Voice For Liberty

Category: Kansas state government

  • Kansas Judiciary Gets National Criticism

    Kansas Judiciary Gets National Criticism
    Karl Peterjohn, Kansas Taxpayers Network

    The school finance litigation began in the 1980’s in Kansas and has continued and expanded in the 21st Century. The first lawsuit was tragic, but now Kansas is becoming a judicial joke, albeit a very expensive demonstration of judicial activism and contempt for the democratic principles that are the foundation for not only this state, but for this republic.

    Kansas is now getting negative national attention created by the judicial activism coming from the Kansas Supreme Court. Kansas is not alone in judicial activism but the attention focused upon the Sunflower state by the Wall Street Journal April 8, 2006 is a national recognition of a fundamental problem facing Kansas. The negative judicial impact is already hurting Kansas firms as business costs and risks grow. Any out-of-state firm looking to relocate into this region won’t come anywhere near us.

    Here, the judges are setting budgets and legislatures have been relegated to an elected advisory board. Litigious school district lawyers publicly whine about “inadequate school funding” despite an increase of over $650 per pupil last year alone. Governor Sebelius and her liberal legislative allies in both parties want this spending to be doubled again to a total of roughly $2,000 more per pupil per year. That would be an additional $40,000 per twenty student classroom in Kansas if the legislature approves this spending when they return to Topeka April 26.

    When this gubernatorial backed spending spree was approved in the Kansas house all 42 Democrats joined 22 liberal Republicans led by Garden City lawyer, Representative Ward Loyd in narrowly passing this bill on a 64-to-61 vote in March. In a spasm of caution, the senate deadlocked and passed nothing so far this year.

    Now New York Law School professors Ross Sandler and David Schoenbrod bluntly stated in the Wall Street Journal, ” …courts have no power to force a state legislature to appropriate money.” Most people assume that the legislature must cough up the cash because courts have the power of contempt, which allows them to punish those who disobey their orders. In the school case, however, the courts can’t punish anyone. State legislators are not defendants in this case, and even if they were, they can’t be pushed because they are immune from suit. The state’s treasury is immune because the court lacks authority to appropriate more funds and can’t fine the state for the legislature’s unwillingness to do so.

    These professors go on to warn that courts have tried to close schools until the legislature responded to the court’s demands. In some cases the threat succeeds. They said, “…when the Kansas court raised the question of whether it should close the schools, the threat was enough to pry more money from the legislature.” This leads to an outrageous situation, “When courts claim that they have power to make legislatures spend more to vindicate a constitutional right to basic education, they tamper with a basic tenet of our democracy — no taxation without representation.”

    The judicial activists among Kansas lawyers, the Kansas Bar, the judicial nominating and “ethics” committees meeting behind closed doors, and the Kansas judges from the liberal Terry Bullock to the Democrat dominated, activist Kansas Supreme Court control the interpretation of Kansas state law. Democratic principles are no match for Democrat and liberal judges. What the judges cannot control are the consequences from this usurpation of elected officials’ power by this ascendant judicial oligarchy.

    The Wall Street Journal’s editorial clearly indicates that businesses are entering a risky legal environment once they step into Kansas. The word is out. Other recent Alice in Wonderland rulings, like the Kansas Supreme Court’s eminent domain edict, add to the problems and risks of conducting business in this state. As the court grabs spending power and weakens property rights this state is being economically as well as politically damaged by judicial activism.

    The bizarre nature of the Kansas school finance case is increased by several facts. First, the legislature was never even a defendant in the school finance lawsuit, the state school board was. The Kansas Supreme Court denied the legislators’ right to appear before the court because of this fact, but then the appointed judges on this court turned around and issued a ruling against the elected legislators.

    Second, the other states pursuing these public school spending cases refuse to manufacture some specious dollar amount to be constitutionally authorized like Kansas. The Texas Supreme Court specifically rejected this claim. In New York, their highest court said in its March, 2006 ruling that it had, “neither the authority, nor the ability, nor the will, to micromanage education financing.”

    Dissenting judges in this case warned that the New York school finance lawsuit will create endless litigation and perpetual legal second-guessing by their courts. That description of the legal environment sounds like Kansas beginning with Judge Bullock’s infamous Mock decision in 1992.

    Who supported this school finance lawsuit in New York? Besides the usual school spending lobbies there were the two “expert” professors from New York whose work is the foundation for the Kansas Legislative Post Audit report issued last January. These are Syracuse University professors and left wing school spending advocates William Duncombe and John Yinger.

    There are many lessons for the Kansas citizens paying these tax bills to fund this legal circus. Taxpayers are funding both sides of this expensive, multi-million dollar lawsuit. Kansas ranks low in the percentage of tax dollars that gets into classrooms, but there is unlimited tax funds for lawsuits, statehouse school district lobbyists, raising top administrators’ salaries, and despite all the spending there are lax fiscal controls. Lax controls have created several recent public school financial scandals that included, in one case, shipping over $500,000 in school district tax funds to a bunch of crooks in Kazakstan. This financial scandal indicates that money is the excuse, not the problem, for Kansas public schools.

