Voice For Liberty

Category: Sedgwick county government

  • Testimony supporting an arena re-vote

    From Karl Peterjohn, Executive Director Kansas Taxpayers Network

    We need to correct the flawed downtown arena proposal’s mistakes. Since the legislature authorized the county sales tax for the downtown arena it has become abundantly clear that the case against proceeding with the flawed arena project has been made. Enclosed with this testimony is a copy of the 2004 flyer used in that election campaign that shows that the critics of this proposal were correct on the key points in this project.

    Here are key points why there should be a revote:

    1) The 2004 cost estimates for the downtown arena project at $184.528 million were inaccurate (see county’s Sept. 1, 2004 arena document). The county now projects $201 million and that is likely to grow. In addition, new reports indicate that there is an effort to have the city fund $108 million in additional infrastructure changes for the arena and the area around it.

    If the 1 cent sales tax was used entirely for property tax relief, the county’s mill levy could be dropped by roughly 20 mills or roughly 65 percent of the current mill levy.

    If you divided the total county and city costs ($201 M + $108 M), that’s almost $700 per person or over $2,700 for a family of four. That’s excessive.

    2) There is no anchor tenant for this facility. The Kansas Coliseum rarely sells out. With the same shows and sports franchises, why build a larger facility?

    3) There is inadequate parking for this facility. Adding necessary parking will drive the cost of this project even higher.

    4) Downtown arena advocates threatened voters with higher property taxes if they did not vote for the sales tax. Sadly, the county property tax mill levy was raised roughly six percent last year and two incumbent commissioners were defeated in their reelection bids as a result.

    5) A privately owned and funded arena in Park City is likely to be built and opened well before the downtown arena project is completed. One of the current users of the coliseum will move to this new private facility.

    In 1993, Wichita city voters rejected a proposed downtown arena project by better than a 2-to-1 margin. In 2004 voters narrowly, by a 52-to-48 percent margin, approved the downtown arena at $184.5 million. Since then, more realistic cost data about the increased price for a downtown arena has become available.

    Let the people vote again on the following four point proposal:

    The county will not proceed with the flawed downtown arena project. The roughly $200 million in sales tax revenue that has been raised will be put to the following uses: 1) The Britt Brown Arena will be remodeled with roughly ¼ of the funds generated by the current 1 cent arena sales tax; 2) The current costs that have been incurred in land acquisition, designs, and other contractual costs will be paid with these funds; 3) The remaining sales tax revenue balances will be used to pay down the county’s mill levy (that should be well over ½ of the entire amount raised so far). In addition, the county will seek state authorization to continue the existing 1 cent countywide sales tax with the proviso that it be used entirely to reduce county property taxes. That would provide a reduction of about 65% of the county’s property tax mill levy; 4) All future county mill levy increases must be submitted to voters and approved at a referendum election in the same way that local sales tax increases are approved.

    Eliminating this large a portion of the county’s mill levy will provide Sedgwick County businesses, taxpayers, and citizens with a significant comparative advantage over other Kansas counties by reducing this tax on assets as well as reducing the uncertainty concerning future property tax hikes. This will take us one step towards becoming more competitive with progressive states where all tax hikes have to receive voter approval: Colorado, Missouri, and Oklahoma.

  • Recycling in Wichita: Be Careful What You Wish For

    The Wichita Eagle editorial board, particularly Randy Scholfield, has been pressing for mandatory recycling. Here’s an example of the type of legislation we might see if reason fails us:

    AN ACT concerning newspapers, and the recycling thereof, in observance of our state’s relationship to Nature, and general lack of trees within this State.

