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Posts published in “Sedgwick county government”

SB 58 Testimony from Kansas Taxpayers Network

More testimony opposing SB 58, the bill to allow Sedgwick County to increase its sales tax to pay for the downtown arena.


Testimony Opposing SB 58
By Karl Peterjohn, Executive Director, Kansas Taxpayers Network

SB 58 is a flawed bill that should either be re-drafted or defeated in its current form, Let me outline the major problems with this legislation.

1) This bill does not address the serious flaws already contained within KSA 12 187 that cry out for correction. This is a grossly non uniform statute that should be made, uniform covering all local government units. Today, cities may, and some already have, opt out of this statute using their home rule powers because of this statute's non uniform condition. County home rule requires a change in statutes for the lid on local sales taxes (see KSA 19 101a). At some point in time the cities may opt out of this statute in a way that negates any requirement for voter approval at an election. It will be a sad day for Kansas government when the voter approval requirement within this statute gets voided within a municipality. This is only a matter of when, not a matter of if

From John Todd: Testimony regarding Senate Bill No. 58

February 3, 2005

Members
Senate Assessment and Taxation Committee
State Capitol
Topeka, Kansas 66612

Subject: Testimony in OPPOSITION TO SENATE BILL #58 (Sales Tax Increase For The Proposed Wichita/Sedgwick County Arena).

My name is John Todd. I am a self-employed real estate broker from Wichita, and I come before you in opposition to the enabling legislation that would allow Sedgwick County to raise the local sales tax 1% to fund a new Downtown Arena.

The reason why I am here in opposition to this government driven plan is my basic belief that individuals know best how to spend their own money, and that they should be allowed the freedom to spend the fruit of their own labor as they wish, and not as government dictates, particularly when it involves mandatory spending for an elective entertainment venue like the proposed downtown arena.

Written testimony regarding Senate Bill No. 58 (Wichita downtown arena tax)

I realize that the voters in Sedgwick County voted for the arena sales tax increase. I believe, however, there is ample reason why you should vote against the tax. The idea of the taxpayer-funded arena came about so fast in the summer of 2004 that there was little thought given to the underlying issues. I wish to present what my research has uncovered.

Guest post: The Sedgwick County Downtown Arena Sales Tax

(It has been suggested that the following message, which I have sent as email to all Kansas State Senators and Representatives, may be of interest to you.

The article, as written and sent, does contain some minor inaccuracies, both in fact and in interpretation; but this merely shows that those of us who relied on the Wichita Eagle, my primary news source, for information prior to the arena tax vote were denied needed information and were, probably deliberately, given false, incomplete, and/or misleading information. I have made no effort to update it since a week or two after the election.

John A. Robinson
Wichita, KS)

The Kansas Legislature will be asked soon to approve a special sales tax for construction of a Downtown Arena in Wichita.

The recent "Arena Vote" in Wichita is a classic example of an election rigged by special interests, and does not represent an informed consent of the people of Wichita and Sedgwick County.

A vote was taken approximately a year prior to this vote in which the people of Wichita voted NOT to build a "downtown arena." A main reason for the failure to support such a construction in that vote was the almost total inability of those favoring the arena to provide verifiable information in support of their claims that an arena would "do great things for Wichita," a complete lack of any assessment of adverse related effects, denial, without examination, of any and all obvious problems, and a total lack of any coherent PLAN for the proposed arena. Those advocating this project were essentially unable to demonstrate that they had the best interests of the people of the community in mind, and made it clear that their real objective was their own personal profit and interest.

The people of Wichita voted NO to a downtown arena.

Downtown Wichita arena as a public good

The streets and highways, and certainly the public parks, are examples of public goods. Public goods are characterized by two things: nonexcludability, meaning that non-payers can't be excluded from enjoying and using the good, and nonrivalrous consumption, meaning that consumption of the good by one person doesn't reduce the availability of the good to others. Neither applies to an arena.

