In this episode of WichitaLiberty.TV: The Sentinel’s Danedri Herbert joins Bob Weeks to discuss the upcoming gubernatorial debate, the Kansas Legislature’s website and transparency, and accountability in government. View below, or click here to view at YouTube. Episode 184, broadcast February 17, 2018.
New Kansas Governor Jeff Colyer proudly cites the low Kansas unemployment rate, but there is more to the story.
In his recent speech to the legislature, Kansas Governor Jeff Colyer said, “There’s some good news to report here. According to the most recent data, the Kansas unemployment rate is 3.4%. That’s one of the lowest in the country, and the lowest our state has seen in more than seventeen years!”
Data from the Bureau of Labor Statistics, part of the United States Department of Labor shows changes to Kansas employment. The recent peak of the unemployment rate in Kansas was in 2009, when the rate reached 7.3 percent, averaging 6.9 percent for the entire year. In December 2017 it was 3.4 percent, just as the governor said. But since the unemployment rate is a ratio of two numbers, it can change for several reasons, and not all reasons are good news.
As shown in the nearby table, the unemployment rate since 2009 is down, and down a lot. Similarly, the number of unemployed persons is down, too, by nearly half. Good news.
But the number of employed persons has barely changed since 2009, rising by just one percent. At the same time, the labor force has fallen by 2.4 percent. The contracting labor force is the largest factor in the declining Kansas unemployment rate, and that is not good news.
In this episode of WichitaLiberty.TV: Professor Edward Stringham joins Karl Peterjohn and Bob Weeks to discuss Bitcoin, sound money, and the role of markets in private governance. View below, or click here to view at YouTube. Episode 182, broadcast February 10, 2018.
Edward Peter Stringham is the Davis Professor of Economic Organizations and Innovation at Trinity College in Hartford, Connecticut. Stringham is editor of the Journal of Private Enterprise, president of the American Institute for Economic Research, past president of the Society for the Development of Austrian Economics, and past president of the Association of Private Enterprise Education. He a prolific author. His book, Private Governance: Creating Order in Economic and Social Life, is published by Oxford University Press.
His appearance on WichitaLiberty.TV was made possible by the Wichita Chapter of the Bastiat Society.
In this episode of WichitaLiberty.TV: Wichita Area Technical College (WATC) has formed an affiliation with Wichita State University, to be called the Wichita State University Campus of Applied Sciences and Technology, or WSU Tech. Sheree Utash, president of WATC and future president of WSU Tech, joins Karl Peterjohn to discuss these institutions. (Bob should be back next week.) View below, or click here to view at YouTube. Episode 181, broadcast January 27, 2018.
Is the state’s leading expert on school funding truly knowledgeable, or is he untrustworthy?
Recent events have found Kansas Department of Education’s Deputy Commissioner Dale Dennis in the news regarding a possible mistake or misapplication of school funds. The school spending establishment has rushed to his rescue, with Kansas National Education Association, Kansas Association of School Boards, United School Administrators of Kansas, Kansas School Superintendents Association, and American Federation of Teachers Kansas issuing a joint statement. Dale Dennis, says the statement, is “the best friend public education and the kids of Kansas have had.” He is described as “the most trustworthy, honest, and respected advocate for children and schools.”
Consider, however: The goals of these institutions are more spending on schools, less accountability for schools, and stamping out any movement towards school choice. And Dale Dennis accommodates this, especially more spending. This is the basis of the complaint, that he authorized more spending than the legislature intended in statute.
No matter how this dispute resolves, Dale Dennis is not trustworthy and honest. Below is a description of a speech he gave to the Hutchinson Rotary Club last year. He portrayed a number called “base state aid per pupil” as all that the state spends on schools. The reality is that the state spends much more. Presenting base state aid as though it was all the state spends is misleading. It’s a lie.
Base state aid is a fairly low figure and it has not kept up with inflation. But total state (and local) spending is much higher and has risen. This is why Dale Dennis is not trustworthy and honest. This is fake government.
But because Dennis is willing to paint Kansas school finances untruthfully and in a way that makes it look like spending is low and has declined, the public school spending establishment loves him. They cite his figures. And then: Who can argue with the Kansas Department of Education Deputy Commissioner?
What can argue with Dennis are the facts. Here’s how to refute Dale Dennis: View spending numbers from the Kansas State Board of Education.
Following, from April 2017, analysis of Dale Dennis and his speech to the Hutchinson rotary Club.
Fake government spawns fake news
Discussions of public policy need to start from a common base of facts and information. An episode shows that both our state government and news media are not helping.
