Voice For Liberty

Search results for: “historic tax credits”

  • Tax increment financing (TIF) and economic growth

    Regarding the effect of tax increment financing (TIF) districts on economic development, economists Richard F. Dye and David F. Merriman have studied tax increment financing extensively. Their paper The Effects of Tax Increment Financing on Economic Development bluntly states the overall impact of TIF: “We find clear and consistent evidence that municipalities that adopt TIF grow more slowly after adoption than those that do not.”

    Later in the same paper the authors conclude: “These findings suggest that TIF trades off higher growth in the TIF district for lower growth elsewhere. This hypothesis is bolstered by other empirical findings.”

    Summarizing, the authors write:

    In summary, the empirical evidence suggests that TIF adoption has a real cost for municipal growth rates. Municipalities that elect to adopt TIF stimulate the growth of blighted areas at the expense of the larger town. We doubt that most municipal decision-makers are aware of this tradeoff or that they would willingly sacrifice significant municipal growth to create TIF districts. Our results present an opportunity to ponder the issue of whether, and how much, overall municipal growth should be sacrificed to encourage the development of blighted areas.

    In their later article Tax Increment Financing: A Tool for Local Economic Development, Dye and Merriman further explain the results of their research:

    TIF districts grow much faster than other areas in their host municipalities. TIF boosters or naive analysts might point to this as evidence of the success of tax increment financing, but they would be wrong. Observing high growth in an area targeted for development is unremarkable.

    So TIFs are good for the favored development that receives the subsidy — not a surprising finding. It’s what elected officials, bureaucrats, and newspaper editorial writers can see and focus on. But what about the rest of the city? Continuing from the same study:

    If the use of tax increment financing stimulates economic development, there should be a positive relationship between TIF adoption and overall growth in municipalities. This did not occur. If, on the other hand, TIF merely moves capital around within a municipality, there should be no relationship between TIF adoption and growth. What we find, however, is a negative relationship. Municipalities that use TIF do worse.

    We find evidence that the non-TIF areas of municipalities that use TIF grow no more rapidly, and perhaps more slowly, than similar municipalities that do not use TIF. (emphasis added)

    So if we are concerned about overall growth in Wichita, we need to realize that TIF simply shifts development from one place to another. The overall impact, according to uncontroverted research, is negative: less growth, not more.

  • Tax funds finance Kansas school finance lawsuit

    Contributed by Kansas Taxpayers Network

    By Karl Peterjohn

    There might not be funds for public school classrooms but for 15 Kansas school districts there is money for financing lawsuits. Since the 1998-99 school year, $2,095,020 has been spent in public funds to pay for the school finance litigation and lawsuit.

    This outrage is a classic case of the school districts biting the state’s hand that fed the 300 Kansas school districts with over $2.7 billion in state funds. Of course, the state does not have any money that it has not taken from taxpayers so you and I pay our taxes to the schools and to the state paying for both the plaintiffs and defendants in this legal battle.

    A portion of that money is taken by these school districts and then used to sue for more spending that will require higher taxes. Sadly, Kansas already has the highest property taxes on business in our five state region as well as the second highest taxes on homeowners too so this litigation worsens our tax climate.

    This is not a new event. The school finance lawsuits stretch back into the late 1980’s. The lead attorney on the most recent lawsuit, Alan Rupe, has been involved in all of these cases going back to the 1980’s. The 15 school districts misusing their tax funds to finance these lawsuits are led by the Salina and Dodge City public schools. The other school districts financing this litigation are: Arkansas City, Augusta, Derby, El Dorado, Emporia, Fort Scott, Great Bend, Hays, Independence, Leavenworth, Manhattan, Newton, and Winfield (For a listing of the tax dollars spent for these lawsuits between 1998-to-2005 see www.kansastaxpayers.com).

    If the legislative conservatives were serious about addressing the litigation crisis in Kansas public schools these expenditures would be stopped. This misuse of tax funds for trial attorneys should stop immediately. Any school finance legislation passed by the Kansas legislature that does not address this abuse of taxpayer funds is a disgrace.