  • Is Kansas Competitive?

    Is Kansas Competitive?
    Karl Peterjohn, Kansas Taxpayers Network

    Is the Kansas economy competitive? State revenues are growing and Governor Sebelius and other state spending proponents are promoting a consultant’s report that ranks Kansas as 10th for “Pro Business States for 2006,” according to Pollina Corporate Real Estate, Inc. consulting service. This was a big jump for Kansas in this rating due to the state scoring a middling 23rd in the first survey released in 2004. This is an important issue as Kansas spending and ultimately tax issues remain unresolved and the blacked robed legislators on the Kansas Supreme Court await an opportunity to issue more spending edicts.

    Free market and conservative legislators have been complaining that Kansas is not economically competitive or business friendly. The uncertainty and enhanced risk created by judicial spending edicts certainly hurts this state but is one important criteria that was not considered in the Pollina report.

    The conservative legislators have tried to pass a much larger package of tax cuts that go well beyond what the liberal Governor Sebelius wants. April 7 the governor expressed her preference for another dramatic hike in state school expenditures over any tax cuts when she met with statehouse reporters.

    However, the key question remains. Does Kansas has a competitive fiscal climate or not? The Tax Foundation’s State Business Tax Climate Index ranked Kansas as 34th in their 2006 report, down two places from last year. Kansas is getting marginally worse here and lags behind all of our neighbors except Nebraska. The Council of State Taxation’s 2006 report issued in March ranked Kansas business taxes at the top of our five state region and well above the U.S. national average.

    The Pollina consulting report ranked Kansas on a number of criteria and in only one was Kansas in the top ten. The business tax ranking in this report scored Kansas at 45th (with one being best and 50th worst). Job losses between 2002-04 in this report has Kansas scoring 47th which ironically probably explains one of Kansas’ best scores of 13th on their workforce. This means that Kansas has lots of qualified workers trying to find jobs. Sadly, many of these folks will move to states with more competitive tax climates where the job growth is located. Kansas also scored badly on our unitary taxation of business but that was offset by Kansas not taxing inventories.

    Dr. Pollina explained that Kansas scored well because we are one of 22 Right to Work states but that does not explain how Kansas moved up from 2004. “Its not always that the state is doing that much better but that others are doing worse,” Dr. Pollina suggested.

    Dr. Pollina also cited the state’s programs for incentives for business as another reason. The more incentives and state programs the higher his rating. Critics of these programs have described many of these special benefits as corporate welfare. However, Dr. Pollina could not explain how Kansas, which was ranked on this criteria as 6th this year, would improve significantly overall when we also ranked 6th on this same criteria in 2004. While having a strong economic development department with programs was an important part of this study’s rating, this cannot explain how Kansas moved up. If you ignored the state incentive programs, Dr. Pollina did say that Kansas would not have moved up to 10th in his survey.

    The irony about the variance in these reports is buried in the details. The Pollina survey actually relies upon some of the Tax Foundation data. The Pollina report ranked Kansas as scoring 23rd on infrastructure, including roads, despite this state spending more than our neighbors on a per capita basis for roads and highways. So like school spending, Kansas spends more, taxes more, but gets less bang for the buck. Effectiveness of state spending was not measured.

    The Pollina survey actually measured a number of different criteria from the tax and competitiveness comparisons performed by the Tax Foundation and the Council of State Taxation. Pro business when it comes to state subsidies is sometimes in conflict with free market and limited government. Small businesses that are ineligible for many state development programs are ignored in the state Commerce Department’s “elephant hunt” that is focused primarily upon the Fortune 500 corporations.

    The Pollina survey actually contains a lot of disturbing data about how poorly Kansas competes that will sadly be ignored by the 10th place rating. These details matter. Lots of state Department of Commerce programs and a glitzy web site will only be a case of putting “lipstick on the pig.” The fact that state revenues in 2005 grew at half the national rate is a warning signal that is being ignored by liberal elected officials in both parties, Governor Sebelius, and her judicial allies wearing the black robes in the Kansas “House of Lords,” who are preparing their next expensive edict within the Kansas Supreme Court.

  • Senate spending spree blows roof off Kansas capitol

    Thank you to Karl Peterjohn, Kansas Taxpayers Network, for this fine article containing information we don’t see in our state’s newspapers.

    Why is information like this important to our liberty? It’s because much of what our state spends consists of simply taking the property of one person and giving it to someone else. Add to that the fact that much of this spending is on public schools, that our government leaders firmly refuse to allow us choice in schools (vouchers), this spending (and resultant taxation) amounts to a huge assault on liberty, our freedoms, and our wealth.

    Senate spending spree blows roof off Kansas capitol
    March 30, 2006 @ 11:30 AM

    The government school spending spree is erupting in the Kansas senate today. The senate took up the horrific house passed HB 2986 this morning. Over three years Sen. Karin Brownlee said this bill would cost a total of $1.38 billion.

