on the right side of the chart have higher standards than those to their left. Note where Kansas appears: Only seven states appear to its left, meaning that Kansas has very low standards for fourth grade reading.

In other subject areas and other grades, Kansas appears a little further to the right. But in no case does Kansas appear above the midpoint.

Despite these facts, last year Kansas school superintendents claimed in an editorial that “Historically, our state has had high-performing schools, which make Kansas a great place to live, raise a family and run a business.” Most newspaper editorial writers believe that without looking at the actual situation. See Despite superintendents’ claim, Kansas schools have low standards for more on this topic.

National test scores

It’s often expressed that Kansas ranks well on the National Assessment of Education Progress, a test that is the same in all states. Kansas school administrators take pride in mentioning this.

Consider fourth grading reading, an important benchmark. Kansas ranks 17th among the states, with eight performing significantly better than Kansas, and 21 with no significant difference from Kansas. If you stopped looking at this point, you might conclude, as do most Kansas newspaper editorial writers, that Kansas has good schools.

But consider white students alone. In this case, Kansas ranks 25th among the states, with 11 performing significantly better than Kansas, and 24 not significantly different.

If we look at black students alone, Kansas ranks 26th among the states, with six performing significantly better than Kansas, and 37 not significantly different.

Considering Hispanic students alone, Kansas ranks 17th among the states, with six performing significantly better than Kansas, and 34 not significantly different.

Because different ethnic groups tend to perform at different levels on the NAEP test, and because states have different mixes of ethnic groups, aggregated statistics can hide an important underlying story. In this case, we see that Kansas schools don’t rank as high as naive supporters believe.

Kansas and National NAEP Scores, 2011, by Ethnicity and Race

For another look at how aggregated data can mask important stories, see Kansas school test scores, in perspective, were the statistics show that Kansas students score better than Texas students, as most Kansans probably believe. But, Texas white students score better than Kansas white students, Texas black students score better than Kansas black students, and Texas Hispanic students score better than or tie Kansas Hispanic students. The same pattern holds true for other ethnic subgroups.

Kansas tax changes

Tax

What are the changes to Kansas tax law that have been passed by the legislature and await the governor’s signature?

The nearby table presents estimated changes in tax revenue based on changes to the law that was current at the time of the estimate. (The source is Kansas Legislative Research Department.) The largest factor in that law was that if the legislature did nothing, the sales tax rate would change from 6.3 percent to 5.7 percent on July 1, 2013. The legislature decided to change the rate to 6.15 percent on July 1. The estimated increase in revenue is estimated to be $193.2 million in fiscal year 2014, and $1,118.5 million total over the next five years.

Kansas tax changes, June 2013

Other changes to the law presented along with the estimated change in revenue.

The most important number to notice is the five-year total: $777.1 million. This is the additional tax revenue that Kansas is expected to collect based on the action of the legislature this year. For the year starting July 1, the number is $307.9 million, which is 40 percent of the five-year total.

Someone asked me whether the tax bill increases taxes on the middle class. It’s hard to answer that question, as several changes were made. Here’s what each change means:

Sales tax: On July the sales tax rate will be less than it has been for the last three years, but more than if the legislature had done nothing. Whether this counts as a tax increase or not is solely in the eye of the beholder. The new tax law, as the chart shows, brings in more sales tax revenue than the law we’ve been living under, so I think that’s a tax increase.

Sales taxes are commonly thought of as regressive, meaning the burden falls disproportionally on the poor or low income. To help with this, the legislature partially restored the food sales tax credit program. This is estimated to refund a little more than $20 million to low-income Kansans to compensate for the sales tax on food.

The mechanism of the food sales tax credit is clunky. One has to file an income tax return to receive it. Further, the credit is now non-refundable, meaning that it can only be used to offset an income tax liability. In tax year 2010, when it was refundable, this credit was worth $59 million to Kansans, but is estimated to provide only $20 million in relief next year.

Itemized deductions: Except for charitable deductions, the value of itemized deductions is being reduced. It’s called a “haircut,” and the amount is 30 percent next year, and increasing after that.

For example, if a taxpayer has a deduction of $1,000, the value of that deduction is either $30 or $49, depending on whether the taxpayer is in the 3.0 percent or 4.9 percent marginal tax brackets. After the haircut, the deduction is reduced to $700, meaning the value of that deduction is either $21 or $34.30. This change to the law is estimated to bring in an additional $114.6 million next year, and $663.8 million over five years.

Not everyone itemizes deductions. At the federal level, only about 30 percent of returns use itemized deductions. So for 70 percent of filers, the value of the standard deduction is greater than their itemized deductions. For these, this tax law change has no impact.

Standard deduction: Most taxpayers use the standard deduction. Last year, Kansas increased the amount of this deduction, meaning that everyone paid less tax. Currently, it is set at $9,000. The new lax law changes that to $7,500 for married taxpayers filing jointly and to $5,500 for single heads-of-household. This means taxes will rise for most people. A family will pay tax on an additional $1,500 of income, which is an extra $45 or $103.50 in taxes. This change is estimated to raise an additional $56.3 million next year, and $311.1 million over five years.

Tax rate reduction: The new tax bill reduces tax rates. For tax year 2013, the two marginal income tax rates are 3.0 percent and 4.9 percent. The law calls for these to be reduced slowly over the next five years. This change in tax law is estimated reduce revenue by $35.2 million next year, and by $1,195.5 million over five years.

Rural Opportunity Zones: This program provides income tax relief to those who move to eligible counties. Its expansion is estimated to reduce tax revenue by $10.3 million over five years.

Food sales tax rebate: As explained above, this program is expected to reduce revenue to the state by $110.5 million over five years.

So whose taxes went up, and whose went down? The law changes several provisions, and in different directions. None of the changes are particularly large in magnitude, unless you spend a lot or earn a lot. Most people will be paying a different mix of taxes, which will influence their behavior.

The bottom line, though is this: Tax revenue flowing to the state of Kansas is rising.

Spending and taxing in the states

Tax

In the current policy debate in Kansas, we often compare our state with Texas. The prevailing themes sounded by Democrats and other spenders include that because Texas has no income tax, its other taxes (sales and property) are higher. We also hear that Texas is “atop a sea of oil” from which the state collects a gusher of tax revenue.

But what are the facts? Regarding taxation: In 2011 Kansas state government collected $2,378 in taxes for each person. Texas collected $1,682. We see that Texas collects far less tax per person than does Kansas. Texas may have higher sales or property taxes than Kansas, but the total tax burden in Texas is lower.

Spending follows the same pattern. In 2011 Kansas state government spent $5,115 per person in total, with $1,974 in general fund spending and $130 in bond spending. For Texas the total was $3,718 spent per person in total, with $1,654 in general fund spending and $50 in bond spending.

The lower level of spending means Texas has a less burdensome state government, which allows more money to remain in the productive private sector. In Kansas, we spend more on government.

The “sea of oil” and bountiful severance tax revenue: In 2011 Kansas, which has a severance tax of its own, collected $42.54 in this form of tax for each person. How much did Texas collect from its severance tax? $104.29 per person. The difference between the two — $61.75 per person per year — is only a small portion of the difference between Kansas and Texas taxation.

To see how your state compares with others in spending, use the interactive visualization below. To use the visualization, click the check boxes to add or remove states and years from the chart. Use the visualization below, or click here to open it in a new window. Data is from National Association of State Budget Officers and U.S. Bureau of Economic Analysis (BEA); visualization created by myself using Tableau Public.


(alternate link to the above table)


(alternate link to the above table)

Kansas looks better in Rich States, Poor States report

A new edition of Rich States, Poor States signals a brighter future for Kansas.

Rich States, Poor States, sixth edition

Last week American Legislative Exchange Council (ALEC) released the sixth edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.

ALEC is a nationwide organization of state legislators, the center-right counterpart of the center-left National Conference of State Legislatures (NCSL).

In the forward-looking economic outlook ranking, Kansas moves up to eleventh place. That’s ahead of Texas (12), Colorado (16), Oklahoma (19), Missouri (23), Iowa (25), and Nebraska (37).

The report praises tax reform legislation Kansas passed in 2012. In a section headed “The Kansas Uprising”:

Gov. Sam Brownback campaigned in 2010 promising a tax cut to make the Kansas economy more competitive. But his plan to reduce tax rates and close loopholes ran into trouble in the Senate, which had been controlled by opponents of tax reform. The governor managed to pass his tax cut, but the Left-leaning Senate coalition refused to cut loopholes and pork spending projects. … The most outside of the box section of the plan is the “Small Business Accelerator,” which exempts all non-wage income from taxation for all pass-through entities. This means that the vast majority of small businesses in Kansas are now not subject to an income tax on their business earnings. This includes all sole proprietorships, partnerships, S corporations, and limited liability companies (LLCs). … While the Kansas tax reform plan has received criticism from both sides of the political spectrum, the resulting economic growth in Kansas speaks for itself. The plan is not perfect, but it is a bold step toward pro-growth tax reform that will certainly continue to unlock more of Kansas’ economic potential.