    Last year the Topeka public schools faced a financial scandal when it was revealed that roughly $1/2 million had been paid to pay fraudulent checks in central Asia. The schools had such lax financial controls that numerous bogus checks got paid. The schools continued to operate despite this long distance financial flim-flam. Sadly, the mainstream Kansas press outside of Topeka has largely ignored this scandal and treated it as an isolated event.

    This is another indication that there are plenty of funds available for financing Kansas public schools. The latest federal data indicate that Kansans, despite having lower than average incomes, are paying substantially more than the national average for our public schools. Kansans are paying more per pupil than for public schools in our neighboring states too. Higher expenditures mean higher taxes. Being a high tax state is one of the reasons that Kansas has suffered the largest reduction in private sector jobs during this century according to federal data.

    If the school districts can continue to litigate their way to higher taxes and spending by misusing tax dollars, the future of this state will be grim. Lawsuits promoting higher government spending and higher taxes will drive jobs and businesses to taxpayer friendlier states.

  • Free standing emergency department about to open in Wichita

    Free standing emergency department about to open in Wichita

    A project in Wichita received substantial subsidy from taxpayers. How have public policy issues been reported?

    Free standing emergency rooms are a recent trend in medical care. This is a facility that has equipment, personnel, and capability like a traditional hospital emergency room, but is not connected to a hospital. The first in Wichita is nearly ready to open, on Twenty-first Street east of Webb Road.

    Regarding the Wichita facility, the Wichita Business Journal quoted Malik Idbeis, chief information officer for Kansas Medical Center: “We see a lot of patients from the northeast side of Wichita. We thought it’d be nice to bring our style of care closer to them. There are a lot of neighborhoods and families in that area.” 1

    Here, the spokesman is promoting that facility is located convenient to (affluent) families in northeast Wichita. That wasn’t the argument made to the Wichita City Council last year when the facility applied for tax relief through the Industrial Revenue Bonds program. At that time, the facility was pitched as an attraction that would serve many out-of-town customers. City documents reported: “The current Economic Development Policy requires medical facilities to attract at least 30% of patients from outside the Wichita MSA. Kansas Medical Center reviewed the location of patients utilizing the emergency room in Andover, which revealed that 37% come from outside the Wichita MSA.” 2

    It seems a stretch to assume that the demographic characteristics of a hospital in Andover would also apply to an emergency room in Wichita, but the city council accepted this reasoning.

    Aside from this, the Wichita Business Journal article contains problems in its reporting of public policy issues. The reporter wrote: “Last summer, the Wichita City Council authorized issuing industrial revenue bonds for the project to help finance land and construction costs. With IRBs, the city serves as a pass-through entity for developers to obtain a lower interest rate on projects. IRBs require no taxpayer commitment.” (For background on IRBs in Kansas, see Industrial revenue bonds in Kansas.)

    It’s not likely the facility will save on interest costs with IRBs. It might save if the bonds were non-taxable, but these bonds are taxable, according to the agenda packet for this item. The article is correct in that IRBs require no taxpayer commitment — at least superficially. Here, I believe the reporter is letting readers know that the city makes no guarantee as to the bond repayment. If the city guaranteed repayment, that would help the borrower obtain a lower interest rate. But there is no guarantee.

    Instead, the benefit of the IRB program is lower taxes. The city estimates the first-year property tax savings to be $61,882, allocated this way: City of Wichita: $17,226. State of Kansas: $792. Sedgwick County: $5,520. USD 259 (Wichita public school district): $28,345. Savings like this would be realized for five years, plus another five years if employment commitments are met.

    This property tax forgiveness is, in many ways, a “taxpayer commitment.” If we don’t recognize that, then we must reconsider the foundation of local tax policy.

    In Wichita, as in most cities, the largest consumers of property tax dollars are the city, county, and school district. All justify their tax collections by citing the services they provide: Law enforcement, fire protection, education, etc. It is for providing these services that we pay local taxes.

    But through the Industrial Revenue Bond program, properties don’t pay property tax. (In the case of this facility, the property tax abatement is limited to 88 percent of the full tax burden.)

