Voice For Liberty

Category: Sedgwick county government

  • Assessment of Wichita’s Intrust Bank Arena’s success premature

    Any rational assessment of the success of the Intrust Bank Arena in downtown Wichita must realize that the arena is in its honeymoon period. Will the parade of big-name stars playing to a packed arena continue for long? Will the Wichita Eagle and local television stations continue to breathlessly announce every upcoming event?

    Until initial enthusiasm dies down and the arena has a track record of a year or more, we simply have no idea what the financial performance of the arena will be. That’s what’s important.

    This premature glowing assessment of the arena’s success is dangerous in that it leads us to believe that there is a positive role for large government projects in Wichita. Worse, people are lead to think that taxation is a good way to pay for such things. As an example, the one cent sales tax used to pay for the arena is presently touted as a model for funding other government spending, ranging from Governor Parkinson’s proposal for a sales tax to fund state government to what surely will be a proposal for a sales tax to fund the revitalization of downtown Wichita.

    Proponents say that the sales tax was painless, so why not do it again? Some were sorry to see it expire. As the sales tax that funded the arena was nearing its end, Sedgwick County Commissioner Tim Norton “wondered … whether a 1 percent sales tax could help the county raise revenue.” (“Norton floats idea of 1 percent county sales tax,” Wichita Eagle, April 4, 2007)

    But the tax was not painless. Undoubtedly, the employment landscape was shifted in Sedgwick County because of the tax, and that caused some people to be unemployed. My post Prepare for sales tax-induced job effects now reports on what happened in Little Rock when that city’s arena was built. It would be reasonable to think that similar effects happened here.

    Last year in Portland, a proposal to build a new minor league baseball stadium was found to produce a net job loss. An economics consulting firm reported: “Thus, the Lent’s project would have a net impact of a 182 job-year loss on the City’s economy (a gain of 175 from the construction less a loss of 357 due to reduced spending by households and businesses because of higher taxes).”

    It also concluded that “If those individuals who put their money into baseball via taxes are allowed to put that money into the private market, that same amount of money would actually yield more jobs.” Reportedly, Portland’s mayor “appears to have sat on” the study and was not eager to release it.

    This effect — a shiny, highly touted public works project being much more visible than private dispersed economic activity — was known long ago and explained by Henry Hazlitt in his classic work Economics in One Lesson:

    Therefore for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $1,000,000 taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project.

    We were also told that the arena would be a driver of downtown development. But in its first test, the Wichita City Council evidently didn’t believe what arena boosters told them, as it voted to grant several million dollars in subsidy to the developer of a hotel just a few blocks from the arena. Will all future development around the arena — if it happens — require similar subsidy?

  • Sedgwick County Manager to address civic group

    This Friday, Sedgwick County Manager Bill Buchanan will address members and guests of the Wichita Pachyderm Club.

    All are welcome to attend Pachyderm club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive fifteen minutes early to get your lunch before the program starts.

    The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). Park in the garage just across Broadway and use the sky walk to enter the Bank of America building. Bring your parking garage ticket to be stamped and your parking fee will be only $1.00. There is usually some metered and free street parking nearby.

  • Karl Peterjohn elected Chairman of Sedgwick County Commission

    Karl Peterjohn 2010-01-13 03At a reception for county commissioners, new chairman of the Sedgwick County Commission Karl Peterjohn answers a reporter’s questions.

    A note to readers: I served as co-manager of Peterjohn’s campaign in 2008.

    Yesterday members of the Sedgwick County Commission unanimously elected Karl Peterjohn to be their chairman.

    Citizens of Sedgwick County should appreciate Peterjohn’s first year of service, just concluded, where he often asked questions from the bench that no one else asks — or even thinks of asking. In the coming year we should benefit from Peterjohn’s leadership, which will be especially important as the county navigates what is sure to be a difficult year financially.

  • Intrust Bank Arena’s missing name

    A note to readers: I served as co-manager of Peterjohn’s campaign in 2008.