No praise, however, for public pension reform. Commenting on lack of progress in converting to defined-contribution plan and a proposal to borrow additional money for fund KPERS, the report concludes:

The result was a double loss for pension reform advocates in Kansas. There would be no structural reform, and the Kansas retirement system and taxpayers would take on $1.5 billion in additional debt. While the proposal for fundamental pension reform failed this session, fiscally conservative legislators and Gov. Brownback are optimistic that real reform will have a good chance of passing in the future.

The bill to issue the KPERS bonds is still pending in the legislature.

An important chapter in this year’s report is titled “There They Go Again: A New Dose of Junk Economics.” This chapter addresses critics of Rich States, Poor States. In particular, this chapter explains the caution required when using per-capita statistics.

Kansas among the states

Rich States, Poor States evaluates state economies two ways. The “Economic Outlook Ranking” is a forecast looking forward. It is based on factors that are under control of the states. The “Economic Performance Ranking” is a backward-looking rating that measures state performance, again using variables under control of each state.

The Economic Performance Rank considers a state’s gross domestic product, absolute domestic migration, and nonfarm payroll employment. This ranking details states’ individual performances over the past ten years based on the economic data.

For Economic Performance Ranking, Kansas is ranked 35th among the states. In previous years, Kansas was ranked 39th, 40th, and 34th. Kansas has made some progress in this area.

The second measure, the Economic Outlook Rank, is a “forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less — especially on income transfer programs, and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.”

It’s in this ranking that Kansas made most progress. Kansas is ranked 11th, up from 26th the year before. In previous years, Kansas averaged around 26th place.

Notable areas where Kansas ranks better than average in Top Marginal Personal Income Tax Rate (15), Recently Legislated Tax Changes (6), State Liability System Survey (5), State Minimum Wage (1), and being a right-to-work states.

Kansas scores low in Property Tax Burden (29), Sales Tax Burden (35), Debt Service as a Share of Tax Revenue (41), Public Employees Per 10,000 of Population (48), and having a low number of tax expenditure limitations.

Read the report at Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.

Wichita mayor said to be ‘under lockdown’

When Wichita ABC affiliate KAKE Television ran a news story critical of Wichita Mayor Carl Brewer, reporter Jared Cerullo wasn’t able to interview Brewer to get his reaction to his critics. The mayor refused to talk to Cerullo.

Jeff Herndon, KAKE Television news anchor, speaking at Wichita Pachyderm Club, May 17, 2013. Herndon is speaking for himself, and not on behalf of KAKE.

Speaking last week at the Wichita Pachyderm Club, KAKE news anchor Jeff Herndon said that KAKE has “repeatedly” tried to get an on-camera interview with Brewer. But the mayor is always busy, Herndon said: “They’ve got him on lockdown. He’s not going to answer that.”

Herndon was speaking for himself, and not for his employer. In his talk to the Pachyderms, he was critical of Wichita news media — both television and print — for not covering city government rigorously, telling the audience: “We need more reporters on that city government beat, and not just on decisions they make. We need to hold them accountable for the decision. We don’t do that.”

Brewer is sometimes mentioned as a candidate for higher office, perhaps challenging Kansas Governor Sam Brownback next year. Brewer’s term as mayor ends in April 2015. He is not eligible for election to another term as mayor because of Wichita’s term limits law.

KAKE Television news story: Controversy over hotel sales tax vote

Notes:

  • The KAKE news story referred to is Wichita Mayor Scrutinized For Controversial Vote. Both text and video are available.
  • On his radio program, Joseph Ashby had an interesting take on Herndon’s remarks and Wichita new media.
  • Video of the city council meeting that was the subject of the KAKE news story is here.
  • Explanation of the public policy angle that drove citizens to testify at the April 16 city council meeting is here.
  • The original article that identified the problem and to solutions is Pay-to-play laws are needed in Wichita and Kansas. In that article I wrote: “When one looks at the candidates these people contribute to, you notice that often there’s no commonality to the political goals and ideals of the candidates. Some people contribute equally to liberal and conservative council members. Then, when these people appear in the news after having received money from the Wichita City Council, it snaps into place: These campaign donors are not donating to those whose ideals they agree with. They’re donating so they can line their own pockets.”

Sales tax increase isn’t necessary

By Dave Trabert, Kansas Policy Institute.

Tax

What a difference a year makes. Last May, Governor Brownback signed historic tax reform legislation that would reduce state income taxes by roughly $800 million in its first full year. As the legislature returns this week, the debate is about how much of the last year’s tax reform will be wiped out. Instead of reducing the cost of government to implement tax reform this year, Governor Brownback and the Senate want to make the 6.3 percent sales tax permanent and eliminate the income tax deduction for home mortgage interest; they also propose 0.5 percent reduction in the income tax on the first $15,000 of taxable income in 2014 and a reduction in all marginal rates beginning in 2017 (after a billion dollar increase in sales taxes) with revenue growth above 4 percent being used to reduce rates thereafter and eventually eliminate income taxes.

The House plan isn’t perfect but it’s better. It allows the sales tax rate to drop to 5.7 percent as promised, proportionally reduces income tax deductions, has more spending reductions and a formula that gradually eliminates the income tax altogether, using annual revenue growth above 2 percent to buy down rates.

The goal of tax reform is to reduce the overall tax burden, not shift it. Consumption taxes are better than income taxes, but taxes will still be too high (and economic growth impaired) until we deal with the real problem of excess spending. But even some self-identified fiscal conservatives don’t want to reduce spending.

Part of their resistance is that many people equate spending less with service cuts, but that doesn’t have to be the case. Per-resident spending varies greatly across all fifty states. Yet, every state has schools, highways, social programs, etc.; some simply do so more efficiently. States with an income tax spend 44 percent more per-resident than those without an income tax. States that spend less, tax less (and grow more). Done well, states can spend less and actually deliver the same or better services.

In fact, Kansas would have spent $2.9 billion less last year if spending were at the same level as the average state without an income tax.

Our “Legislator’s Guide to Delivering Better Service at a Better Price” shows legislators how to use existing cash reserves to ‘buy time’ and implement thoughtful efficiency measures to reduce costs over time. It can be done and it can be done now.

The problem with implementing income tax reductions is one of politics, not economics. As Thomas Sowell says, “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

Here’s hoping legislators make taxpayer-focused decisions based on sound economics when they return to Topeka this week.

A version of this appeared in the Wichita Eagle.

photo credit: 401(K) 2013 via photopin cc

Kansas editorial writers aren’t helping

Recently it has become fashionable for newspapers to carry editorials bemoaning the current state of affairs in Kansas, contrasting the current regime to a tradition of moderation in Kansas governance. In particular, Governor Sam Brownback is singled out for criticism.

Examples of such columns are Kansas 1861-2013 in the Hutchinson News, Kansas slipping away from its people in the Topeka Capital-Journal, and Which Kansas is that? in the Wichita Eagle.

The common thread in these articles is willing ignorance of the facts. I say willing ignorance because these writers ought to know facts. If they don’t know facts about the Kansas economy and schools, we have to wonder why they are writing editorials that will be read by thousands of Kansans?

Here’s a brief rundown of the state of Kansas:

Kansas population has been growing at a slower rate than the country. A chart is here.

Kansas has been growing jobs at a slower rate than many other states. Here’s a link to an interactive visualization of job growth in the states. You can compare Kansas to any other state or combination of states. Should we be satisfied with the performance of Kansas compared to other states over the past few decades? No, we shouldn’t be satisfied with our record during the period that these editorialists write about.

Kansas has been growing its private-sector gross domestic product at a rate slower than most states. An interactive visualization is here.

Kansas has lost ground in interstate migrants. Many more people leave Kansas for other states than move to Kansas, as can be seen here. In the 2012 United Van Lines migration study, Kansas is seen as “balanced.” But Atlas has more outbound shipments than inbound.

While Kansas newspaper editorial writers like to boast of outstanding public schools, a proper examination of NAEP scores finds that Kansas can’t do better than Texas, a state that we often compare with ourselves in a negative way. Comparing Kansas to national averages, Kansas performs well compared to other states in math and reading in grades four and eight, scoring better than the national average in all these cases. But if we look at the data separated by racial/ethnic subgroups, something different becomes apparent: Kansas lags behind the national average in some of these areas. A table of these figures is here.

Regarding Texas again: Editorial writers say that because Texas has no income tax, its property and sales taxes are higher. Perhaps. But overall, Texas collects less taxes from its citizens. In 2011 Kansas state government collected $2,378 in taxes for each person. Texas collected $1,682. Texas may have higher sales or property taxes than Kansas, but the total tax burden in Texas is lower.

