Voice For Liberty

Search results for: “historic tax credits”

  • Kansas and Wichita quick takes: Thursday March 8, 2012

    Candidate representatives at Pachyderm. This Friday’s meeting (March 9th) of the Wichita Pachyderm Club features Republican presidential candidate spokespersons. In addition, Lora Cox, Executive Director of the Sedgwick County Republican Party will be on hand to answer questions regarding the mechanics of Saturday’s Republican Party Caucus. … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Sedgwick County pre-caucus rally. Friday afternoon (March 9th) Kansans for Liberty is producing a pre-caucus rally at Century II. Ron Paul is scheduled to appear. There will be other speakers and live entertainment, say event organizers. Tickets are $25. For more information, see Kansans for Liberty.

    Libertarian ideals. The Winfield Courier criticizes U.S. Representative Mike Pompeo for his bill that would eliminate all tax credits for energy, writing “This is a case of putting libertarian ideals ahead — far ahead — of the interests of our region and our state.” But the libertarian ideals of personal liberty, economic freedom, and free markets ought to be all that government concerns itself with. … This is not the only way this op-ed is misinformed on facts. The anonymous author writes: “New, life-changing technologies, from the railroads to the Internet, have long had the active support of our national government.” But: Consider the railroads. The government-subsidized railroads involved in the transcontinental project went bankrupt. Only The Great Northern Railroad, which was built without government subsidy, was profitable and not a burden on the national treasury. (See Interfacing with Obama’s Intercontinental Railroad). Shame on the Winfield Courier so being so misinformed on U.S. history and the proper role of a limited government.

    High Kansas taxes. Kansas Reporter covers more of the Tax Foundation’s report on the high cost of Kansas business taxes: “A new national study says Kansas business owners pay some of the highest taxes in the country. … Kansas businesses that are 3 or fewer years old pay the third-highest total taxes in the nation among all 50 states and Washington, D.C., the study found. Older businesses, such as Midway Wholesale, pay the fourth-highest totals. The findings contrast sharply with previous surveys, including some by the Tax Foundation, that put Kansas closer to the midpoint in regard to tax burden. As recently as January, for example, the foundation released its latest compilation of its Business Tax Climate Index, which put Kansas almost dead center — in 25th place — among lightest- to heaviest-taxed states. ‘Those surveys focus on tax policies, such as what types of taxes do states have or what are their tax rates,’ said Scott Hodge, the foundation’s president. ‘This new study looks at the issue from a business’ viewpoint and what they actually pay.’” … More at New study finds KS tax loads worse than reported.

    Harm of individual mandate explained. In the following short video, Elizabeth Price Foley of the Institute for Justice explains the harm of the individual mandate that is the centerpiece of the Patient Protection and Affordable Care Act (Obamacare). She explains that if the U.S. Supreme Court fails to strike down the individual mandate, there will be nothing to stop Congress from forcing people into other contracts against their will — employment contracts or union membership, for example. If we still have a constitutional republic in which the federal government’s powers are limited, then the Court should strike down this law. More information on IJ’s brief is contained in this press release.

  • Destination ICT rollout presents a look at the future of Wichita

    Destination ICT rollout 2010-02-22Destination ICT presentation.

    Yesterday Rebecca Ryan of Next Generation Consulting presented “Destination ICT.” This is a program designed to “attract and retain talent to Wichita.” It’s sponsored by Young Professionals of Wichita which is an initiative of the Wichita Metro Chamber of Commerce.

    In her talk, Ryan presented evidence that knowledge workers are highly concentrated, and that a relatively small proportion of workers create much of the economic output. “Some workers have a higher economic impact on an economy than other workers.” She said that Wichita must continue to invest in knowledge-based jobs and knowledge-based occupations.

    She said that Wichita employers say that they need 3,000 professional workers over the next six to eight years. But 23 percent of the people Ryan surveyed said they are leaving Wichita in the next four years. She said this would cost Wichita $610 million over the next four years.

    Ryan said Wichita needs to use “intentional design” in which we design an ICT that “people are homesick for.”

    Ryan presented the seven indexes of a “next city” — referring to attributes, attitudes, and amenities that the “next generation” will get excited about. These are:

    • Cost of lifestyle. Can I afford to live here?
    • Earning opportunities. Many families or couples who locate to a town require two jobs.
    • Vitality. Is this a community that invests in parks, trails, and recreation?
    • Learning. This refers to career education for professionals as well as the K-12 public school system.
    • Around town. This refers both to in-town mobility as well as things like the number of flights.
    • Social capital. Does everyone feel they have a stake and a say in the community? Voting rates and crime count here.
    • After hours. What is there to do after work and on weekends?

    Ryan showed a chart, based on a survey of Wichitans, that showed “value vs. perception,” that is, how do Wichitans feel about these indexes as compared to their measured values? Consistently, Wichitans’ perception was lower than the reality.

    Wichita scores well in cost of lifestyle. Wichita scored low in “around town.” Wichita also scored low in earning opportunities. In other categories, Wichita scored about the same as its group of peer cities, which for the purposes of this analysis are Denver, Raleigh, Lexington, Kansas City, Omaha, Oklahoma City, Tulsa, Chattanooga, Fort Worth, Salt Lake City, and Richmond.

    Ryan said that Wichita’s low cost of lifestyle is “a key strength that can be leveraged, particularly in efforts to attract and retain Millennials who are in their early years of earning.”