    The commemorative plaque on the Intrust Bank Arena in downtown Wichita, Kansas.The commemorative plaque on the Intrust Bank Arena in downtown Wichita, Kansas.

    On the commemorative plaque outside the Intrust Bank Arena in downtown Wichita, there’s a missing name.

    The names of eight Sedgwick County commissioners appear, including all who were members of the Commission when the arena sales tax passed in November 2004, all who have served since then, and all present commissioners.

    Except for one: current third district commissioner Karl Peterjohn.

    In 2004 Peterjohn led opposition to the sales tax ballot measure that funded the arena. When he decided early in 2008 that he would run for the commission against long-time Republican incumbent Tom Winters, Peterjohn told Winters that the next commissioner would have their name on a plaque on the arena. On primary election night, when Peterjohn defeated Winters, Peterjohn told me “I told him [Winters] he could have that spot, and I’m keeping my word.”

    It was a gracious gesture.

    There’s been a small controversy surrounding Peterjohn in his new role as arena supporter. He participated in the arena’s recent ribbon-cutting ceremony. More importantly, he voted last February for a $1.7 million seating upgrade. That upgrade would reduce the cost of transition between events, and also improve seating and viewing.

    That vote, along with participation in the ribbon-cutting, is central to Peterjohn’s goal of seeing that the arena is a success and doesn’t become a fiscal burden on taxpayers. Although the contract with SMG, the arena’s management firm, shields Sedgwick County from losses, that contract comes to an end someday. It’s also full of loopholes that, in my opinion, would allow SMG to make an early exit if arena finances are not favorable.

    Working for the success of the arena, therefore, is a logical continuation of Peterjohn’s concern for the taxpayer, the same concern as when he opposed the arena in 2004, he said.

    There’s also been grumbling that county commissioners and bureaucrats will receive perks such as tickets and premium parking passes to arena events. Peterjohn said he’s received no tickets or parking perks.

    A Wichita Eagle blog post by Deb Gruver on this topic is Karl Peterjohn’s name not on Intrust Bank Arena sign.

  • Ticket scalping is a market function, not a criminal activity

    At the Intrust Bank Arena in downtown Wichita, some concerts are very popular, which leads to people frustrated at two things: the inability to buy tickets when they go on sale, and then the high prices that ticket scalpers ask for tickets on the aftermarket.

    I understand the frustration of the stymied ticket buyers. Who wants to pay $300 for a ticket that was sold by the arena’s box office for $50? It would be great if everyone who wanted to attend could do so for $50 — or for $5, for that matter. And that gets to the heart of the problem and why it isn’t likely to be solved: human behavior and economics.

    Walter Block has a chapter in his book Defending the Undefendable that defends the ticket scalper. (The book in pdf form is here.)

    As it turns out, scalping is a beneficial economic activity. But even if you don’t believe this, scalping could be avoided if venues like the arena would sell tickets in a different manner.

    According to Block, scalping requires “a fixed, invariable supply of tickets.” After all , if the supply of tickets was unlimited, everyone could buy all they wanted at list price (the price printed on the ticket, and what the venue sells them for).

    Also, scalping requires “the ticket price chosen by management be lower than the ‘market clearing price.’” Markets clear when people want to buy the same number of tickets that are for sale. This balance is achieved by allowing the price of the tickets to freely adjust. When the list price of the ticket is less than what some people are willing to pay, that’s when scalpers have an opportunity to earn profits.

    This points to one way that scalping could be eliminated, if concert promoters wanted to: They could sell tickets like shares of stock or bushels of wheat are sold. These items don’t have a list price. Instead, their price is whatever people are willing to pay.

    Why would concert promoters price tickets at less than some people are willing to pay? If a scalper can get say, $300 for a ticket that the box office sells for $50, why doesn’t the box office price the ticket at $300? Or maybe $200? Here’s what Block writes:

    For one thing, lower prices invite a large audience. Long lines of people waiting to enter a theater or ballpark constitutes free publicity. In other words, management forgoes higher prices in order to save money it might have had to spend on advertising. In addition, managers are loath to raise ticket prices — even though they would have little difficulty selling them for a big event or special movie — for fear of a backlash. Many people feel that there is a “fair” price for a movie ticket, and managers are responsive to this feeling.

