Voice For Liberty

Tag: Chris Steineger

  • Kansas Bioscience Authority hearings, day 2

    At the second day of testimony (January 26, 2012) regarding a forensic audit of the Kansas Bioscience Authority, a representative of Kansas Governor Sam Brownback was strongly critical of the audit itself, and also of the Board of Directors of KBA. Kansas Secretary of Agriculture Dale A. Rodman, who oversaw the audit process on behalf of the Brownback Administration, also said that legislators who voted to form the KBA should “feel outraged that a golden opportunity that you helped create was taken away from your efforts.”

    Rodman urged the committee to step back and look at the situation from a distance, saying that many of the issues are “deep and buried.” To him, he said the important issues are first, is the KBA obtaining the performance expected, and second, is the KBA worthy stewards of Kansans’ money?

    Based on his investigation, Rodman listed several measures that troubled him, specifically: “The KBA spent $200,000 per job before Tom Thornton and $700,000 per job after he became the CEO of the KBA.” Thornton is the former CEO who resigned shortly after the audit process started. At yesterday’s hearing, Senator Chris Steineger, a Kansas City Republican, presented figures that estimated a cost of $750,000 per job created, using a slightly different set of data.

    A second troubling measure, Rodman said, is that KBA spent “nearly 40 cents of every dollar invested on overhead expenses.” He said the KBA board must be responsible for these results.

    In a separate letter sent to KBA Board Chairman Dan Watkins, Rodman listed more detailed concerns, including that only 347 jobs are shown by KBA as having been created since 2007. Another concern, he said, is that there appear to be many instances of double counting of invested funds. He said that certain companies were not reporting as required, and some numbers were being “filled in.”

    Rodman said the expenditure of over $18 million for KBA headquarters was excessive, a concern shared by many legislators.

    What amazed Rodman, he said, was when acting KBA CEO David Vranicar told Rodman he was not there to create jobs. This, along with the earlier evidence he cited, showed him that KBA was not fulfilling the mission of the Kansas Economic Growth Act, the legislation that created KBA.

    In follow-up correspondence from KBA, Watkins cited the larger mission statement of KNA, and also that “the longer-term mission is more robust: to build a bioscience infrastructure that will generate high-paying bioscience jobs today and for future generations of Kansans.” Near-term job creation is not the sole focus, the letter added.

    Rodman also spoke about the conflict of interest issues, which were prominent in Wednesday’s hearings. BKD auditors said that KBA board followed policy by disclosing that they had a financial interest in a potential KBA investment or grant, and refraining from voting. But Rodman said that is not enough: “Whether or not it is legal is not the issue. It does not pass the smell test. If it smells bad, it is bad, and you should not do it.”

    Rodman cited the governing Kansas statute, which reads “No part of the funds of the authority shall inure to the benefit of, or be distributed to, its employees, officers or members of the board.” The statute has exceptions which do not apply in this case.

    Rodman, both in his verbal and written testimony, cited the case of KBA board member Bill Sanford. Quoting from the KBA audit, Rodman said “Bill Sanford is the COB and 14% owner of NanoScale, a bioscience company that received four grants totaling $674,996 from KBA.”

    Relating a discussion he had with Sanford, Rodman told the committee: ‘Director Sanford looked at me and said ” If you want to get something done, you have to hire someone like Thornton. If we had hired a laid-back Kansan we would not be where we are at today.’ You know, I have to agree with him, we would not be in this room today. With a good Kansan in charge we would not be having this meeting.”

    The issue of Thorton’s unethical behavior is at the center of this affair, with a related issue being whether Thornton’s departure solves all problems with the KBA, or if there is a deeper problem.

    Also highlighted by Rodman was the issue of missing intellectual property. This refers to the loss of data, along with backups of that data, on the so-called “J-Drive,” a shared and restricted storage location on KBA’s network. Thornton also erased and digitally scrubbed data from his personal laptop computer. Computer forensics experts were not able to recover any of this missing data.

    Rodman told the committee that the KBA board, immediately after learning that Thornton quit to go work for a competing firm (Cleveland Clinic Innovations), should have issued a “cease and desist” order, saying “This will inform the competitor that knowledge the employee has belongs to the former employer, and use of that information will result in legal action.” As he believes the KBA board did not do this, Rodman said he concludes “Kansas has lost intellectual property.”