    Ryan said we need to connect people to Wichita’s career opportunities. She showed two examples — ColumbusTalent.com in Columbus, Indiana, and SmartCareerMove.com in Iowa — of cities or regions that have done this. Also, she said we need to feature employers on high-traffic websites. A “robust internship culture” is valuable, too.

    She also recommended that we make Wichita a more attractive place to work and play, and that is sustainable. She mentioned — as do the downtown Wichita planners — “connectedness.” A quote from a survey participant is “There are parks [in Wichita], but there’s no way to get from one to another … there are no arteries linking the green spaces.” She said that Wichita should have many more miles of bike paths. Our bus transit system is a problem, too, as it takes a very long time to get from one place to another on a bus. She recommended a grid system rather than a hub system as Wichita presently uses.

    Wichitans also needs to convince themselves that Wichita is a great place to live. She said that most people don’t realize Wichita is as large in population as it is.

    She recommended a centralized place for finding information about Wichita such as events. She used OnMilwaukee.com as an example of such a site, noting that Wichita’s UploadWichita.com has not been updated frequently.

    She said that we need to make sure that what people are saying about our community matches the reality. Two-thirds of the people who have moved away from Wichita have thought about coming back. These are the “convinceables,” she said.

    She recommended that if people care about downtown, they should attend Saturday’s design charrette.

    Analysis

    Wichita’s advantage of low cost of lifestyle (is this different from a low cost of living?) is something that we must work to maintain. Actions by Wichita’s city council such as the creation of TIF districts make the burden of paying for government more expensive for everyone in the city except those in the TIF district. Other misguided economic development policies such as tax abatements make it more expensive for everyone but the recipient of the incentive.

    The emphasis on bicycle paths is misplaced. A recent visitor to Wichita, Randal O’Toole, said that bicycle paths are not nearly as useful as city streets for serious commuting and traveling by bicycle.

    With regard to public schools, Wichita is falling behind the rest of the country in educational freedom. Our charter school law gives local boards of education total control over the formation of charter schools, and as a result, there are very few in Kansas. Furthermore, we have no school choice through vouchers or tax credits. Many cities and states are using these programs to implement choice — rather than government monopoly — in education. Wichita lags far behind in this regard. School choice programs, by the way, could be implemented quickly at very low cost, and in fact, could save money.

    Ryan’s promotion of the downtown planning process shows a reliance on centralized government planning. This means a loss of economic freedom for Wichitans, as those who chose not to live downtown will subsidize those who do. Reliance on government planning means that more economic activity in Wichita will be controlled by bureaucrats and politicians. These classes of people have motivations different from entrepreneurs, who must meet the demands of consumers or go out of business. Bureaucrats, especially, do not face such a stern taskmaster.

    I was also troubled by other reliance on government recommended by Ryan. The parks system — which suffers, according to Ryan, from a lack of connectedness — is a creation of government. So here’s an example of a large government program that has produced something other than what is needed, or at least is not optimal. Now Wichita has a new and ambitious program to create a new generation of parks. But what makes us think that the current generation of parks planners can do better than the past?

    Reliance on websites as a way to distribute information and build community in Wichita has been problematic. Ryan noted UploadWichita.com as an example. Its most most recent story is from July 2008, and the most recently uploaded photo is from March 2009.

    More recent efforts by government-sponsored enterprises to promote the city through online efforts are sputtering, too. The Wichita Downtown Development Corporation’s blog — ironically titled Momentum — hasn’t had a fresh post since December 17, even though Wichita is in an intense period of downtown planning.

    There are some efforts such as RokICT and Naked City Wichita that promote events in Wichita. Both sites seem to be in transition at the moment, however, and are not the fresh and copious sources of information that they once were.

  • In Kansas, school reform not on the plate

    Conventional wisdom this year is that Kansas is struggling with a plan for school reform. The reality, however, is that the state is merely considering a change in how to pay for its schools.

    No actual reform of what happens within the schools is contemplated, except that schools might have more flexibility in how to spend their funds. A recent plan to spend more on schools over the next two years doesn’t count as reform, as it merely allows schools to do more of the same.

    As Kansas struggles to find funding for its public schools and other functions of government, we’re losing an opportunity to examine our schools and see if they’re performing as well as they should, both financially and academically. Here are some actual reform measures not being discussed on a widespread basis.

    School choice

    Across the country, charter schools and school choice programs are offering choice and improved educational outcomes to families. While Kansas has charter schools, the charter school law in Kansas is one of the weakest in the nation, and virtually guarantees that public schools won’t face much meaningful competition from charters.

    School choice in the form of vouchers or tax credits doesn’t exist in Kansas. As a result, Kansas public schools face very little of the competitive forces that have been found to spur public schools to improvement across the country.

    School choice programs save money, too. In 2007, the The Friedman Foundation for Educational Choice released the study School Choice by the Numbers: The Fiscal Effect of School Choice Programs, 1990-2006. According to the executive summary: “Every existing school choice program is at least fiscally neutral, and most produce a substantial savings.”

    Kansas is overlooking several reforms that would increase freedom and educational opportunity and would save money at the same time.

    Accountability with teeth

    Recently former Florida Governor Jeb Bush explained the accountability measures that have produced great success in Florida. Measures including grading individual schools from “A” to “F,” ending social promotion, and school choice programs, which help all schools: “Choice is the catalytic converter here, accelerating the benefits of other education reforms. Almost 300,000 students opt for one of these alternatives, and research from the Manhattan Institute, Cornell and Harvard shows that Florida’s public schools have improved in the face of competition provided by the many school-choice programs.”