A recent Hutchinson News article1 started with this:
Once you wake up to where Kansas was in 1992 at funding schools and what it needs to do to get caught up, said the Kansas Department of Education’s Deputy Commissioner Dale Dennis, it’s a shocker.
In 1992, base state aid per pupil was $3,600. That amount, taking into account the Consumer Price Index, would be the equivalent of $6,001.12 in 2013. Base state aid, however, has been frozen at $3,852 since 2014-15.
“The numbers are shocking, shocking,” Dennis told the Hutchinson Rotary Club at its Monday luncheon meeting at the Hutchinson Town Club.
Why is a speech by a government bureaucrat, as covered in a major newspaper, important? It illustrates two problems we face in understanding, discussing, and debating important matters of public policy.
First, can government be truthful and accurate? Dale Dennis — the state’s top official on school finance — certainly knows that the numbers he presented do not accurately characterize the totality of school spending in Kansas. But the problem is even worse than that. To use base state aid as the indicator of state spending on schools is deceptive. It’s deceptive in that, after adjusting for inflation, base state aid has declined. But total state aid to school districts has increased.
Base state aid is a false indicator of total spending on schools by the state. It’s fake — fake government. And for a newspaper to uncritically present this as news illustrates the second problem we face.
Background on base state aid and school spending
Base state aid per pupil — the statistic Dennis presented — is an important number.2 It’s the starting point for the Kansas school finance formula used before the 2015-2016 (fiscal 2016) school year, and something like it may be used in a new formula.3
Base state aid, however, is not the only important number. To calculate the funding a school district receives, weightings are added. If students fall into certain categories, weightings for that category are added to determine a weighted enrollment. That is multiplied by base state aid to determine total state aid to the district. 4
While this may seem like a technical discussion that doesn’t make a difference, it’s very important, because some of the weightings are large. The at-risk weighting, intended to cover the additional costs of teaching students from low-income families, started at five percent in 1993. In other words, for every student in this category, a school district received an extra five percent of base state aid. The value of this weighting has risen by a factor of nine, reaching 45.6 percent starting with the 2008-2009 school year.
There’s also the high-density at-risk weighting. Starting with the 2006-2007 school year districts with a high concentration of at-risk students could receive an extra weighting of four percent or eight percent. Two years later the weightings were raised to six percent and ten percent. (This formula was revised again in 2012 in a way that may have slightly increased the weightings.)
The weightings have a large effect on school funding. For example: During the 2004-2005 school year, base state aid was $3,863 and the at-risk weighting was ten percent. An at-risk student, therefore, generated $4,249 in state funding. (Other weightings might also apply.)
Ten years later base state aid was $3,852 — almost exactly the same — and the at-risk weighting was up to 45.6 percent. This generates funding of $5,609. For a district that qualified for the maximum high-density at-risk weighting, an additional $404 in funding was generated. (These numbers are not adjusted for inflation.)
So even though base state aid remained (almost) unchanged, funding targeted at certain students rose, and by a large amount.
Over time, values for the various weightings grew until by 2014 they added 85 percent to base state aid. A nearby chart shows the growth of total state aid as compared to base state aid. (Starting in fiscal 2015 the state changed the way local tax dollars are counted. That accounts for the large rise for the last year of data in the chart. For school years 2016 and 2017, block grants have replaced the funding formula, so base aid and weightings do not apply in the same way.)
What have we learned?
We’re left wondering a few things:
- Did Deputy Superintendent Dale Dennis tell the audience that base state aid is just part of the school funding landscape, and not reflective of the big picture? Did he tell the audience that total state aid to schools has increased, and increased substantially? If so, why wasn’t it mentioned in the article?
- If Dale Dennis did not tell the audience these things, what conclusions should we draw about his truthfulness?
- Why didn’t the Hutchinson News article explain to readers that base state aid is not an accurate or total indicator of total state spending on schools?
- What is the duty of reporters and editors? We’re told that experienced journalists add background and context to the news — things that the average reader may not know. (This article is designated as “Editor’s Pick” by the Hutchinson News.)
By the way, the Wichita Eagle, on its opinion page, cited in a positive and uncritical manner the Hutchinson News article.5 This is notable as the writer of the Eagle piece, opinion editor Phillip Brownlee, was a certified public accountant in a previous career. This is someone we should be able to trust to delve into numbers and tell us what they mean. But that isn’t the case.
Whatever your opinion on the level and trend of school spending, we need to start the discussion from a common base of facts and information. From this episode, we see that both our state government and news media are not helping.