    Be it enacted by the Legislature of the State of Kansas:

    Definitions.
    Sec. 1. As used is this act:
    (a) “Newspaper” means a publication printed primarily on newsprint, usually daily.
    (b) “Recyclable newspaper” means a newspaper upon which a deposit of at least 10 cents has been paid, or is required to be paid upon the removal of the newspaper from the sale or reading area.
    (c) “Dealer” means a person who sells or offers for sale to consumers within this state a newspaper, including an operator of a vending machine containing a newspaper, and including a person operating a delivery route.
    (d) “Distributor” means a person who sells newspaper to a dealer within this state, and includes a manufacturer who engages in such sales.
    (e) “Manufacturer” means a person who prints newspapers for sale to distributors, dealers, or consumers, with a daily circulation of 75,000 or more.
    (f) “Sale or consumption area” means the premises within the property of the dealer where the sale is made, within which newspapers may be read without payment of a deposit, and, upon removing a newspaper from which, the customer is required by the dealer to pay the deposit.

    Sec. 2.
    (1) A dealer shall not, within this state, sell, offer for sale, or give to consumers a nonrecyclable newspaper.
    (2) A dealer who regularly sells newspapers for reading off the dealer’s premises shall provide on the premises, or within 100 yards of the premises on which the dealer sells or offers for sale a returnable newspaper, a convenient means whereby the newspaper of any kind, size, and brand sold or offered for sale by the dealer may be returned by, and the deposit refunded in cash to, a person whether or not the person is the original customer of that dealer, and whether or not the newspaper was sold by that dealer.
    (3) A dealer shall not refuse to accept from a person a read recyclable newspaper of any kind, size, and brand sold by that dealer, nor refuse to pay to the person its full refund value in cash.
    (4) A dealer who does not require a deposit on a recyclable newspaper when the contents are read in the dealer’s sale or reading area shall not be required to pay a refund for accepting that read newspaper.
    (5) A distributor shall not refuse to accept from a dealer a read recyclable newspaper of any kind, size, and brand sold by that distributor, nor refuse to pay to the dealer its full refund value in cash.
    (6) Every newspaper sold or offered for sale by a dealer within this state shall clearly indicate by embossing or by a stamp, a label, or other method securely affixed to the front page, the refund value of the newspaper and the name of this state. A dealer or distributor may, but is not required to, refuse to accept from a person a read recyclable newspaper which does not state on the front page the refund value of the newspaper and the name of this state.
    (7) A dealer within this state shall not sell, offer for sale, or give to consumers a plastic newspaper wrapper, any part of which becomes detached when the newspaper is removed.

  • Government funds promoting downtown Wichita arena

    … it is our opinion that public funds may not be used to promote or advocate the position of a governing body on a matter which is before the electorate. However, this does not mean that public funds may not be expended to educate and inform the electorate.

    That’s the opinion of the Kansas Attorney General Robert Stephan from 1993. In this opinion, the Attorney General cited this court opinion:

    It would be establishing a dangerous and untenable precedent to permit the government or any agency thereof, to use public funds to disseminate propaganda in favor of or against any issue or candidate. This may be done by totalitarian, dictatorial, or autocratic governments but it cannot be tolerated, directly or indirectly, in these democratic United States of America. This is true even if the position advocated is believed to be in the best interest of our country. To educate, inform, to advocate or promote voting on any issue may be undertaken, provided it is not to persuade nor to convey favoritism, partisanship, partiality, approval or disapproval . . . of any issue, worthy as it may be.

    Now, look back at the actions of our elected government leaders in the months leading up to the November 2004 election.

    Were they presenting educational material about the benefits of a new arena? Were they promoting an open and honest debate of a new arena’s merits?

    Or were they cheerleading and advocating for the arena, using their offices and government resources?

    I submit that our local governments, our elected officials, and their quasi-governmental surrogates were working in full force for the passage of the arena and its tax.

    That’s not just my opinion. Others noticed it too.

    An editorial by Phillip Brownlee, published in the Wichita Eagle on September 5, 2004, read in part: “If the plan is to pass, city and county elected officials — supported by business leaders — must continue their strong leadership and high-profile support for the arena.”

    After the election, another Wichita Eagle editorial by Rhonda Holman published on November 4, 2004 stated in part: “What made the difference this time, in addition to the effective marketing campaign and all those pennant yard signs, was the unified show of political will on the part of Wichita and Sedgwick County officials. Their willingness to declare the need for such a facility, then argue for raising taxes to meet that need, helped attract necessary support from the businesses that backed the campaign, and finally from voters asked to pay for the arena with a 30-month, 1-percent sales-tax increase.”