    Teacher quality policies

    Recently Sandi Jacobs of National Council for Teacher Quality spoke in Wichita and addressed Kansas policies regarding teacher quality. Our policies rank below the average for all states. More information from Jacob’s presentation is at Kansas ranks low in policies on teacher quality.

    Fund balances

    The Kansas Policy Institute has found that Kansas schools are sitting on fund balances of over $700 million that could be used to make it through a tough budget year.

    School spending advocates dispute this. But Kansas Deputy Education Commissioner Dale Dennis agrees with KPI President Dave Trabert that these fund balances could be used — if the schools wanted to.

    Chief school spending lobbyist Mark Tallman of the Kansas Association of School Boards (KASB) has argued that “many of the funds Trabert labels reserves are restricted or necessary to cover costs before government payments are received.”

    That’s true. But this argument, just like a faulty op-ed written by Kansas school board member David Dennis, says nothing about whether the balances in these funds are too high, too low, or just right.

    The evidence we do have tells us that the balances in these funds are more than needed, because they’ve been growing rapidly. The only way the fund balances can grow is if schools aren’t spending the money as fast as it’s going in the funds.

    Focus on what works

    Class size, merit pay, salary scales, unions, teacher experience and education, certification: all need to be examined to make sure that schools make decisions based on what works. We find, however, that school districts resist reforms. As a monopoly shielded from significant competition, Kansas public schools face little pressure to reform.

    Consider class size, something that the education bureaucracy says is of utmost importance, and one of the primary reasons given for school bond issues. What the school spending lobby won’t realize is that class size is not important. Instead, the quality of teachers is much more important. Writes education researcher Eric Hanushek: “Much of the work that I have done has focused on teacher effectiveness. From this research I have concluded that teacher quality is the most important factor in determining how well a school will do. … Teacher quality is not captured by typically discussed characteristics of teachers such as master’s degrees, teaching experience, or even certification — things that states typically monitor. Requiring such things unrelated to student performance dilutes accountability and detracts from things that would make them more effective.”

    Consider the harm of union work rules: When private sector companies are forced to layoff employees, they may use the opportunity to shed their lower-performing employees first. Government schools, governed by union contracts like the one in Wichita, can’t do this. They must dismiss the teachers with least seniority first. While this might seem like a good way to keep the best teachers, it turns out that experience is only a minor factor in teacher quality.

    Test scores

    Are Kansas test scores a reliable and valid measure of student achievement? The test scores that school spending advocates use — tests administered by the state of Kansas — are almost certainly misleading. The basic problem is that scores on the National Assessment of Educational Progress (NAEP) show achievement by Kansas students largely unchanged in recent years. This is at the same time that scores on tests given by the Kansas education establishment show large improvements. We need to investigate so that we understand the source of this difference. The Kansas education bureaucracy resists such efforts.

    The cost of a suitable education

    The issue of what an education in Kansas should cost is again being examined by courts. This should provide an opportunity to examine the cost studies used by the court. The Kansas Policy Institute has published Kansas Primer on Education Funding: Volume II Analysis of Montoy vs. State of Kansas, which provides useful criticism and perspective of the cost studies used.

    Alternative remedies

    Besides ordering increased spending, courts should consider alternative remedies. These might take the form of increased opportunities for parents to escape failing public schools. An example is the parent trigger. This mechanism allows parents to force radical change on a school through the petition process.

  • Kansas and Wichita quick takes: Monday October 10, 2011

    AFP meeting features former Congressman Tiahrt. Tonight’s (October 10th) meeting of Americans for Prosperity, Kansas features former United States Representative Todd Tiahrt speaking on “How regulations affect our economy.” There will be a presentation followed by a group discussion. Tiahrt represented the fourth district of Kansas from 1995 to 2011. He is presently our states Republican National Committeeman. … This free meeting is from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. The event’s sponsor is Americans for Prosperity, Kansas. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

    Government planning. In an address from 1995, Gerald P. O’Driscoll Jr. spoke on Friedrich Hayek and his ideas on government interventionism. His conclusion should be a caution to those — such as Wichita City Council members and city hall bureaucrats — who believe they can guide the economic future of Wichita through interventions such as TIF districts, grants, forgivable loans, tax credits, tax abatements, sweetheart lease deals, eminent domain, zoning, and other measures: “In all his work, Hayek focused on the self-ordering forces in society. Hayek’s fellow Nobel laureate Kenneth Arrow has suggested that ‘the notion that through the workings of an entire system effects may be very different from, and even opposed to, intentions is surely the most important intellectual contribution that economic thought has made to the general understanding of social processes.’ The Arrovian formulation echoes Adam Smith’s observation that, as a consequence of the interaction of conflicting interests, man is ‘led by an invisible hand to promote an end which was no part of his intention.’ The classic Hayekian statement visualizes economics as analyzing ‘the results of human action but not of human design.’ The economic conception of society is an affront to the conceit of those who would impose order from above. Economic forces defy the will of authoritarians seeking to mold social outcomes. Human beings respond to each government intervention by rearranging their lives so as to minimize its disruptive effects. The resulting outcome may thus be different from and even opposed to the intention of the intervention.” The full lecture is at The Meaning of Hayek.

