Author: Bob Weeks

  • Questions for the next Wichita city attorney: Number 1

    Questions for the next Wichita city attorney: Number 1

    Wichita City Hall SignWichita’s city attorney is retiring soon, and the city will select a replacement. There are a few questions that we ought to ask of candidates, such as the following.

    Here’s a section from the Wichita city code as passed in 2008 (full section below):

    “[Council members] shall refrain from making decisions involving business associates, customers, clients, friends and competitors.”

    Wichita city attorney candidate, here’s a question: If a member of the Wichita city council had a business relationship with a person, and then that person was involved in a matter that the city council was called to vote on, how would you advise the council member?

    It’s not a hypothetical question. Last year the Wichita city council had to make a decision regarding two development teams that had applied to build a project. (See Wichita contracts, their meaning (or not) for video.) It included various forms of subsidy. Here are some facts that no one disputes:

    Warren Theater Brewer's Best 2013-07-18

    1. Wichita Mayor Carl Brewer is a member of the Wichita City Council and was in position to make a decision.

    2. Bill Warren was one of the parties applying for the project.

    3. Bill Warren also owns movie theaters.

    4. Wichita Mayor Carl Brewer owns a company that manufactures barbeque sauce.

    5. Brewer’s sauce was sold at Warren’s theaters.

    It seems straightforward, doesn’t it? The mayor should not have participated in a decision involving his business partner. That seems to be the clear meaning of the city code. But the mayor proceeded to participate in the discussion and vote.

    Now, I don’t know what happened behind the scenes. Did the mayor ask the city attorney for his opinion on whether he should abstain from voting? If so, what did the city attorney say? Did the mayor follow or disregard the advice?

    Wichitans ought to be interested in the tenor of the advice the next city attorney will provide to council members and the city’s staff of bureaucrats. Will the next city attorney ignore the plain meaning of laws in order to provide legal cover for the council and staff? Or, will the attorney provide advice that respects citizens and the rule of law?

    We probably won’t ever know.

    Here’s the Wichita city code:

    Sec. 2.04.050. — Code of ethics for council members.

    Council members occupy positions of public trust. All business transactions of such elected officials dealing in any manner with public funds, either directly or indirectly, must be subject to the scrutiny of public opinion both as to the legality and to the propriety of such transactions. In addition to the matters of pecuniary interest, council members shall refrain from making use of special knowledge or information before it is made available to the general public; shall refrain from making decisions involving business associates, customers, clients, friends and competitors; shall refrain from repeated and continued violation of city council rules; shall refrain from appointing immediate family members, business associates, clients or employees to municipal boards and commissions; shall refrain from influencing the employment of municipal employees; shall refrain from requesting the fixing of traffic tickets and all other municipal code citations; shall refrain from seeking the employment of immediate family members in any municipal operation; shall refrain from using their influence as members of the governing body in attempts to secure contracts, zoning or other favorable municipal action for friends, customers, clients, immediate family members or business associates; and shall comply with all lawful actions, directives and orders of duly constituted municipal officials as such may be issued in the normal and lawful discharge of the duties of these municipal officials.

    Council members shall conduct themselves so as to bring credit upon the city as a whole and so as to set an example of good ethical conduct for all citizens of the community. Council members shall bear in mind at all times their responsibility to the entire electorate, and shall refrain from actions benefiting special groups at the expense of the city as a whole and shall do everything in their power to ensure equal and impartial law enforcement throughout the city at large without respect to race, creed, color or the economic or the social position of individual citizens.

  • ALEC should stand up to liberal pressure groups

    ALEC should stand up to liberal pressure groups

    From April 2012.

    Today’s Wall Street Journal explains how left-wing activists are using fear of the racism label to shut down free speech and debate. The target of their current smear campaign is American Legislative Exchange Council, or ALEC.