    The Wichita Downtown Development Corporation, led by its president Ed Wolverton, was a prominent booster for the arena. Do you know where this organization receives its funds? It is funded through property taxes and its contract with the City of Wichita. Other taxpayer funded institutions, such as the Greater Wichita Convention & Visitors Bureau, the Greater Wichita Area Sports Commission, the Hyatt Regency Wichita, and even the Kansas Turnpike Authority contributed money or in-kind resources to the pro-arena Vote Yea campaign, and most of these institutions campaigned for the arena, too.

    In a television story about Wichita city manager George Kolb, the reporter said: “Some things Kolb says he filled the council in on were … helping get the downtown arena passed.” The clear meaning of this is that city manager Kolb was proud of how he and the Wichita city council worked to help pass the downtown arena tax. Now if Mr. Kolb had talked about how he helped educate the electorate on the issues surrounding the arena tax ballot measure, that would be acceptable. Instead, he and other government leaders are proud of how they worked to ensure passage of the arena tax. That behavior is contrary to how the Kansas Attorney General said they should act.

    I asked our District Attorney to look into this issue of government advocacy for the arena. That office decided, even in light of all this and more evidence, that there was no wrongdoing by our leaders.

    Does this seem a correct conclusion by the district attorney, in light of these facts about the behavior of our local government officials?

    Were local government officials, especially the Sedgwick County Commission, presenting educational material, or were they campaigning for the arena?

    I believe the only conclusion we can make is that they were all campaigning — and campaigning vigorously — for the arena, in spite of what Kansas Attorney General Opinion 93-125 says is acceptable behavior for government officials and the expenditure of public funds.

  • Government vs. private investment and the downtown Wichita arena

    A Wichita businessman proposes building an arena that, while not as large as the downtown Wichita arena being built by Sedgwick County, would provide some competition to the government-owned arena.

    Normally, private investment is welcomed. If you believe in limited government as I do, it is vastly preferred to government spending. But if you’re a Sedgwick County Commissioner getting ready to spend some $200 million in sales tax collections on a government arena, it seems that competition from the private sector isn’t welcome. As reported in The Wichita Eagle:

    Sedgwick County Commission Chairman Dave Unruh said he would prefer Hartman [the Wichita businessman] not go “head to head” with the county. “I am definitely (in favor) of free enterprise and allowing folks to do whatever they think they can do to improve their own financial stature,” Unruh said. “This, however, I think would present some competitive challenges to the downtown arena, and I prefer he not do it.”

    The absurdity in Commissioner Unruh’s statement is eye-catching and revealing of his arrogance. He says, and I believe I am accurate in my interpretation, that free enterprise is good, unless it happens to provide a challenge to a government project!

    Assistant Sedgwick County Manager Ron Holt is a little gentler in his criticism of the proposed private arena, remarking that “overall, it would not be in the best interest of the community.”

    Wichita and Kansas need private investment. When government officials make remarks like these, it a wonder that anyone would choose to invest here. Yet, people do invest here, and the results show the failures of government projects and government-subsidized partnerships. Consider, for example, the government-subsidized Waterwalk vs. the privately developed Waterfront. Consider that the government-owned Kansas Coliseum is not yet 30 years old, but, by most accounts, not suitable for continued use.

    It’s even worse when government is investing in projects of dubious value to the community at large, but is requiring everyone to pay for it. It is telling that in an article about the downtown arena, The Wichita Eagle looks to Greater Wichita Area Sports Commission president and chief executive Bob Hanson for a reaction. It tells how the downtown arena is a gift to special interests, Mr. Hanson being an especially vocal member of this special interest group that will benefit from a taxpayer-supplied arena.

  • Wichita downtown arena project’s failing finances

    Arena Project’s Failing Finances
    Critics And Tax Hike Opponents Were Right

    From Kansas Taxpayers Network

    “The arena critics are being proven right,” said Karl Peterjohn, Executive Director of the Kansas Taxpayers Network, the oldest taxpayer organization in Kansas. “As the leading opponent of the 2004 downtown arena project in Wichita, it is becoming increasingly clear that this project is in major trouble.”

