Newsletter for December 9, 2018

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Efficiencies in Sedgwick County government

A document that hasn’t been made public details savings achieved in Sedgwick County over a recent period of nearly three years.

A document prepared within the Sedgwick County Division of Finance details savings of $6,308,097 over a period of almost three years, starting in November 2015. That is the month when Michael Scholes joined Sedgwick County as County Manger. His last day as manager was November 30, 2018, after being dismissed by the county commission. This document is dated August 29, 2018.

An example of a savings is: “Eliminated 6.0 FTEs and associated funding due to the outsourcing of EMS Billing ($304,027).”

The document contains a summary:

  • Priority 1 – Safe & Secure Communities had a total savings listed of $3,959,137, where the categories of efficiencies included technology changes, process improvements, consolidation, training, grants to offset costs, and staffing changes.
  • Priority 2 – Human Services & Cultural Experiences had a total savings listed of $1,931,447, where the categories of efficiencies included technology changes, process improvements, staffing changes, consolidation, training, and collaboration with other entities.
  • Priority 3 – Communications & Engagement had efficiencies in transparency and elections process with the purchase of new voting equipment.
  • Priority 4 – Effective Government Organization had a total savings listed of $417,513, where the categories of efficiencies included technology changes, process improvements, and staffing changes.

To the best of my knowledge, this document has not been shared with the public, and is not found on the county’s website. I make it available here.

Newsletter for December 3, 2018

Click here to view the freshest edition of the newsletter from Voice For Liberty. This edition is dated December 3, 2018.

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On big contracts, Wichita has had problems

As Wichita prepares to award a large construction contract, let’s hope the city acts in an ethical manner this time.

As the Wichita City Council prepares to make a decision regarding a contract for the new baseball stadium, the council’s past reputation in these matters can’t be overlooked.

The controversy over the stadium contract has been covered by the Wichita Eagle: “The Wichita City Council hasn’t officially approved a design-build team for the city’s new $75 million Minor League ballpark, but there’s already been a protest over the recommended group. … At issue in a protest by a competing team is whether the JE Dunn team meets a key requirement to be selected, which is that it has built at least three similar Major or Minor League ballparks.” 1

The biggest potential for unethical behavior comes from Wichita Mayor Jeff Longwell. In 2012, as the Wichita city council was considering the award of the contract for the new airport terminal, Longwell (then a council member) received campaign contributions from executives of Walbridge, a Michigan construction company partnering with Key Construction to build the new Wichita airport terminal. 2

Two Walbridge contributions were made on July 16, 2012, the day before the council, Longwell included, voted to award the contract to the Key/Walbridge partnership. More contributions from Walbridge arrived on July 20, according to Longwell’s campaign finance reports.

When questioned about the Michigan contributions, Longwell told the Wichita Eagle, “We often get contributions from a wide variety of sources, including out-of-town people.” But analysis of past campaign finance documents filed by Longwell showed just three out-of-state contributions totaling $1,500. 3

In deciding the airport contract issue, the council was asked to make decisions involving whether discretion was abused or whether laws were improperly applied. It’s not surprising that Jeff Longwell made these decisions in favor of his campaign contributors. But he shouldn’t have been involved in the decision.

That was not the first time Jeff Longwell has placed the interests of his campaign contributors ahead of taxpayers. In 2011 the city council, with Longwell’s vote, decided to award Key a no-bid contract to build the parking garage that is part of the Ambassador Hotel project. The no-bid cost of the garage was to be $6 million, according to a letter of intent. Later the city decided to place the contract for competitive bid. Key Construction won the bidding, but for a price $1.3 million less.

It’s not only Longwell with problematic behavior in the past. In 2012, before the vote on the airport contract, executives of Key Construction and spouses contributed heavily to the campaigns of both Wichita City Council Member Lavonta Williams (district 1, northeast Wichita) and Wichita City Council Member James Clendenin (district 3, southeast and south Wichita). These contributions were not known to the public until months after the vote was cast.

Williams is no longer on the council, but Clendenin remains.