    Liberals can’t stand ALEC because it is a strong and influential advocate for free market and limited government principals in state legislatures. Liberals accuse ALEC of supplying model legislation which may influence the writing of actual state law, or even become state law in some cases. Of course, liberal advocacy groups do this too, but they don’t let that get in the way of their criticism of ALEC.

    The reality is that all sorts of people and special interest groups seek to influence the writing of laws. But for laws to take effect — no matter who proposes them — they must be passed by legislatures and signed by the chief executive (or a veto must be overturned).

    The false charges of racism are particularly troubling, as no one wants to be labeled as such. That’s why scoundrels demonize their opponents with charges of racism, writes the Journal, and it’s become a powerful weapon for left-wing activists: “The ugly, race-baiting anti-ALEC campaign is typical of today’s liberal activism. It’s akin to the campaigns to smear libertarian donors Charles and David Koch and to exploit shareholder proxies to stop companies from giving to political campaigns or even the Chamber of Commerce. The left these days isn’t content merely to fight on the merits in legislatures or during elections. If they lose, they resort to demonizing opponents and trying to shut them down. The business community had better understand that ALEC won’t be the last target.”

    As it turns out, the motivations of some contributors to ALEC are quite narrow. Coca-Cola wanted help from ALEC only in the opposition to soft drink taxes: “So Coke executives are happy to get ALEC’s help in their self-interest but head for the tall grass when ALEC needs a friend.”

    Liberals accuse ALEC of being a front group for corporations, promoting only legislation that advances the interests of corporations or business at the expense of others. When you examine specific examples of these charges, the proposals being criticized often reduce taxes for everyone or reduce harmful and unnecessary regulations. If ALEC does promote legislation that caters to special interest groups, it should stop doing so.

    Besides services to legislators, ALEC provides a valuable service to the public: The Rich States, Poor States publication that examines why some states perform better in economic growth and opportunity than others. The fifth edition was released last week.

    Recently a city council member from a small town asked me if there were resources to help city council or county commission members understand and apply the principals of free markets and limited government to city and county governments. I looked and asked a few people. The answer is no, there appears to be no such resource. This seems like a growth opportunity for ALEC or a new organization. There are several well-known organizations that strive to advance the size and scope of city and county governments, and these need a counter-balance.

    Shutting Down ALEC

    Playing the race card to silence a free-market policy voice

    Is it suddenly disreputable to advocate free-market policies? That’s the question raised by a remarkable political assault on the American Legislative Exchange Council (ALEC), which promotes reform in the 50 states. Led by former White House aide Van Jones, various left-wing activists and media are bullying big business to cut off ALEC’s funding. So much for free and open debate.

    Founded in 1973, ALEC is a group of state lawmakers who meet to share and spread conservative policy ideas. ALEC’s main focus is fiscal and economic policy, notably at the moment pension and lawsuit reform, tax and spending limitation, and school choice. For years it labored in obscurity, its influence rising or falling with the public mood. But after conservatives made record gains in state legislatures in 2010, the left began to target ALEC for destruction.

    Continue reading at the Wall Street Journal (no subscription required)

  • WichitaLiberty.TV: Newspaper editorial writers on how democracy works, Kansas school test scores.

    WichitaLiberty.TV: Newspaper editorial writers on how democracy works, Kansas school test scores.

    In this episode of WichitaLiberty.TV: An editorial in a Kansas newspaper exposes a dangerously uninformed and simplistic view of politics and democracy. Then, will Kansas school leaders and newspapers tell us the hidden truths about Kansas school test scores? Episode 41, broadcast May 4, 2014. View below, or click here to view at YouTube.

  • End the wind production tax credit

    wind-power-turbine-closeupU.S. Representative Mike Pompeo, a Republican who represents the Kansas fourth district, and U.S. Senator Lamar Alexander in 2012 contributed the following article on the harm of the wind power production tax credit (PTC). The NorthBridge Group report referenced in the article is available at Negative electricity prices and the production tax credit. While the PTC is a federal issue, the Kansas Legislature could do taxpayers in Kansas and across the country a favor by ending the mandate to produce more of this taxpayer-subsidized power.