Spending follows the same pattern. In 2011 Kansas state government spent $5,115 per person in total, with $1,974 in general fund spending and $130 in bond spending. For Texas the total was $3,718 spent per person in total, with $1,654 in general fund spending and $50 in bond spending. The lower level of spending means Texas has a less burdensome state government, which allows more money to remain in the productive private sector. In Kansas, we spend more on government.

The “sea of oil” and bountiful severance tax revenue that newspaper editorial writers say benefits Texas but not Kansas: In 2011 Kansas, which has a severance tax of its own, collected $42.54 in this form of tax for each person. Texas collected $104.29 per person in its severance tax. The difference between the two — $61.75 per person per year — is only a small portion of the difference between Kansas and Texas taxation.

I could go on. But the more facts one states, the more criticism one receives.

It’s not that what our governor is doing is perfect. It wasn’t the best course to single out certain forms of business organization to receive tax cuts. Everyone should have their taxes cut the same way.

Governor Brownback still meddles in the economy, supporting harmful policies like the renewable portfolio standard for electricity generation. The Hutchinson News editorial wrote of how “Kansas proved to be a state teeming with inventiveness, ingenuity, determination and a savvy sense of business” and mentioned iconic Kansas-founded companies like Cessna, Beech, Stearman, Coleman, Pizza Hut, and White Castle. But today our state is strangling entrepreneurs, expanding control over economic development under the Brownback regime. Kansas has expanded the realm of public-private partnerships to the detriment of entrepreneurship. Cities like Wichita implement new regulations over industries like parking lot striping, taxicab driving, and haunted house attractions.

Instead of moving to a modern pension system for state employees, we’re considering borrowing money to cover up the mistakes of the past, with no reform forthcoming and few lessons learned.

Most inexplicably, Governor Brownback was absent in this year’s debate over important school reform measures like charter schools and school choice. These are initiatives that are working in other states, but not in Kansas.

It isn’t supportive of our state (or county, city, or school district) to overlook facts in order to create a false impression of a prosperous state with successful schools. Yet that’s exactly what these newspaper editorials want us to do.

If we don’t learn the facts and if we don’t accept the facts, we don’t have a common base of understanding and a common starting point for debate. Even if the facts are uncomfortable — especially then — we must recognize where we’ve been and what is the actual condition of our state.

Hoping that Kansans won’t notice might be politically expedient. Both parties can be guilty of valuing political gain more than the health of Kansas. But it’s a severe loss to Kansas that these newspaper editorial writers will not recognize facts, and a shame that they prefer political attacks to reality.

Kansas Governor delivers weekly address

Kansas CapitolToday Governor Sam Brownback delivered the Republican weekly address. His remarks follow, and video is below.

Hi I’m Kansas Governor Sam Brownback.

A week ago nearly a third of the world’s population celebrated Easter, the resurrection of Jesus. New life. Well, we need new life in our nation and economy.

Washington is broke. Big spending programs are running out of money and change is coming. The ideas on how to fix the federal government are now percolating in the states, 30 of which are led by Republican governors.

You see, you don’t change America by changing Washington — you change America by changing the states. And that’s exactly what Republican governors are doing across the country — taking a different approach to grow their states’ economies and fix their governments with ideas that work.

They involve a more focused government that costs less. A taxing structure that encourages growth. An education system that produces measurable results. And a renewed focus on the incredible dignity of each and every person, no matter who they are.

Now, take my state, Kansas, as an example.

The year I became governor, the state began the fiscal year with just $876.05 in the bank — less than $1,000 and it projected a $500 million deficit. Two years later we had a $500 million ending balance — and did it without tax increases.

Now to make that financial turnaround a reality, we didn’t cut state funding to schools, we didn’t cut state funding for our universities and colleges, we didn’t cut state funding for our Medicaid system, we didn’t cut state funding for our prisons.

We did consolidate agencies, cut overhead costs, offered a voluntary retirement buyout to state employees and eliminated outdated programs.

We reformed our state’s Medicaid system to save a billion dollars over five years while at the same time, we expanded health care services for our neediest Kansans.

We found ways to reduce the cost of running state government while increasing our investments in key areas like research in aviation, agriculture and medicine.

We reduced the number of state employees and increased the number of students taking technical education courses which will help them prepare for a future with a better paying job.

We reformed our court of appeals so that judges are selected more democratically.

We took steps to safeguard our state’s water resources for future generations and gave Kansans more local control of their future water needs.

And we passed the largest tax cut in state history — eliminating the income tax on small businesses altogether. This took us from being one of the highest tax states in the region to one of the lowest.

My objective is to make Kansas the best place in America to raise a family and grow a business.

Now, for those who come to our state because of lower taxes, opportunities abound.

We had an all-time record of new businesses formed in Kansas last year.

Kansas recently received an “A” for its friendly small business environment and we have one of the lowest unemployment rates in the country at 5.5 percent.

All signs of strong economic growth.

Governors compete each and every day for citizens and for businesses, and unfortunately, Kansas hasn’t kept up with that competition the last 30 years, but working with the legislature, we’re back in the game.

What I and other Republican governors around the country are doing is a lot like the Wichita State Wheat Shockers basketball team playing in the NCAA Final Four this weekend — unranked as a team, the pundits said “you can’t win” and the Shockers said, “watch us.”

Republican governors have been told you can’t cut taxes, balance your budgets and invest in the future all at the same time, and we’ve said, “watch us” and done what we said we would do.

Growing our economies, building strong family structures and making wise government investments produces winning results.

Our Republican message is a belief in the power of the people more than the control of government. This unleashes the creativity of entrepreneurs and the strength of hope and dreams.

Join us as we remake our country, not into a place that looks more and more like Europe. We don’t need to do that. We just need to become America again. And that is the rebirth we are doing.

Thanks for listening. God bless you all.

Wichita Eagle editorial board on the truth

Wichita Eagle Opinion: Brownback Numbers are Suspect

A recent Wichita Eagle editorial penned by Rhonda Holman took Governor Sam Brownback to task for a mistake made in reporting Kansas spending numbers. (Eagle editorial: Brownback ’s numbers are suspect.)

Specifically, Holman wrote:

What’s going on here is clear: Brownback is embracing and repeating numbers that help promote his agenda, including what he sees as the need to push back against a court order for more state funding of public schools.

But Kansans need to trust that what they hear from their governor, especially again and again, is rooted in truth, not cherry-picked, spun or flat wrong.

So let’s look at the use of numbers by the Wichita Eagle editorial board. When discussing school spending, the editorialists refer to base state aid per pupil and treat that as though it was the totality of school spending.

Base state aid per pupil is just part of school spending, and most schools spend much more than that. Specifically, base state aid per pupil for the last school year was $3,780. But the state spent an average of $6,983 per pupil that year, which is an additional $3,203 or 84.7 percent more than base state aid. Overall spending from all sources was $12,656 per pupil. Both of the latter numbers are higher than the previous year.

Also, base state aid per pupil has declined in recent years. That’s a convenient fact for school spending boosters. They can use a statistic that contains a grain of truth in order to whip up concern among the uninformed over inadequate school spending. They can cite this as an argument for increasing spending, even though spending has been rising.

(By the way, when citizens in Kansas and across the nation are asked questions about school spending, we learn they are totally uninformed. Even worse, several candidates for the Wichita school board are similarly uninformed. See Wichita school board candidates on spending.)

Further, citing only base state aid reduces “sticker shock.” Most people are surprised to learn that our schools spend $12,656 per student. It’s much easier to tell taxpayers that only $3,780 was spent. But that’s not a complete picture. In fact, using base state aid as a measure of school spending defines “cherry-picked,” a practice of which Holman accuses the governor.

Informed readers are left wondering whether the Eagle editorial board is ignorant of these facts, or does it have an agenda to push — just like they accuse Brownback.

Here’s something else from Holman in the editorial:

Plus, Brownback has said that “29 percent of Kansas fourth-graders can’t read at a basic level.” That’s a misuse of the results of the 2011 National Assessment of Educational Progress survey, in which Kansas actually ranked 10th best in the nation. The better measure is the state assessment, which found 10.1 percent of fourth-graders failed to meet the state standard in reading that year.

The high ranking of Kansas on the NAEP can be explained by the demographic composition of Kansas students compared to other states. As I show in Kansas school test scores, in perspective, Kansas students score better than Texas students on the NAEP. This is a fact congruent with Holman’s citing of Kansas’ high ranking among the states.

But it is also true that Texas white students score better than Kansas white students, Texas black students score better than Kansas black students, and Texas Hispanic students score better than or tie Kansas Hispanic students. The same pattern holds true for other ethnic subgroups. If we examine figures for low-income students, we see a similar pattern.