    Two amendments to lower the spending increases failed. The first would have limited spending growth to $670 million failed on a 17-to-20 vote with three legislators showing their profile in courage and passing! Then the original house spending plan that would raise school spending over $1 billion over three years was taken up and failed 17-to-23.

    Once again unified Democrats and their big spending GOP allies headed up by school district attorney Sen. John Vratil and Wichita school district specialist Sen. Jean Schodorf (they are vice chair and chair of the education committees, does anyone see a special interest there?) easily defeated these slightly smaller spending bills with the votes of their liberal allies.

    Sen. Karin Brownlee warned the senate that the house passed H 2986 would “…spend the roof off the dome…,” if this passed. So far, the smallest spending increase amendment to this bill came from Sen. Jim Barnett who had a four-year spending hike plan. Barnett’s proposal did not receive a single Democrat vote and the most “moderate,” ie. liberal Republicans voted against it: Allen, Brungardt, Emler, Morris, Reitz, D. Schmidt, V. Schmidt, Teichman, Umbarger, Vratil, & Wysong. The three passing were McGinn and two Democrats: Haley and Lee.

    Barnett warned the senate that continuing the spending spree that began in the 2005 regular legislative session and was compounded by the court mandated special session was going to lead this state into major financial mess. He was not alone in these concerns. He was joined by a majority of senate Republicans including excellent comments from senators Brownlee and Wagle.

    Sen. Les Donovan joined warned the senate that there are, “… built in (spending) escalators and they are not going away,” and that the cumulative impact is to put the state in a $600 million fiscal hole two years from now.

    The left wing and all too bipartisan senate leaders on both sides of the aisle Steve Morris, Tony Hensley, Derek Schmidt, and John Vratil do not care. As I write this, the debate continues and more amendments are being offered. The sausage mill continues to grind.

    From this taxpayer advocate’s perspective it is hard to see who is more irresponsible: the usurping Kansas Supreme Court that created the fiscal environment with the lawsuit that continues to fester over the entire state, Governor Sebelius who proposes nothing but controls through her legislative leadership allies Morris/Hensley everything, or left-wing Republicans and Democrats in the legislature. The house plan was increased with the Loyd-McKinney amendment but a more accurate name for this spending spree bill would begin with Governor Sebelius, add the four senate leaders, and then the two house members: Loyd/McKinney. Then the seven members of the black robed legislature/Supreme Court’s names should be included too. All these folks’ fingerprints dominate this spending spree bill.

    The scuttlebutt among some lobbyists is that there aren’t 21 votes in the senate to adopt any school finance bill. I don’t buy it. It looks like there are 21 votes to go on a spending spree that when fully implemented will place this state in such a deep financial hole that it will be decades before Kansans will see any sunlight. This is what Governor Sebelius’ father did when he was governor in Ohio for one term in the 1970’s and created that state’s debilitating income tax. Its deja vu all over again.

    The big lie is that gambling is a fiscal solution. It is only a solution if you think that the $323 million of spending from 2005 when combined with $660 million in additional spending (and assuming that the state doesn’t increase spending anywhere else, fat chance) can be funded by the gambling proponents most optimistic guess of $200 million in new money (that a gross not net figure). I guess this is called “Government Math.” Even an increase in state revenues of a couple of hundred million this year will not balance this spending spree.

    The government school establishment does not know how to spend this money fast enough. Full day kindergarten is already becoming universal statewide. Then the school districts will begin to expand their pre-kindergarten programs. They still will have truckloads of cash to spend.

    The size of the spending spree is demonstrated by the 2005-06 increase that if nothing were added, would increase state spending per pupil by $725 per FTE pupil statewide. That’s almost chump change when the spending in HB 2986 is added to the total. That should add roughly $1,500 more per pupil and assumes that local and federal spending is not increased—which is highly unlikely. That would take average spending from about $10,000 per pupil per year (or $200,000 for a classroom with 20 kids in it) to $12,000 per pupil (or $240,000 per classroom) a year.

    The legislature has been warned that financing HB 2986 would require draconian hikes in any one of the state’s major revenue sources: 22% hike in state personal income tax rates (taking us close to a max rate of 8 percent), more than doubling by over 21 mills in the statewide property tax, or at least a 38% hike in the state sales tax rate. What would be most likely is a combination of all three and perhaps adding some other excise tax hikes to the mix.

    Kansas’ already obscenely high tax rates would be made even higher. The departure of businesses and productive people will grow. The governor has a key supporter, Phil Ruffin, who is already a billionaire according to Forbes Magazine’s billionaire issue. To help fund this spending spree with slots/casino’s at his racetracks he would be able to move a good ways up the Forbes list into the multiple billionaire category. Forbes reports that Ruffin lives in Nevada where the sales tax is a fraction of Kansas; there is no statewide property or personal income taxes.

    The irony is that a large chunk of this new spending will not be used to raise the salaries of Kansas’ best public school teachers. The government school spending lobbies plan is to expand the number of employees (see the Augenblick and Myer report that is the basis for the court’s school finance edicts).

    This is a political play for more power. More employees means more union dues and that means more political power. Ultimately, the state grows and dependency upon government will grow. Kansas union leaders will soon be getting the same mid-six figure pay that national union heads like the National Education Association currently enjoy.