    Longwell joins Democrats to defeat Republicans. While Wichita city council members are officially non-partisan — meaning they don’t run for election as members of political parties — most members are closely identified with a party. Some, like Jeff Longwell (district 5, west and northwest Wichita), see themselves as leaders in their parties, the Republican Party in this case. Last week, however, Longwell joined with the three Democrats on the Wichita City Council to oppose the votes of three Republicans. (There was a nuance to that vote, but nonetheless Longwell voted with the Democrats.) On Sunday he teamed with left-wing Council Member Janet Miller (district 6, north central Wichita) to write an op-ed that appeared in The Wichita Eagle (Grant helps region). The piece approved increased federal government spending, increased federal government control, and increased centralized planning.

    Optimal size of government. Is government too large? Yes, and trying to determine an optimum size for government is impossible. So says a new policy briefing paper from the Center for Global Liberty and Prosperity, a project of the Cato Institute.

    Can We Determine the Optimal Size of Government? by James A. Kahn. In the executive summary, we can read this: “The massive spending programs and new regulations adopted by many countries around the world in response to the economic crisis of 2008 have drawn renewed attention to the role of government in the economy. Studies of the relationship between government size and economic growth have come up with a wide range of estimates of the ‘optimal’ or growth-maximizing size of government, ranging anywhere between 15 and 30 percent of gross domestic product (GDP).

    This paper argues that such an exercise is ill conceived. Modern growth economics suggests, first, that government policies leave their long-term impact primarily on the level of economic activity, not the growth rate; and, second, that the sources of this impact are multi-dimensional and not necessarily well measured by conventional measures of ‘size,’ such as the share of government spending in GDP.

    In fact, measures of economic freedom more closely relate to per capita GDP than do simple measures of government spending. The evidence shows that governments are generally larger than optimal, but because the available data include primarily countries whose governments are too large, it cannot plausibly say what the ideal size of government is. The data can realistically only say that smaller governments are better, and suggest that the optimal size of government is smaller than what we observe today.”

    Steve Jobs. What is his legacy? From Richard A. Viguerie: “Steve Jobs, Apple Computer’s late founder and CEO, gave the vast majority of his hundreds of thousands of dollars in political contributions to liberal Democrats, such as Nancy Pelosi, Ted Kennedy and California Governor Jerry Brown. Yet it is hard to think of a 21st Century entrepreneur who has done more to empower individuals and free them from the demands of the liberal collective than Steve Jobs did through the invention of the iPod, and iPad and the popularization of personal computing. Through the innovative products Apple brought to market, Jobs proved the collectivist premise of John Kenneth Galbraith’s The Affluent Society to be both absolutely true and utterly wrong.” … More at Steve Jobs’ Conservative Legacy.

    Lieutenant Governor in Wichita. This week’s meeting (October 14th) of the Wichita Pachyderm Club features Lieutenant Governor Jeff Colyer, M.D. speaking on “An update on the Brownback Administration’s ‘Roadmap for Kansas’ — Medicaid Reform” … Upcoming speakers: On October 21st: N. Trip Shawver, Attorney/Mediator, on “The magic of mediation, its uses and benefits.” … On October 28th: U.S. Representative Tim Huelskamp, who is in his first term representing the Kansas first district, speaking on “Spending battles in Washington, D.C.” … On November 4th: Chris Spencer, Vice President, Regional Sales Manager Oppenheimer Funds, speaking on “Goliath vs Goliath — The global battle of economic superpowers.” … On November 11th: Sedgwick County Commission Members Richard Ranzau and James Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On November 18th: Delores Craig-Moreland, Ph.D., Wichita State University, speaking on “Systemic reasons why our country has one of the highest jail and prison incarceration rates in the world? Are all criminals created equal?”

    When governments cut spending. Advocates of government spending argue that if it is cut, the economy will suffer. Is this true? Is government spending necessary to keep the economy functioning? “There is no historical credence to this very popular idea that cutting spending now will actually slow down the economy and actually lead to a double dip recession or an increase in economic stagnation.” This is the conclusion of Dr. Stephen Davies in a short video. As one example — he cites others — Davies explains that there was fear in the United States that the end to massive government spending during World War II would lead to a return of the Great Depression. “In fact, as we know, exactly the opposite happened. As the defense spending of the war years was wound down, and as government was pulled back in other ways as well under the Truman and Eisenhower administrations, the result was an enormous period of sustained growth in the United States and other countries that went through a similar process.” Davies says that economic growth accelerates when government reduces its spending. Reasons include the greater productivity of private sector spending as compared to government spending, and increased confidence of private sector investors. … The video is from LearnLiberty.org, a project of Institute for Humane Studies.

  • Kansas budget solution overlooked

    As Kansas prepares for a legislative session that must find ways to balance a budget in the face of declining revenues, not all solutions are being considered.

    Generally, the choices are presented as either raising revenues or cutting services. An example comes from H. Edward Flentje of Wichita State University. In a recent op-ed, he presents two solutions: (a) raising more revenue, by canceling the recently-passed tax cuts and retaining the current sales tax rate hike instead of letting it expire, or (b) cutting services. (H. Edward Flentje : State facing fiscal cliff, December 16, 2012 Wichita Eagle)

    In the Kansas City Star, Steve Rose made a similar argument.

    I hope that “cutting services” means cutting spending on services, not the actual level of services the state provides, although that could probably use some trimming, too.

    How much spending does the state need to cut? Kansas Policy Institute has calculated that a one-time spending cut of 8.5 percent, followed by spending growth of four percent per year, would produce a balanced budget with ending balances.