    Summarizing, Rodman said that “Thornton was a mistake,” and that the KBA board should have recognized this. He urged the committee to fix the problem, as Kansas needs growth in the bioscience industry.

    Senator Susan Wagle, a Wichita Republican who chaired the meeting, noted the statute that Rodman cited regarding conflicts of interest, saying that it prevents board members or employees from receiving a financial benefit based on their position. The BKD audit, she said, cites many such instances of financial benefits, and in every instance the audit concludes that since board members disclosed their conflict was resolved, and that procedures are in place to prevent conflicts of interest.

    Of the BKD audit generally, Rodman said the document is complex, and “probably deliberately so.” Wagle, who has been concerned that the audit is “sanitized” and doesn’t present the full scope of issues and problems, asked “Could that be sanitizing conclusions?” Rodman demurred, answering “There was a lot of work on the report.”

    Senator Ty Masterson, a Republican from Andover, asked Rodman what needed to be changed at the KBA. Rodman said he wasn’t ready to answer that now, despite having thought about it. He did say there had to be some dramatic changes in the system.

    Masterson also asked about the costs of the audit: Did Thornton’s action in deleting data increase the cost of the BKD audit? Rodman said we should go after Thornton for possible increased costs of the audit.

    A question from Representative Les Osterman, a Wichita Republican, framed the issue this way: Do we need different or better rules and laws, or does the problem lie with the composition of the KBA board? Rodman answered that If the KBA board had done their job, we wouldn’t be here today. He repeated that there is a statute to take care of conflicts of interest, but there is a problem with the governance of the KBA board.

    Follow-up by Republican Senator Ray Merrick expressed concern that since Thornton, who he labeled a “bad apple,” is gone, the problem is over. But the same board is in place, the same people are in charge, and that he was not satisfied going forward.

    But not all members of the committee shared these concerns. Tom Holland, a Democratic Senator from Baldwin City, pressed Rodman as to whether intellectual property had actually been stolen from KBA due to the loss of data from the J-Drive and Thornton’s computer, or was there only the potential for that? Rodman said yes, intellectual property was taken, although that was not stated in the audit.

    Holland repeated his questions from yesterday: Does KBA have appropriate management procedures, policies, and controls in place? And does KBA follow these consistently? Snyder, the BKD auditor, had answered yes to both of these questions, although with one exception. Today, Holland pressed Rodman if he took “ownership” of the BKD audit. Eventually Rodman said he did. Holland then asked if the audit was “an accurate summary of life at the KBA.” Rodman said yes, but with qualifications, and Wagle expressed her concern, also.

    There is a factor not brought up in testimony, nor in my reading of the BKD audit report, that complicates the KBA governance and may be a source of problems. The KBA has an independent source of revenue that is not dependent on appropriations from the legislature. This source is the incremental growth in tax withholding from employees of Kansas bioscience companies and research institutions. I asked both Wagle and a spokesperson for Governor Brownback if this was a factor or a problem. Both said this is a question for the KBA.

  • Kansas committee asks if KBA audit did enough to expose problems

    By Bob Weeks, Special to KansasWatchdog.org

    Members of the joint Commerce and Economic Development Committees expressed concern that a forensic audit of the Kansas Bioscience Authority was not broad enough and that deliberate deletion of data from a KBA computer left questions unanswered.

    On Wedesday James Snyder, managing partner for BKD’s Forensics and Valuation Services, told the committee that while his firm was hired and paid by KBA, Kansas Governor Sam Brownback’s administration was heavily involved. Secretary of Agriculture Dale Rodman served as the main contact for the Brownback Administration, although Caleb Stegall, the governor’s chief lawyer, and Steve Anderson, the Budget Director, also participated.

    Snyder told the committee the audit process was designed to avoid a situation where after the final report was released, people would ask why certain facts were not considered or covered. “This process was specifically designed to avoid that, and it worked pretty well,” he said.

    The Kansas Legislature created the KBA in 2004 and gave it $581 million to bring bioscience research and jobs to Kansas. KBA has been under fire for expenses and salaries paid to top executives and for giving grants to fund projects out of state.

    Any disputes about the report’s contents were ironed out by January, but on Sunday, the day before the report was to be released, Rodman raised a difference of opinion over a possible conflict of interest involving former KBA board member Angela Kreps. Snyder characterized this as the only difference of opinion, and that it was a narrow and minor one.