How can this be? You have to look more closely at the figures than the Wichita Eagle editorial board is willing or able. But if you do this, you will understand more about Kansas schools.

As far as relying on Kansas state assessments to gauge our schools’ performance, we need to be careful. When compared to other states, Kansas has low standards, and these standards have declined.

The U.S. Department of Education’s National Center for Education Statistics (NCES) has analyzed state standards, and we can see that Kansas has standards that are below most states. The table of figures is available at Estimated NAEP scale equivalent scores for state proficiency standards, for reading and mathematics in 2009, by grade and state. An analysis of these tables by the Kansas Policy Institute shows that few states have standards below the Kansas standards.

The editorial board might also wonder why scores on the Kansas assessments — the ones under control of Kansas education officials — are rising, while NAEP scores are not.

A reader sent in this comment, which I believe is apt:

To paraphrase a trusted source:

“[The Eagle's] numbers matter because they’re being used by [Democrats] and [government employees' unions] to guide and justify state spending policy decisions, especially in education. The [Eagle] has used [misleading statistics] to drum up public support for plans to [raise] income taxes and to [support] a recent court decision that found the state isn’t meeting its constitutional mandate to provide adequate funding for schools.”

I don’t expect a correction anytime soon.

Wichita Eagle editorial board: When writing that “Kansans need to trust that what they hear from their governor, especially again and again, is rooted in truth, not cherry-picked, spun or flat wrong” please apply this standard to yourself.

In Kansas, arguing about the wrong school issues

School blackboard

Sunday’s Wichita Eagle makes a state-wide issue (literally) out of something that could self-regulate, if only we would let it.

The issue is what proportion of Kansas school spending finds its way “into the classroom” — whatever that means — and Kansas Governor Sam Brownback’s use of this statistic.

The front page Sunday article (Governor’s numbers come under question) spent over 1,000 words on the topic. It covers where Brownback got the number he uses, the controversy over how to classify spending as “classroom” or other, and troubles surrounding an advocacy group that pushed for more spending going to the classroom.

Why is this issue important? In Kansas, most children attend government schools that are funded and regulated by government. This means that how schools spend money is a political issue. There will be arguments.

In the private sector, however, we don’t see these types of arguments. Do we argue in public about how much the grocery store spends on administrative overhead compared to other spending? Of course not. The managers and owners of the grocery store are intensely interested in this issue. The public is too, but only in how the management of the grocery store affects their shopping experience.

If shoppers don’t like the way a store is managed, they shop somewhere else. Management may notice this and make changes that customers appreciate. If management doesn’t adapt, the store will likely close and be replaced by other stores that do a better job delivering what customers want.

Or, some shoppers may like a high level of management in a grocery store — one with more personal service. Some like a bare-bones store where you sack the groceries yourself. This variation in customer tastes and needs leads to what we observe: diversity in the types of grocery stores shoppers can choose from.

The point is that in the private sector, people get to choose what they like. They choose what’s best for them. But with our system of public schools funded and regulated by government, there is no choice. (Yes, you can escape the public schools and use others, but you still must pay for the government schools.)

There’s a factor that leads to this diversity of grocery stores and self-regulation focused on meeting consumers’ needs. It’s market competition.

But Kansas has no market competition in schools, unless you want to escape the system entirely and still pay for it. We have a very weak charter school law, meaning there are very few charter schools in Kansas. We have no vouchers or tax credit scholarships.

If we had these instruments of school choice in Kansas, government schools would face market competition. They would have to start being responsive to customers. We could allow schools to decide for themselves how much to spend on management and things other than the classroom. Market competition would guide schools in structuring their management and budgets to best meet the needs of schoolchildren and parents.

If we had school choice in Kansas, we would have a more diverse slate of schools for parents to select from. We could rely on the nature of markets to self-regulate schools like we rely on markets to regulate grocery stores.

We could quit arguing about things like how much is spent in the classroom, and we could actually focus on teaching children.

But the Kansas school education establishment doesn’t want that. That establishment fights every attempt to introduce even small elements of choice into Kansas. We’ll see this soon as several bills facilitating school choice are introduced in the Kansas Legislature.

Well-intentioned policies do more harm than good

By Derrick Sontag, Americans for Prosperity-Kansas. A version of this appeared in the Wichita Eagle.

Medicaid.gov Keeping America Healthy

Governor Brownback and legislators in Kansas must make an important decision this legislative session. Following the Supreme Court’s ruling in June 2012, Kansas must decide whether it will vastly expand its Medicaid rolls. Adding hundreds of thousands of Kansas residents to Medicaid is the exact wrong policy for our state.

The desire to expand Medicaid is well-intentioned, but will do more harm than good. The plan ignores the realities of the Medicaid system.

Medicaid is a broken, costly system traditionally serving low-income populations focusing on pregnant women, children and the disabled. Its expansion is a key component of the President’s health care law.

Unfortunately, Medicaid is rife with problems. Medicaid’s unique structure–jointly managed by the state and the federal government — results in subpar outcomes for covered families. Medicaid combines countless restrictions and paperwork requirements for providers while at the same time paying half of other insurance plans. This results in a lose-lose for providers, forcing many out of the Medicaid market. A recent study found 32 percent of Kansas doctors won’t accept new Medicaid patients.

These problems lead to even bigger problems for Medicaid patients and families. The health outcomes for Medicaid patients dramatically lag those on private insurance or Medicare. Study after study has confirmed these results.

Adding hundreds of thousands of people to this system will only make these problems worse and does not qualify as real health reform.

Even if Medicaid wasn’t a broken system, Kansas can’t afford to expand coverage.

The federal government is making gigantic promises to encourage states to comply. According to the President’s health care law, the federal government will pay 100 percent of expenses for newly eligible individuals for the first three years stepping down to 90 percent by 2020.

This seems like a great deal for Kansas. The state can leverage federal funding to provide for its residents. But not so fast.

The federal government can’t afford these promises. The President himself has twice suggested the government cut its reimbursement to states due to the high costs imposed. Even if the government honors its generous promises, Kansas taxpayers will pay an additional $525 million in the next 10 years just for this expanded population.

By refusing to create a health insurance exchange last year, Gov. Brownback admitted the health care law won’t result in better care or better outcomes for patients. Expanding Medicaid, while well-intentioned, is just another flawed health care idea coming from Washington.

Instead of subject Kansas to a broken, costly system, Kansas’ leaders should refuse to expand the Medicaid rolls in the Sunflower State.

Kansas school efficiency task force report

In an effort to spur greater efficiency in Kansas public schools, Kansas Governor Sam Brownback created a school efficiency task force. The task force has released its report, which may be viewed here.

While some of the recommendations are very useful and should be implemented, some are minor in nature, and some — especially the ones that would reduce the power of the teachers union — will be very difficult to implement. There is also a list of mostly generic “best practices,” such as “Look for savings on utilities.” The task force also solicited anonymous suggestions from the public, and a representative sample is included.

Two specific recommendations relate to the issue of the various funds schools use and their balances. This has been a contentious issue, with schools defending the need for large (and increasing) fund balances. See Kansas schools have used funds to increase spending for background.

School districts have complained that the state has been late in making its payments. School districts use this as an argument for the need for high fund balances. So it’s not surprising to see this recommendation: “Place a priority emphasis on the timely transfer of state payments to school districts in June and January.”

There’s also this recommendation: “Legislatively eliminate, reduce, and consolidate the statutory cash reserve accounts and separate fund accounts that currently exist, thereby ending the ‘use-it-or-lose-it’ policy and allowing the funding contained in each fund category to be more broadly spent across the full variety of educational requirements. Accounts that remain, including the General Fund, should be allowed a modest amount of carryover from year to year.”

The explanation tells us that the current system of accounts restricts school districts’ ability to effectively use funding. And obviously, “use-it-or-lose-it” is a bad policy.

There is also the recommendation to form a definition of what counts as “instructional” spending, and whether the current target of 65 percent instruction spending is the best goal.

In school bond issue campaigns, a popular selling point made to voters is that the state will pay for some of the bond payments. It’s pitched as free money, or at least as a way to get back the money the taxpayers have been sending to Topeka to pay for other school districts’ bonds. So another recommendation is to consider reevaluating this program.

The issue of accounting and data management is addressed, with examples of the state requiring reports that are “cumbersome, inefficient, and time-consuming” to provide. The reports calls for data to be trackable down to the building level, and made more readily available to the public.

There are also recommendations that are sure to be opposed by Kansas National Education Association (KNEA), our state’s teachers union. These include a review of teacher tenure, seen as limiting administrators’ ability to efficiently allocate resources. Instead of the strict salary schedule that is currently used, the report recommends a salary range, which could include factors like experience and area of expertise.