    “In 2004 KTN’s Vote NO flyer warned, ‘Key details about the arena such as location, parking, and design, are not known’,” Peterjohn said. “Our vote NO flyer also warned, ‘With a $184.5 million price tag and no guarantee of events, the arena is a huge gamble with taxpayers money. Half of the events at the Kansas Coliseum (12,000 seats) have less than 3,000 people attend’.” Now the “guaranteed $184.5 million price tag,” is history and the total cost for this deeply flawed project continues to grow and critical details remain up in the air.

    “In our final item urging county voters to reject the sales tax hike to fund the arena, KTN’s flyer warned, ‘The build it and they will come syndrome sounds good but the money spent would be better utilized in YOUR pocket’,” Peterjohn said. “If the county’s sales tax for the arena was used to lower the county’s property tax, we could reduce the county’s mill levy by over 60 percent or roughly 20 mills for the duration of this tax.”

    The arena tax hike was narrowly approved by just over 50 percent of voters in November, 2004. “If the voters had another chance at the arena issue at the ballot box, and taking the tax money that has already been collected and not yet spent, to be used to lower county property taxes and refunded to taxpayers, the downtown arena project would be terminated by the people,” Peterjohn said.

    Arena tax hike advocates succeeded in forcing voters to approve this sales tax increase with the not-so-veiled threat that a property tax hike would otherwise occur. Sedgwick County commissioners unanimously approved a large property tax hike, in August 2006, funding higher county spending in addition to the arena sales tax hike.

    Two of the three incumbent county commissioners seeking reelection in 2006 lost their seats in large part due to their support for raising property taxes in particular and all county taxes in general. The two incumbents, commissioners Burtnett and Sciortino, were defeated by challengers, Parks and Welshimer, who signed KTN’s Taxpayer Protection Pledge promising not to raise county taxes.

  • A public or private downtown Wichita arena, which is desirable?

    (From October, 2004)

    Image what our town could be like if the Wichita downtown arena vote fails and Sedgwick County Commissioners put aside for a moment their plans for the renovation of the Kansas Coliseum.

    Suppose, instead, that arena supporters, along with those who would vote yes for the sales tax and anyone else who wants to, formed a corporation to build and own an arena.

    Instead of having paid taxes to government, arena supporters would be investors. They would own something: their shares in the arena. They would have the pride and responsibility that comes with ownership. They would have a financial stake in its success. Even taxpayer-funded arena opponents might see merit in investing in a local business rather than paying taxes.

    Instead of politicians and bureaucrats deciding what the people of our town want and need, a privately owned arena would be subject to the guidance and discipline of markets. It would either provide a valuable service to its customers and stay in business, or it would fail to do that and it would go out of business. Governments do not have such a powerful incentive to meet the needs of their constituents.

    Instead of the bitter feelings dividing this town over the issue of a taxpayer-funded arena and other perceived governmental missteps, the arena corporation would act in the best interests of its shareholders and customers. Even if it didn’t, it wouldn’t be the public’s business, because after all, the corporation is formed of private individuals investing their own money.

    When individuals invest in an arena they are nurturing the virtues of investment, thrift, industry, risk-taking, and entrepreneurship, Wichita having an especially proud tradition of the last. There is nothing noble about politicians spending someone else’s money on projects like a downtown arena, or a renovated Kansas Coliseum for that matter.

    At this time in our town we have a chance to let private initiative and free markets work, or we can allow government to continue to provide for us in ways that few seem truly satisfied with. Writing about a public utility in England that was transferred to private enterprise, economist John Blundell observed:

    When it was “public” it was very private. Indeed, it was totally captured by a small band of bureaucrats. Even members of Parliament struggled to find out what was going on. No proper accounts were produced, and with a complete lack of market signals, managers were clueless as to the correct course to take. The greatest casualty was a lack of long-term capital investment.