    Puff, the Magic Drag on the Economy
    Time to let the pernicious production tax credit for wind power blow away

    By Lamar Alexander And Mike Pompeo

    As Congress works to reduce spending and avert a debt crisis, lawmakers will have to decide which government projects are truly national priorities, and which are wasteful. A prime example of the latter is the production tax credit for wind power. It is set to expire on Dec. 31 — but may be extended yet again, for the seventh time.

    This special provision in the tax code was first enacted in 1992 as a temporary subsidy to enable a struggling industry to become competitive. Today the provision provides a credit against taxes of $22 per megawatt hour of wind energy generated.

    From 2009 to 2013, federal revenues lost to wind-power developers are estimated to be $14 billion — $6 billion from the production tax credit, plus $8 billion courtesy of an alternative-energy subsidy in the stimulus package — according to the Joint Committee on Taxation and the Treasury Department. If Congress were to extend the production tax credit, it would mean an additional $12 billion cost to taxpayers over the next 10 years.

    There are many reasons to let this giveaway expire, including wind energy’s inherent unreliability and its inability to stand on its own two feet after 20 years. But one of the most compelling reasons is provided in a study released Sept. 14 by the NorthBridge Group, an energy consultancy. The study discusses a government-created economic distortion called “negative pricing.”

    This is how it works. Coal- and nuclear-fired plants provide a reliable supply of electricity when the demand is high, as on a hot summer day. They generate at lower levels when the demand is low, such as at night.

    But wind producers collect a tax credit for every kilowatt hour they generate, whether utilities need the electricity or not. If the wind is blowing, they keep cranking the windmills.

    Why? The NorthBridge Group’s report (“Negative Electricity Prices and the Production Tax Credit”) finds that government largess is so great that wind producers can actually pay the electrical grid to take their power when demand is low and still turn a profit by collecting the credit — and they are increasingly doing so. The wind pretax subsidy is actually higher than the average price for electricity in many of the wholesale markets tracked by the Energy Information Administration.

    This practice drives the price of electricity down in the short run. Wind-energy supporters say that’s a good thing. But it is hazardous to the economy’s health in the long run.

    Temporarily lower energy prices driven by wind-power’s negative pricing will cripple clean-coal and nuclear-power companies. But running coal and nuclear out of business is not good for the U.S. economy. There is no way a country like this one — which uses 20% to 25% of all the electricity in the world — can operate with generators that turn only when the wind blows.

    The Obama administration and other advocates of wind power argue that the subsidy provided by the tax credit allows the wind industry to sustain American jobs. But they are jobs that exist only because of the subsidy. Keeping a weak technology alive that can’t make it on its own won’t create nearly as many jobs as the private sector could create if it had the kind of low-cost, reliable, clean electricity that wind power simply can’t generate.

    While the cost of renewable energy has declined over the years, it is still far more expensive than conventional sources. And even the administration’s secretary of energy, Steven Chu, calls wind “a mature technology,” which should mean it is sufficiently advanced to compete in a free market without government subsidies. If wind power cannot compete on its own after 20 years without costly special privileges, it never will.

  • Renewables portfolio standard bad for Kansas economy, people

    Renewables portfolio standard bad for Kansas economy, people

    Kansas wind turbinesA law that forces Kansans to buy expensive electricity is not good for the state and its people.

    A report submitted to the Kansas House Standing Committee on Energy and Environment in 2013 claims the Kansas economy benefits from the state’s Renewables Portfolio Standard, but an economist presented testimony rebutting the key points in the report.

    RPS is a law that requires the state’s electricity utilities to generate or purchase a certain portion of their electricity from renewable sources, which in Kansas is almost all wind. An argument in favor of wind energy requirementy from the Polsinelli Shugart law firm is at The Economic Benefits of Kansas Wind Energy.