    Committee chair, Sen. Susan Wagle, a Wichita Republican, recognized that BKD’s position was “difficult,” as the firm was hired and paid by KBA, but it was also in frequent communication with the Brownback Administration. Snyder said the administration was involved in an oversight role, and also in defining the scope of the audit.

    Senator Ty Masterson, an Andover Republican, expressed concern over possible deletion of computer files and that BKD could only “dive into that which you had, that you were provided.” BKD’s timeline of the audit showed that KBA leadership was apprised of an audit on March 10th, 2011. The next day CEO Tom Thornton accessed a computer hard drive on KBA’s network. The drive was accessible to only four people and held personnel records and confidential company information.

    BKD was hired on April 11th, a fact Masterson said he found “fascinating” because KBA used a 30-day rolling backup scheme that would not have retained files deleted on or before March 10. The time lag from March 11th to April 11th means that if information was deleted from the J-Drive, it was not available to the BKD audit team.

    The timing of this is “highly suspect,” Masterson said.

    Snyder said the audit team had access to much information and that BKD received everything they asked for, but Masterson pointed out that we don’t know what might have been missing. Thornton’s personal laptop computer was erased or “wiped” days after the audit was called for in a way that made it impossible for the computer forensic team to recover the deleted data.

    Snyder said that the committee should have high confidence in the audit’s findings and that the number of people and computers the team had access to was in many cases “extraordinary.” He also said that core KBA business records had integrity and there was no reason to suspect these systems had been compromised.

    Masterson quoted from page 133 of the audit report: “Our analysis found 301 payments without a contract, including 102 payments that violated KBA’s Contract Policy. The total contract cost involved totaled $1,219,271.81 in payments without a contract, including $571,828.20 in payments which violated Contract Policy.”

    Masterson noted that there’s no indication anything was technically illegal, but that the purview of the committee went beyond that. “Why do we put policies in place? It’s so that we can show best practice, best stewardship. You have shown over 300 violations of policy … I don’t know how we can paint this in the light that this is instilling confidence, and that it is clearing the air.”

    Masterson also said that the best case seems to be that there was unethical management combined with inadequate oversight. He said there is the possibility of a coordinated cover up of behavior that could potentially be illegal.

    Snyder answered that over time they observed “increasing sophistication” of board participation and compliance with procedures and that there had also been changes initiated by the board that offered protection.

    Wagle said she received faxes from KBA employees expressing concern that the Senate Commerce Committee received altered documents. “It became very apparent that we could not rely on the information we were receiving,” she said. She asked Snyder if it was possible that documents were altered or erased so BKD did not see them.

    Snyder said that although one expense report was altered, there was no indication of a “systematic issue” of alterations or erasures.

    Wagle and Snyder disagreed over the extent of BKD’s contact with Wagle contending that it did not constitute an “interview” as claimed in the audit report.

    Democratic Senator Tom Holland asked Snyder two questions relating to whether KBA has business policies and procedures in place to effectively run the organization, and has KBA consistently followed these? Snyder answered yes, with very few exceptions. “We found a very high level of compliance.”

    Republican Senator Chris Steineger of Kansas City asked a series of questions regarding the mission of the KBA, which is, according to KBA “advancing Kansas’ leadership in bioscience” as well as creating investment and jobs in Kansas. Steineger expressed concern that much of KBA’s funding is spent on overhead, such as lawyers, architects, office buildings, travel, and dining.

    Steineger distributed a series of calculations based on KBA data in the audit that he said reveals that KBA made $265 million in commitments resulting in 1,347 jobs for a cost of $196,808 per job created.

    Steineger showed that removing the largest company from the mix — Quintiles, which created 1,000 jobs for a KBA contribution of $3.5 million — the remaining jobs cost more than $750,000 each.

    Senator Jeff Longbine, an Emporia Republican, mentioned that there had been criticism of the KBA for insider activities among board members, conflicts of interest, cronyism, and fraud and asked Snyder if these accusations were true. Snyder said these generalized accusations were not true, although there was one instance where there was “some technical violation of a conflict of interest rule.” He said that KBA is not “fraught with fraud or self-dealing.”

    The audit report also noted that KBA made regular use of executive sessions not open to the public and that, “No notes or recordings are made of Executive Sessions. This is a common business practice. Therefore, information discussed in Executive Session was not available for BKD’s review and could not be considered with regard to the findings of this report.”