There is also recommended a reduction in the matters that are subject to negotiation with the union, specifically mentioning “work hours, amount of work, insurance benefits, force reductions, professional evaluation procedures, etc.” as no longer subject to mandatory negotiation.

Missing from the dialog

Perhaps it was not included in the mandate given to this task force, but missing from the recommendations is using the power of markets to improve the education of Kansas schoolchildren.

For example: Private sector firms don’t need to be told to “Look for savings on utilities.” The profit motive induces them to do things like this, either to earn a better return on investment, or in the case of non-profit institutions, to better serve more customers (students).

While public education spending advocates insist that schools shouldn’t be subject to the same competitive market forces that rule the business world, competition works wonders in states where it is allowed to exist. Since Kansas has a very weak charter school law (and therefore very few charter schools) and no school choice through vouchers or tax credit scholarships, Kansas schoolchildren don’t benefit from the dynamism that we see in other states.

We also don’t experience the cost savings that states with school choice see. The The Friedman Foundation for Educational Choice has found — over and over — that school choice programs save money.

Unfortunately, Governor Brownback has not expressed support for school choice programs, or even for charter schools.

Schools are sure to oppose most of the recommendations, even those that are the hallmark of good government. An example is a KSN Television news story which reported that Newton school superintendent John Morton thinks it is “a real concern” when citizens have access to data about government spending. This is a common reaction by government bureaucrats and officials. They prefer to operate without citizen scrutiny.

Finally, there is this irony: The Kansas school bureaucracy says that everything they do “is for the kids.” You might think that they would already be doing everything they can to increase school efficiency in order to benefit students. They have much of the power they need to do this. It’s time to see whether they’re actually willing to act in the best interests of Kansas schoolchildren, and for taxpayers, too.

Kansas Governor’s School Efficiency Task Force Recommendations

Kansas Policy Institute on Kansas 2014 budget

Kansas Policy Institute president Dave Trabert offered the following statement today regarding the release of fiscal year 2014 — 2015 budget proposal by Governor Sam Brownback:

On taxes: “HB 2117 was a great step in the right direction on taxes and we should absolutely continue to lower taxes on all Kansans. We applaud Governor Brownback’s efforts to eliminate income taxes in Kansas, but increasing sales taxes in July is not the way to do it. Completely eliminating the income may require a sales tax increase, but the rate cannot be determined until government stops giving away taxpayer money in the name of economic development and gets spending under control.”

On spending: “We can’t know how much government should spend until we actually look for ways to be more efficient. Spending less is not about cutting service, it’s about providing the same or better service at a better price. The Governor’s budget does so in some places but it should go further. 31 states are estimated to have spent less per-resident than Kansas in 2012 so we can certainly find ways to be more efficient — especially given that general fund spending has increased 32% since 2005.”

“We often hear laughter when we ask people around the state if government operates efficiently and a recent public opinion poll we conducted with SurveyUSA backs this up. In fact, 83 percent of Kansans believe the state government could operate five to 10 percent more efficiently.”

On K-12 Finance and Gannon implications: “The $654 increase in Base State Aid Per-Pupil called for in the Gannon court ruling, would bring total taxpayer aid to schools to $14,045 per-pupil this year. It costs a lot of money to operate our schools, but it’s how the money is spent that matters, not how much. No study has ever been conducted in Kansas to determine what it costs for students to achieve required outcomes and have schools organized and operating in a cost-effective manner. Legislators have an obligation to fund schools, but they also have an obligation to do so in a way that makes effective use of taxpayer money.”

“The education focus should be on outcomes. Billions in increased aid to schools over the years have not improved student achievement on independent national exams. Even state assessments show that only 56 percent of 11th grade students read grade-appropriate material with full comprehension. More money isn’t the answer to raising student achievement. It’s time to start looking for real solutions..”

On KPERS: “Gov. Brownback clearly recognizes that last year’s KPERS reform didn’t go as far as it needs to. So even though it isn’t formally in the budget a move to a 401(k) style plan for new hires and non-vested current employees stops the likely $15 billion KPERS hole from getting deeper and, if properly structured, starts filling it back in.

Reaction to Kansas State of the State Address, 2013

Governor Sam Brownback delivered his State of the State Address on January 15, 2013. The as-prepared text of the address may be read here.

Americans for Prosperity-Kansas:

“Americans for Prosperity-Kansas continues to support the eventual elimination of the income tax in Kansas, and we applaud Gov. Brownback for making this a priority in 2013″” said AFP-Kansas state director Derrick Sontag. “We would support a trigger mechanism for future rate reductions in the proposal rather than legislators continuing to seek a reduction in the rate every year.

“We have no doubt that continued reductions in the income tax rate will help create economic activity, expand the tax base and create jobs.

“We’re coming off a years-long cycle in which excessive government spending stifled Kansas families and resulted in stagnant population growth, taxpayers migrating to other states, and the loss of tens of thousands of private sector jobs. The Governor said it best when he pointed out that some choose to grow spending rather than jobs.

“We look forward to working with legislators and the Governor in the coming session on other important areas of reform such as judicial selection — giving citizens of Kansas more direct input in the judges who sit on the Kansas Supreme Court and Kansas Court of Appeals. Senate confirmation or elections of judges would certainly create a more transparent process that is accountable to the people.”

Senate Democratic Leader Anthony Hensley and House Democratic Leader Paul Davis issued the following statement. Hensley is wrong about the school spending figures, as I report in Kansas Democrats wrong on school spending.

“Governor Brownback’s $2.5 billion dollar self-inflicted budget shortfall, a result of his irresponsible tax policy, has brought Kansas to the edge of its own fiscal cliff. He has brought Washington, D.C. politics to Kansas, and they do not belong here,” said Hensley. “Four months into office, he signed the single largest cut to public education in Kansas history. In just three school years, statewide funding for K-12 education was cut nearly $442 million, or a cut of $620 per child. It is no surprise that a three-judge panel issued its ruling last Friday that the Legislature isn’t meeting its K-12 school funding duty under the Kansas Constitution. Members of the Legislature took an oath just yesterday swearing to uphold the Constitution of Kansas. What is our oath worth if we renege on our constitutional duty to adequately and fairly fund our schools?”

The 2013 legislative session will likely be marked by three major issues: a budget deficit created by tax breaks for the wealthy and big corporations, a court order to restore funding to Kansas public schools and a fundamental debate over checks and balances in Kansas.

“Democrats want to be part of the solution to this problem, but we cannot support proposals that make the gap between the rich and the middle class even wider. The most troubling part of the Brownback Agenda is the extent to which it brings Washington-style politics to Kansas. We need Kansas based solutions to our Kansas problems, which means funding for Kansas schools, lower property taxes, and proposals to create good paying jobs for middle class families,” said Davis.

Some tweets:

Someone doesn’t understand the difference between “deductible” and “refundable”:

Winners and losers in Kansas school finance lawsuit

Who are the winners and losers now that the decision in Gannon vs. Kansas — better known as the Kansas school finance lawsuit — has been reached?

The decision reached by the court is that Kansas schools are unconstitutionally underfunded. While it is most commonly reported that the decision requires Kansas to spend an additional $440 million per year on schools, the actual amount of increased spending will be $594 million per year. This is because of the mechanism of the local option budget, according to Kansas Policy Institute. The decision is being appealed to the Kansas Supreme Court.

The winners are the Kansas school spending establishment. These are the people who are devoted to spending more on Kansas schools — without regard to need, or whether the spending increases student achievement, or whether the spending is harmful to the Kansas economy. The main cheerleader for this team is Kansas National Education Association (KNEA), our state’s teachers union. Although not a party to the suit, Kansas Association of School Boards (KASB) is a winner, too. Kansans should remember a story told by Kansas House of Representatives member Arlen Siegfreid of a conversation he had with KASB lobbyist Mark Tallman: “During our discussion I asked Mr. Tallman if we (the State) had the ability to give the schools everything he asked for would he still ask for even more money for schools. His answer was, ‘Of course, that’s my job.’”

An obvious group of losers is Kansas taxpayers. Obviously.

The people who truly lost, and who will suffer the most from the court’s decision, are Kansas schoolchildren. That’s because most people believe the problems with Kansas schools — whatever they are — can be solved with more spending. Certainly that’s the position taken by school system bureaucrats and others who benefit from increased school spending.

These advocates for spending conveniently ignore that school spending has been on a long upward trajectory, while at the same time test scores are steady or even falling in some cases. But school spending is an easy issue. Appeals that tug on heartstrings — “It’s for the kids” — are easy to make. And it’s easy to spend more on schools — at least easier than the real reforms that will help Kansas schoolchildren.

The relevant part of the Kansas Constitution states: “The legislature shall make suitable provision for finance of the educational interests of the state.” It’s a good thing for the state’s education bureaucracy the Constitution doesn’t say “the state shall provide a suitable education.” We’d be in a lot of trouble.