    Michael Head, a Research Economist at Beacon Hill Institute presented a paper that examined each of Polsinell’s key findings. The paper may be read at The Economic Impact of the Kansas Renewable Portfolio Standard and Review of “The Economic Benefits of Kansas Wind Energy” or at the end of this article. An audio recording of Head speaking on this topic is nearby.

    [powerpress url=”http://wichitaliberty.org/audio/michael-head-kansas-rps-2013-02-14.mp3″]Michael Head, Beacon Hill Institute

    Here are the five key findings claimed to be economic benefits to the Kansas economy, and portions of Head’s responses.

    Key Finding #1: “New Kansas wind generation is cost-effective when compared to other sources of new intermittent or peaking electricity generation.”

    The first observation to make from this key finding is that if it were true the state RPS policy is not necessary. If wind power is truly cost-effective compared to other sources of energy, state mandates that wind power be used should be repealed, allowing wind power to compete with other technologies to provide low cost electricity in Kansas.

    This point is obvious. The actions of the wind power industry — insisting on mandates and subsidies — lets us know that they don’t believe their own claim.

    Key Finding #2: “Wind generation is an important part of a well-designed electricity generation portfolio, and provides a hedge against future cost volatility of fossil fuels.”

    Hedging has been, and will continue to be, a useful tool for utilities, and benefits the consumer. But the Kansas state government should not engage in this level of industrial policy by regulating just how much utilities can hedge, all for the sake of requiring wind power production. This is not a benefit in itself. Utilities will attempt to maximize profits by consistently analyzing the energy market and making the best decisions, often through long term purchasing agreements. … In short, hedging is a valuable tool when left to the discretion of the utility, but by utilizing a heavy-handed mandate, state lawmakers are actually constraining the ability of the utilities to make sound business decisions.

    Key Finding #3: “Wind generation has created a substantial number of jobs for Kansas citizens.”

    This key finding fails to take into consideration opportunity costs, a concept that Bastiat explained in his 1850 essay, and is a prime example of the reviewed paper only considering benefits. If a shopkeeper has a window broken, this creates work for a glazer to replace the window. However, this classic “broken window” fallacy mistakes breaking windows as job creation policy. At this point “The Economic Benefits of Kansas Wind Energy” is correct, wind generation does create jobs, just as a broken window creates jobs. But the report stops at this point and fails to provide a complete analysis of the effect of wind generation on total employment in Kansas.

    As Bastiat showed, a consideration must be made to the opportunity cost. How would the shopkeeper have spent his money if he did not need to replace his window? He could use the money on capital investment, further growing his business, hire another worker or make various other purchases. Regardless of what it was, they would have all brought him more benefit, than replacing his window. If not, he would have broken the window himself.

    This is one of the most important points: By forcing Kansans to pay for more expensive electricity, we lose the opportunity to use money elsewhere.

    Key Finding #4: “Wind generation has created significant positive impact for Kansas landowners and local economics.”

    This key finding makes a common mistake by assuming transfer payments are a benefit, a fallacy. The transfers of money via lease payments or property tax payments are not benefits. This transfer of money is a cost to one party and a benefit on the other, and can be illustrated easily.

    What if Kansas wind farms vastly overpaid for their land and lease payments were valued at $1 billion a year. This report would place the benefit of wind power leasing this land at $1 billion a year. But the project has not changed, where did these new benefits come from?

    In fact, there would not be any change to the net benefit of the project. Landowners would amass benefits equal to $1 billion minus the land value and utilities would amass costs equal to $1 billion minus the land value. These costs would in turn be passed along to rate payers in the form of higher utility costs. This illustrates the point that this policy is industrial policy. By dispersing the costs of a project to all citizens in the state, small, but powerful, groups with strong lobbying efforts are able to gather the rewards.

    Key Finding #5 “The Kansas Renewable Portfolio Standard is an important economic development tool for attracting new business to the state.”

    This key finding is related closely with the analysis of the job benefits that wind power purportedly conveys. Of course, legally requiring that utilities use specific sources of electricity will attract new business in that sector to the state. But we need to see the whole picture. This policy has costs, which will be borne by state residents and businesses via higher utility prices.