Former Wichita Mayor Carl Brewer had his own issues, with a curious set of ethics principles. 4

The city needs an adult in the room. That person is, or should be, Wichita city manager Robert Layton. In the past he has implemented policies to end the practice of no-bid contracts. We don’t know what will happen this week.


Notes

  1. Rengers, Carrie. City selects ballpark design-build group; competing bidder questions qualifications. Wichita Eagle, November 29, 2018. Available at https://www.kansas.com/news/business/biz-columns-blogs/carrie-rengers/article222372330.html (subscription may be required).
  2. “A campaign finance report filed by Wichita City Council Member Jeff Longwell contains contributions from executives associated with Walbridge, a Michigan construction company partnering with Key Construction to build the new Wichita airport terminal. … These contributions are of interest because on July 17, 2012, the Wichita City Council, sitting in a quasi-judicial capacity, made a decision in favor of Key and Walbridge that will cost some group of taxpayers or airport customers an extra $2.1 million. Five council members, including Longwell, voted in favor of this decision. Two members were opposed.” Weeks, Bob. Michigan company involved in disputed Wichita airport contract contributes to Jeff Longwell. Available at https://wichitaliberty.org/wichita-government/michigan-company-involved-in-disputed-wichita-airport-contract-contributes-to-jeff-longwell/.
  3. “Analysis of Longwell’s July 30, 2012 campaign finance report shows that the only contributions received from addresses outside Kansas are the Walbridge contributions from Michigan, which contradicts Longwell’s claim. Additionally, analysis of ten recent campaign finance reports filed by Longwell going back to 2007 found three contributions totaling $1,500 from California addresses.” Weeks, Bob. Jeff Longwell out-of-town campaign contributions. Available at https://wichitaliberty.org/wichita-government/jeff-longwell-out-of-town-campaign-contributions/.
  4. Weeks, Bob. The odd ethics of Wichita Mayor Carl Brewer. Available at https://wichitaliberty.org/wichita-government/odd-ethics-wichita-mayor-carl-brewer/.

It’s not the bonds, it’s the taxes

A Wichita Eagle headline reads “Wichita aircraft supplier plans 45 new jobs with $7.5 million bond request,” but important information is buried and incomplete.

According to the agenda packet for the December 4, 2018 meeting of the Wichita City Council, a local aircraft supplier is “requesting issuance of bonds” worth $7.5 million. 1

Even if you read the entire Wichita Eagle article2 on this matter, you wouldn’t really learn much about this item. You might think the city is lending the company this money, which many people assume is the purpose of the Industrial Revenue Bonds program. But in the IRB program, the city lends no money, nor does it guarantee repayment of the bonds. 3

Instead, the purpose of the IRBs is to convey a tax holiday. In the very last paragraph, the article mentions this property tax abatement, but no dollar value is given, even though the “city documents” presumably used as a source for this story clearly state the dollar values. The sales tax exemption is also mentioned, with no dollar value given. City documents don’t hold that, either.

The value of the tax holiday, according to the city, is estimated at $82,040 annually for up to ten years, shared among local taxing authorities thusly:

City of Wichita: $22,837
State of Kansas: $1,050
Sedgwick County: $20,575
USD 259 (Wichita school district): $37,578

For the value of the sales tax exemption, no value is given. By city documents state the purpose of the bonds is to pay for “$4,000,000 for new machinery and equipment.” Sales tax on that would be $300,000. If the entire $7.5 million is spent on taxable purchases, sales tax savings would be $562,500.

Why doesn’t the Wichita Eagle mention some of these important matters?

The article also holds no mention of the important public policy issues involved. For example, why does the owner of the business want to escape paying the same taxes that (nearly) everyone else must pay? This question is especially pertinent as Kansas is one of the few states in which even low-income households pay the full sales tax rate on groceries.

Perhaps the reason is that the cost of government makes this investment unprofitable. If that is true, we have a grave problem. If the city must issue bonds and create a tax holiday for this rather small investment, we have a capacity problem. A reader on Facebook left this wry comment to the Eagle story: “So, local area population 600,000+ people … About to add 45 jobs over 5 years?”