    In response to another question, Snyder said that no changes were recommended to the Kansas Economic Growth Act, the legislation that created the KBA. There were some recommendations to KBA board policies and procedures.

    Wagle also noted that conflict of interest rules don’t really resolve conflicts. Generally, if KBA board members disclose that they have a conflict of interest — such as a company they have financial ties to getting a grant — they can refrain from voting to satisfy the rules. “To me, I don’t know if it’s okay with the people of Kansas,” Wagle said.

    The joint hearing will continue tomorrow with a presentation from Rodman.

    This article originally appeared on Kansas Watchdog.

  • Kansas and Wichita quick takes: Thursday April 14, 2011

    Kansas State Board of Education vs. Walt Chappell. There is another development in the tenure of Walt Chappell, Kansas State Board of Education member. Chappell holds some opinions that differ from the rest of the board, or at least the majority of the board, and they don’t like Chappell expressing his opinions in newspaper columns, etc. The board would rather have a unified front, even if the position taken is incorrect. Of particular, the issue of the unspent Kansas school fund balances has been prominent. Kansas Watchdog reports on a recent meeting of the board where the issue of Chappell and his speech was an issue.

    Protest on tax day. A message from Wichita State University Students for Liberty: “You are cordially invited to a tax protest on Friday, 15 April at 3:00 pm. It will be held on the southeast corner of 21st Street and Rock Road. I and several members of WSU Students for Liberty will be in attendance, and we welcome yours as well.” For more information see Wichita State University Students for Liberty.

    Tax day tea party events. AFP Kansas has a list of tea party events at Kansas Tea Parties. Nothing in Wichita, though.

    Steineger, Kansas senator, to address Pachyderms. This Friday (April 15) Kansas Senator Chris Steineger will speak to the members and guests of the Wichita Pachyderm Club on the topic “Using Business Principles to Restructure State and Local Government For Long-Term Efficiency.” Steineger, of Kansas City, has served in the Kansas Senate since 1997 and in December switched his affiliation from the Democratic to Republican party. Steineger has voted with Republicans on fiscal issues for many years. Explaining why he switched parties, he wrote “I am a fiscal hawk who believes Americans have been borrowing, spending, and living beyond their means for too long.” Steineger has spoken at events organized by Americans for Prosperity.

    Trade protectionism makes us poorer. The president of a large labor union is urging President Obama to not implement pending free trade agreements. Should we have free trade with other countries, or not? Richard W. Rahn explains, starting with the complexity of even the most humble and simple of consumer goods — the pencil — as highlighted in yesterday’s article: “As simple as a pencil is, it contains materials from all over the world (special woods, paint, graphite, metal for the band and rubber for the eraser) and requires specialized machinery. How much would it cost you to make your own pencils or even grow your own food? Trade means lower costs and better products, and the more of it the better. Adam Smith explained that trade, by increasing the size of the market for any good or service, allows the efficiencies of mass production, thus lowering the cost and the ultimate price to consumers. … It is easy to see the loss of 200 jobs in a U.S. textile mill that produces men’s T-shirts, but it is not as obvious to see the benefit from the fact that everyone can buy T-shirts for $2 less when they come from China, even though the cotton in the shirts was most likely grown in the United States. Real U.S. disposable income is increased when we spend less to buy foreign-made products because we are spending less to get more — and that increase in real income means that U.S. consumers can spend much more on U.S.-made computer equipment, air travel or whatever. … The benefits of trade are not always easy to see or quickly understand, and so it is no surprise that so many commentators, politicians, labor leaders and others get it wrong.”

    City government under control. From Reason.tv: “While cities across the country are cutting services, raising taxes and contemplating bankruptcy, something extraordinary is happening in a suburban community just north of Atlanta, Georgia. Since incorporating in 2005, Sandy Springs has improved its services, invested tens of millions of dollars in infrastructure and kept taxes flat. And get this: Sandy Springs has no long-term liabilities. This is the story of Sandy Springs, Georgia — the city that outsourced everything.” Click here for video.

  • Kansas and Wichita quick takes: Sunday April 10, 2011

    Local elections, qualifications of Wichita’s elected officials. On today’s edition of the KAKE Television public affairs program This Week in Kansas, Wichita State University’s Ken Ciboski, Chapman Rackaway of Fort Hays State University and myself join host Tim Brown to discuss local elections in Kansas. Mention was made of a recent article I wrote that was critical of the educational attainment of some Wichita City Council members. See Education gap on Wichita City Council.