    In conclusion, Head asked the obvious question: “With all of these supposed benefits of wind power, why does it require a government mandate and taxpayer funding?”

  • ‘Ten Thousand Commandments’ for 2014 released

    Ten Thousand Commandments 2014

    By Clyde Wayne Crews

    Full Report Available Here

    Ten Thousand Commandments is the Competitive Enterprise Institute’s annual survey of the federal regulatory state. Authored by CEI Vice President for Policy Clyde Wayne Crews, it shines a light on the large, growing, and hidden costs of America’s regulatory state.

    The scope of federal government spending and deficits is sobering, but federal regulations cost hundreds of billions – perhaps trillions – of dollars annually. Unfortunately, they get little attention in policy debates. Regulatory costs are difficult to quantify because, unlike taxes, they are unbudgeted and often indirect. Ten Thousand Commandments compiles scattered government and private data on the numbers and costs of regulations and about the agencies that issue them, in an attempt to make the regulatory state more comprehensible.

    Highlights of the 2014 Edition Include:

    • Combined with $3.454 trillion in federal spending, Washington’s share of the economy now reaches 31 percent.
    • Costs for Americans to comply with federal regulations reached $1.863 trillion in 2013. That is more than the GDPs of Canada or Australia.
    • This is the 21st edition of Ten Thousand Commandments. In that time, 87,282 final rules have been issued. That’s more than 3,500 per year or about nine per day.
    • The “Unconstitutionality Index” is the ratio of regulations issued by agencies compared to legislation passed by Congress and signed into law by the president. The ratio stood at 51 for 2013. That means there were 72 new laws and 3,659 new rules – 51 rules for every law, or a new rule every 2 ½ hours.
    • Regulatory costs amount to an average of $14,974 per household – 23 percent of the average household income of $65,596 and 29 percent of the expenditure budget of $51,442. This exceeds every item in the household budget except housing – more than health care, food, transportation, entertainment, apparel, services, and savings. Some 63 departments, agencies and commissions have regulations in the pipeline.
    • The 2013 Federal Register contains 79,311 pages, the fourth highest ever. The top two all-time totals are 81,405 pages in 2010 and 81,247 in 2011, both under Obama.
    • The top six federal rulemaking agencies account for 49.3 percent of all federal rules. In 2013, these were the Departments of the Treasury, Commerce, Interior, Health and Human Services, and Transportation and the Environmental Protection Agency.
    • Small businesses pay more in per-employee regulatory costs. Firms with fewer than 20 employees pay an average of $10,585 per employee, compared to $7,755 for those with 500 or more employees.

    Wayne Crews – Ten Thousand Commandments 2014.pdf

    Ten Thousand Commandments 2014 on Scribd

  • Meet ALICE. Who knew?

    Meet ALICE. Who knew?

    ALICE logoProgressives criticize “bill mills,” but the movement has its own. Criticism of policies based simply on their sources is a weak form of argument. But this is the substance of criticism leveled against ALEC, or American Legislative Exchange Council.

    Opponents of ALEC say it is a “bill mill” that “pushes” legislation upon unsuspecting state legislatures. Since the goal of ALEC, according to its website, is to “advance limited government, free markets, and federalism at the state level,” it’s good that legislators are being advised by an organization with these goals. There are, of course, forces on the other side that seek, on a daily basis, to grow government at the expense of freedom.

    It’s not uncommon for states to look to other states for legislation. A few years ago, a bill appeared for consideration in the Kansas Senate that would add taxes to sugary soft drinks. I found that the Kansas bill contained large sections of statutory language taken word-for-word from a California bill. (See Tax law imported to Kansas from California.) While this bill was introduced in a Senate controlled by Republicans — President Steve Morris and Vice President John Vratil — neither were friends of limited government or taxpayers.