    Yet, this new facility will undoubtedly demand and consume the services local government provides — law enforcement, fire protection, and education. But it won’t be paying property tax to support these services (except for the 12 percent not abated). Others will have to pay this cost.

    We’re left with an uncomfortable and awkward circumstance. City officials tell us that we must pay property tax so the city can provide services. (In fact, last year the Wichita city manager recommended increasing property taxes to pay for more police officers.)

    At the same time, however, the city creates special classes of people who use services but don’t pay for them.

    Often the justification for economic development incentives is economic necessity, that is, the project could not be built without the incentive. That argument was not made for this project.

    Free standing emergency rooms

    Free standing emergency departments are controversial. The notes to this article hold references to news articles and academic studies looking at the costs and usage of these facilities. 3 4 5 6 7 8 9 10

    Researchers note that the emergency rooms are much more expensive than traditional doctor offices or urgent care facilities, yet many of the diagnoses made at the ERs are the same as made at non-emergency facilities.

    —
    Notes

    1. Heck, Josh. Medical group sets opening date for free-standing ER. Wichita Business Journal. Available at https://www.bizjournals.com/wichita/news/2018/04/06/medical-group-sets-opening-date-for-free-standing.html. ↩
    2. City of Wichita. Request for Letter of Intent for Industrial Revenue Bonds (E Wichita Properties, LLC/Kansas Medical Center, LLC). City Council agenda packet for June 6, 2017. ↩
    3. NBC News. You Thought It Was An Urgent Care Center, Until You Got the Bill. Available at https://www.nbcnews.com/health/health-care/you-thought-it-was-urgent-care-center-until-you-got-n750906. ↩
    4. Carolyn Y. Johnson. Free-standing ERs offer care without the wait. But patients can still pay $6,800 to treat a cut. Washington Post, May 7, 2017. Available at http://wapo.st/2pUCskD?tid=ss_tw&utm_term=.21bb76a447aa. ↩
    5. Rice, Sabriya.Texans overpaid for some medical services by thousands, study says. Dallas Morning News. Available at https://www.dallasnews.com/business/health-care/2017/03/23/texans-overpaid-medical-services-thousands-study-said. ↩
    6. Blue Cross Blue Shield of Texas. Rice U. Study: Freestanding Emergency Departments In Texas Deliver Costly Care, ‘Sticker Shock’. Available at https://www.bcbstx.com/company-info/news/news?lid=j0s5sm9d. ↩
    7. Alan A. Ayers, MBA, MAcc. Dissecting the Cost of a Freestanding Emergency Department Visit. Available at https://c.ymcdn.com/sites/ucaoa.site-ym.com/resource/resmgr/Alan_Ayers_Blog/UCAOA_Ayers_Blog_FSED_Pricin.pdf. ↩
    8. Michael L. Callaham. Editor in Chief Overview: A Controversy About Freestanding Emergency Departments. Annals of Emergency Medicine, Volume 70, Issue 6, 2017, pp. 843-845. Available at http://www.annemergmed.com/article/S0196-0644(17)31505-6/fulltext. ↩
    9. Ho, Vivian et al. Comparing Utilization and Costs of Care in Freestanding Emergency Departments, Hospital Emergency Departments, and Urgent Care Centers. Annals of Emergency Medicine, Volume 70 , Issue 6 , 846 – 857.e3. Available at http://www.annemergmed.com/article/S0196-0644(16)31522-0/fulltext. ↩
    10. Jeremiah D. Schuur, Donald M. Yealy, Michael L. Callaham. Comparing Freestanding Emergency Departments, Hospital-Based Emergency Departments, and Urgent Care in Texas: Apples, Oranges, or Lemons? Annals of Emergency Medicine, Volume 70, Issue 6, 2017, pp. 858-861. Available at http://www.annemergmed.com/article/S0196-0644(17)30473-0/fulltext. ↩

  • Wichita helps out the Ambassador Hotel campaign

    A page on the City of Wichita’s official, taxpayer-funded website provides information on the February 28th special election regarding a guest tax rebate for the Ambassador Hotel in downtown Wichita. While the page provides useful information, it makes a claim that is not accurate, and one which may persuade Wichita voters to vote Yes.