The city justifies tax giveaways like this by using a benefit-cost analysis. That is, if the city gives up some taxes, it will receive even more in additional taxes. This analysis is useful to politicians and bureaucrats. But the analysis is valid and meaningful only if the investment is impossible without the tax giveaway.

The question then becomes: Is this tax forgiveness necessary? City documents don’t say. Showing necessity is not a requirement of the IRB incentive program. We’re left wondering if the tax expenditure, which is potentially more than one million dollars over ten years, is truly needed.

The city is proud of its requirements that the benefit-cost ratio must be at least 1.3 to 1. But for USD 259, the Wichita school district, the ratio is 1.17 to 1. So the city is pushing an “investment” on the school district that is below the standard it requires for itself. The school district has no say in the matter, based on Kansas state law. Note also that the school district gives up the most tax revenue, 1.6 times as much as the city.

By the way, Wichita Mayor Jeff Longwell says the city is no longer using cash as economic development incentives. But when the city waves a magic legislative wand and says you don’t have to pay $82,040 per year in property tax, how is that different than giving the same amount in cash? Or when the city says don’t bother paying the sales tax on this, how is that different than giving a cash discount?

The answer is there’s no difference. The mayor, city council members, and city bureaucrats hope you won’t notice the sleight of hand, that is, skillful deception. And with the Wichita Eagle being the watchdog, there’s little chance very many people will be informed.


Notes

  1. City of Wichita, agenda for December 4, 2018. V-2: Public Hearing and Issuance of Industrial Revenue Bonds, Etezazi Industries, Inc. Available at http://www.wichita.gov/Council/Agendas/12-04-2018%20Agenda.pdf.
  2. Siebenmark, Jerry. Wichita aircraft supplier plans 45 new jobs with $7.5 million bond request. Wichita Eagle, November 30, 2018.
  3. “Industrial Revenue Bonds are a mechanism that Kansas cities and counties use to allow companies to avoid paying property and sales taxes.” Weeks, Bob. Industrial revenue bonds in Kansas. Available at https://wichitaliberty.org/kansas-government/industrial-revenue-bonds-kansas/.

Sedgwick County income and poverty

Census data show Sedgwick County continuing to fall behind the nation in two key measures.

Data released today from the United States Census Bureau through the Small Area Income and Poverty Estimates (SAIPE) Program shows Sedgwick County median household income continues to fall farther behind the nation.

In 1989, median household income in Sedgwick County was greater than that for Kansas and the nation. In 2017, however, Sedgwick County has fallen behind both.

In 1989, the all-age poverty rate in Sedgwick County was less than the national rate, but now it is higher.

As can be seen in the nearby charts produced by the Census Bureau’s visualization tool, the trend in economic performance between Sedgwick County and the nation started diverging around the time of the last recession. As time passes, the gap between the two generally grows larger, with Sedgwick County falling farther behind.

Courtesy U.S. Census Bureau. Click for larger.
Courtesy U.S. Census Bureau. Click for larger.

WichitaLiberty.TV: Kansas Representative Leo Delperdang

In this episode of WichitaLiberty.TV: Representative Leo Delperdang joins Bob Weeks to discuss the recent election and the upcoming session of the Kansas Legislature. View below or click here to view at YouTube. Episode 220, broadcast December 2, 2018.

Shownotes

Wichita employment, October 2018

For the Wichita metropolitan area in October 2018, jobs are up, the labor force is up, and the unemployment rate is down, compared to the same month one year ago. Seasonal data shows a slowdown in the rate of job growth.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a mostly improving employment situation for the Wichita Metropolitan Statistical Area.

Total nonfarm employment rose from 296,900 last October to 299,000 this October. That’s an increase of 2,100 jobs, or 0.7 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 1.7 percent.