    This spending hike is a negative productivity plan since it will take more people to perform the same schooling that has occurred in the past. Don’t get me wrong; school employees will certainly get paid more. Superintendents will be able to trade in their Jaguars for Rolls-Royces (this is not hyperbole, there already is a superintendent driving her Jag). If teachers get 10 percent hikes principals will get a bigger percentage as will their bosses. More staff will be needed. Kansas will follow the build the government school bureaucracy model.

    If the Kansas City (MO) school lawsuit experience in the 1980’s was a tragedy that cost taxpayers a couple of billion the school spending debacle in 2006 should be called a farce. Except Kansas is larger so it will be a lot more expensive. All additional efforts to provide more performance and school accountability for state spending were removed on the house floor and the efforts to re-insert these provisions on the senate floor were terminated by the liberal senators.

    Since Kansas is already spending a higher percentage of its state budget for the public school establishment, the idea that taxpayers are short-changing any public school is absurd. Over 50 percent of the state’s $5.2 billion plus Gen. Fund budget already goes for public schools. When colleges are added in the figure is now approaching 70 percent. This new spending is likely to make the former figure close to 60 percent and the latter percentage around 75 percent.

    Since the efforts to stop the school finance lawsuits have largely been sidetracked in the legislature the future for Kansas enterprise is high in uncertainty, increasing risk, and more automatic tax hikes. There are enough state reserves due to the 2003 Bush tax cuts that have helped grow state revenues so that no tax hike (besides the automatic property tax appraisal/income tax inflation) will be necessary in this election year of 2006 but wait till after November.

    The property appraisal notices went out this month and Kansas property owners will be paying large increases. Again. This is now an annual event. One mill of the statewide property tax has now grown to over $30 million per year. In the 1990’s this figure was in the just over half this amount.

    None of the statewide property tax collections for schools show up in the state’s official revenue figures. I’ll let you do the math and multiply the $30 million by the 21.5 mill statewide mill levy and add this to a 2007 state budget that will soon be pushing $6 billion for the General Fund and blow by $12 billion for the All Funds budget (Medicaid costs are soaring at double digit rates too). In 2002 the state budget reached $10 billion for the first time.

    The fiscal decline of Kansas will lead to an overall decline for this state. We are a spending model for the rest of country: watch Kansas and do the opposite. Please feel free to forward this to anyone with an interest in the fiscal health of this state.

  • Judicial Reform in Kansas on Hold

    Thank you to Alan Cobb of Americans For Prosperity, Kansas for this report on this needed measure for judicial reform in Kansas.

    The current system of Kansas Supreme Court selection, the mis-named “merit system,” is a secretive, closed system dominated by lawyers. Kansas lawyers elect themselves to the Kansas Supreme Court selection board. There are no campaign finance filings, no reports, no public meetings. It is time to bring this system out into the light of day.

    However two attempts to reform this system failed in the Kansas Senate this week. A proposed constitutional amendment that would require Senate confirmation of Kansas Supreme Court Justices failed yesterday, March 9th. What is worse is that this legislation had 28 co-sponsors and only needed 27 votes to pass. Six senators switched their support for the bill they co-sponsored ensuring the failure of the measure. The six Senators who switched their support were:

    Sen. Steve Morris, R-Hugoton
    Sen. Roger Reitz, R-Manhattan
    Sen. David Wysong, R-Mission Hills
    Sen. Jim Barone, D-Frontenac
    Sen. Vicki Schmidt, R-Topeka

    Sen. Ruth Teichmann, R-Stafford, abstained from voting. (ed: See Karl Peterjohn’s article Report From the Kansas Statehouse, March 9, 2006 to understand what “passing” means in this context.)

    On March 8th, Sen. Jim Barnett proposed an amendment which would have scrapped the so-called “merit system” completely and replaced it with Gubernatorial selection and Senate confirmation. Barnett’s amendment was defeated 25-15.

    Senators voting against: Allen, Apple, Barone, Betts, Brungardt, Emler, Francisco, Gilstrap, Goodwin, Hawley, Hensley, Kelly, Lee, McGinn, Morris, Pine, Reitz, Schmidt D, Schmidt V, Schodorf, Steineger, Teichman, Umbarger, Vratil and Wysong.

    Senators voting for Barnett’s reform measure: Barnett, Brownlee, Bruce, Donovan, Huelskamp, Jordan, Journey, O’Connor, Ostmeyer, Palmer, Petersen, Pyle, Taddiken, Wagle, Wilson.

  • Report From the Kansas Statehouse, March 9, 2006

    Thank you to Karl Peterjohn, Kansas Taxpayers Network, for this report on happenings in Topeka.

    The Kansas senate surrendered their ability to rein the activist Sebelius and leftist dominated Kansas Supreme Court Thursday afternoon. A constitutional amendment to require senate confirmation of judges barely received a majority vote Thursday afternoon as a coalition of most senate Democrats and the Senate GOP leadership of Senate President Steve Morris and Vice President John Vratil succeeded in killing this constitutional amendment that needed a 2/3 or 27 votes to pass and move to the house.