The state of Kansas schools

Those who think Kansas schools are doing well should compare Kansas NAEP scores with those of Texas. See Kansas school test scores, in perspective for an explanation of why Kansas test scores seem to be much better than other states.

Kansas Commissioner of Education Diane DeBacker has written that she is proud of student achievement in Kansas: “Since 2001, the percentage of students statewide who perform in the top three levels on state reading assessments has jumped from about 60 percent to more than 87 percent. In math, the jump has been from just more than 54 percent to nearly 85 percent.”

This rise in performance, however, is only on tests that the Kansas education establishment controls. On every measure of student performance that I know of that is independent, this rising trend in student achievement does not appear. In some measures, for some recent years, the performance of Kansas students has declined.

How can it be that one series of tests scores are rising, but not others? Kansas school administrators don’t have a good answer for this. But there is a good reason: The Kansas test scores are subject to manipulation for political reasons.

In 2006 Kansas implemented new tests, and the state specifically warns that comparisons with previous years — like 2001 — are not valid. A KSDE document titled Kansas Assessments in Reading and Mathematics 2006 Technical Manual states so explicitly: “As the baseline year of the new round of assessments, the Spring 2006 administration incorporated important changes from prior KAMM assessments administered in the 2000 — 2005 testing cycle. Curriculum standards and targets for the assessments were changed, test specifications revised, and assessed grade levels expanded to include students in grades 3-8 and one grade level in high school. In effect, no comparison to past student, building, district, or state performance should be made.” (emphasis added.)

Despite this warning, DeBacker and Kansas school superintendents make an invalid statistical comparison. This is not an innocent mistake. This is an actual example of — turning the superintendents’ quote on themselves — “data that was used out of context, completely misrepresenting the truth.”

On other tests, only 28 percent of Kansas students are ready for college-level work in all four subjects the ACT test covers. While this result was slightly better than the national average, it means that nearly three-fourths of Kansas high school graduates need to take one or more remedial college courses.

School spending advocates also take advantage of the fact that citizens are generally misinformed on Kansas school spending. When asked about the level of spending on public schools in Kansas, citizens are generally uninformed or misinformed. They also incorrectly thought that spending has declined in recent years.

Kansas school standards

Last summer Kansas schools received a waiver from participating in the No Child Left Behind program. KSDE reported: “Another key component of the state’s waiver is related to evaluating teachers and school leaders. Among the criteria for achieving a waiver request was implementing an evaluation system that includes student achievement as a significant factor in the evaluation. The Kansas plan calls for appointing a commission to identify the most effective means of tying student achievement to teacher and leader evaluations and building that into the existing Kansas Educator Evaluation Protocol (KEEP).”

Many people would be surprised to learn that student achievement has not been the primary factor used in evaluating teachers in Kansas. This is one of the reasons why Kansas has been found to rank low in policies on teacher quality.

Last year Kansas school superintendents wrote an op-ed proclaiming the high standards and performance of Kansas schools. But what Kansans ought to take notice of is the superintendents’ claim in this sentence: “Historically, our state has had high-performing schools, which make Kansas a great place to live, raise a family and run a business.”

The truth is that when compared to other states, Kansas has low standards.

The U.S. Department of Education’s National Center for Education Statistics (NCES) has analyzed state standards, and we can see that Kansas has standards that are below most states. The table of figures is available at Estimated NAEP scale equivalent scores for state proficiency standards, for reading and mathematics in 2009, by grade and state. An analysis of these tables by the Kansas Policy Institute shows that few states have standards below the Kansas standards.

This table is from KPI’s report in 2012 titled Removing Barriers to Better Public Education: Analyzing the facts about student achievement and school spending.

The conclusion by NCES is “… most states’ proficiency standards are at or below NAEP’s definition of Basic performance.” KPI, based on simple analysis of the NCES data, concluded: “Kansas is one of those states, with its Reading Proficiency standard set lower than what the U.S. Department of Education considers Basic performance. Math Proficiency levels are above what NAEP considers to be Basic but still well below the U.S. standard for Proficient.”

Should we spend more on Kansas schools?

Education is vitally important, school officials tell us. They’re right — and that’s why the education of Kansas schoolchildren is too important to be exclusively in the hands of government.

The school finance lawsuits illustrate this. Suppose that the court is right, and that increased spending will fix the problems with schools. How many years will pass before the solution is implemented? And even if we immediately start spending more, do we really think it will improve student outcomes, in light of our past experience?

The solution for Kansas schoolchildren is increased school choice, through charter schools and either vouchers or tax credit scholarships. This is what we are missing in Kansas. With greater choices available to students and parents, there will be less need for government oversight of schools and all the bickering that accompanies decisions made through the political process.

This is the reform that will most help Kansas schoolchildren. It will cost less and improve outcomes. It doesn’t require fleets of education bureaucrats and stacks of plans and regulations. But it does require the school establishment to give up some power and their stranglehold on the use of public funds for schools.

Unfortunately, we’re not moving in that direction in Kansas. Recently in Wichita, Kansas Governor Sam Brownback had two opportunities to promote school choice in Kansas. On the Joseph Ashby radio program he was asked about school choice, but wouldn’t commit to it as a priority.

Later that day at the Wichita Pachyderm Club a similar question was asked, and again Brownback wouldn’t commit to school choice. The focus right now is efficiency and to get fourth grade reading levels up, Brownback said. He added that about 28 percent of fourth graders can’t read at basic level, which he described as a “real problem. If you can’t read, the world starts really shrinking around you.”

It’s a mystery why Governor Brownback hasn’t made school choice a priority in Kansas. Many governors are doing that and instituting other wide-reaching reforms.

Reaction to Kansas school lawsuit decision

Following are several reactions to the decision in Gannon vs. Kansas, the school funding lawsuit. The court ruled the state must spend more on schools.

An important observation on the true size of the court-ordered tax increase was offered by Kansas Policy Institute:

“Today’s mandate of a $654 Base State Aid Per-Pupil (BSAPP) increase forces the state to raise annual spending and taxes by $440 million and, because of the way the Local Option Budget is written, local property taxes will automatically increase by $154 million. In total, the Shawnee District Court would take an additional $594 million out of the Kansas economy every year.”

See KPI on Gannon: Extremely Unfortunate $600 Million Annual Tax Hike more, including:

“It is extremely unfortunate for citizens of Kansas that the court has effectively ordered an annual $594 million tax hike. This is even more shocking given that there is no evidence that the billions in increased spending have raised student achievement on independent national exams. According to the National Assessment of Educational Progress (NAEP), less than half of Kansas’ 4th and 8th grade students are proficient in math and only about one third are proficient in reading – this is essentially unchanged over the past decade despite billions in increased taxpayer support.

“It costs a lot of money to operate our schools, but its how the money is spent that matters, not simply how much. Just this week, Education Week gave Kansas a D+ for student achievement; among other things, this was a result of low rankings for achievement gains and that we are below the national average for gains in each subject and grade level. They also pointed out that per-pupil spending in Kansas is above the national average and that State expenditures on K-12 schooling, as a percent of state taxable resources, are the 12th highest in the nation.

Kansas Governor Sam Brownback issued this statement:

“The ruling by the district court is disappointing but not unexpected given the Kansas Supreme Court’s previous ruling in the Montoy case in 2005. Through today’s ruling, the courts are drastically increasing the property tax burden on every Kansan. The Kansas Legislature, not the courts, has the power of the purse and has, in fact, increased total state funding for schools every year during my administration. The legislative process is the appropriate venue for debating and resolving issues of taxation and spending.”

From Senate President Susan Wagle:

“Once again, Kansas judges have overstepped their constitutional bounds and defied the will of Kansas voters and their elected representatives and senators. With today’s decision, this judicial panel ignored the system of checks and balances that every Kansas student is taught in school and decided that they alone, not the people via the legislature, would determine how the people’s money should be spent, by imposing a specific dollar amount that Kansas must spend for education.

“These judges have made themselves the sole arbiters of spending — and by extension, taxation — in Kansas. They have demonstrated no regard for the ability of struggling Kansas families to pay higher taxes, if necessary, to meet their demands. This also disregards the will of Kansas voters, who overwhelmingly elected a House and Senate that supports the existing school funding policy — one that maintains educational quality while also being sensitive to the very real difficulties being faced by Kansas taxpayers.

“I am committed to upholding the will of the majority of Kansans who want their elected leaders to maintain high-quality public education. I am committed to restoring to Kansas the fundamental American principle that only the elected representatives of the people of Kansas — accountable to them at the ballot box — may enact laws regarding spending and taxation.”