    Steineger, Kansas senator, to address Pachyderms. This Friday (April 15) Kansas Senator Chris Steineger will speak to the members and guests of the Wichita Pachyderm Club on the topic “Using Business Principles to Restructure State and Local Government For Long-Term Efficiency.” Steineger, of Kansas City, has served in the Kansas Senate since 1997 and in December switched his affiliation from the Democratic to Republican party. Steineger has voted with Republicans on fiscal issues for many years. Explaining why he switched parties, he wrote “I am a fiscal hawk who believes Americans have been borrowing, spending, and living beyond their means for too long.” Steineger has spoken at events organized by Americans for Prosperity.

    Washington Monument strategy. At about 11:00 pm Friday night, President Barack Obama spoke on television in front of a window where the Washington Monument could be seen in the background. He said that thanks to the just-struck agreement to continue funding the operations of the federal government, the monument would be open to visitors the next day. This is explicit use of the Washington Monument strategy, in which the response to any proposed cut or slowdown in the growth of government is illustrated in the most painful or visible way. As the Wikipedia entry states: “The most visible and most appreciated service that is provided by that entity is the first to be put on the chopping block.” … The president also said “I would not have made these cuts in better circumstances.”

    Soros conference online. This weekend’s conference of the Institute for New Economic thinking has quite a few papers and videos online at the conference’s website. Surprise: Keynes and his economic theories are revered. Attendees are treated to papers and presentations like this: “It is the interdependence between the rule of law and the production and distribution of goods and services that gives capitalism its unity. The autonomy of the economy is thus an illusion, as is its ability to self-regulate. And we are in the current mess because the scales have tipped slightly too far in favour of this illusion. This shift in the balance represents an inversion of values. Efficiency, it was believed, would be better served if the workings of governments were regulated more tightly (especially in Europe, although the theory originates in America) and if the markets were deregulated to a greater extent. The ingenuity of the financial markets initially, then their blind sightedness, did the rest.” … What?

    Economics in one lesson this Monday. On Monday (April 11), four videos based on Henry Hazlitt’s class work Economics in One Lesson will be shown in Wichita. The four topics included in Monday’s presentation will be The Lesson, The Broken Window, Public Works Means Taxes, and Credit Diverts Production. The event is Monday (April 11) at 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.

    Wichita City Council this week. On Tuesday, the Wichita City Council considers only consent agenda items. Then, tributes — including video — to outgoing Council Members Paul Gray, Sue Schlapp, and Roger Smith and installation of new members. A new vice mayor will also be selected. … I don’t know if the city will be hosting a luncheon afterward. Two years ago a celebratory luncheon titled “Wichita City Council Changing of the Guard” cost over $1,000.

  • Kansas and Wichita quick takes: Tuesday December 21, 2010

    Steineger switches teams. Chris Steineger, a Kansas State Senator from Kansas City, has switched to the Republican Party. As a Democrat, Steineger had compiled a voting record more conservative than many senate Republicans. On the Kansas Economic Freedom Index for this year — recognizing that supporting economic freedom is not the same as conservatism or Republicanism — Steineger had a voting record more in favor of economic freedom than that of 15 of the senate’s Republicans.

    Kansas school funding reform to wait. Incoming Kansas Governor Sam Brownback says that the Kansas economy comes first, and then school finance, Medicaid, and KPERS in a “year or two.” Tim Carpenter of the Topeka Capital-Journal reports in Revitalizing the Kansas economy is the governor-elect’s No. 1 priority.

    Tax cuts in Kansas not likely, says new senate leader. Yesterday Kansas Senate Republicans elected Jay Emler of Lindsborg to be the majority leader, replacing Derek Schmidt, who will become Attorney General. As the Associated Press reports, Emler is not in favor of any tax cuts, including a repeal of the recent increase in the statewide sales tax.

    McGinn to lead Ways and Means. Carolyn McGinn, a Kansas Senator from Sedgwick, will chair the Ways and Means Committee. This important committee handles appropriations — in other words, the actual spending of money. On the Kansas Economic Freedom Index for this year, McGinn scored seven percent, tying her with Senate President Stephen Morris as the Republicans most opposed to economic freedom. She also scores low in the Kansas Taxpayer Network/Americans for Prosperity ratings.