    The odious nature of this defeat was that the proposal had 28 co-sponsors including Morris, Wysong, Barone and several others who voted against their own proposal. Fortunately, many senators had their reasons for voting for or against this measure in the journal so you can see why they voted the way they did. An effort to improve this constitutional amendment by eliminating the nominating commission failed during the debate on Wednesday on a 15-to-25 vote with the Democrats joining with the liberal Republicans to kill this amendment.

    The profile in pusillanimous pontification goes to Sen. Ruth Teichman who ended up passing on the bill. He equivocation “passing” serves as an effective “no” vote but allows her to state that she did not against reining in the court. The voters in her south central district need to know how weasily this behavior is on this crucial issue. Passing on difficult votes has become a common form of trying to hide their position in the Kansas senate in the last couple of years.

    In all likelihood, this looks like the senate won’t even bother to pass any other constitutional amendments to reassert their own fiscal authority or rein in the court during the rest of the 2006 session. Last summer the senate passed two constitutional amendments on almost party line, 30-to-9 votes last summer. The senators passed these provisions with some cynicism on the part of some of the senators voting yes with the full knowledge from the Democrats that there were not enough votes in the Kansas House Of Representatives to have anything reining in the courts get to the voters for a constitutional referendum vote.

    In sense, this is not surprising. Spending and spending measures are proliferating. Eminent domain reform and the Taxpayers Bill Of Rights are being throttled in committee, the government lobbyists are dominating the legislative process, and local units are likely to get more taxing authority in the form of additional sales taxes in the desire for “uniformity” that will help make the misnamed “streamline” sales tax more uniform during this year’s legislature.

    It is sad to hear that so much of the “leadership” agenda seems to be driven by liberals in both parties setting out their goals for growing Kansas government.

    By contrast, the Arizona, Florida, and Michigan legislatures are all looking at serious tax cutting legislation. Arizona is looking at $400 million in income and property tax cuts. In Topeka, the appraisal notices are going out this month and significant hikes in property that has not been improved are now being reported with double-digit percentage increases. Raising property taxes by the appraiser in an on-going process. The decline of Kansas continues.

    Two excellent quotes from the senate debate over reining in the court was Sen. Kay O’Connor’s point that only about 25% of Kansans are Democrats but the closed process in Kansas has given us a Supreme Court where 5-out-of-7 judges are registered Democrats. This is the Sebelius court. Sen. Susan Wagle pointed out that a “cloud” of uncertainty created by the court’s spending edicts hangs over this state.

    Sen. Terry Bruce pointed out that there are over 9,000 lawyers who get three votes on selecting the members who pick the three nominees for the Kansas Supreme Court. The other 2.7 million of us who are NOT lawyers only get our vote for governor. The governor selects four of the nine members of this commission that meets behind closed doors. Lawyers get to vote for one member in each congressional district that makes up four more members of this commission as well as the one member who is elected statewide. Lawyers make up 5 of the 9 members and in effect this branch is government by the lawyers, of the lawyers, and for the lawyers. Non lawyers in Kansas are officially second class citizens under this outrageous system.

  • The “Free” Kansas Lottery Proceeds

    An article titled “Nothing’s Free” by Russell Roberts, published in The Freeman: Ideas on Liberty
    http://www.fee.org/publications/the-freeman/article.asp?aid=4419 explains that even though we might be accustomed to thinking that the state’s proceeds from taxes like those on the Kansas Lottery are “free,” this is not at all the case. As Mr. Roberts explains:

    About 55 percent of the receipts go to prizes, 10 percent to expenses, and 35 percent to education or some similar unimpeachable cause. Because 35 percent goes to neither winners nor losers, the real cost of the lottery is that you win less often and the prizes are smaller than would be the case without a government monopoly. If government allowed competition or made gambling legal, people who like to gamble would have a higher chance of winning and there would be more money distributed to winners.

    So lottery-funded education is not free after all. Subsidizing education out of lottery proceeds punishes people who like to gamble. Those turn out on average to be people who are relatively poor with less education. Can you think of a more immoral solution for funding education than to take the money from those with the least education?

    (I checked the Kansas Lottery’s website. Our state’s figures are close to the figures Mr. Roberts gives: “In fiscal year 2005 (July 1, 2004 through June 30, 2005), the Kansas Lottery paid out 54 percent in prizes. The State Gaming Revenues Fund received 31 percent of ticket sales; cost of sales was 5 percent (which covers online vendor fees, telecommunications costs and instant ticket printing); 6 percent was transferred to retailer earnings and 4 percent covered administrative expenses (salaries, advertising, depreciation, professional services and other administrative expenses.)”)

    (By the way, for Kansas in fiscal year 2005, a year in which $65,400,000 was transferred to the state, a whopping $80,000 went to the Problem Gambling Grant Fund.)