- Clarkin, Mary. Department of Education’s Dennis: Shocking number when looking at funding gap. Hutchinson News. April 17, 2017. http://www.hutchnews.com/news/local_state_news/department-of-education-s-dennis-shocking-number-when-looking-at/article_4abe359e-8421-53f9-a8d7-1eaa56e95423.html. ↩
- Weeks, Bob. Kansas school weightings and effects on state aid. In making the case for more Kansas school spending, the focus on base state aid per pupil leaves out important considerations. https://wichitaliberty.org/wichita-kansas-schools/kansas-school-weightings-and-effects-on-state-aid/. ↩
- For the fiscal 2016 and 2017 school years, the formula was replaced by block grants. ↩
- AMENDMENTS TO THE 1992 SCHOOL DISTRICT FINANCE AND QUALITY PERFORMANCE ACT AND THE 1992 SCHOOL DISTRICT CAPITAL IMPROVEMENTS STATE AID PROGRAM (FINANCE FORMULA COMPONENTS), Kansas Legislative Research Department, May 20, 2014
- Brownlee, Philip. School funding numbers are ‘shocking.’ Wichita Eagle. April 22, 2017. http://www.kansas.com/opinion/opn-columns-blogs/now-consider-this/article146084839.html. ↩
- Waggoner, Paul. Shocking news about Kansas education. Hutchinson News. April 21, 2017. http://www.hutchnews.com/opinion/columnists/shocking-news-about-kansas-education/article_2ebea7d3-6659-51fc-b3b5-409d5b0aa243.html. Or, see https://wichitaliberty.org/kansas-government/shocking-news-kansas-education/. ↩
Kansas ranks low among the states in growth of gross domestic product (GDP) for the third quarter of 2017.
For the third quarter, GDP for the nation grew at the annual rate of 3.4 percent. For Kansas, growth was 2.1 percent. Kansas ranked 41st among the states.
The nearby table shows GDP change by industry group and compares Kansas to the country, Plains states (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota), and nearby states.
- Bureau of Economic Statistics. Gross Domestic Product by State: Third Quarter 2017. Available at https://www.bea.gov/newsreleases/regional/gdp_state/qgdpstate_newsrelease.htm. ↩
Personal income growth in Kansas trails most of the nation. While personal income for the nation grew at the rate of 0.6 percent in the third quarter, Kansas grew at 0.3 percent. Only three states experienced slower growth.
In this episode of WichitaLiberty.TV: Radio Host Andy Hooser of the Voice of Reason appears with Karl Peterjohn to discuss the simulcast of his radio show on KGPT 26, the legislative session, and whether President Trump’s tax breaks can save Kansas from the recent tax hike. Bob Weeks is still out. View below, or click here to view at YouTube. Episode 180, broadcast January 20, 2018.
In this episode of WichitaLiberty.TV: Vice president and policy director of Kansas Policy Institute James Franko joins Karl Peterjohn to discuss Governor Brownback’s State of the State Address for 2018. Topics include schools and Medicaid expansion. Bob Weeks hopes to be back next week. View below, or click here to view at YouTube. Episode 179, broadcast January 13, 2018.
In this episode of WichitaLiberty.TV: Karl Peterjohn and Bob Weeks look back at some stories from 2017, and take a peek at the year ahead. View below, or click here to view at YouTube. Episode 178, broadcast January 6, 2018.
In Community Improvement Districts (CID), merchants charge additional sales tax for the benefit of the property owners, instead of the general public. Wichita may have an additional three, contributing to the problem of CID sprawl.
This week the Wichita City Council will hold public hearings considering the formation of three Community Improvement Districts. In Kansas Community Improvement Districts, merchants charge additional sales tax for the benefit of the property owners, instead of the general public. 1
Each of these CIDs will charge customers additional sales tax, with a cap on the amount that may be raised, and a separate cap on the length of the CID. For the three projects this week, here are the details: 2
Delano Catalyst CID: 2% additional tax, raising up to $3,000,000, up to 22 years
Spaghetti Works CID: 2% additional tax, raising up to $3,118,504, up to 22 years
Chicken N Pickle CID: 1.5% additional tax, raising up to $2,300,000, up to 15 years
All these CIDs are of the pay-as-you-go type, which means the city is not borrowing money that would be repaid by the CID tax proceeds. Instead, the CID tax proceeds are periodically sent to the landowners as they are collected. The city retains a 5% administrative fee.