    Kansas holds on to House seats. At one time it was feared that the 2010 U.S. Census might find Kansas losing one of its four seats in the U.S. House of Representatives. But Kansas will retain them. Texas picks up four seats, Florida adds two, while Georgia, South Carolina, Arizona, Nevada, and Utah gain one seat each. Ohio and New York lose two each, while Illinois, Iowa, Massachusetts, Michigan, Missouri, and New Jersey lose one each.

    Rasmussen polls. As often, Rasmussen is the bearer of bad news. Like: What’s the deal with Obama? “For the first time since he became president, only 35% of voters say Barack Obama thinks society is fair and decent. That’s almost half as many as voters who hold that belief themselves. A new Rasmussen Reports telephone survey finds that 49%, on the other hand, say Obama thinks society is unfair and discriminatory.” See America’s Best Days: Fewer Voters Than Ever Say Obama Thinks Society is Fair and Decent. … Tea Party people skeptical of newly elected officeholders: “Most Tea Party members view the candidates they elected in November as agents of change from government business as usual, but non-members are a lot more skeptical. A new Rasmussen Reports national telephone poll finds that only 34% of all Likely U.S. Voters think Tea Party candidates elected in November will remain true to their beliefs. See Most Tea Party Members Think Those They Elected Won’t Sell Out, Others Aren’t So Sure. … Others are pessimistic, too: “Just 23% of Likely U.S. Voters now say the country is heading in the right direction.” See Right Direction or Wrong Track.

  • Kansas budget can be balanced without tax increases

    As the Kansas Legislature prepares to get to work next week producing a budget plan for the next year, Kansans are being told that tax increases are inevitable. Several sources, however, have ideas and detailed plans as to how the state can avoid tax increases.

    Kansas Senator Chris Steineger, a Democrat from Kansas City, has a list of cost-cutting measures that could be implemented quickly. See Kansas can have fast, achievable savings for his list.

    Steineger also has what he calls the billion dollar list, which contains items that could save even more money. Some of these proposals such as downsizing the legislature, consolidation of Kansas counties, and consolidation of state agencies, might take more time to implement. But these proposals, if implemented, would place Kansas government on a permanent low-cost track.

    The Kansas Policy Institute has developed some proposals for savings that it delivered in the form of a letter to Kansas Governor Mark Parkinson. The proposal contains some revenue enhancements that are not in the form of tax increases, which is usually what proponents of revenue enhancements mean. It also contains many cost-cutting measures.

    In the letter, KPI President Dave Trabert raises a point that I’ve not heard from any other source. The large budget gap that is routinely mentioned is composed in part of federal stimulus (ARRA) dollars that Kansas received, just like other states. But these funds will not be available in the next budget year, fiscal year 2011. According to KPI, ARRA funds accounted for $205 million of spending in fiscal year 2010.

    Should these “missing” funds — which everyone knew were temporary — now be used to create a large “budget gap” in order to justify the need for tax increases? Trabert explains: “KPI uses a taxpayer-focused approach that defines 2010 spending as that which was funded by state taxes. Your proposed 2011 budget would allow government to continue spending at levels funded by both state and federal tax dollars. It was well known that the stimulus money was temporary and that the state should plan accordingly, so state taxpayers should not be required to pay more to make up the difference.”

    The need to avoid further tax increases is vital to the Kansas economy, as Trabert notes in his letter to the governor: “The Kansas economy is already absorbing a $163 million unemployment tax increase that is negatively impacting jobs and we must do everything we can to avoid further damage.”

    The KPI letter and analysis may be read by clicking on Letter to Kansas Governor Mark Parkinson.

    Another plan comes from Americans for Prosperity-Kansas, which has prepared its commonsense budget proposal for fiscal year 2011. AFP’s plan contains both long-term and short-term measures for restoring our state’s fiscal health. It contains many specific measures that could be taken immediately to balance the budget without raising taxes.

    The AFP document is a comprehensive look at Kansas government spending, as noted in the introduction: “Following the approach of a concise but broad-ranging examination of every function Kansas state government attempts to perform, AFP has produced a budget that makes real tax cuts possible for Kansas taxpayers. AFP has gone beyond the traditional cursory examinations of state spending where the stock solutions are merely eliminating waste, fraud, abuse, and/or rooting out duplication.”

    As an example, for the Revisor of Statutes office the proposal suggests this: “This department received an increase of over 23 percent for FY 2008 which only partially reflects the cost of two FTEs for committee staffing. With the updated computer systems and additional staffing the Revisor’s office should be able to suffice with the reduction of 15 percent of appropriations funding.”