    What’s ironic is that gamblers are worse off playing against the State of Kansas than the mob-run numbers rackets. As a letter-writer in the New York Times wrote: “They [organized crime] paid out about 85 percent of the amounts that were bet, retaining 15 percent or less for profits and expenses like payoffs.”

    If we want to let people gamble, let’s at least have a lottery where players have a decent chance of winning. From Mr. Roberts again: “Under a private, competitive lottery system, the prizes would be bigger and the odds of winning would be higher. It would be a better world than the one we now live in, where people in search of hope are forced to pay a 35 percent tax to finance the college education of mostly upper-class children.”

  • The Kansas Productivity Puzzle

    The Kansas Productivity Puzzle

    Lance Kinzer
    Kansas State Representative, Dist. 14
    http://www.lancekinzer.com

    Among the many interesting things that occurred during the first week of the legislative session perhaps the most compelling involved a presentation to the House Tax Committee by Professor Arthur Hall of the Center for Applied Economics at The University of Kansas. Dr. Hall’s presentation was focused on something he calls The Kansas Productivity Puzzle. Simply put, Kansas lags behind both the national average and other states in our region in the crucial economic category of productivity growth.

    In economic terms productivity is the value of goods and services per worker. Kansas falls short with respect to productivity growth in every sector of our economy except durable goods manufacture. This is true not merely when the comparison is made against the nation as a whole, but also when the comparison is made against other agricultural states in our region. To understand why this matters it is important to recognize that productivity growth is a key factor in determining wages. It is also a crucial determinant in overall economic growth. If Kansas had enjoyed merely average productivity growth over the past 25 years our state economy would be some $18 billion dollars larger than it is at the current time. Furthermore, wages in Kansas lag some $5,000.00 per worker behind the national average for similarly educated workers.

    The impact of sub-par productivity growth also has a negative impact on unit labor costs for Kansas businesses. This is merely a fancy way to say that businesses in Kansas get less bang for their buck than elsewhere in the country. Indeed, Dr. Hall reports that Kansas has the 3rd worst unit labor cost growth rate in the country. The data suggests that this ‘productivity puzzle” is both long term and systemic. Understanding all of the various factors that contribute to our productivity lag is a complicated question. That having been said, Dr. Hall’s current hypothesis is that there is an important relationship between the size of government in Kansas and our low productivity growth.

    In particular, Dr. Hall points out that Kansas has the 4th highest number of local government employees per capita in the nation. Furthermore, the number of local government employees in Kansas is growing at the 4th highest per capita rate in the country. Part of this problem may result form the relatively large number of local government units that exist in Kansas. For a state of our size we have a large number of counties and school districts, and employment in these sectors of government is growing at a rapid rate.

    Taking school districts as an example, during the 30 year period between 1972 and 2002 the total K-12 student population in Kansas decreased by 1%, yet the number of teachers and administrators employed by our schools have roughly doubled. Indeed, if the school district employee to student ratio in Kansas were the same today as it was when I was in high school about 15 years ago the cost savings would be approximately $400 million dollars per year. Looking at non-K-12 local government employees in the same way the cost savings would be more than $315 million dollars per year if local government worker per citizen numbers returned to their 1987 level.

    The issues of slow productivity growth and fast government sector growth brought to light by Dr. Hall have serious implications that all Kansas citizens and policy makers should consider. While seemingly abstract economic categories like productivity growth may appear detached from everyday life, they have important real world implications. In sorting through how best to address the Kansas Productivity Puzzle it is important to remember that the only way to increase overall productivity is by helping individual Kansas businesses to improve their productivity. This involves enacting polices that provide grater access to the capital, both financial and intellectual, that leads to innovation and in turn growth. It is also crucial that we keep in mind the negative impact an ever growing government sector can have on productivity growth.

    The solution to this complex problem may not then be so obscure after all. Policies that limit the size and growth of government and a tax and regulator structure that encourage business growth appear the best available solutions to addressing the Kansas Productivity Puzzle.

  • The decline In Kansas continues

    The Decline In Kansas Continues
    By Karl Peterjohn, Executive Director Kansas Taxpayers Network
    January 17, 2006

    The relative decline of Kansas continues. This decline is vividly demonstrated when state and federal revenue growth is examined.

    Total federal revenues grew 13.9 percent last year to total $2.142 trillion dollars. This was an increase in federal revenues of $262 billion. This increase was almost twice the percentage rate of growth of Kansas state revenues that grew only 7.1 percent or $322 million in fiscal year 2005 that ended June 30, 2005. The federal revenue figures are for the fiscal year that ended September 30, 2005.

    The variance in this growth between Kansas and the other 49 states is important. This data is another confirmation of two recent reports that compared Kansas economic trends and reported distressing results. K.U. economics professor Art Hall and Wichita State University’s Center for Economic Development and Business Research’s (CEDBR) Janet Harrah have issued separate reports indicating that Kansas is lagging in a number of key economic indicators.

    Harrah’s 2005 report showed that income, population, and job growth were lagging in Kansas. This CEDBR study looked at all 50 states using six measurements for population growth, income, and jobs (see: www.wichita.edu/cedbr/). Kansas lags nationally and, even more distressing, was at or near the bottom in almost every category used in this 10 year survey from 1994-2003. Harrah’s study used the most recent 10 year period of federal data that was available.