Additionally, two of these CIDs earmark 10% of the CID tax collections for public benefits, which are extra park maintenance for the Spaghetti Works CID, and street improvements for the Chicken N Pickle CID. While these earmarks may seem magnanimous gestures, they directly work to the developers’ benefit. For Spaghetti Works, Naftzger Park is, in effect, becoming the front yard to a development. It will be of great benefit for it to be maintained well, especially considering that the developers will be able to close the park for private events. For the Chicken N Pickle CID, the street improvements the CID will fund are usually paid for by special tax assessments on the nearby landowners, which in this case is the Chicken N Pickle. This is a large savings.
By the way, none of the applications for these economic development incentives pleads economic necessity. They simply want more money, and are willing to let government take the blame when customers notice they’re paying 9% or 9.5% sales tax in these districts.
It will be interesting to see how the council’s two new members, Brandon Johnson (district 1, northeast Wichita) and Cindy Claycomb (district 6, north central Wichita), will vote in these matters. As Progressives, we might expect them to be opposed to higher sales taxes, which affect low-income households disproportionally. We also might expect them to be opposed to targeted tax incentives for the “wealthy,” such as the now-defunct exemption on pass-through business income in Kansas. Here, they are asked to vote on a highly targeted tax incentive that will benefit identifiable wealthy parties.
Issues regarding CID
Perhaps the most important public policy issue regarding CIDs is this: If merchants feel they need to collect additional revenue from their customers, why don’t they simply raise their prices? But the premise of this question is not accurate, as it is not the merchants who receive CID funds. The more accurate question is why don’t landlords raise their rents? That puts them at a competitive disadvantage with property owners that are not within CIDs. Better for us, they rationalize, that unwitting customers pay higher sales taxes for our benefit.
Customers of merchants in CIDS ought to know in advance that an extra CID tax is charged. Some have recommended warning signage that protects customers from unknowingly shopping in stores, restaurants, and hotels that will be adding extra sales tax to purchases. Developers who want to benefit from CID money say that merchants object to signage, fearing it will drive away customers.
State law is silent on this. The City of Wichita requires a sign indicating that CID financing made the project possible, with no hint that customers will pay additional tax, or how much extra tax. The city also maintains a website showing CIDs. This form of notification is so weak as to be meaningless. See Wichita community improvement districts should have warning signs and In Wichita, two large community improvement districts proposed. In the latter, future Wichita Mayor Jeff Longwell argued that signs showing different tax rates for different merchants would be confusing. Council Member Sue Schlapp said she supported transparency in government, but informing consumers of extra taxes would make the program “useless.”
One of the follies in government economic development policy is the categorization of costs into eligible and non-eligible costs. The proceeds from programs like CIDs and tax increment financing may be used only for costs in the “eligible” category. I suggest that we stop arbitrarily distinguishing between “eligible costs” and other costs. When city bureaucrats and politicians use a term like “eligible costs” it makes this process seem benign. It makes it seem as though we’re not really supplying corporate welfare and subsidy.
As long as the developer has to spend money on what we call “eligible costs,” the fact that the city subsidy is restricted to these costs has no economic meaning. Suppose I gave you $10 with the stipulation that you could spend it only on next Monday. Would you deny that I had enriched you by $10? Of course not. As long as you were planning to spend $10 next Monday, or could shift your spending from some other day to Monday, this restriction has no economic meaning.
Notification and withdrawal
If a merchant moves into an existing CID, how might they know beforehand that they will have to charge the extra sales tax? It’s a simple matter to learn the property taxes a piece of property must pay. But if a retail store moves into a vacant storefront in a CID, how would this store know that it will have to charge the extra CID sales tax? This is an important matter, as the extra tax could place the store at a competitive disadvantage, and the prospective retailer needs to know of the district’s existence and its terms.
Then, if a business tires of being in a CID — perhaps because it realizes it has put itself at a competitive disadvantage — how can the district be dissolved?
The nature of taxation
CIDs allow property owners to establish their own private taxing district for their exclusive benefit. This goes against the grain of the way taxes are usually thought of. Generally, we use taxation as a way to pay for services that everyone benefits from, and from which we can’t exclude people. An example would be police protection. Everyone benefits from being safe, and we can’t exclude people from participating in — and benefiting from — police protection.
But CIDs allow taxes to be collected for the benefit of one specific entity. This goes against the principle of broad-based taxation to pay for an array of services for everyone. But in this case, the people who benefit from the CID are quite easy to identify: the property owners in the district.