    Specifically, a page on the city’s website states: “Developers would be allowed to collect the rebate for 15 years for costs associated with redeveloping the hotel.”

    An informational sheet also on the city’s website says much the same, claiming that the purpose of the guest tax rebate is to “reimburse them for costs associated with redeveloping the hotel.”

    Many city programs, such as TIF and CID, have specified, allowable uses for the funds provided by these incentive programs. But this guest tax rebate program does not. When the city makes these claims regarding the use of the guest tax, it makes it sound almost benign. Voters might feel persuaded to vote in favor of the rebate program using a reason that doesn’t exist in fact or in contract.

    The guest tax is mentioned on pages 22, 25, 27, 81, 82, 95, and 98 of the agenda packet for the September 13, 2001 city council meeting. The packet includes the actual agreement between the city and the Ambassador Hotel development team.

    None of the references to the guest tax rebate say anything about how the money may be used.

    I asked the city about this, as to whether the city was adding extra meaning to the guest tax rebate that was not specified in the contract between the city and the hotel developers.

    A response from city attorney Gary Rebenstorf disagreed with my contention. Rebenstorf wrote “The explanation you question is a factual statement and accurately reflects the purpose of the rebated taxes to help with costs associated with redeveloping the hotel. The development agreement, which details the development project, provides for the incentive. The guest tax rebates will provide operating cost relief with added cash flow to increase the developer’s capacity to carry more private debt and/or equity and thus cover costs associated with redevelopment of the hotel.”

    But you be the judge. Is the guest tax rebate necessary, and will it be used for the purposes mentioned in city attorney Rebenstorf’s statement?

    There’s no contract that requires the hotel developers to do so.

    Furthermore, the hotel developers have said the hotel will open even if the guest tax rebate measure does not pass in the February 28th election.

    The guest tax measure is more properly viewed as a ninth potential layer of taxpayer-funded government subsidy provided for this hotel. Eight layers are already in place and will not be affected by the outcome of the election.

    It is only the ninth layer that is in question — a ninth layer that is unnecessary, and that goes directly to the developer’s pockets, despite the claims of the city’s attorney.

    I believe there’s a technical business and legal term for that: gravy.

  • Downtown Wichita tax base is not growing

    Downtown Wichita tax base is not growing

    There’s been much investment in downtown Wichita, we’re told, but the assessed value of property isn’t rising.

    Wichita city leaders have promoted public investment in downtown Wichita as wise because it will increase the tax base. Over the past ten years, we’re told that there has been one billion dollars in investment in downtown Wichita, including projects in progress.1

    To evaluate the success of the city’s efforts, we might look at the change in assessed property valuation in downtown Wichita over past years. A way to do that is to look at the valuations for property in the Wichita downtown self-supporting municipal improvement district (SSMID). This is a region of the city that pays an additional property tax to fund the activities of the Wichita Downtown Development Corporation. Its boundaries are roughly the Arkansas River east to Washington, and Kellogg north to Central.

    Assessed valuation is the basis for levying property tax. The process starts with an appraised value, which is targeted to be fair market value for the property, or for commercial property sometimes an income-based method is used. Then, that is multiplied by 25 percent for commercial property, or by 11.5 percent for residential property. This produces the assessed value. Multiply that by the sum of the several mill levy rates that apply to the property, and you have the total property tax for that property.

    Click for larger.
    With all the new projects coming online in downtown Wichita, we should expect that the assessed valuation is rising. As someone converts an old, dilapidated property into something more valuable, appraised and assessed values should rise. As new buildings are built, new appraised and assessed value is created where before there was none (or very little).

    So what has happened to the assessed valuation of property in downtown Wichita, using the SSMID as a surrogate?

    The answer is that after a period of increasing values, the assessed value of property in downtown has been declining. The peak was in 2008. The nearby table holds the figures.

    This is the opposite of what we’ve been promised. We’ve been told that public investment in downtown Wichita builds up the tax base.

    Some might excuse this performance by noting there’s been a recession. That’s true. But according to presentations, there has been much activity in downtown Wichita. Hundreds of millions of dollars over the last ten years, we are told.