In a press release titled “District Court decision supports a quality education” Kansas National Education Association (KNEA), our state’s teachers union said:

Once again a Kansas Court has found that the Legislature has failed to fully fund an appropriate public education for Kansas students. …

As to the issue of property taxes, this decision has no effect on property taxes whatsoever. Whether or not property taxes increase will be a matter of how the Legislature decides to react. Since the Legislature last year chose to enact massive cuts to the state income tax, they will need to look to some tax source to overcome first the shortfall of nearly $300 million created by the tax cut and then the projected $440 million necessary to fund the school finance formula. If property taxes go up, the decision will rest entirely with the Legislature. There are many options available to them; they have so far chosen to use scare tactics in reaction to being held accountable.

There is no greater economic development tool than a well-trained, well-educated citizenry. Kansas has long delivered on that promise. This ruling reasserts the State’s commitment to the children, families, and businesses of Kansas.

USD 259, the Wichita public school district:

The District Court of Kansas issued its opinion on the school finance lawsuit on January 11. The ruling, which is in excess of 250 pages, requires adequate funding for schools. The court ordered that the base state aid per pupil should be funded at $4,492, up from $3,838. If funded, the base increase would restore most of the cuts the district has made since 2009. The increase could be at least $45 million. To read the ruling, click here. To watch BOE President Lynn Rogers’ news conference about the opinion, click here.

“This is a win for Kansas students,” said BOE President Lynn Rogers. “The lawsuit is about our children and the Kansas of tomorrow, so we can prepare Wichita students for the high-wage, high skill jobs of the future.”

BOE President Rogers said that the lawsuit was about adequate funding for all Kansas students and that they deserve a quality education regardless of where they live in the state. He also said it is about creating a highly-skilled workforce for the future, which starts with students receiving a quality education.”

“The education we provide is the foundation for our workforce and the future of Kansas. If we don’t give our students a quality education now, we will pay for it in the future,” he added.

The school districts involved in the lawsuit represent about one-third of the students across the state.

President Lynn Rogers said that school districts must collaborate with the Kansas State Legislature to work towards school funding solutions.

Wichita STAR bonds project not good for capitalism

Tomorrow the Wichita City Council considers approval of the project plan for a STAR bonds project in Wichita.

The formation of the district has already been approved. This action by the council will consider the development plan and the actual authorization to spend money.

If approved, the city will proceed under the State of Kansas STAR bonds program. The city will sell bonds and turn over the proceeds to the developer. As bond payments become due, sales tax revenue will make the payments.

It’s only the increment in sales tax that is eligible to be diverted to bond payments. This increment is calculated by first determining a base level of sales for the district. Then, as new development comes online — or as sales rise at existing merchants — the increased sales tax over the base is diverted to pay the STAR bonds. Estimates are that annual revenue available for the bonds will be over $5,000,000.

For this district, the time period used to determine the base level of sales tax is February 2011 through January 2012. A new Cabela’s store opened in March 2012, and it’s located in the STAR bonds district. Since Cabela’s sales during the period used to calculate the base period was $0, the store’s entire sales tax collections will be used to benefit the STAR bonds developer.

(There are a few minor exceptions, such as the special CID tax Cabela’s collects for its own benefit.)

Which begs the question: Why is the Cabela’s store included in the boundaries of the STAR bonds district?

With sales estimated at $35 million per year, the state has been receiving around $2 million per year in sales tax from this store. But after the STAR bonds are sold, that money won’t be flowing to the state. Instead, it will be used to pay off bonds that benefit the project’s developer.

Some questions

Curiously, the city doesn’t provide a cost-benefit study for this project. This is the usual mechanism the city relies on as justification for investments in economic development projects.

Often developers ask government for incentives because they claim the project is not economically feasible without assistance. Is that the case with this development? If not, why the need for subsidies?

And if taxpayer subsidy is required for this development, we need to ask what it is about Kansas that discourages this type of business investment.

STAR bonds should be opposed as they turn over tax policy to the private sector. We should look at taxation as a way for government to raise funds to pay for services that all people benefit from. An example is police and fire protection. Even people who are opposed to taxation rationalize paying taxes that way.

But STAR bonds turn tax policy over to the private sector for personal benefit. The money is collected under the pretense of government authority, but it is collected for the exclusive benefit of the owners of property in the STAR bonds district.

Citizens should be asking this: Why do we need taxation, if we can simply excuse some from participating in the system?

Another question: In the words of the Kansas Department of Commerce, the STAR bonds program offers “municipalities the opportunity to issue bonds to finance the development of major commercial, entertainment and tourism areas and use the sales tax revenue generated by the development to pay off the bonds.” This description, while generally true, is not accurate. This STAR bonds district includes much area beyond the borders of the proposed development, including a Super Target store, a new Cabela’s store, and much vacant ground that will probably be developed as retail. The increment in sales taxes from these stores — present and future — goes to the STAR bond developer. As we’ve seen, since the Cabela’s store did not exist during the time the base level of sales was determined, all of its sales count towards the increment.

STAR bonds, or capitalism?

In economic impact and effect, the STAR bonds program is a government spending program. Except: Like many spending programs implemented through the tax system, legislative appropriations are not required. No one has to vote to spend on a specific project. Can you imagine the legislature voting to grant $5 million per year to a proposed development in northeast Wichita? That doesn’t seem likely. Few members would want to withstand the scrutiny of having voted in favor of such blatant cronyism.

But under tax expenditure programs like STAR bonds, that’s exactly what happens — except for the legislative voting part, and the accountability that sometimes follow.

Government spending programs like STAR bonds are sold to legislators as jobs programs. Development, it is said, will not happen unless project developers receive incentives through these spending programs. Since no legislator wants to be seen voting against jobs, many are susceptible to the seductive promise of jobs.

But often these same legislators are in favor of tax cuts to create jobs. This is the case in the Kansas House, where many Republican members are in favor of reducing the state’s income tax as a way of creating economic growth and jobs. On this issue, these members are correct.

But many of the same members voted in favor of tax expenditure programs like the STAR bonds program. These two positions cannot be reconciled. If government taxing and spending is bad, it is especially bad when part of tax expenditure programs like STAR bonds. And there’s plenty of evidence that government spending and taxation is a drag on the economy.

It’s not just legislators that are holding these incongruous views. Secretary of Commerce Pat George promoted the STAR bonds program to legislators. Governor Sam Brownback supported the program.

When Brownback and a new, purportedly more conservative Kansas House took office, I wondered whether Kansas would pursue a business-friendly or capitalism-friendly path: “Plans for the Kansas Republican Party to make Kansas government more friendly to business run the risk of creating false, or crony capitalism instead of an environment of genuine growth opportunity for all business.” I quoted John Stossel:

The word “capitalism” is used in two contradictory ways. Sometimes it’s used to mean the free market, or laissez faire. Other times it’s used to mean today’s government-guided economy. Logically, “capitalism” can’t be both things. Either markets are free or government controls them. We can’t have it both ways.

The truth is that we don’t have a free market — government regulation and management are pervasive — so it’s misleading to say that “capitalism” caused today’s problems. The free market is innocent.

But it’s fair to say that crony capitalism created the economic mess.

But wait, you may say: Isn’t business and free-market capitalism the same thing? Not at all. Here’s what Milton Friedman had to say: “There’s a widespread belief and common conception that somehow or other business and economics are the same, that those people who are in favor of a free market are also in favor of everything that big business does. And those of us who have defended a free market have, over a long period of time, become accustomed to being called apologists for big business. But nothing could be farther from the truth. There’s a real distinction between being in favor of free markets and being in favor of whatever business does.” (emphasis added.)

Friedman also knew very well of the discipline of free markets and how business will try to avoid it: “The great virtue of free enterprise is that it forces existing businesses to meet the test of the market continuously, to produce products that meet consumer demands at lowest cost, or else be driven from the market. It is a profit-and-loss system. Naturally, existing businesses generally prefer to keep out competitors in other ways. That is why the business community, despite its rhetoric, has so often been a major enemy of truly free enterprise.”

The danger of Kansas government having a friendly relationship with Kansas business is that the state will circumvent free markets and promote crony, or false, capitalism in Kansas. It’s something that we need to be on the watch for. The existence of the STAR bonds program lets us know that a majority of Kansas legislators — including many purported fiscal conservatives — prefer crony capitalism over free enterprise and genuine capitalism.

The problem

Government bureaucrats and politicians promote programs like STAR bonds as targeted investment in our economic future. They believe that they have the ability to select which companies are worthy of public investment, and which are not. It’s a form of centralized planning by the state that shapes the future direction of the Kansas economy.

Arnold King has written about the ability of government experts to decide what investments should be made with public funds. There’s a problem with knowledge and power:

As Hayek pointed out, knowledge that is important in the economy is dispersed. Consumers understand their own wants and business managers understand their technological opportunities and constraints to a greater degree than they can articulate and to a far greater degree than experts can understand and absorb.