- Weeks, Bob. Community improvement districts in Kansas. Available at https://wichitaliberty.org/kansas-government/community-improvement-districts-kansas/. ↩
- Wichita City Council Agenda Packet for January 9, 2018. Agenda items IV-1, IV-2, and IV-3. ↩
- Weeks, Bob. Naftzger Park project details. Available at https://wichitaliberty.org/wichita-government/naftzger-park-project-details/. ↩
- Weeks, Bob. Delano catalyst site. https://wichitaliberty.org/wichita-government/delano-catalyst-site/. ↩
Here are highlights from Voice for Liberty for 2017. Was it a good year for the principles of individual liberty, limited government, economic freedom, and free markets in Wichita and Kansas?
Also, don’t miss these notable episodes of WichitaLiberty.TV in 2017:
- Dr. James Otteson on capitalism
- Keen Umbehr on criminal justice reform
- Ben Jones on the death penalty in Kansas
- Fred L. Smith, Jr., founder of the Competitive Enterprise Institute
- Kansas Senator Ty Masterson
- Kansas Representatives Leo Delperdang, Susan Humphries, John Whitmer, along with their leader Speaker of the House Ron Ryckman
- Jonathan Williams, chief economist at American Legislative Exchange Council
- Congressman Ron Estes here and here
- John Fund, National Review Columnist
- Matte Kibbe
- Senator Jim DeMint on the Convention of States
No one is stealing* from KPERS. No one is stealing from KPERS, the Kansas Public Employees Retirement System. But there are related problems.
Understanding job growth and the Kansas tax reforms. Commissioned by Kansas Policy Institute and written by researchers from Arizona State University, a new report looks at the Kansas economy after the tax reforms passed in 2012.
Kansas school employment. Kansas school employment rose slightly for the current school year, and ratios of employees to pupils fell, also slightly.
Kansas civil asset forfeiture. The law of Kansas civil asset forfeiture is among the worst in the nation, and demands reform.
In Kansas, the war on blight continues. Kansas governments are trying — again — to expand their powers to take property to the detriment of one of the fundamental rights of citizens: private property rights.
Fake news, meet fake research. Do you think we have a problem with fake news? Let me introduce you to fake research.
Analysis of proposed tax changes in Kansas. Proposed changes in the Kansas motor fuel tax and sales tax on groceries affects households in different ways.
Greater Wichita Partnership. Greater Wichita Partnership features untruthful information on its website, which casts doubt on the reliability of the organization and the City of Wichita.
Expanding Medicaid in Kansas. Expanding Medicaid in Kansas would be costly, undoubtedly more costly than estimated, has an uncertain future, and doesn’t provide very good results for those it covers.
In Wichita, the surveillance state expands again. In Wichita, we see another example of how once government starts a surveillance program, it probably won’t produce the promised results, yet will be expanded.
State and local government employee and payroll. Considering all state and local government employees in proportion to population, Kansas has many, compared to other states, and especially so in education.
Downtown Wichita tax base is not growing. There’s been much investment in downtown Wichita, we’re told, but the assessed value of property isn’t rising.
Wichita business property taxes still high. An ongoing study reveals that generally, property taxes on commercial and industrial property in Wichita are high. In particular, taxes on commercial property in Wichita are among the highest in the nation.
Kansas manufacturing and oil not recovering. While total employment in Kansas is growing, two industries are the exception.
Highway budget cuts and sweeps in Kansas. A public interest group makes claims about Kansas roads and highways that are not supported by data. It’s not even close.
Sedgwick County to consider raising debt limit. This week the Sedgwick County Commission will consider raising its limit on borrowing for reasons which need to be revealed, and then carefully examined.
For Wichita Eagle, no concern about relationships. Should the Wichita Eagle, a city’s only daily newspaper and the state’s largest, be concerned about the parties to its business relationships?
Fake government spawns fake news. Discussions of public policy need to start from a common base of facts and information. An episode shows that both our state government and news media are not helping.
Downtown Wichita business trends. There has been much investment in Downtown Wichita, both public and private. What has been the trend in business activity during this time?
Downtown Wichita jobs, sort of. The claim of 26,000 workers in downtown Wichita is based on misuse of data so blatant it can be described only as malpractice.
Growth in Downtown Wichita Jobs. Even if we accept the measure of jobs used by the City of Wichita, the trend is in the wrong direction. Citizens should ask for truth and accountability.
On Wichita’s STAR bond promise, we’ve heard it before. Are the City of Wichita’s projections regarding subsidized development as an economic driver believable?