    While ALEC has model bills, it’s not the only organization that does. Meet ALICE, or American Legislative and Issue Campaign Exchange. Its website says “The American Legislative and Issue Campaign Exchange, or ALICE, is a one-stop, web-based, public library of progressive state and local law on a wide range of policy issues.”

    In more detail, ALICE describes some of its content as “Models = Generalizable framework laws that can serve as the basis for actual legislation.” Also, “Exemplary = Actual laws that were enacted or introduced somewhere that represent good progressive local or state legislation.”

    Does this sound like a “bill mill?” According to ALEC critics, bill mills are bad.

    I could present to you the list of people and organizations that fund ALICE. You might realize that many of them work in favor of big expansive government instead of individual liberty, limited government, economic freedom, and free markets. But I think we’d be better off if we examined ALICE proposals based on their merits, just as we should judge ALEC proposals in the same way.

  • Kansas school spending, contrary to Paul Davis

    Claims about school spending made by a Kansas Democratic Party leader don’t quite align with facts.

    It is commonplace for liberal Kansas politicians and newspaper editorial pages to complain about severely cut spending on schools in Kansas. A recent example is Paul Davis in the Wichita Eagle.

    kansas-school-spending-per-student-2013-10-chart-01Nearby 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 Davis’ claim of students who “have experienced severe budget cuts” don’t match the facts.

    Now, it’s possible that Davis may want readers to consider only a portion of school spending, that being base state aid per pupil. It’s the starting point for the Kansas school finance formula, and therefore an important number.

    Ratios of school spending to base state aid.
    Ratios of school spending to base state aid.
    Base state aid per pupil has fallen in recent years. Because of this, public school spending advocates claim that spending has been cut. But that’s not the case. As shown in the nearby chart, there has been a steady increase in measures of school spending when compared to base state aid.

    In the last school year base state aid per pupil was $3,838. That’s the figure often used as the level of school spending. But in that year total Kansas state spending per pupil $6,984, or 1.82 times base state aid. Adding local and federal sources, spending was $12,781 per student, or 3.33 times base state aid.

    Considering Kansas state spending only, the ratio of state spending to base state aid was 1.10 in 1998. By 2013 that ratio had risen to 1.82, an increase of 65 percent for the ratio. For total spending, the ratio rose from 1.86 to 3.33 over the same period, an increase of 79 percent.

    What’s important to realize is that the nature of Kansas school funding has changed in a way that makes base state aid per pupil less important as an indicator of school spending.

    Kansas Judicial Center
    Kansas Judicial Center
    The Kansas Supreme Court had something to say about this in its recent Gannon opinion that sent part of the case back to the lower court with instructions: All funding sources are to be considered: “In the panel’s assessment, funds from all available resources, including grants and federal assistance, should be considered.”

    I wonder: Those who call for a return to the level of base state aid of 20 years ago (adjusted for inflation, of course): Would they also accept returning to the same ratios of total spending to base state aid?

  • What is the cost to visit the Wichita Art Museum?

    What is the cost to visit the Wichita Art Museum?

    wichita-art-museum-website-example-2014-04The normal adult admission to the Wichita Art Museum is $7.00, but that isn’t anywhere near the cost of each visit.

    According to most recent edition of Wichita’s Performance Measure Report, the cost per visitor for the Wichita Art Museum in 2012 was $48.62.

    That’s a little higher than the three previous years, but much lower than 2009, when the city reported a cost of $59.00 per visitor.

    Cost per visitor for Wichita attractions. Click for larger version.
    Cost per visitor for Wichita attractions. Click for larger version.
    As can be seen in the nearby table, other city cultural attractions registered costs per visitor that are much higher than their admission costs. The Mid America All Indian Center has a per-visitor cost of $11.37. For The Wichita Historical Museum it’s $36.59. Cowtown’s cost per visit is $15.94.

    So while each person who visits the art museum may or may not be willing to pay $48.62 for admission, someone is paying that.

    Visiting the Wichita Art Museum 540