    Does anyone think this goal can’t be met? If not, then perhaps cutting four percent in each of the next two years could be a goal.

    But either way, we can cut spending while maintaining services people have become accustomed to expect from government. Remaking government is a way to do this. We can make government more efficient, despite the claims that it is impossible to do so.

    As an example, in 2010 the Wichita school district saved $2.5 million per year by adjusting school starting times, thereby saving on transportation costs. This was after district officials claimed — repeatedly — there was nothing they could cut. Spending had already been “cut to the bone,” officials said.

    When we see incidents like this, the governing body trumpets the savings, and then, unfortunately, often stops looking for savings. But we need to keep looking. An example of a way to save money is school choice.

    School choice saves states money

    While proponents of public school spending argue that school choice programs drain away dollars from what they claim are underfunded public schools, this is not the case.

    In 2007 The Friedman Foundation for Educational Choice released the study School Choice by the Numbers: The Fiscal Effect of School Choice Programs, 1990-2006. According to the executive summary: “Every existing school choice program is at least fiscally neutral, and most produce a substantial savings.”

    How can this be? The public school spending lobby, which in Kansas is primarily the Kansas National Education Association (KNEA, the teachers union) and the Kansas Association of School Boards (KASB), would have us believe that educational freedom would kill public education. They say that school choice program drain scarce resources from the public school system.

    But when researchers looked at the actual effects, they found this: “In nearly every school choice program, the dollar value of the voucher or scholarship is less than or equal to the state’s formula spending per student. This means states are spending the same amount or less on students in school choice programs than they would have spent on the same students if they had attended public schools, producing a fiscal savings.”

    So at the state level, school choice programs save money. They don’t cost money to implement; they save money.

    Further research on school choice programs funded through tax credits confirms this.

    Other ways to save

    In 2011 the Kansas Legislature lost three opportunities to save money and improve the operations of state government. Three bills, each with this goal, were passed by the House of Representatives, but each failed to pass through the moderate-controlled Senate, or had its contents stripped and replaced with different legislation.

    Each of these bills represents a lost opportunity for state government services to be streamlined, delivered more efficiently, or measured and managed. These goals, while always important, are now essential for the success of Kansas government and the state’s economy.

    Kansas Streamlining Government Act

    HB 2120, according to its supplemental note, “would establish the Kansas Streamlining Government Act, which would have the purpose of improving the performance, efficiency, and operations of state government by reviewing certain state agencies, programs, boards, and commissions.” Fee-funded agencies — examples include Kansas dental board and Kansas real estate commission — would be exempt from this bill.

    In more detail, the text of the bill explains: “The purposes of the Kansas streamlining government act are to improve the performance, streamline the operations, improve the effectiveness and efficiency, and reduce the operating costs of the executive branch of state government by reviewing state programs, policies, processes, original positions, staffing levels, agencies, boards and commissions, identifying those that should be eliminated, combined, reorganized, downsized or otherwise altered, and recommending proposed executive reorganization orders, executive orders, legislation, rules and regulations, or other actions to accomplish such changes and achieve such results.”

    In testimony in support of this legislation, Dave Trabert, President of Kansas Policy Institute offered testimony that echoed findings of the public choice school of economics and politics: “Some people may view a particular expenditure as unnecessary to the fulfillment of a program’s or an agency’s primary mission while others may see it as essential. Absent an independent review, we are expecting government employees to put their own self-interests aside and make completely unbiased decisions on how best to spend taxpayer funds. It’s not that government employees are intentionally wasteful; it’s that they are human beings and setting self-interests aside is challenge we all face.”

    The bill passed the House of Representatives by a vote of 79 to 40. It was referred to the Senate Committee on Federal and State Affairs, where it did not advance. HB 2120 died in a senate committee chaired by Pete Brungardt, who was defeated in August.

    Privatization and public-private partnerships

    Another bill that did not advance was HB 2194, which in its original form would have created the Kansas Advisory Council on Privatization and Public-Private Partnerships.

    According to the supplemental note for the bill, “The purpose of the Council would be to ensure that certain state agencies, including the Board of Regents and postsecondary educational institutions, would: 1) focus on the core mission and provide goods and services efficiently and effectively; 2) develop a process to analyze opportunities to improve efficiency, cost-effectiveness and provide quality services, operations, functions, and activities; and 3) evaluate for feasibility, cost-effectiveness, and efficiency opportunities that could be outsourced. Excluded from the state agencies covered by the bill would be any entity not receiving State General Fund or federal funds appropriation.”

    This bill passed by a vote of 68 to 51 in the House of Representatives. It did not advance in the Senate, falling victim to a “gut-and-go” maneuver where its contents were replaced with legislation on an entirely different topic. Steve Morris, president of the Kansas Senate and a member of the moderate coalition, chaired the committee that killed this legislation. He won’t be in the Senate next year.

    Performance measures

    Another bill that didn’t pass the entire legislature was HB 2158, which would have created performance measures for state agencies and reported that information to the public. The supplemental note says that the bill “as amended, would institute a new process for modifying current performance measures and establishing new standardized performance measures to be used by all state agencies in support of the annual budget requests. State agencies would be required to consult with representatives of the Director of the Budget and the Legislative Research Department to modify each agency’s current performance measures, to standardize such performance measures, and to utilize best practices in all state agencies.” Results of the performance measures would be posted on a public website.

    This bill passed the House of Representatives by a nearly unanimous vote of 119 to 2, with Wichita’s Nile Dillmore and Geraldine Flaharty the two nay votes.