Metro Monitor for the Wichita economy. A research project by The Brookings Institution illustrates the performance of the Wichita-area economy.
Coverage of Downtown Wichita workers. The Wichita Eagle’s coverage of the number of workers in Downtown Wichita isn’t fake news, just wrong news.
Wichita, Kansas, and U.S. economic dashboards. Dashboards of economic indicators for Wichita and Kansas, compared to the United States.
The yardstick for the Kansas experiment. A politician’s boasting should not be the yardstick for policy.
In Kansas, sweeps to continue. Even though the Kansas Legislature raised taxes, sweeps from the highway fund will continue.
Decoding Duane Goossen. When reading the writings of former Kansas State Budget Director Duane Goossen, it’s useful to have a guide grounded in reality.
Deconstructing Don Hineman. Another Kansas legislator explains why raising taxes was necessary. So he says.
More Cargill incentives from Wichita detailed. More, but likely not all, of the Cargill incentives will be before the Wichita City Council this week.
Wichita WaterWalk contract not followed, again. Wichita city hall failed to uphold the terms of a development agreement from five years ago, not monitoring contracts that protect the public interest.
Tax collections by the states. An interactive visualization of tax collections by state governments.
A Wichita social media town hall. A City of Wichita town hall meeting ends in less than nine minutes, with a question pending and unanswered.
Wichita employment trends. While the unemployment rate in the Wichita metropolitan area has been declining, the numbers behind the decline are not encouraging.
Wichita in the Wall Street Journal. A Wall Street Journal article reports on Wichita, but there are a few issues with quotes from the mayor.
Naftzger Park public hearing. On Tuesday August 15 the Wichita City Council will hold a public hearing to consider authorizing spending TIF funds on Naftzger Park.
In Wichita, not your tax dollars. At a Wichita City Council meeting, citizens are told, “These tax dollars are not your tax dollars.”
Wichita job growth. Wichita economic development efforts viewed in context.
Wichita economy shrinks. The Wichita-area economy was smaller in 2016 than the year before.
Kansas highway spending. A look at actual spending on Kansas highways, apart from transfers.
Kansas school fund balances. Kansas school fund balances rose this year, in both absolute dollars and dollars per pupil.
Downtown Wichita report omits formerly prominent data. The new State of Downtown Wichita report for 2017 is missing something. What is it, and why is it missing?
Living in downtown Wichita. Wichita economic development officials use a circuitous method of estimating the population of downtown Wichita, producing a number much higher than Census Bureau estimates.
Kansas school spending. New data for spending in Kansas schools is available.
In Wichita, the surveillance state expands again — and again. In Wichita, we see another example of how once government starts a surveillance program, the urge to expand it is irresistible.
Wichita personal income up, a little. For 2016, personal income in Wichita rose, but is still below 2014 levels.
PEAK benefits across Kansas. The use of PEAK, a Kansas economic development incentive program, varies widely among counties.
NOTA a needed voting reform. “None of the Above” voting lets voters cast a meaningful vote, and that can start changing things.
Wichita school student/teacher ratios. During years of purported budget cuts, what has been the trend of student/teacher ratios in the Wichita public school district?
Spirit expands in Wichita. It’s good news that Spirit AeroSystems is expanding in Wichita. Let’s look at the cost.
Spirit Aerosystems incentives reported. Opinions vary on economic development incentives, but we ought to expect to be told the truth of the details.
Delano catalyst site. A development near downtown Wichita may receive subsidy through four different avenues.
Panhandling in Wichita. The City of Wichita cracks down on panhandling.
Naftzger Park project details. The city has finalized a proposal for a development near Naftzger Park. It includes a few new and creative provisions.
In this episode of WichitaLiberty.TV: Radio Host Andy Hooser of the Voice of Reason appears with Bob Weeks to discuss issues in state and national political affairs. View below, or click here to view at YouTube. Episode 177, broadcast December 23, 2017.
From the Wichita Pachyderm Club: KPTS President and CEO Victor Hogstrom. This was recorded December 15, 2017.
For the country as a whole, personal income grew at the annual rate of 0.7 percent from the previous quarter. For Kansas, the rate was 0.3 percent. That was the forty-seventh best rate. This continues the trend of Kansas underperforming the nation in recent years.
The city has finalized a proposal for a development near Naftzger Park. It includes a few new and creative provisions.