    Professor Hall’s “Local Government and the Kansas Productivity Puzzle,” focused upon weak productivity in Kansas as well as the sizable growth in government that appears to be a factor in the poor level of productivity growth. Hall’s work was particularly distressing due to the fact that Kansas scored poorly among all plains regional states in most of the measurements he examined. So not only was Kansas lagging nationally, it was also lagging regionally (see: www.cae.business.ku.edu).

    Kansas is a laggard being pulled by the faster growing parts of the United States. This state has an economic growth problem that must be addressed due to the high taxes and resulting high level of government spending in this state. This is a reality that can certainly be ignored by state policy makers in Topeka. However, this is a reality that cannot be denied. Kansas is in economic trouble.

  • Kansas Media Spin on Moderates and Conservatives

    Here’s a very good piece on Kansas politics written by Karl Peterjohn of the Kansas Taxpayers Network. Karl has amazing knowledge of Kansas politics and politicians of the past two decades. I wish he would write a book about it.

    Kansas Media Spin on Moderates and Conservatives
    Karl Peterjohn, Executive Director Kansas Taxpayers Network

    The liberal Republican Steve Rose has taken a break from advocating tax hikes to editorialize in the Johnson County Sun newspapers contrasting the difference between GOP “moderates” and “conservatives.” He does this without mentioning fiscal, property rights and other issues. I’m copying Rose’s commentary at the end of this response for your inspection.

    In this commentary Rose cites the pathetic left-wing Iola Register owned and operated by the Lynn family. Emerson Lynn’s daughter Susan now runs this daily southeastern KS newspaper with a gradually shrinking paid circulation of 3,803 subscribers. Emerson never found a statewide tax hike proposal that he didn’t like. He never found a fiscal conservative that he did. Emerson is a liberal in a conservative county in a conservative state and so he tried to influence public policy the way that liberals who dominate the Kansas news media do: they back the liberal faction in the Republican Party at whenever time they think it matters. If the Democrats have a chance, they back them. If the Bolsheviks had an electable candidate on the ballot and occasionally a couple win GOP nominations in certain areas of Johnson County, they would back them.

    The liberal Kansas media lets liberals, like Governor Sebelius, campaign as “fiscal conservatives,” while she prevaricated on whether she’d support raising taxes or not while running for office in 2002. Like her predecessor, once the inconvenience of the election was behind her, she was looking for places to spend more tax money. Higher taxes then became part of the scene. See her 2004 tax hike scheme. Her proposal in December for a tax cut on machinery and equipment is an election year ploy that is needed as a starting point but inadequate to restoring a competitive Kansas. It might be enough to help her reelection prospects on the fiscal front.

    I had hoped that Lynn’s daughter would turn the Iola Register both fiscally and editorially around when I heard that she had taken over from Emerson but I suspect that is probably a faint hope based upon the word I’ve heard from KTN supporters who see that paper regularly. I suspect Susan is more like her counterpart running the N.Y. Times than a David Horowitz.

    If you are in a “red” county in the “red” state of Kansas and you want a career or role in KS politics you often become a Republican even if down deep your politics are more socialist or just another big government advocate. That explains part of the voter registration disparity here.

    Just look at the “moderate” Republicans who have voted against protecting private property from eminent domain abuse. When this was voted upon in a floor amendment in the Kansas senate last year it was mainly conservatives and some Democrats trying to stop this abuse. GOP “moderates” were uniform in clobbering property rights.

    Liberal Republicans in Kansas are well connected and often have business ties to the spending lobbies or certain developers with connections who don’t want to negotiate with unhappy landowners. That’s one of the reasons for the liberal Republicans desire for expanding the ability of local units to grab private property.

    A few days ago I posted the fiscal vote ratings of four former state senators (Bond, Buhler, Emert, and Langworthy) who are part of the latest liberal Republican effort to “take back,” the Kansas Republican Party. Based on their votes that I have seen while monitoring the Kansas legislature from 1993 to the present here is what these four GOP “moderates” stand for (their average KTN fiscal vote rating: of 27.4% (I’m including Buhler in this too) is actually lower than the very liberal Democrat leader Sen. Hensley’s vote rating. It doesn’t matter whether you look at between 1996-2000 or 1996-2005, their combined score is below Hensley’s on fiscal matters.