When knowledge is dispersed but power is concentrated, I call this the knowledge-power discrepancy. Such discrepancies can arise in large firms, where CEOs can fail to appreciate the significance of what is known by some of their subordinates. … With government experts, the knowledge-power discrepancy is particularly acute.

Despite this knowledge problem, Kansas legislators are willing to give power to bureaucrats in the Department of Commerce who feel they have the necessary knowledge to direct the investment of public funds. One thing is for sure: the state and its bureaucrats have the power to make these investments. They just don’t have — they can’t have — the knowledge as to whether these are wise.

What to do

The STAR bonds program is an “active investor” approach to economic development. Its government spending on business leads to taxes that others have to pay. That has a harmful effect on other business, both existing and those that wish to form.

Professor Art Hall of the Center for Applied Economics at the Kansas University School of Business is critical of this approach to economic development. In his paper Embracing Dynamism: The Next Phase in Kansas Economic Development Policy, Hall quotes Alan Peters and Peter Fisher: “The most fundamental problem is that many public officials appear to believe that they can influence the course of their state and local economies through incentives and subsidies to a degree far beyond anything supported by even the most optimistic evidence. We need to begin by lowering expectations about their ability to micro-manage economic growth and making the case for a more sensible view of the role of government — providing foundations for growth through sound fiscal practices, quality public infrastructure, and good education systems — and then letting the economy take care of itself.”

In the same paper, Hall writes this regarding “benchmarking” — the bidding wars for large employers that Kansas and many of its cities employ: “Kansas can break out of the benchmarking race by developing a strategy built on embracing dynamism. Such a strategy, far from losing opportunity, can distinguish itself by building unique capabilities that create a different mix of value that can enhance the probability of long-term economic success through enhanced opportunity. Embracing dynamism can change how Kansas plays the game.”

In making his argument, Hall cites research on the futility of chasing large employers as an economic development strategy: “Large-employer businesses have no measurable net economic effect on local economies when properly measured. To quote from the most comprehensive study: ‘The primary finding is that the location of a large firm has no measurable net economic effect on local economies when the entire dynamic of location effects is taken into account. Thus, the siting of large firms that are the target of aggressive recruitment efforts fails to create positive private sector gains and likely does not generate significant public revenue gains either.’”

There is also substantial research that is it young firms — distinguished from small business in general — that are the engine of economic growth for the future. We can’t detect which of the young firms will blossom into major success — or even small-scale successes. The only way to nurture them is through economic policies that all companies can benefit from. Reducing tax rates is an example of such a policy. Government spending on specific companies through programs like STAR bonds is an example of precisely the wrong policy.

We need to move away from economic development based on this active investor approach. We need to advocate for policies at all levels of government that lead to sustainable economic development. We need political leaders who have the wisdom to realize this, and the courage to act appropriately. Which is to say, to not act in most circumstances.

Public Hearing Considering the Adoption of a STAR Bond Project Plan for the K-96 Greenwich Star Bond Projec… by

Wind tax credit promotes expensive electricity

Conservative and free-market groups are asking Congress to oppose extending the Production Tax Credit for production of electricity from wind.

The letter, presented below, is designed for representatives from states that don’t have a Renewable Portfolio Standard, which is a policy or law that requires a certain amount of electricity to be produced from renewable sources, which is primarily wind in most places. Kansas has an RPS, and Governor Sam Brownback actively supports maintaining this standard, which will require that more Kansas electricity be produced from wind. Kansas Policy Institute has found that RPS will result in higher electricity costs, fewer jobs, and less investment in Kansas. Its summary is at The Economic Impact of the Kansas Renewable Portfolio Standard, and the full report is here.

The letter points out that the PTC has the effect of transferring subsidy from states without RPS to those states, like Kansas, that do.

December 12, 2012
Dear Members of Congress:

We write to urge your opposition to extending the wind Production Tax Credit (PTC). Created in 1992 by the Energy Policy Act, the PTC has far outlived its usefulness. Moreover, as a member of Congress serving a state that does not have a renewable energy mandate, you should be aware that the PTC essentially transfers taxpayer dollars from your constituents and subsidizes the states with such mandates. Renewable energy mandates force utilities to buy politically-favored forms of energy such as wind, while your state has wisely chosen to allow the most abundant and affordable forms of energy to be purchased by consumers and industries.

The wind PTC provides a tax credit of 2.2 cents per kilowatt-hour, and lasts for ten years for anyone receiving it. With the wholesale price of electricity frequently ranging from 2.5 to 4.5 cents per kilowatt-hour, the PTC is worth a large percentage of the total price. This makes the wind industry one of the most heavily subsidized forms of energy. In 2010, federal subsidies paid $56 for every megawatt hour of wind energy compared to $0.64 for coal and natural gas electricity.

Despite having this generous subsidy for two decades, wind only produces 3 percent of America’s electricity. This corporate dependence on federal subsidies not only harms the taxpayers who finance the PTC, it also creates an improper incentive for wind companies to focus on obtaining lucrative subsidies rather than long-term sustainability and competitiveness. It is time the wind energy industry stood on its own and continued funding by the federal government will only hurt cost-effective energy sources as well as American taxpayers.

Lastly, for the twenty-one states that do not have a renewable energy mandate in place — states like your own — the stakes are much higher. Under the structure of the PTC, the bulk of the tax credits flow to those states that have the most wind generation capacity and those happen to be states with an RPS. This is because the PTC helps to disguise the true cost of the mandate. Extending the wind PTC ensures that your constituents will continue to subsidize wind power in other states that have made political decisions to force consumers to buy more expensive and less reliable forms of energy — like wind.

Reliable, affordable, and ‘always on’ electricity is critical to get our economy back on track. The wind PTC promotes unreliable and expensive energy to the detriment of dependable and cost-effective forms of electricity generation. By taking a principled stand against the PTC, you help taxpayers in your own state and ensure more cost-effective electricity generation overall. We urge you to allow this wasteful subsidy to expire, as planned, at the end of the year.

Freedom Action
Competitive Enterprise Institute
American Conservative Union
American Energy Alliance
Heritage Action
American Commitment

Economic development incentives questioned

When the New York Times is concerned about the cost of government spending programs, it’s a safe bet that things are really out of control. Its recent feature As Companies Seek Tax Deals, Governments Pay High Price reports on economic development incentive programs that are costly and produce questionable benefits.

Do we know the cost of economic development incentives? No, reports the Times: “A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.”

Kansas Governor Sam Brownback appears in a video that accompanies the story.

A concern of the newspaper is that the money spent on incentives could be spent on other government programs, primarily schools. My concern is that government spending on incentives is harmful to the economy. It redirects capital from productive to unproductive uses. Charles Koch recently explained:

Today, many governments give special treatment to a favored few businesses that eagerly accept those favors. This is the essence of cronyism.

Many businesses with unpopular products or inefficient production find it much easier to curry the favor of a few influential politicians or a government agency than to compete in the open market.

After all, the government can literally guarantee customers and profitability by mandating the use of certain products, subsidizing production or providing protection from more efficient competitors.

Cronyism enables favored companies to reap huge financial rewards, leaving the rest of us — customers and competitors alike — worse off.

In another article Koch wrote: “Instead of protecting our liberty and property, government officials are determining where to send resources based on the political influence of their cronies. In the process, government gains even more power and the ranks of bureaucrats continue to swell.”

We must distinguish between business and capitalism and hold business groups accountable when they fail to promote economic freedom and capitalism. An example is the Wichita Metro Chamber of Commerce. Its legislative platform reads “The Wichita Metro Chamber believes the State should practice fiscal discipline.”

But the Chamber recommends retaining several business welfare programs that are harmful to capitalism and economic freedom.

Next week the agenda for the meeting of the Wichita City Council contains six items that dish out business welfare and promote cronyism. Another item recommends approval of the city’s legislative agenda, which contains this:

ISSUE: Existing economic development tools are essential for the continued growth and prosperity of our community.

RECOMMEND: The Wichita City Council supports continuation of its 2012 legislative agenda item, calling for protection of existing economic development tools for local public-private partnerships. Among those are Tax Increment Financing (TIF) districts, Community Improvement Districts (CIDs), Industrial Revenue Bonds (IRBs) and Sales Tax Revenue (STAR) bonds.

The premise is false twice: These economic development tools are not “essential,” and Wichita is not growing and prospering, compared to other cities: “The inflation-adjusted gross domestic product for the Wichita metro area declined 0.4 percent in 2010, according to initial estimates from the federal Bureau of Economic Analysis. The decline slowed from the year before, when this measure of economic growth plummeted by 7.7 percent. … Wichita’s decline came even as GDP grew by 2.5 percent nationwide in 2010. GDP increased in 304 of 366 metro areas nationwide.” (Wichita Business Journal, Wichita’s real GDP declined in 2010 amid national recovery, database shows.)