Voice For Liberty

Tag: Community Improvement Districts

  • Kansas and Wichita quick takes: Tuesday January 11, 2011

    Legislature website still down. Last week visitors to the Kansas Legislature website were greeted with a message indicating that an upgrade would be forthcoming. As of this moment, that message is replace with a generic error message and the site is not working. In a phone call yesterday, a clerk said the site would — hopefully — be available yesterday afternoon. The legislature’s site needed an update, as parts of it were frustrating to work with. But with it not working at all, Kansans are missing out on vital information. For example, it is not possible to remotely retrieve the Legislature’s calendars and journals.

    Treasurer to ask for more information. In an effort to return more unclaimed property, new Kansas state treasurer Ron Estes will ask the legislature to allow him to obtain contact information from other state agencies. See Treasurer wants more data so office can return property.

    Wichita CID proposals delayed. Proposals for two Community Improvement Districts in Wichita have been delayed from consideration at today’s Wichita City Council meeting. More information about these two proposals is at In Wichita, two large community improvement districts proposed. Today’s action would have simply accepted the petitions, setting a public hearing and approval — or not — for a future date. … In editorializing against these CIDs, the Wichita Eagle’s Rhonda Holman wrote: “As it was, insufficient time had been allowed for staff vetting of the proposals and thorough consideration by the council and public.” Time and time again, city staff assures the public that they have thoroughly vetted developers and projects, but here is another example of why citizens need to be wary of city hall bureaucrats. … In summary, Holman writes: “The council needs to treat the CID designations as the hidden tax hikes that they are — and use them only where and when they are mission critical, such as to implementing the Goody Clancy downtown master plan.. … By that standard, these two proposals don’t even come close.”

    Longwell on citizen knowledge. My reporting on Wichita City Council member Jeff Longwell and his attitude towards citizen knowledge reminded me of a similar incident from the past. Recently, Longwell spoke in favor of signs telling shoppers that they’re about to enter a store that relies on Community Improvement District financing. But the signs would not tell shoppers how much extra tax they would be paying. Longwell said “So having something on the front door that says we are financing this with a CID tax, where they’re made well aware that it’s collected there, I think to try and include a percentage might even add some confusion as we collect different CID taxes around the city.” In other words, giving citizens too much information will confuse them. … In 2008, when a matter was rushed through the council with little time to study the issue, Longwell was quoted in The Wichita Eagle as saying: “It’s unlikely many residents would read the full contract even if it had been made public earlier.” … It doesn’t take many residents to read it. Just a few will usually be enough. … Not surprisingly, the matter Longwell wanted to rush through concerned taxpayer-funded welfare for Wichita theater owner Bill Warren. This is another example of how Longwell has been captured by special interests.

    State of the State tomorrow. On Wednesday, Kansas Governor Sam Brownback will deliver the State of the State Address. It will be carried in Wichita on KPTS channel 8 at 6:30 pm.

    This week at Sedgwick County Commission. Tomorrow’s meeting of the Sedgwick County Commission has a light agenda. It will be the first meeting for commissioners Richard Ranzau and Jim Skelton. At the end of the meeting, commissioners will elect a new chairman and chairman pro tem. Karl Peterjohn has been the chair for the last year. The chairman conducts the meetings and signs official documents. Speculation is that Dave Unruh, who is just starting his third term, has the inside track for election.

    Changes to Kansas campaign law recommended. Washburn University’s Bob Beatty writes about two “common sense bills” bills that the Kansas Legislature will consider this year, and which he recommends be passed “in order to help clarify for voters what they’re seeing when the political ad season begins anew.’ … The first measure would ban state officeholders from appearing in public service advertisements for a 60-day period before elections. The second would require candidates to state their approval of an advertisement. More at Fine-tuning political ads.

  • In Wichita, two large community improvement districts proposed

    On Tuesday (January 11) the Wichita City Council will decide whether to accept petitions calling for the formation of two Community Improvement Districts (CIDs) in Wichita. In both cases, city staff recommends that the council accept the petitions and set February first as the date for the public hearing. It is on that date that the council will accept public input and vote whether to form each of the CIDs.