This week the City of Wichita will consider a development agreement for land and buildings near Naftzger Park in downtown Wichita. 1
Community Improvement District
The plan includes the formation of a Community Improvement District. In CIDs, merchants charge additional sales tax for the benefit of the property owners, instead of the general public.2 In this CID, the proposed additional sales tax is two cents per dollar, the maximum available under state law, and could generate up to $3.1 million over a period as long as 22 years.3
This proposed CID contains a “sweetener,” likely designed to reduce public opposition. Ten percent of the CID revenue would be used to maintain Naftzger Park. We’ve seen this before, as in the Cabela’s CID where some of the funds paid for road improvements near the store.4
The action the city council will consider this week is whether to accept the petitions to form the CID and set January 9, 2018 as the date for the public hearing.
Industrial Revenue Bonds and tax forgiveness
This project is also requesting Industrial Revenue Bonds. under this program, the city will not be lending money, nor will it be responsible for repaying any loans. Instead, the program allows the developers to avoid paying sales tax on construction.5 City documents don’t give an amount of tax savings, but it could be over one million dollars. 6
City documents state that a property tax abatement is not being requested. That isn’t available for this project, as its property taxes are already allocated by TIF.
Tax Increment Financing (TIF)
The project has already been approved for of Tax Increment Financing. In this case, future property tax revenues from this project will be rerouted from their normal flow to reconstruct Naftzger Park, something that is seen as a large benefit to the developers.
Construction administration fee
The city will pay the developers up to $250,000 for construction administration of the park.
This agreement also contains something I’m sure is considered as creative. We also saw this as an incentive offered to Cargill earlier this year. In this case, the city will pay the developers a fee for using their parking spaces. In this case, the city proposes paying a one-time easement fee of $10,000 per spot for from 80 to 90 parking spots. The total payment would be from $800,000 to $900,000. These parking spots would be available to the public outside of business hours, which are defined as 6:00 a.m. to 6:00 p.m. Monday through Friday.
Buried with the development agreement is a provision that the developers may use the park for private events: “The City and the Board will cooperate with Developers, upon Developers’ request, to create an Annual Master Calendar of private and public events for the Park, with the expectation that the Developers will have the use of the Park for certain private events.”
Little else is mentioned regarding these private events, such as the maximum number of private events. This seems subject to abuse.
Other Naftzger Park material
- The city’s page for Naftzger Park
- Naftzger Park Facebook group
- Photo album on Flickr
- Chase Billingham: Who does Naftzger Park belong to?
- Naftzger Park public hearing to be considered. The Wichita City Council may set August 15, 2017 as the date for a public hearing on the future of Naftzger Park in downtown Wichita.
- Naftzger Park tax increment financing (TIF). Background on tax increment financing (TIF) as applied to Naftzger Park in downtown Wichita.
- Downtown Wichita gathering spaces that don’t destroy a park. Wichita doesn’t need to ruin a park for economic development, as there are other areas that would work and need development.
- Naftzger Park concerts and parties? In Wichita, a space for outdoor concerts may be created across the street from where amplified concerts are banned.
- Wichita Eagle: Should city shoo homeless from downtown Wichita park?
- Naftzger Park contract: Who is in control? The City of Wichita says it retains final approval on the redesign of Naftzger Park, but a contract says otherwise.
- Upcoming Naftzger Park legislative action. The redesign of Naftzger Park in downtown Wichita is not a done deal, at least not legally.
- Naftzger Park construction manager. The City of Wichita seeks a construction manager for the construction of Naftzger Park.
- Downtown Wichita business trends. There has been much investment in Downtown Wichita, both public and private. What has been the trend in business activity during this time?
- Wichita Eagle: Four designs unveiled for Naftzger Park downtown—
- City of Wichita Agenda Packet for December 19, 2017, Item IV-6. ↩
- Weeks, Bob. Community improvement districts in Kansas. Available at https://wichitaliberty.org/kansas-government/community-improvement-districts-kansas/. ↩
- Council Agenda: “The Developer and Park Board control the land within the proposed CID. The requested CID would provide pay-as-you-go financing for qualified project costs through the imposition of a 2% special retail sales tax on all taxable retail sales within the district for a maximum of 22 years. The eligible project costs identified in the CID petition include costs of renovating the building at 691 E. William and construction of the Class A commercial building. The City will receive 10% of the CID revenue to fund Naftzger Park maintenance and or ROW repairs and improvements, in addition to the 5% administrative fee. The revenue is estimated to be $310,000. The maximum amount of project costs that can be reimbursed is $3,118,504 based on the projected revenue of the project, exclusive of the City’s administrative fee and Naftzger Park maintenance.” ↩
- Weeks, Bob. Cabela’s CID should not be approved in Wichita. Available at https://wichitaliberty.org/wichita-government/cabelas-cid-should-not-be-approved-in-wichita/. ↩
- Weeks, Bob. Industrial revenue bonds in Kansas. Available at https://wichitaliberty.org/kansas-government/industrial-revenue-bonds-kansas/. ↩
- “The Developer is also requesting the issuance of a letter of intent to issue Industrial Revenue Bonds (IRBs), valid through December 31, 2022, in an amount not-to-exceed $26,000,000 to achieve a sales tax exemption on items purchased for the redevelopment project. No property tax abatement is being requested.” ↩
In this episode of WichitaLiberty.TV: Attorney Richard Peckham joins Karl Peterjohn and Bob Weeks to discuss judicial selection and other judicial issues in Kansas. View below, or click here to view at YouTube. Episode 176, broadcast December 16, 2017.