    Opposition to these bills from Democrats often included remarks on the irony of those who were recently elected on the promise of shrinking government now proposing to enlarge government through the creation of these commissions and councils. These bills, however, proposed to spend modest amounts increasing the manageability of government, not the actual range and scope of government itself. As it turns out, many in the legislature — this includes Senate Republicans who initiated or went along with the legislative maneuvers that killed these bills — are happy with the operations of state government remaining in the shadows.

    HB 2158 was victim of a “gut-and-go” maneuver in a committee chaired by Carolyn McGinn, another member of the moderate coalition. She will be returning to the senate next year, but probably won’t have the ability to stop legislation like this.

  • Articles of Interest

    Kansas budget, wind power, alternative fuels gone wild, newspaper bailouts, journalism entrepreneurship

    House pushing big K-12 cuts (Topeka Capital-Journal) “The Republican-led House Appropriations Committee on Wednesday approved a budget-reduction plan that would trim $100 million in state aid to public schools in Kansas. The 3.3 percent reduction for the upcoming 2010 fiscal year would help balance the state budget.” With K-12 schools consuming about half of state general fund spending, it’s surprising that is all they’re asked to sacrifice.

    Wind farm to provide power to Greensburg homes, businesses (Wichita Eagle) A town destroyed by too much wind now seeks to benefit from wind. Actually, it’s milking the government subsidy that will benefit Greensburg: “And NativeEnergy Inc., a leader in climate solution services, will buy about two-thirds of the wind farm’s renewable energy credits over 20 years.” It’s unlikely this would be happening without taxpayer subsidy.

    Brownback backs Open Fuels Standards Act (Kansas Liberty, a subscription service) “Republican Sen. Sam Brownback today endorsed the introduction of legislation that would require 50 percent of new cars to have the capability to operate on gasoline, ethanol and methanol or diesel or biodiesel.” This is more of government trying to plan the future of the automobile industry, this time from someone who is considered a conservative.

    Kerry aims to rescue newspapers (Washington Times) “Troubled by the possible shuttering of his hometown paper, Sen. John Kerry reached out to the Boston Globe on Tuesday, then called for Senate hearings to address the woes of the nation’s print media.” Bailout fever continues to spread. If you think it’s bad for the federal government to run banks and automobile companies, just think how bad things will be when the press is beholden to people like Kerry for its survival.

    True/Slant Tests Another Model Of Web Journalism (Wall Street Journal) “This week, a new Web news site is entering the fray, with a novel approach to journalistic entrepreneurship, new forms of advertising, and an effort to blend journalism and social networking.” This site’s address is trueslant.com. If journalism is to survive — and let us hope it thrives — it will serve America best if it is through private initiative like this, rather than through Sen. John Kerry’s government bailouts.

    Alternative Fuel Folly (Kimberly A. Strassel in the Wall Street Journal) Describes how a paper company may reap a $1 billion annual windfall by simply continuing to do what it already does. It’s an example of how government policies often produce unintended effects.

  • Wichita school board members should not be re-elected

    Next Tuesday, four members of the board of USD 259, the Wichita public school district, seek to be elected again to their current posts.

    These members — Lanora Nolan, Lynn Rogers, Connie Dietz and Betty Arnold — are part of a board and school district that is increasingly out-of-step with education reforms that are working in other parts of the country. Their policies and actions are harmful to both Wichita schoolchildren and Wichita taxpayers.

    At the time when most of the country is starting to realize that quality teachers, not the number of teachers, is what makes the biggest difference in student outcomes, the Wichita school district is going the wrong way. The bond issue, with its focus on reducing class size, will force the district to hire more teachers. This makes it more likely that schoolchildren in Wichita will be taught by poorly-performing teachers.

    Its contract with its teachers union forbids any type of merit pay that might induce the best teachers to stay in teaching. Instead, all teachers are paid the same. Only length of service and extra education credentials allow teachers to earn more. Now researchers have found that length of service and the credentials earned at university schools of education make very little difference in student outcomes.

    Across the country parents can take advantage of school choices programs such as charter schools, vouchers, and tax credits. These programs give parents — instead of school administrators and politicians — choice as to where to send their children to school. In some cases, they allow parents to decide how their own tax dollars should be spent. The Wichita school district, including its board and the incumbent candidates that stand for election next week, are firmly against these type of programs that have benefited many students and parents. They prefer a government monopoly.

    The Wichita school district and its board are miles behind other school districts and governmental agencies regarding transparency and openness. Its recent search for a new superintendent was conducted in such a secretive manner that even the Wichita Eagle’s Rhonda Holman — one of the district’s several apologists at that newspaper — was critical.

    The district and board’s attitude towards citizens is nothing less than hostile. In particular, board member, now board president, Lynn Rogers has told citizens that records requests are a burden to the district. When citizens ask for evidence of claims the district makes, Rogers advises them to use Google to look things up for themselves.

    The board gets even little things wrong. For example, the board’s agenda that’s posted on the USD 259 website holds appendixes, which are usually attached files that hold additional information such as a Powerpoint presentation. But these files are removed quickly after the meeting. Most governmental agencies leave them available for eternity.

    Three board members, in their joint campaign materials, state they are proud of 11 years of rising test scores. Across the country school districts and states have watered-down testing standards in response to political pressure to produce rising test scores. Is this the case in Wichita and Kansas? We don’t know. But as scores rise on tests administered by the state, they remain unchanged on the national tests that are immune from local political pressures.