    CIDs are a creation of the Kansas Legislature from the 2009 session. They allow merchants in a district to collect additional sales tax of up to two cents per dollar. The extra sales tax is used for the exclusive benefit of the CID.

    The districts proposed are two well-established Wichita shopping centers. Westway Shopping Center is at the southwest corner of West Pawnee Avenue and South Seneca Street. Eastgate Center is at the southeast corner of Kellogg and Rock Road.

    In the case of Westway, city documents indicate that the funds from the CID proceeds are to be used for “public and private improvements and the payment of certain ongoing operating costs.” At Eastgate, funds will be used for “renovation and modernization.”

    Both projects ask for one cent per dollar to be added to shoppers’ sales tax. Both ask to be implemented using the “pay-as-you-go” method, meaning that the city will not issue bonds. Instead, the city will send to the applicants the proceeds from the extra sales tax as it is collected.

    Both applicants are represented by Polsinelli Shughart, an Overland Park law firm that has represented other clients that have received approval for community improvement districts from the Wichita City Council.

    Signage discussion at city council

    At the December 7, 2010 meeting of the Wichita City Council, the council considered whether stores in CIDs should be required to post signs warning shoppers of the amount of extra tax being charged. Some, including myself, feel that shoppers should have this information before deciding to shop in such a store.

    At the meeting Korb Maxwell, a representative of Polsinelli Shughart, spoke to the city council in support of the CID legislation. While Maxwell spoke as though he was advocating for the public interest, he in fact works for a law firm that is representing the narrow interests of its clients.

    Speaking to the council, Maxwell denied that developers “have any interest in hiding something from the public, or keeping citizens from having full knowledge about these community improvement districts.”

    But he said — rather obliquely — that the retailers they are trying to bring to Wichita would be discouraged by full disclosure of the extra sales tax that citizens would pay in their stores. “We want to make sure that anything that we do, or anything that we implement within a policy is appropriate and will not counteract the very tool we’re creating here.”

    He provided a suggested sign design that states that community improvement district financing was used, but not that customers will pay a higher sales tax in CID stores. Retailers would accept this, he said.

    In discussion from the bench, Vice Mayor Jeff Longwell said it is important that we disclose these “types of collections” as they are taxing the public. But in a convoluted stretch of reasoning, he made a case that posting a sign with a specific sales tax would be confusing to citizens:

    “I was leaning to putting a percentage on there, but again if we have a website that spells out the percentage, I think that’s important. And number two, I guess I would be a little bit concerned how we would work through it — if you put a percentage on a development over here in downtown that’s only collecting one percent and someone walks in and sees a CID tax collected of one percent and just assumes every CID tax is one percent it would be confusing when they go to the next one, and it may scare them off if they see one that’s two percent, they’ll never go to one that’s maybe only one percent. So I think that proves an additional concern for some confusion. So having something on the front door that says we are financing this with a CID tax, where they’re made well aware that it’s collected there, I think to try and include a percentage might even add some confusion as we collect different CID taxes around the city.”

    I think this means that Longwell’s okay with telling people as they enter a store that they’re being taxed, but not how much tax they’re being asked to pay. We can summarize his attitude as this: Giving citizens too much information will confuse them.

    Council Member Sue Schlapp said she supported transparency in government:

    “Every tool we can have is necessary … This is very simple: If you vote to have the tool, and then you vote to put something in it that makes the tool useless, it’s not even any point in having the vote, in my opinion. Either we do it, and we do it in a way that it’s going to be useful and accomplish its purpose. … I understand totally the discussion of letting the public know. I think transparency is absolutely vital to everything we do in government. So I think we’re doing that very thing.”

    Schlapp understands and said what everyone knows: that if you arm citizens with knowledge of high taxes, they’re likely to go somewhere else.

    Mayor Brewer said he agreed with Schlapp and the other council members.