The unemployment rate was 3.3 percent, down from 3.5 percent one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by 719 persons (0.2 percent) in October 2018 from September 2018, the number of unemployed persons rose by 283 (2.7 percent), and the unemployment rate was unchanged at 3.5 percent. The number of employed persons not working on farms rose to 298,219 in October from 297,783 the prior month, an increase of 436 persons, or 0.1 percent.

Click charts for larger versions.

Newsletter for November 25, 2018

Click here to view the freshest edition of the newsletter from Voice For Liberty. This edition is dated November 25, 2018.

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WichitaLiberty.TV: Economic development incentives

In this episode of WichitaLiberty.TV: A look at some economic development incentive programs in Wichita and Kansas. Second in a series. Tax increment financing (TIF) is prominent in this episode. View below, or click here to view at YouTube. Episode 219, broadcast November 25, 2018.

Shownotes

Updated: Kansas tax receipts

Kansas tax receipts by category, presented in an interactive visualization.

The Kansas Division of the Budget publishes monthly statistics regarding tax collections. I’ve gathered these and present them in an interactive visualization. Updated with data through October 2018.

Click here to learn more and access the visualization.

Sedgwick County jobs, second quarter 2018

For the second quarter of 2018, the number of jobs in Sedgwick County grew slightly slower than the nation.

Data released today from the Bureau of Labor Statistics, part of the United States Department of Labor shows an improving labor picture in Sedgwick County, growing at a rate 80 percent of the nation.

For the second quarter of 2018 there were 12,600 establishments in Sedgwick County employing 250,800 workers. That is an increase in jobs of 1.2 percent from the same time the previous year, a proportional rate which ranked 176 among the nation’s 349 largest counties. For the same period, the national job growth rate was 1.5 percent. (Ranked by employment, Sedgwick County is the 123rd largest county.)

These are figures from the Quarterly Census of Employment and Wages program.

The average weekly wage was $882, an increase of 2.7 percent over the year, that change ranking 204 among the same 349 largest counties. The U.S. average weekly wage was $1,055, increasing by 3.4 percent over the same period.

Newsletter for November 18, 2018

Click here to view the freshest edition of the newsletter from Voice For Liberty. This edition is dated November 18, 2018.

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Kansas jobs, October 2018

For October 2018, an expanding labor force in Kansas, and a slight increase in jobs from September.

Data released this week from the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving jobs picture for Kansas in September 2018.

Over the year (October 2017 to October 2018), the Kansas labor force is up by 0.4 percent, also rising slightly over the past three months.

The number of unemployed persons was essentially unchanged from September to October. The unemployment rate was 3.3 percent in October, down from 3.5 percent from one year ago, and unchanged from August and September.

Click for larger.

The number of Kansas nonfarm jobs for October 2018 rose by 19,500 or 1.4 percent over last October. This is using seasonally adjusted data, and the non-adjusted figure is nearly the same at 19,600.

From September 2018 to October 2018, nonfarm employment in Kansas grew by 400, which is 0.03 percent.

Click for larger.

WichitaLiberty.TV: Economic development incentives

In this episode of WichitaLiberty.TV: A look at some economic development incentive programs in Wichita and Kansas. First in a series. View below, or click here to view at YouTube. Episode 218, broadcast November 18, 2018.

Shownotes

Personal income in Wichita rises, but slowly

For 2017, personal income in Wichita rose, but slower than the national rate.

Today Bureau of Economic Analysis, an agency of the United States Department of Commerce, released personal income figures for metropolitan areas through the complete year 2017. For the Wichita metropolitan statistical area, personal income in 2017 rose from the 2016 level in nominal dollars, and is now slightly less than the 2104 level.

For all metropolitan areas in the United States, personal income rose by 4.5 percent. For the Wichita metro area, the increase was 2.3 percent. Of 383 metropolitan areas, Wichita’s growth rate was at position 342.

While the Wichita area has kept up with national personal income growth and even surpassed it in some years, that is no longer the case. Wichita’s income has stalled while national income continues to grow.

Click for larger.
Click for larger.