    Click for larger.
    A few years ago the city said that the decline was due to the legislature exempting business equipment and machinery from the property tax rolls. Undoubtedly this was true when the law took effect, which was in 2006. It could also explain the some of the drop for a few years after that.

    But for the last several years this factor is gone. At any rate, I believe its effect was small compared to the value of real property.

    Also: How how does the assessed valuation in the SSMID compare to the city as a whole? Nearby is a chart of the percent change in assessed valuation for each year, comparing the SSMID with the city as a whole less the SSMID. In other words, Wichita minus downtown. The SSMID is underperforming the city.

    So why isn’t the assessed valuation rising? Why is it falling during the time of huge successes?

    I don’t have enough data to answer this question. But we need to know.

    —
    Notes

    1. Fluhr, Jeff. Downtown Wichita being transformed. Wichita Eagle, September 4, 2016. http://www.kansas.com/opinion/opn-columns-blogs/article99291922.html. ↩
  • Wichitans willing to fund basics

    Wichitans willing to fund basics

    Wichita City Hall SignIn Wichita, voters are willing to pay a higher sales tax for fundamentals like infrastructure and water supply, and less willing for business incentives, downtown development, and convention centers.

    In April Kansas Policy Institute commissioned SurveyUSA to conduct a scientific poll concerning current topics in Wichita. The press release from KPI, along with a link to the complete survey results, is available at Poll: Wichitans don’t want sales tax increase.

    In a series of questions asking if Wichita voters would be willing to pay a higher sales tax to provide certain services, a pattern appeared: Voters are willing to pay for things that are fundamental in nature, and less willing to pay for others.

    As can be seen in the nearby chart, voters are willing to pay for infrastructure, and more willing to pay for maintenance of existing infrastructure than for new infrastructure. Voters are most willing to pay for securing a long-term water source.

    kansas-policy-institute-2014-04-willing-to-fund

    For business incentives, downtown development, and convention centers, Wichita voters express less willingness to pay higher sales tax to fund these items.

    For the first three items, the average was 68 percent of voters willing to pay a higher sales tax. For the last three, the average is 30 percent.

    Following is the complete text of the questions:

    Would you personally be willing to pay a higher sales tax in the city of Wichita to fund incentives to businesses expanding in Wichita or moving here from other states?

    Would you personally be willing to pay a higher sales tax in the city of Wichita to fund maintenance work on existing infrastructure, such as sewers and roads?

    Would you personally be willing to pay a higher sales tax in the city of Wichita to fund new infrastructure, such as new highways and passenger rail connections?

    Would you personally be willing to pay a higher sales tax in the city of Wichita to continue developing downtown Wichita with apartments, businesses, and entertainment destinations?

    Would you personally be willing to pay a higher sales tax in the city of Wichita to expand or renovate convention spaces, such as the Hyatt Hotel and Century II?

    Would you personally be willing to pay a higher sales tax in the city of Wichita to secure a long-term water source?

  • Examining claims in favor of the proposed Wichita sales tax

    Examining claims in favor of the proposed Wichita sales tax

    In an advertisement in the Wichita Eagle and in a mailer sent to Wichita voters, the “Yes Wichita” group makes a series of statements regarding plans for a new water supply. It’s important that Wichita voters be aware of the complete facts and context of these claims so that they make an informed decision on how to vote.

    The city has proposed a one cent per dollar sales tax. The largest portion — 63 percent or $250 million — is earmarked for a new water supply. Voters will see this question on the ballots for the November 4, 2014 election.

    Advertisement from "Yes Wichita."
    Advertisement from “Yes Wichita.” Click for larger version.
    Here’s what the “Yes Wichita” group has stated under the heading “The Plan For Affordable Long-term Water Supply” along with what voters also need to know.

    Save taxpayers $221 million over 20 years in costs. This statement is true only if the Wichita city council decides to pay for ASR expansion by using long-term debt. That decision has not been made. Besides that, there are other ways to raise this money. And if using debt for water projects is bad, why did the city borrow over $200 million for the current ASR project, and hundreds of millions for other water projects? See By threatening an unwise alternative, Wichita campaigns for the sales tax.