- Richard J. Peckham: Four justices should be voted out of office
The City of Wichita cracks down on panhandling.
In today’s Wichita Eagle Chase Billingham has an excellent column explaining the recent changes to panhandling laws in the City of Wichita (Chase Billingham: New laws will criminalize homeless). An assistant professor of sociology at Wichita State University, he makes important observations and warnings about the effect of these laws.
In his column, Billingham notes a problem with the ordinance designed to regulate “aggressive” panhandling: “Importantly, though, the ordinance defines ‘contact’ in an extremely vague manner.” I may have noticed the same problem in this example from Ordinance No. 50-643:
Section 2: “Contact” means the intentional action by any person which attempts to attract the attention of any other person for the purpose of inducing such other person to slow, stop or which obstructs or hinders the movement of such other person to facilitate a transfer of anything to or from either person.
What is an example of attracting someone’s attention to induce them to slow or stop? Busking. And it’s designed to encourage — “facilitate” — the transfer of money to the busker.
In the ordinance, the city says its purpose is to “regulate behaviors that are intimidating, threatening or harassing.” At the same time, the city takes actions that work in cross-purposes. In particular, the city has taken steps to allow — if not to encourage — more alcohol consumption. In 2016 laws were changed that both restricted and liberalized alcohol consumption. This year the city lobbied the state for laws that would establish “common consumption areas.” These are geographically-defined areas where free-range drinking is allowed. That is, you can drink outside in public, like on Bourbon Street in New Orleans. Besides Old Town, the city mentioned Delano and College Hill as possible common consumption areas.
There is a reason why cities have long outlawed drinking on the streets and sidewalks. But I guess that no longer applies.
I wonder if the city is running the risk of creating a Disneyland downtown, where everything is planned, staged, and regulated. Our city planners set design standards for buildings, and then use the lure of our tax money to encourage compliance. Is there a purportedly problematic public park interfering with you plans for development? No problem. Just ask the city to redirect your tax dollars away from police and schools so that the park can be rebuilt at no cost to you — in a Disneyland style. Too much crime on the streets? The city will install expensive and obtrusive surveillance systems to protect you, and also to harvest revenue if you forget to activate your turn signal in time.
The city uses words like “vibrant” to describe its vision for downtown and other areas. In this commentary about Indianapolis we see the same issues at play. This is from Erika D. Smith: Tougher panhandling law would hurt Indy’s urban fabric:
Vibrant urban areas need organic, grass-roots use of public spaces. It’s a big part of what makes a city a city and not a carefully manicured suburb. It’s knowing that the unexpected could be around any corner and fully embracing that possibility.
Funny thing is, the entities that are pushing for this crackdown on panhandling know this. Visit Indy, Indianapolis Downtown Inc. and Ballard’s administration called for the promotion of organic urban experiences in the Velocity Action Plan released earlier this month.
They want a freer, livelier atmosphere Downtown. They want “guerrilla-style” takeovers of public spaces. They want visitors and residents to be surprised by randomness. In short, they want a true urban environment.
But here’s the inconvenient truth: To get that kind of organic, vibrant urban atmosphere, you cannot control everything. And part of not being able to control everything is that, to a certain extent, you have to accept the good with the bad. The pretty with the ugly.
The mime outside Bankers Life Fieldhouse and the man sitting quietly with a sign asking for money. The woman sprawled on the sidewalk with a cup and the saxophone-playing busker who sends people to the Chatterbox club to hear more jazz.
This is the messiness of an urban environment. It’s not always pretty. But it’s not supposed to be. The people who live Downtown know this. We understand it. It’s why we moved here and not to Carmel.