    The fact that all of the candidates facing election challenges have advertised jointly is evidence of another severe problem on the Wichita board of education: Rarely is there controversy or evidence of independent thought by board members. Consider the bond issue from last year, which passed narrowly (51 percent to 49 percent) when voted on by the public. Board members were unanimous in their support of the bond issue. What are the odds of that? (Well, board member Jeff Davis initially dissented, but only because he thought his district didn’t get its fair share. His straying from the board’s groupthink mentality was short-lived, however, as at the next meeting he changed his vote.)

    Then there’s the bond issue from last year. One analysis found that 72% of the contributions, both in-kind and cash, came from contractors, architects, engineering firms and others who directly stand to benefit from the new construction. The board rewarded Schaefer Johnson Cox Frey Architecture for its efforts in passing the bond issue with a no-bid $3.7 million contract to manage the bond issue.

    As large as the bond issue is, to board members it’s not enough. Board members started with a list of projects that totaled some $550 million. These projects are on the back burner, and as soon as this board senses the time is right, it will propose another bond issue. Count on it.

    We should remember the board’s conduct during the election. Calling a special election to be held in May, the board delayed it when it appeared the political landscape was not in their favor — after their opponents had mobilized and spent resources. The board appeared to rely on a hapless citizen group during the summer months for recommendations. Despite the district’s denials, huge amounts of district resources, all provided by taxpayers, were used to promote the bond issue.

    This Wichita school district and its board is an institution firmly rooted in and preferring a big-government style of education monopoly. It ignores evidence of reforms that work, preferring to remain beholden to special interests such as the teachers union, education bureaucrats, and firms that benefit from school construction. None of its members deserve re-election.

  • Janet Miller corrects misinformation

    A Wichita City Council member sets out to correct misinformation, but instead makes a number of factual errors.

    At last week’s Wichita City Council meeting, Council Member Janet Miller (district 6, north central Wichita) took an opportunity to correct misinformation she says was presented. It wasn’t the first time she’s done that; see On Wichita’s Exchange Place TIF, Janet Miller speaks, City council members on downtown Wichita revitalization, Wichita Old Town TIF district illustrates cost and harm of subsidy, Wichita fluoridation debate reveals attitudes of government, and At Wichita City Council, facts are in dispute for other examples of Miller attempting to correct misinformation.

    It should be noted that Miller and some other council members make these statements from their perch on the city council bench. There, their statements can’t be questioned or rebutted except by other council members. That happens only rarely. It’s left to others to do that job.

    Here are some examples from the most recent meeting, with video following.

    On the positive economic impact to the city of the project, Miller said “For every dollar that the city invests in any part of this project the return to the public good is two point six two.” But as I detail in In Wichita, economic development policies are questioned, this is not true for this project when the large cost to the city’s debt service fund is considered, as has been the city’s policy for economic development incentives. Except: Apparently new policy has been formulated to suit the special needs of this project.

    Also, the hotel received tax credits that were a cost to the state and the nation, of which Wichita taxpayers are part. These costs were not included in the cost-benefit study that Miller cited.

    In promoting the benefit of the hotel, Miller said that the city retains one hundred percent of the guest tax collected by the hotel. She didn’t tell the audience that this wasn’t her preference. Miller voted for an ordinance that would have re-routed 75 percent of that tax back to the hotel, to be used in any way its owners want. But Kansas law allowed citizens to challenge the special type of ordinance that was used to implement this law. By gathering signatures and winning an election, this guest tax redirection that Miller supported was defeated. Now, she says that having no such redirection is a positive factor.

    Miller also mentioned the retail space lease in the parking garage, saying it’s “being leased to a third party professional management entity who has the expertise to recruit high quality tenants,.” She added that this will result in increased tax revenue to the city.

    This is true, I suppose. But it doesn’t negate what Miller voted to do for one of her long-time campaign supporters. She vote to build, at taxpayer expense, about 8,500 square feet of retail space in the garage. Then she voted to lease it to her campaign contributors for $1 per year. This space can then be rented out for, at minimum, about $127,500 annually. We don’t really know what the public purpose for this is, or why this had to be done. Except for cronyism — we’re sure of that.

    Miller also said that as a council member she earns a salary that is 30 percent of her previous salary. Council members have a salary of around $35,000, which implies that Miller previously earned around $116,000. Good for her to have earned that.

    Miller also carped about the referendum election in February 2012, noting that the “city” could not raise money and campaign for the project. That’s not entirely true. We saw that in November 2004 and November 2008, government officials campaigned “off the books” for the temporary county sales tax and Wichita school bond. Council members could have spoken as private individuals in favor of their position, whatever it was.

    As it turned out, the Ambassador Hotel group spent four times as much as the side that won. Lack of money to get out a message was not a problem.

    As far as misinformation during the campaign, I would ask readers to review the Wichita Eagle’s fact-checking article, as well as my own article Fact checking the Wichita Ambassador Hotel campaign. Additionally, the campaign site I created at dtwichita.com is still available, as are the articles on wichitaliberty.org. If Miller or anyone else is able to find an error, I will post a correction.

  • Wichita’s political class

    From June.

    The discussion at yesterday’s Wichita City Council meeting provided an opportunity for citizens to discover the difference in the thinking of the political class and those who value limited government and capitalism.

    At issue was Mid-Continent Instruments, Inc., which asked the city for a forgivable loan of $10,000. It received the same last week from Sedgwick County. According to city documents, the State of Kansas through its Department of Commerce is also contributing $503,055 in forgivable loans, sales tax exemptions, training grants, and tax credits.