    Wichita Water Supply Plan Capital Costs
    Wichita Water Supply Plan Capital Costs
    Replace 60 year old aging pipelines so water is transported safely. The sales tax plan for water calls for the augmentation of one pipe, as shown in the city’s plan. Not replacing pipes plural, as this advertisement indicates. Plus, the pipe that is the subject of the city’s water plan is 60 years old, but there is no indication that it needs replacement.

    Tourists, visitors and renters help pay for our water. This is true. It is also true that if funds were raised through higher water bills, these people would also pay. Also, city documents regarding the sales tax state: “The State of Kansas estimates that 13% of sales taxes paid in the Wichita area are paid by non-residents based on a report at www.ksrevenue.org/pullfactor.html.” But at the “Yes Wichita” website, there is a different claim: “If we fund a new water source through a sales tax instead of water bills or property taxes, visitors and tourists will pay the sales tax, reducing the burden of this cost to Wichitans by about one-third.” Which is it? 13 percent, or 33 percent? Will “Yes Wichita” show us their figures or provide a reference for the basis of this claim?

    Prevent future high water rate increases. This is true. If we experience a prolonged drought, water rates would have to rise to cover the fixed costs of the water utility. That is, if we have such a drought. That may not happen, or it may not happen for many years.

    Fund ASR improvements which would provide new wells and a water storage site. This is true. What’s left is to decide whether making these additional investments in the ASR project is wise. We’ve learned that the expectations of ASR have been cut in half. We’ve learned that the ASR project is still in its commissioning phase, and it has not been turned loose for actual production for any significant period. I do not believe we have enough knowledge and experience to judge the success or failure of ASR. See Should Wichita expand a water system that is still in commissioning stage?

  • Kansas economy debated in Wichita

    Last Thursday at a meeting of the City Clerks and Municipal Finance Officers Association of Kansas, the effectiveness of the federal economic stimulus and the Kansas economy were discussed. Americans For Prosperity National Director of State Operations Alan Cobb and Kansas Secretary of Revenue Joan Wagnon were the participants, with Dale Goter, Wichita Governmental Relations Manager, as moderator.

    Wagnon started the debate by reciting the distress that the economy has experienced over the past year. She said that these conditions said to the new president “You need to do something.” She said that about 10,000 jobs were picked up in Kansas by the federal stimulus plan. The stimulus worked, she said.

    Cobb said that to conclude that the stimulus has worked is premature. He said that in Kansas 6,500 jobs were created at a cost of $500 million, a cost of about $75,000 per job created. There’s a fundamental problem in politics, he said, in that politicians look at the short-term, not the long term. In the long term, there is no question that the stimulus spending will result in lower growth, as the borrowed money must be repaid. It’s the “seen” versus “unseen” problem.

    Goter asked: “What if nothing had been done?”

    Cobb replied that the President Obama’s team had said that without the stimulus, unemployment would rise to 7.5%, noting that today the rate is 10.2%. Wagnon relied that without intervention, more Kansas banks would have failed, and that the flow of credit would have shut down more than it has. Kansas would have run out of unemployment compensation funds, too, requiring the state to ask employers to make larger contributions at the same time they were laying off employees, resulting in a downwards spiral. She recited a list of construction projects and counties that received stimulus money.

    Wagnon referred to lessons learned during the Great Depression, that the power of the federal government was used to save the economy. Cobb replied that the lesson to be learned is the opposite. It took ten years to recover. Massive government intervention and higher taxes prolonged the Great Depression, he said.

    Goter asked: “Where do we go from here?”

    Wagnon explained that we spent a lot of our stimulus money on K-12 education. This helped the state get through fiscal years 2009 and 2010. For 2011 — the budget year that the Kansas legislature will begin working on in January — the stimulus money is no longer available. She said that we’re likely to see another round of cuts, not only in budget expenditures, but also in tax expenditures.

    There’s no appetite for raising taxes, she said. She noted that the 2010 Commission has recommended raising taxes instead of cutting spending.