Arenas’ Financial Statements Not Complete

The WSU Center for Economic Development and Business Research study (reported by Fred Mann in the September 5 Wichita Eagle), showing a small loss for the proposed downtown arena, does not account for the cost of building the arena. Neither do the Qwest Center in Omaha nor the Alltel Arena in Arkansas when they report their profits. How do I know? I wrote to each of these facilities and asked. None include any expense for depreciation, debt service, lease payments, or anything that recognizes the tremendous amount of capital consumed by building these arenas. Yet, these facilities report a profit, or perhaps a negligibly small loss.

I have found that the arenas I have looked at (Qwest, Alltel, and the proposed Wichita) don't account for the cost of the capital consumed in building them. For example, the projected profit (actually a small loss) for the proposed Wichita downtown arena includes no expense taken for depreciation. Now it is true, that being a government entity, the downtown arena wouldn't pay taxes, and therefore depreciation expense doesn't help it reduce its income taxes. But an allowance for depreciation helps us to recognize that a large amount of money was spent to build this arena, and that money has a correspondingly large opportunity cost. Indeed, GASB 34 requires governments to start depreciating their assets, and Mr. Chris Chronis, the Chief Financial Officer of Sedgwick County, has told me that the county will take depreciation expense for the downtown arena, or for a remodeled Kansas Coliseum, for that matter.

My investigation and a series of email messages with Mr. Ed Wolverton revealed that the WSU center that prepared the estimate of profitability for the proposed downtown arena wasn't aware that the county would be required to calculate depreciation expense.

WSU Study on Downtown Wichita Arena Not Complete

Government Accounting Standards Board Statement 34 requires governments to account for the cost of their assets, usually by stating depreciation expense each year. Through a series of email exchanges with Mr. Ed Wolverton, President of the Wichita Downtown Development Corporation, I have learned that the WSU Center for Economic Development and Business Research was not aware of this requirement when they prepared their forecast. Mr. Wolverton admitted this after checking with the study authors.

Mr. Chris Chronis, Chief Financial Officer of Sedgwick County, in an email conversation told me that the county will take depreciation expense for the downtown arena, or for a renovated Kansas Coliseum, for that matter.

I appeared in a story on a local television station where I presented research I had read showing that if new development occurs around a downtown arena, it would likely be economic activity that formerly took place somewhere else in town. This is the "substitution effect." Mr. Wolverton appeared in the same story and state that due to time constraints, the WSU study did not study these effects.

The leadership of our local government officials regarding the downtown Wichita arena

It is clear that our local government leaders want a downtown arena in Wichita. Just read their remarks in the Wichita Eaglenewspaper. Since the Sedgwick County Commission has promised that they will proceed with renovation of the Kansas Coliseum if the downtown arena vote fails, it is in their interest to make the Coliseum renovation option look as bad as possible. In my opinion, they've done a pretty good job of this.

Economic justification of arenas and the downtown Wichita arena

It seems that the best argument that arena supporters have for asking the entire community to pay for the Downtown Wichita arena is that it will somehow pay for itself through spillover economic benefit. That is, through increased economic development around a downtown arena, the citizens of Sedgwick County will somehow be repaid for their investment in the arena through the taxes they paid.

The value of economic impact studies

One of the factors that usually plays a part in an economic impact study like that used to promote the Downtown Wichita arena is the "multiplier," which accounts for the fact that money spent once is spent again, and maybe yet again.

Local government officials as downtown Wichita arena advocates

Kansas Attorney General Opinion 93-125 deals with "the use of public funds to promote or advocate a governing body's position on a matter which is before the electorate." In its summary, it states "However, public funds may be expended to educate and inform regarding issues to be voted on by the electorate."

“Sports Daily” on KFH Radio, October 20, 2004

I happened to hear this radio show one day when Mayor Carlos Mayans was a guest. He was promoting the downtown arena. Bob Lutz, one of the hosts, invited opponents of the arena to contact him, and he might invite them on the show. I did, and he issued the invitation. I was a little nervous, not having much experience being on radio or television.

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