    Now it is “private” and very public. Not just public in the sense of open, but also in the sense of accountable directly to its shareholders and customers. Copious reports and accounts are available and questioning citizens will find their concerns taken very seriously indeed.

    If we allow the government instead of private enterprise to build a new arena or to renovate the Kansas Coliseum, this is the opportunity we lose.

  • Sedgwick County surrenders key tax advantage

    Sedgwick County Surrenders Key Tax Advantage
    By Karl Peterjohn, Executive Director, Kansas Taxpayers Network

    Spirit Aerosystems CEO Jeff Turner defended the massive spending hike that was used as the primary justification for the county’s 8.8 percent property tax hike in his editorial August 9, 2006. Turner’s support for this increased government spending ignored some important ramifications behind this economically destructive vote.

    Sedgwick County has an important fiscal advantage over 19 other Kansas counties. Sedgwick County has no community college and hence no community college property tax. That property tax is a major reason why this levy makes the total tax burden higher in Butler, Cowley, and Reno counties. The Wichita Area Technical College is becoming this community’s community college. This will mean increasing pressure to raise property taxes. This would be in addition to the current 1.5 mills left over from the old Wichita University days that the county charges.

    Sadly, the Sedgwick County commission seems intent on creating another tax dependent entity here in this community. If Jeff Turner, Spirit Aerosystems and Turner’s former company Boeing want to promote property tax hikes, that is certainly their prerogative.

    It is a public record that Boeing tied as the largest donor for the 2000 Wichita school bond issue with a five figure donation and Raytheon was the largest corporate donor in support of the Local Option Budget property tax hike for Wichita during that 1997 property tax referendum. Cessna’s CEO Jack Pelton spoke out in support of the county’s spending plans that required this property tax hike August 9.

    On the other hand, when the news cameras are generally gone, these aircraft companies return to the city or the county and seek sizable, often 100 percent property tax abatements. So a small or medium sized business gets to pay a much higher proportion of say $100,000 worth of their commercial property than the largest public businesses in this community. This is not fair.

    This distorts the overhead costs shifting the fiscal burden from the taxpayer subsidized onto the businesses without the tax breaks. It also shifts this burden onto homeowners and other taxpayers. Special tax breaks provides the subsidized firms with lower overhead costs so they can afford pay more for employees too. That places small and medium sized firms that lack the political clout and leverage, at a hiring disadvantage as well. If the non tax abated firms have out-of-state competitors their extra overhead costs hurts their ability to compete. However, tax abatements are a big help in cyclical industries that are in perpetual “hiring and firing” cycles and need to pay more because of this employment instability.

    There is certainly a need for qualified workers for many Wichita area businesses. This $40 million county spending hike, that is well above per foot construction costs, ignores a bigger question. How much spending in the government school establishment is enough? Property tax hike advocates are ignoring the fact that well over $3/4 billion in taxes are going to be spent on the 10 public school districts in this county in 2006-07. This figure is growing rapidly in the age of judicial edicts and Montoy.

    2004 Census data indicates that Kansas has the 14th highest property taxes in all 50 states as well as the highest property taxes per capita in our five state region. Soaring appraisals have been the primary cause of this situation but the county’s rising mill levy without getting voter approval is an insult to every county voter. In 1997 almost 90 percent of county voters wanted to retain the property tax lid on local government. County officials helped kill the property tax lid in 1999 and now will not let voters decide this property tax hike at the ballot box. Creating a new level of local government in Sedgwick County with higher property taxes will hurt and hinder overall economic growth here.

  • Government Charity in Sedgwick County

    At the July 25, 2006 Sedgwick County Commission meeting, during the public hearing on the proposed 2007 Sedgwick County budget, a speaker said this in support of funding for mental health services: “I agree with the previous presenter and I’d be willing to forego a few cheeseburgers this year so that if I need to pay more taxes to help provide services, I’m willing to do that.”

    It hardly seems necessary to remind this speaker that she may give whatever she wants of her time and money to any organization she wants. She doesn’t need the Sedgwick County Commission to do it for her.