    At the city council meeting Clinton Coen, a young man who ran for city council earlier this year, spoke against this measure, which he called corporate welfare.

    In response to Coen, Council Member James Clendenin (district 3, south and southeast Wichita) asked if we should ignore companies that want to do business here, or should we allow them to leave? Implicit in the question is that the threat dangled by Mid-Continent is real: that unless the city gives them $10,000, they will expand somewhere else. How citizens and council members feel about this issue largely depends on their perceived genuineness of this threat.

    When Coen recommended that the city cut spending, Clendenin said “I can guarantee you, from what I have seen, this city government has cut a tremendous amount of spending.” When pressed by Coen for examples of cuts, he demurred. Clendenin also said that the $10,000 is needed to show the city’s commitment to the company.

    Perhaps coming to the rescue of her younger and less experienced colleague, Council Member Janet Miller asked City Manager Bob Layton how much has been cut from the budget, and he replied “we’ve cut over $20 million in the general fund over three years.”

    In saying that, Layton is using the language and mind-set of bureaucrats and politicians. In this world, it’s a cut if spending does not rise as fast as planned or hoped for. As you can see from the accompanying chart, Wichita general fund spending has not been cut in recent years. It has risen in each of the last three years, and plans are for it to keep rising.

    Wichita general fund spending

    This illustrates a divide between the thinking of the political class and regular people. Blurring the distinction between plans and reality lets politicians and bureaucrats present a fiscally responsible image — they cut the budget, after all — and increase spending at the same time. It’s a message that misinforms citizens about the important facts.

    Miller also praised the return on investment the city receives for its spending on economic development, citing Wichita State University Center for Economic Development and Business Research and the cost-benefit calculations it performs. These calculations take the cost of providing the incentives and compare it to the returns the city and other governmental entities receive.

    What is rarely mentioned, and what I think most people would be surprised to learn, is that the “returns” used in these calculations is manifested in the form of increased tax revenue. It’s not like in the private sector, where business firms attempt to increase their sales and profits by providing a product or service that people willingly buy. No, the city increases its revenue (we can’t call it profit) by collecting more taxes.

    It’s another difference between the political class and everyone else: The political class craves tax revenue.

    Aside from this, the cost-benefit calculations for the city don’t include the entire cost. The cost doesn’t include the county’s contribution, the majority of which comes from residents of its largest city, which is Wichita. Then, there’s the half-million in subsidy from the state, with a large portion of that paid for by the people of Wichita.

    But even if you believe these calculations, there’s the problem of right-sizing the investment. If an investment of $10,000 has such glowing returns — last week Sedgwick County Commissioner Jim Skelton called the decision a “no-brainer” — why can’t we invest more? If we really believe this investment is good, we should wonder why the city council and county commission are so timid.

    Since the applicant company is located in his district, Council Member Pete Meitzner (district 2, east Wichita), praised the company and the state’s incentives, and made a motion to approve the forgivable loan. All council members except Michael O’Donnell (district 4, south and southwest Wichita) voted yes.

    Going forward

    While the political class praises these subsidies and the companies that apply for them, not many are willing to confront the reality of the system we’re creating. Some, like O’Donnell and Sedgwick County Commissioner Richard Ranzau, have recognized that when government is seen as eager to grant these subsidies, it prompts other companies to apply. The lure of a subsidy may cause them to arrange their business affairs so as to conform — or appear to conform — to the guidelines government has for its various subsidy programs. Companies may do this without regard to underlying economic wisdom.

    We also need to recognize that besides simple greed for public money, businesses have another reason to apply for these subsidies: If a publicly-traded company doesn’t seek them, its shareholders would wonder why the company didn’t exercise its fiduciary duty to do so. But this just perpetuates the system, and so increasing amounts of economic development fall under the direction of government programs.

    While most people see this rise in corporate welfare as harmful — I call it a moral hazard — the political class is pleased with this arrangement. As Meitzner said in making his motion, he was proud that Wichita “won out” over the other city Mid-Continent Instruments considered moving to.

    Another harmful effect of these actions is to create a reputation for having an uncompetitive business environment. Not only must businesses of all types pay for the cost of these subsidies, some face direct competition by a government-subsidized competitor. This is the situation Wichita-area hotels face as a result of the city granting millions in subsidy to a hotel developer to build a Fairfield Inn downtown.

    Even those not in direct competition face increased costs as they attempt to hire labor, buy supplies, and seek access to capital in competition with government-subsidized firms. Could this uneven competitive landscape be a factor that business firms consider in deciding where to locate and invest?

    We can expect to see more government intervention in economic development and more corporate welfare. Former council member Sue Schlapp in April took a job with the Kansas Department of Commerce. Her job title is “senior constituent liaison,” which I think can be better described as “customer service agent for the corporate welfare state.” Her office is in Wichita city hall.

    Increasingly we see politicians and bureaucrats making decisions based on incorrect and misleading information, such as claiming that the city’s general fund budget has been cut when spending has increased. Sometimes they are fed incorrect information, as in the case of a presentation at Sedgwick County Commission that bordered on fraudulent.

    Sometimes, I think, officeholders just don’t care. It’s easiest to go along with the flow and not raise ripples. They participate in groundbreakings and get their photograph in the newspaper and on television that way. Which brings up an important question: why do none of our city’s mainstream media outlets report on these matters?

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