Kansas school salaries

An interactive visualization of Kansas school salaries by district and category.

This visualization holds salaries of Kansas school superintendents, principals, and teachers. The visualization shows the average for each of these categories for each school district. The values are adjusted for inflation to the most current year values. Some data is presented on a per-pupil basis using full-time equivalent student counts.

The visualization includes both tables and charts. The source of the data is Kansas State Department of Education for salaries and enrollments, United States Bureau of Labor Statistics for price levels, and author’s calculations.

Click here to access the visualization.

Kansas school salaries. Click for larger.
Kansas school salaries on a per-student basis. Click for larger.
Example from the visualization. Click for larger.

Sedgwick County Manager epitomizes duty, honor, country

Statement to Sedgwick County Commission
By Karl Peterjohn

As a Sedgwick County citizen and taxpayer, I have been distressed to see news reports about the scandals, FBI and other legal investigations, that involve this county commission. The details of this appalling topic shall remain for another day.

Today, I am here to praise four county employees who deserve public commendation.

On May 12, 1962, five star General-of-the-army, Douglas MacArthur, an army officer during World War I, World War II, and the Korean War, gave his famous speech to the army cadets at the West Point military academy. MacArthur, then in the twilight of his life, used the hallowed phrase, “duty, honor, country,” the motto of West Point, in speaking of the obligations that exist for army leaders; past, present, and future.

I believe that, “Duty, honor, country,” should not be limited to only our military leaders. General MacArthur said, “… teach you … not to seek the path of comfort, but to face the stress and spur of difficulty and challenge; to learn to stand up in the storm,” and MacArthur goes on to say, “… that the very obsession of public service must be duty, honor, country.”

General Michael Scholes epitomizes “duty, honor, country.” I repeatedly saw this demonstrated during the years that I had the privilege of working with him while serving on this commission, as well as more recently as he continues to demonstrate his personal integrity.

While Judge Yost enjoys the same amount of military experience that I possess, and that is none, his distinguished public work, whether it was at the White House over 40 years ago, over a decade of service in both houses of the Kansas legislature including serving as a leader in the Kansas senate, and almost 20 years on the district court bench personifies, “duty, honor, country.”

General Scholes and Judge Yost are distinguished men of achievement, who possess the diligence, competence, and most importantly, integrity, that I stand to recognize this morning.

Last week this commission voted 3-2 in another direction. I rise today to thank both commissioners, Jim Howell and Richard Ranzau for voting against the motion to place Judge Yost on leave.

I also want to praise commissioners Howell and Ranzau for their efforts to provide transparency in this county, as well as protecting taxpayers while providing efficient public services. Howell and Ranzau are pillars of integrity during these county commission scandals. This needs recognition, and I proudly provide as much as this citizen can do.

These are four men — General Scholes, Judge Yost, Commissioner Howell, and Commissioner Ranzau — are personifying MacArthur’s hallowed words of, “duty, honor, country.”

As a former Sedgwick County commissioner, I would conclude by recommending that this county commission now proceed to move to receive and file this commendation.

For video of Peterjohn delivering these remarks at the Sedgwick County Commission meeting on November 14, 2018, click here.

Kansas GDP growth spurt

In the second quarter of 2018, the Kansas economy grew at the annual rate of 4.7 percent, the seventh-best rate in the nation.

In the second quarter of 2018, the Kansas economy grew at the annual rate of 4.7 percent in real (inflation-adjusted) dollars, according to statistics released today by Bureau of Economic Analysis, a division of the United States Department of Commerce. GDP for the quarter was at the annual rate of $164,018 million.

Click for larger.
This is a sharp jump in the rate of growth from the first quarter of 2018, when the rate was 0.5 percent, with only three states having lower rates.

Quarterly GDP growth for states can be volatile, as shown in the nearby chart.

For Kansas, industries that differed markedly from the state average include agriculture, forestry, fishing, and hunting, and durable goods manufacturing. The nearby table shows more industries.

Individual liberty, limited government, economic freedom, and free markets in Wichita and Kansas

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