    There are several other motivations, less compelling, for keeping prices fixed at below equilibrium levels. Taken together they ensure that this pricing policy — the third condition necessary for scalping — will continue.

    In other words, better for scalpers to bear the brunt of public ire for setting market-clearing prices. Can you imagine the public backlash at the Intrust Bank Arena and Sedgwick County if ticket prices for very popular concerts were set at market-clearing prices?

    The chapter goes on to explain the two ways that scarce goods — concert tickets in this care — are rationed: price rationing, and non-price rationing. Price rationing, as you might imagine, relies on the price mechanism to determine a market-clearing price so that supply equals demand.

    Non-price rationing, on the other hand, relies on something else. Block mentions “first-come, first served” (camping out the night before at the box office window) and favoritism (those connected to or favored in some way by arena management get special privileges) as two methods of non-price rationing. The Intrust Bank Arena has used another method — a lottery — for some concerts.

    So which is “fair?” Does price rationing favor those with the ability to pay high prices? Certainly scalping makes it easier for rich people to obtain scarce tickets. But Block says that scalping provides entrepreneurial opportunities. Someone with a small amount of capital (just enough to buy one or more tickets) but a lot of spare time (someone without a job) can camp out in line and earn profits by selling the tickets. Or, they could simply wait in line and be paid a wage.

    By the way, scalpers are not guaranteed profits. If there is not much demand for tickets for an event, scalpers will have to sell the tickets at a loss — or they may not be able to sell them at any price.

    Back to Wichita: According to a Wichita Eagle article, a group named Taxpayers for Tickets has been formed to take action against scalping. Reading the website, it seems that the group’s focus is on more laws and enforcement of them to effect the goal of getting tickets in the hands of the taxpayers who paid for the construction of the Intrust Bank Arena.

    I don’t favor this approach. First, as we’ve seen, scalping is a socially beneficial activity that provides market-clearing prices for tickets.

    Second, there is plenty of actual crime in our community that causes death, injury, and loss of property. We don’t need to squander law enforcement resources on victimless crimes like people willingly and voluntarily engaging in market transactions.

    In a letter published in the Wichita Eagle, Todd Allen, head of Taxpayers for Tickets, wrote “I figured that since the taxpayers paid for the arena, that makes us the owners.” I hate to disappoint Mr. Allen, but that’s far from the case. Try requesting a contract, as in Sedgwick County keeps lease agreement secret. Not even Sedgwick County Commissioners are able to see the lease of the arena’s flagship tenant.

    Another article on ticket scalping is Ticket Scalpers Are Hidden Heroes.

  • Visioneering Wichita should not receive public funds

    Remarks to be delivered to the December 16, 2009 meeting of the Sedgwick County Commission.

    Mr. Chairman, members of the commission,

    I’m here today to recommend that this body not give taxpayer funds to Visioneering Wichita.

    My reason is simple: Many of the items that Visioneering is in favor of require government spending. Mr. Rolph told me that Visioneering doesn’t advocate for higher taxes. But any government spending — at least by governmental bodies other than the federal government — requires taxation or borrowing, which is simply deferred taxation.

    For example, the items on Visioneering’s unified legislative agenda all involve funding from the state. Mr. Rolph told me, correctly, that we’re in a battle with other parts of the state to see who gets funding, and that we need to make sure we in south central Kansas get our fair share. There’s some truth in that. But the better battle we need to fight is to control state spending in all areas, so that there’s not this regional battle every year.

    If the county is inclined to spend money on legislative matters, I might suggest that restoring funding for a contract lobbyist — that was about $29,000 if memory serves — plus some expense money for commissioners to spend some time at the statehouse might be a better expenditure. This is especially true this year as this commission has proposed some legislative initiatives that deserve advocacy in Topeka.