    The AFP budget proposal was developed by Steven J. Anderson, a certified public accountant with extensive experience in government accounting and budgets.

    The AFP budget proposal may be read at AFP-Kansas releases FY 2011 “Commonsense Budget Proposal.”

  • Kansas can have fast, achievable savings

    Kansas Senator Chris Steineger (Democrat from Kansas City) has formulated a list of items that he says could lead to “fast, achievable savings” for the state of Kansas. This list is titled the “$100 million list.” Some of the items have cost savings given, and some don’t.

    In particular, the idea of selling state-owned office buildings is appealing. Steineger showed me preliminary research that showed that the “rent” the state charges agencies is more expensive than private office space in downtown Topeka. The revenue from selling the buildings is a one-time boost, but the reduced operating expense is ongoing.

    Here’s Steineger’s list:

    1. Sell and lease-back of State office buildings: Docking, Landon, Eisenhower, Curtis, and Dillon House could be sold to professional real estate companies who can perform renovations
      cheaper and faster than the State. Sale and lease back offers four advantages:

      • immediate cash payment for buildings;
      • any remodeling can be done by private owner FASTER and CHEAPER than the State;
      • most office buildings in USA are privately owned; and
      • sale could generate $100 million.
    2. Eliminate $5 million state-subsidy for air fares in Wichita. Let free market work!
    3. Eliminate State purchases of water rights in government owned reservoirs.
    4. Eliminate construction of more “weather monitoring” stations.
    5. Eliminate state owned buffalo herds. ($50,000)
    6. Eliminate state aid to cities and counties which will incentivize unification.
    7. Eliminate transfer of state alcohol tax to cities’ general fund and recreation fund. ($18 million)
    8. Eliminate all future state aid for school bond and interest and technology.
    9. Reduce Leadership pay by one-half for one year & limit voucher days to 12. ($100,000)
    10. Eliminate Leadership office budget surplus carryover.
      ($138,000)

    11. Reduce by one-half the Leadership Office budget for one year. ($710,000)
    12. Reduce Leadership mail franking to same as rank and file legislator.
    13. Reduce funding for Kansas Bio-Science Authority.
    14. Reduce by one-half funding for KU Cancer Center and order Legislative Post Audit of expenditures since inception.
    15. Renegotiate State building and property insurance for lower rates.
    16. Consolidate all functions of probation and parole in Kansas. A computer tracking system currently in the design stage will greatly facilitate such an efficiency merger.
    17. Consolidate all regulatory and licensing functions of racing, gaming, and bingo.
    18. Consolidate and simplify all alcohol regulation, including cereal malt beverage.
    19. Consolidate into the Department of Agriculture: Livestock Commission, Conservation Commission, Water Office, and Geological Survey. A 2007 Post Audit concludes this will save $700,000 year: www.kslegislature.org/postaudit/audits perform/Q8pa23.pdf.
    20. Consolidate into one agency: Bank Commission, Credit Union Office, and Securities Commissioner. A 2008 Post Audit concludes this will save $500,000 year: www.kslegislature.org/postaudit/audits perform/08pa22.pdf.
    21. Go another step further and consolidate all of the above with Insurance Dept. and create one, streamlined financial regulatory agency.
    22. Consolidate all state housing programs into Kansas Housing Resources Corporation.
    23. Consolidate all early childhood programs (Tiny-K, Head Start, Early Head Start, Parents as Teachers, Smart Start, Healthy Start, Kansas Preschool Program) at State Board of Education.
    24. Consolidate KTEC, MAMTC, KS Inc, per Post Audit.
    25. Consolidate Kansas Turnpike Authority and KDOT.
    26. Capitol restoration — exempt from sales tax. ($8 million)
    27. Capitol restoration — delay build out of basement level visitors’ center. Install doors and lights only to make it a minimally functional space. It would be like an unfinished basement under someone’s home: dry, lighted and usable, but bare concrete.
    28. Auction Governor’s silver Chevy Suburban, which is parked in lower level of parking garage and seldom driven. ($25,000)
    29. Increase premiums and co-pays for state employee health insurance AND create large discounts for those who choose healthy living habits such as tobacco avoidance, healthy weight, and annual checkups.
    30. Allow Kansas Department of Corrections to pay hospitals at Medicaid rates.
    31. Obtain fair market value of the state owned business known as KU Hospital. If the Legislature is a board of directors for the state, then we have a fiduciary duty to have some idea of what our assets are worth.