    Cobb replied that the stimulus money is misnamed, as much of the spending is not stimulative. It simply replaced existing state spending and delayed some tough political decisions. Spending is the real problem, he said, noting that if spending had increased at just the rate of population growth plus inflation over the last six or seven years, Kansas would have perhaps $500 million in the bank now.

    Wagnon referred to the large number of governmental bodies in Kansas, saying that we may not be able to afford small school districts and the large number of county governments.

    Goter asked “Have we gone too far with tax exemptions?”

    Wagnon referred to these as tax expenditures. She said there’s a report on the Kansas Revenue Department website that details the cost of these. We should look at the cost of these expenditures, she said. The effectiveness of economic development tools should be looked at, and we’re giving away more than we need to in order to attract jobs.

    Wagnon said we’ve phased out the estate and franchise tax, and we need these revenues. She also mentioned the giveaways of employee withholding tax that Kansas has granted, where a company gets to use its employee tax contributions to repay economic development incentives. “What’s the value of a job, then, at that point?” People go after tax expenditures because they’re confidential and easier to get than going through the appropriations process, she said.

    Cobb said he agrees with some of the problems with these exemptions, although they’re not really expenditures, as the money belongs to the people to begin with. A better policy is lower tax rates for everyone with fewer exemptions. Corporate welfare does not grow a state’s economy, he added. Government is not equipped to pick winners and losers in the economy. Companies make location decisions based on labor force, tax rates, and markets, with incentives viewed simply as gravy.

    Analysis

    One of the most important lessons to take from this debate is to realize that the attitude commonly held by government officials such as Joan Wagnon is that taxes belong to the government first. Government, according to many officials, has a legitimate claim on the income and property of citizens, and if a reduction is given, it’s considered a cost to government. This is why Wagnon called them “tax expenditures.” This is the attitude of our former governor. The Kansas school spending lobby feels the same way, too.

    To learn more about the “seen and unseen” that Cobb referred to, read this excerpt from Economics in One Lesson, in which Hazlitt explains the fallacy of the broken window.

    Kansas Senator Chris Steineger has introduced legislation to reduce the number of counties in Kansas, as reported in Steineger introduces Kansas county consolidation bill.

    A report by the Kansas Division of Legislative Post Audit on the effectiveness of $1.3 billion spent by Kansas on economic development incentives is at Determining the Amounts the State Has Spent on Economic Development Programs and the Economic Impacts on Kansas Counties. Reporting from the Lawrence Journal-World is at Effect of economic spending in doubt. Readers of this site know that the effectiveness of economic development efforts by government is one of the issues I feel most strongly about. My recent testimony on this matter to the Wichita City Council is at Wichita universal tax exemption could propel growth.

  • In Kansas fourth district, debates reveal differences

    In this article, Wendy Aylworth of Wichita takes a look at candidates for the Republican Party nomination for United States Congress from the fourth district of Kansas and their responses to questions at several candidate forums. In particular, she examines the candidates and their attitudes towards free trade.

    The well-known candidates for this nomination (and their campaign websites) are Wichita businessman Jim Anderson, Wichita businessman Wink Hartman, Wichita businessman Mike Pompeo, and Kansas Senator Jean Schodorf. Election filing records maintained by the Kansas Secretary of State indicate that Paij Rutschman of Latham has filed for the Republican Party nomination, but little is known about this candidate at this time, and no website is available.

    Aylworth supports the campaign of candidate Mike Pompeo.

    Part one: Flip-flops, free markets, and NAFTA

    Are you getting a good chuckle yet when listening to the forums featuring the candidates vying for the Republican nomination for the 4th Congressional District seat? If you haven’t yet, you’ll find a few here for your enjoyment.

    We’ll look at the changes in the candidates over the various forums and appearances.

    The positions of three of the candidates appear similar on the surface, but their explanations and tone of voice often reveal whether the candidate has a real grasp of the topic. Three of the four candidates claim to be in favor of limiting the scope of government and shrinking it down to only the powers granted it in the Constitution, yet the answers given by these same candidates reveal a conflicting ideology.

    Have there been flip-flops by the candidates? Yes.

    (more…)

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