    In another area, Visioneering supports the planning effort for the revitalization of downtown Wichita. Besides being an expenditure of taxpayer money to pay for the plan, it’s certain that the ambitious plans for downtown will require a massive infusion of taxpayer funds. The sales tax used in Oklahoma City, for example, has been cited as something that should be “of interest” to Wichita.

    Funding Visionering with taxpayer funds, therefore, amounts to taxpayer-funded lobbying for more government spending funded by taxation. This leads to a loss of economic freedom for the people of Wichita and Kansas. I am reminded of the words of Milton Friedman, who wrote in his book Capitalism and Freedom: “Freedom in economic arrangements is itself a component of freedom broadly understood, so economic freedom is an end in itself … Economic freedom is also an indispensable means toward the achievement of political freedom.”

    So no, we don’t need to do anything that encourages more government spending and taxation.

    If this commission should decide to fund Visioneering, I make this suggestion: As a condition of funding, the county should require that Visioneering agree, in writing, that it and its parent or affiliated organizations meet the definition of a “public agency” as defined in KSA 45-217 (f)(1), and are therefore subject to the provisions of the Kansas Open Records Act and the Kansas Open Meeting Act.

    By doing this, citizens may request documents without having to confront disagreements over the definition of a public agency.

  • Peterjohn’s Kansas taxpayer protection platform recognized

    Last week, Sedgwick County Commissioner Karl Peterjohn lead a successful effort to add strong protection for taxpayers to the county’s legislative platform. My coverage is at Peterjohn presses taxpayer protection platform through Sedgwick County Commission. Following is a short op-ed from Americans For Prosperity-Kansas on this matter.

    I was pleased to learn of the Sedgwick County Commission’s new legislative platform regarding property taxes. It reads, “All local sales tax increases must be approved by voters under Kansas law. All property tax increases that raise the mill levy should also be required to receive voter approval.”

    This is a significant step for the Sedgwick County Commission, considering this goes against the position of the Kansas Association of Counties. The supporters of this measure, Commissioners Kelly Parks, Karl Peterjohn, and Gwen Welshimer, should be applauded for recognizing the importance of allowing the people to vote on property tax measures.

    However the opponents, Commissioners Dave Unruh and Tim Norton, should be asked why they oppose allowing their constituents to vote on an issue as important as property taxes. If government has a compelling reason for increasing taxes, then shouldn’t it feel comfortable in taking its case to the people?

    Derrick Sontag
    Americans for Prosperity-Kansas
    Topeka

  • Peterjohn presses taxpayer protection platform through Sedgwick County Commission

    At today’s meeting of the Sedgwick County Commission, commissioners revised the county’s 2010 legislative platform, adding important and groundbreaking taxpayer protection to the platform. The split vote lets voters know without a doubt where commissioners stand on taxpayer protection issues.

    The legislative platform is Sedgwick County’s “wish list” for the legislature. The items in the platform are not laws, but instead indicate the desires of the county commission.

    Commissioner Karl Peterjohn proposed new language to add to the legislative platform: “All local sales tax increases must be approved by voters under Kansas law. All property tax increases that raise the mill levy should also be required to receive voter approval.”

    Kansas has no such provision, and this is a defect, Peterjohn said. Kansas is one of the few states that have property taxes at the city, county, school district, and state levels. Most states did away with state-wide property taxes in the 1930s, he said, but Kansas did not.

    Peterjohn made a motion that this language be included in the legislative platform, and Chairman Kelly Parks seconded.

    Peterjohn noted that three of the four states surrounding Kansas have such limitations.

    Commissioner Tim Norton asked a question that revealed that cities have more authority than counties to raise sales tax. He said this is an issue of equity, of rebalancing the ways that counties can fund their government. “Counties don’t have the ability to have more tools in their toolbox other than just property tax. … We’re very restricted.” He added that he doesn’t like the idea of artificial ceilings being placed on the county.