    This speaker may be thinking that if she agrees to pay a little more in taxes to support her cause, then everyone else will have to pay more, too. In this way, her small additional sacrifice is leveraged by the additional taxes everyone else must pay.

    In fact, many people think this way. Everyone has their own ideas of what the government should do, and if by paying just a little more in taxes myself I can get the government to tax everyone else, why, that’s quite a good deal for me and my pet project!

    The problem is that this government activity is wrong. The economist Walter E. Williams makes the case succinctly:

    Can a moral case be made for taking the rightful property of one American and giving it to another to whom it does not belong? I think not. That’s why socialism is evil. It uses evil means (coercion) to achieve what are seen as good ends (helping people). We might also note that an act that is inherently evil does not become moral simply because there’s a majority consensus.

    It doesn’t matter how noble the cause. To take from one and give to another is wrong, even if it is to provide food or medical services to truly needy people.

    Furthermore, this government “charity” deprives us of our ability to give true charity ourselves, and in the process, makes us less happy than we could be. Arthur C. Brooks, associate professor at Syracuse University’s Maxwell School of Public Affairs, in a commentary in the December 8, 2005 Wall Street Journal titled “Money Buys Happiness” tells us this:

    In fact there is another explanation for unchanging happiness levels over time which is rather less supportive of income redistribution. As incomes rise, so generally do levels of government revenues and spending, and there is evidence that these forces work against personal income on the overall level of happiness. For example, a $1,000 increase in per capita income is associated with a one-point decrease in the percentage of Americans saying they are “not too happy.” At the same time, a $1,000 increase in government revenues per capita is associated with a two-point rise in the percentage of Americans saying they are not too happy. In other words, not only can money buy happiness, but it may be that the government can tax it away as well.

    Mr. Brooks also tells us that donating money and time — that is, the giving of charity — illustrates the link between money and happiness: “Givers of charity earn substantial mental and physical health rewards, even more than do the recipients of charity — empirical evidence that it is indeed more blessed to give than to receive.”

    The operative idea is “to give.” When government takes by taxation, it is not giving.

  • Let profits save (or sink) Exploration Place

    What must a business do to make a profit? It must deliver something that people want at a price they are willing to pay. It must deliver that product or service with costs lower than revenues, if it is to survive beyond the short-term.

    If a business fails to do this it will become immediately aware, as it will be generating losses instead of profits. Since losses can’t be continued for very long before the business goes bankrupt, management has a very powerful motive to make corrections.

    There are some who believe that making a profit is evil or immoral, that to make a profit you must be ripping off the customer. But profits are a signal that the business is doing something right. It must be satisfying customers’ desires, and doing it efficiently.

    Governments, bureaucrats, and politicians, on the other hand, don’t have such a powerful motivating factor. They have, at least in their minds, a deep well of public money to spend. Through their power to tax they have the ability to keep money-losing institutions in place, no matter how inefficiently the institution operates, or how little demand there is for its product.

    The simple fact is, and there is really no way to sugarcoat this, the people of Sedgwick County do not value the product that Exploration Place offers enough to pay what it costs to produce it.

    Now if Exploration Place was privately owned, its owners would have the right to keep it in business and operating at a loss as long as they wanted or could afford to. But Exploration Place is asking the government to pay for its losses and keep it operating. That means that you and I — probably the very same people who thought Exploration Place didn’t provide a product we were willing to pay for — are asked to keep it in business.

    Examine the incentives in place. Exploration Place operates at a loss. Instead of confronting the urgent and undeniable need to change, they receive a handout from the government. Considering the recent history of our local governments and other money-losing institutions, this is likely the first of a series of payments to be made.

    Yes, I am aware that consultants are being dispatched to figure out how Exploration Place can change to avoid future losses, but I don’t have a lot of confidence that the right changes will be made. That’s because after changes are made — whatever they may be — Exploration Place will still undoubtedly lack the feedback mechanism of market signals that guide business managers to provide products and services that people actually value enough to buy.

    Government leaders and newspaper editorial writers tell us that we cannot afford to lose such a wonderful place. But if it’s so wonderful, why won’t its customers pay what it really costs?