    Expanding taxes, preferably on consumer and excise taxed items but income and property tax hikes are not beyond the pall–look at former RINO (Republican In Name Only) Rep. Bill Kassebaum’s tax hike proposals in 2004; expanding bonded indebtedness (a number of bond houses have traditionally helped fund the KS GOP) without voters having any say; using the property tax appraisal process to automatically generate additional state and local taxes and stopping automatic income tax hikes; weakening 2nd amendment provisions and making Kansas one of only four states without any sort of conceal carry law; stop any laws that would limit or restrict abortions; tried unsuccessfully to kill the marriage amendment and keep it from getting to voters; stop voter referendums particularly on fiscal issues like property taxes and non school bonding by local units; expand select businesses ability to use their local government contacts to do eminent domain and grab property on the cheap; often vote against any death penalty legislation; defend the school spending lobby’s efforts to expand school spending without providing accountability or choice; and keep the political power in the hands of bipartisan “experts” who receive suitable cover from the news media while expanding government faster than our ability to pay for it. This last point is crucial because it explains why there was a large number of GOP “moderates” siding with Democrats to protect the activist and Democrat dominated (5 of 7 judges are registered Democrats) Kansas Supreme Court from any legislative or citizen response to their spending edicts in the school finance lawsuit.

    This also explains why the “economic development” seems to center around narrow projects or narrow provisions in the law to help various special interests instead of a broader policy that benefits all Kansans and levels the playing field and strengthens the rule of law. Instead, there are too often special benefits for special folks.

    These policies, that are often hard to distinguish between the moderate GOP and Democrat governors in this state over the last 50 years explains why there is low interest in politics among some Kansans: 1) few meaningful differences between liberal factions–the GOP liberals are more pro-business on workers compensation or unemployment insurance than AFL-CIO Democrats and rearranging the decks chairs at SRS seem like their big issues but for many Kansans these issues are secondary to issues like taxes or abortion; 2) regardless of election results the same group of insiders keeps rotating between the top state positions; 3) elections that are more often dominated by personality than policies; 4) continuing to limit the ability of the people to participate either through tax referendums, bond votes, and binding votes on other issues reduces voter interest and hence participation; 5) a political structure where many candidates are unopposed in both (or either) primary and general elections; 6) this is why many Kansas governors have been Democrats because they could easily run to the right of these spend and tax Republicans.

    Here are some examples of how this works in practice naming some of the names: 1) Dave Corbin is a RINO senator who loses his senate seat in 2004 and is shortly thereafter hired into the Sebelius administration’s revenue department; 2) Sebelius and Graves retain their predecessors from the theoretically “opposite” political parties in the critical position as budget directors; 3) Former RINO Governor Mike Hayden is now serving in the Sebelius cabinet–hey, he needs a job; 4) One of the candidates seeking to replace Democrat State Rep. Bruce Larkin ran for the GOP nomination to that state senate seat (dist. 1) that covers that same area in 2004 as a GOP “moderate”; 5) Look at the numerous “Republicans for Moore,” “Republicans for Sebelius,” and “Republicans for (fill in the blank for your favorite left-wing Democrat)” organizations: Audrey Langworthy, Tim Emert (former senate majority leader and current law partner to the current senate majority leader) were both prominent Republicans for Sebelius members, as well as a large cast of other “moderate” folks whose policies are LIBERAL in office and often become more liberal once they get bumped out of office; 6) Legislators “hand off” their seats to hand picked successors by resigning in mid-term. Conservatives are learning this latter maneuver and are almost as good at doing this as liberal Republicans or Democrats.

    These self-described GOP “moderates” claim national ties to the Republican Party but seem out-of-step with the national GOP and President Bush. These are the same folks who had no use for a conservative like Ronald Reagan 20 years ago. President Bush has signed a pledge not to raise taxes and has succeeded in getting two major tax cutting bills passed as well as repatriation of overseas corporate money which has strengthened the U.S. dollar. In contrast, Kansas GOP moderates prefer raising taxes, fees, and other “revenue enhancements,” (see KTN’s vote ratings at www.kansastaxpayers.com for details).

    Bush is pro-life on abortion and conservative on defending marriage from activist judges. Kansas GOP moderates are not. Bush is from Texas where conceal carry has been working for ages and the death penalty is not a legal joke like it is here. GOP moderates have been successful in stifling these policies in Kansas. Actually, GOP liberals in Kansas are more of a throw back to an earlier GOP president and I’m not thinking of Eisenhower. Think Nixon. Think “we’re all Keynesians now,” with wage and price controls, more federal bureaucracy (think what was then new agencies like OSHA/EPA), higher taxes, and expanding government lands and employees. While a Democratically controlled U.S. Congress hindered Nixon the buck stops with the top elected official whether it is in Washington or one of the 50 statehouses and KS GOP moderates are very Nixonian in their use of government.

    GOP “moderates” campaign as “conservatives” when they run for office. I remember voting for the “fiscal conservatives.” I could name some folks but let me stick with former Governor Graves. Bill Graves’ first campaign for governor was successful because he campaigned as a fiscal conservative advocating a constitutional lid on state spending growth (it didn’t hurt that 1994 was a great year to run as a Republican anywhere). He did everything he could to get away from that promise after being elected. Graves is a prototype for the successful “moderate” Republican. He holds only one elected office that has only administrative functions so his policy positions are largely a blank slate; he campaigns as a “fiscal conservative” but begins “growing in office” almost the day after he is sworn in; he’s personally wealthy so campaign fund raising is not as critical for his candidacy; and now that he’s left office he’s bailed out of Kansas and cashing in as a national trucking lobbyist. Ain’t politics great in Kansas!