    Commissioner Dave Unruh agreed with Norton, saying local officials are elected to carry out the responsibility of making responsible budget decisions. A limitation from the state makes no sense, he said.

    Norton made the point that the state can place a lid on the ability of counties to raise funds through taxation, and may still place mandates on what counties must do. This compresses the decisions that the commission gets to make, and goes against representative government.

    Peterjohn’s motion passed three to two, with Commissioner Gwen Welshimer and Parks joining Peterjohn in the majority, with Unruh and Norton in the minority.

    After the meeting, Peterjohn said this platform language represents a major change in the county’s position, a reversal of the county’s historic position on property tax policy. This action is also at odds with the Kansas Association of Counties. It’s a major change, he said.

    “Traditionally the local government lobby has been in lockstep opposition to any requirement that property tax hikes get voter approval. Sedgwick County’s shift today is extremely significant for the second-most populous county in the state, the county that contains the largest city in the state, to support voter approval for any increase in property taxes.”

    Analysis

    Requiring voter approval of tax increases was one the “Five Reasons to Back Karl Peterjohn” that Peterjohn used in his successful campaign for the county commission last year. His action today represents a move towards fulfilling that pledge.

    It’s important to remember what the commission passed was simply their desire — and a split decision at that — for the legislature to pass a law requiring voter approval of tax increases. Whether the legislature acts on this request is anyone’s guess. For such a law to have any chance, it will take a determined advocate to press for it. The commission’s action today created no such advocate. As it stands now, the county will not have a lobbyist in Topeka next year, as the budget passed in August provided no funding for a lobbyist.

    Officeholders who are in favor of more government spending are generally opposed to giving voters the right approve or refuse tax rate increases, for the simple reason that voters often refuse to approve the tax hikes. Often the argument is given that the elections that are now necessary are expensive, and there may be emergencies that require the rapid raising of funds. There may be small amounts of validity in these arguments. But tax revenues, through the natural forces of economic growth and rising property tax appraisals, rise on their own without any help from officeholders. Anything that restrains the growth of tax rates, which is what today’s proposal does, is welcome relief as a restraint on the runaway growth of government.

  • Wichita arena lands a whopper

    The Intrust Bank Arena in downtown Wichita has landed NCAA women’s basketball first- and second-round tournament games in 2011.

    Recently, the NCAA bypassed the Wichita arena when selecting sites for men’s NCAA games. On KAKE TV, arena manager Chris Presson said women’s games are a testing ground for something “perceived to be bigger. … Certainly the women’s to us is as big as the men’s and is as big a deal to us as the men’s would be. We’re more than content, more than happy with what we’ve got.”

    According to Associated Press reporting from earlier this year, “The first two rounds drew an average of 4,100 people.” The Wichita Eagle reports 4,915 averages attendance for all tournament games.

    Is Presson being reasonable: women’s games, at 4,100 per game, are equivalent to men’s games, which are likely to sell out the arena? It’s his job to promote the arena, but statements like this are not reasonable.

    The publicly-supported arena in downtown Wichita remains a contentious issue. Comments left to a recent post of mine about the arena provide some insight into the thinking of arena tax supporters.

    One comment writer said that instead of complaining, I should be supporting the arena. He may have forgotten the extra sales tax that I contributed to pay for the arena. Doesn’t that count?

    Another wrote: “My question to you is since the arena has been built, do you want it to succeed or fail?” I guess this writer didn’t read the final sentence of the post, which is: “Ultimately, it is the Sedgwick County taxpayer who is financially responsible for the arena, and it is they who must hope for success.”

    So yes, I do hope that the arena is a success. As someone who is opposed to taxation — that’s why I opposed the arena sales tax ballot measure — I sincerely hope that tax revenues are not required to support the arena. Arena tax supporters have already shown that they’re willing to tax one person to build a playhouse for themselves, so I don’t suspect they’ll be opposed to future tax support of the arena, should it become necessary.