  • Kansas texting, seat belt law passes

    Today the Kansas Senate debated and passed Senate Substitute for House Bill 2437.

    This bill creates a “primary” seat belt law, meaning that a law enforcement officer can stop a car when the officer believes someone in the car may not be wearing a seat belt. Currently, the car must have been stopped for other reasons before the officer could cite occupants for not wearing seat belts. The bill would send about $11 million federal dollars to Kansas; $1 million earmarked for transportation safety, but the rest could be shifted into the state general fund. Governor Mark Parkinson has identified this money as being used to close the state’s general fund budget gap.

    Senator Tim Huelskamp, a Republican from Fowler, objected to the bill because it’s a federal mandate that interferes with our local state control. The federal government has taken our tax money, he said, and is using it to coax our state into passing the primary seat belt law. Huelskamp’s actual language was stronger, using the term “outright bribery,” and noting with displeasure that the governor was acceding to this action.

    Senator Davie Haley, a Democrat from Kansas City, along with Senator Oletha Faust-Goudeau, Democrat from Wichita, expressed concerns that the seat belt law and the texting laws could be used as pretexts for stopping cars when the real aim of the officer is to perform a stop or search that couldn’t have been performed otherwise. “Driving while black” is the term both senators used, perhaps alluding to studies that have shown that minority drivers are stopped more often for minor traffic violations than non-minority drivers.

    The bill also bans text messaging or electronic mail while driving. During the debate Senator Chris Steineger, a Democrat from Kansas City, gave Kansans a defense if they’re ticketed for texting while driving: The bill doesn’t prohibit using a phone for making telephone calls while driving. In fact, the bill contains language providing an exception “if the person reads, selects or enters a telephone number or name in a handheld wireless communication device for the purpose of making or receiving a phone call.”

    Steineger wondered how a law enforcement officer could tell, just by looking, if a person is dialing a telephone number or entering a text message. He couldn’t get a specific answer from Senator Dwayne Umbarger, who was carrying the bill.

  • Kansas school consolidation: it won’t be the first time

    An issue that some promote as a way to make Kansas schools more efficient and save money is school consolidation. If it happens, it won’t be the first time schools in our state have gone through consolidation.

    Kansas Senator Chris Steineger, who is a Democrat representing Kansas City, recently asked the Kansas Legislative Research Department for information about school consolidation in Kansas. The memo that KLRD produced is below, and here are some interesting facts.

    In 1958 Kansas had 2,794 school districts. That number shrunk to 311 in 1969. (Today there are 296 districts.) The goal during the 1960s was to produce school districts that had at least 400 students in grades 1-12, or at least 200 square miles and an assessed valuation of at least $2 million. Some of the intent of the legislation in 1963 was “the general improvement of the public schools,” “equalization of the benefits and burdens of education,” and to use state funds more wisely.

    A previous attempt at consolidation in 1961 was rejected by the courts, but public interest in the bill was high, according to material found by KLRD. One remark was “Most of the opposition [to consolidation] was due to a large majority of small school not wanting their little kingdom disrupted, even at the expense of educational standards.” We see similar remarks made today.

    A note in the memo mentions a 1992 report of school consolidation efforts in other states, finding that “consolidating school districts led to a minor savings in administrative costs but major savings would result only from closing schools, reducing the number of teachers, and increasing class sizes.”

    Kansas school spending advocates tell us that reducing teachers and increasing class sizes would be a disaster for children. But see this article and also this to learn how teacher effectiveness is much more important than class size.

    The history of school consolidation in Kansas nearly 50 years ago is also interesting for this reason: Currently a coalition of Kansas school districts are suing the state, asking for more money to be spent on schools. The state’s been sued for this reason before, and the remedy was probably not what the school spending advocates of the day wanted. Here’s correspondence from Sen. Steineger:

    This past summer, I met former Senator Glee Smith who served in the Legislature from the late 50’s into the mid 60’s. I asked him what prompted the unification movement, and he replied, “A bunch of school districts got together and filed a lawsuit against the State claiming not enough state aid,” and the Legislature responded by establishing a mechanism requiring unification of smaller weaker school districts.

    The standard remedy that school districts ask for in lawsuits is more money. Perhaps the courts will impose a different remedy.

    Kansas School Consolidation History