    In the end, the council unanimously voted for requiring signage that reads, according to minutes from the meeting: “This project made possible by Community Improvement District Financing and includes the website.”

    This sign doesn’t mention anything about extra sales tax that customers of CID merchants will pay. Contrary to Schlapp’s assertions, this is not anything like government transparency.

    This episode is a startling example of the council and staff being totally captured by special interests.

    Sales tax increase spreading across Wichita

    These two CIDs break new ground in that these shopping centers are not tourist destinations or trendy shops. Some council members like Longwell have justified past CIDs on the basis that since they are tourist destinations, much of the tax will be paid by visitors to Wichita. This is not a wise policy, but even it it was, it does not apply to these two shopping centers.

    Instead, these two applications are more indications that soon Wichita — its major retail centers and destinations, at least — is likely to be blanketed with community improvement districts charging up to an extra two cents per dollar sales tax. Currently, merchants in a CID are running the very real risk that once their customers become aware of the extra sales tax, they will shop somewhere else. But as CIDs become more prevalent in Wichita, this competitive disadvantage will disappear.

    Step by step, a sales tax increase is engulfing Wichita, and our city council and mayor are fine with that happening. This is on top of the statewide sales tax increase from last year, which, despite claims of its supporters and opposition by conservatives, is likely a permanent fixture.

  • Kansas and Wichita quick takes: Friday December 10, 2010

    This Week in Kansas. On This Week in Kansas guests Rebecca Zepick of State of the State KS, Joe Aistrup of Kansas State University, and myself discuss Kansas House of Representatives leadership, Governor-elect Brownback’s appointments, and voter ID. Tim Brown is the host. This Week in Kansas airs on KAKE TV channel 10, Sunday morning at 9:00 am.

    Cato scholar to speak on economic freedom. Today’s meeting (December 10) of the Wichita Pachyderm Club features noted Cato Institute scholar, Principal Attorney at the Pacific Legal Foundation, and author Timothy Sandefur. He will discuss his recent book The Right to Earn a Living: Economic Freedom and the Law. A description of the book at Amazon.com reads: “America’s founders thought the right to earn a living was so basic and obvious that it didn’t need to be mentioned in the Bill of Rights. Yet today that right is burdened by a wide array of government rules and regulations that play favorites, rewrite contracts, encourage frivolous lawsuits, seize private property, and manipulate economic choices to achieve outcomes that bureaucrats favor. The Right to Earn a Living charts the history of this fundamental human right, from the constitutional system that was designed to protect it by limiting government’s powers, to the Civil War Amendments that expanded protection to all Americans, regardless of race. It then focuses on the Progressive-era judges who began to erode those protections, and concludes with today’s controversies over abusive occupational licensing laws, freedom of speech in advertising, regulatory takings, and much more.” … Of the book, Dick Armey said: “Government today puts so many burdens and restrictions on entrepreneurs and business owners that we’re squandering our most precious resource: the entrepreneurial spirit and drive of our people. Sandefur’s book explains how this problem began, and what steps we can take to ensure that we all enjoy the freedom to pursue the American Dream.” … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Tea party regional blogs compiled. Phillip Donovan has compiled a list of top tea party-related blogs by region, and Voice for Liberty in Wichita is on the list. Of my blog, Donovan wrote “Bob Weeks has been blogging the perspective of free markets, personal liberty, and limited government since 2004, long before the ‘tea party movement’ was born.”

    Tax rates still a secret. Rhonda Holman’s Wichita Eagle editorial asks the central question about signage requirements warning customers of Community Improvement Districts that they will be paying higher sales tax: “But if transparency about CIDs is bad for business, how can CIDs be good for citizens and the community?”

    Federal spending oversight. In the U.S. House of Representatives, the actual spending of money happens in the Appropriations Committee, and this committee is a large source of the problems we have with federal spending. The Wall Street Journal column Oversight for the Spenders explains why: “The Members who join the Appropriations subcommittee on, say, agriculture do so precisely because they are advocates of farm spending. They have no interest in subjecting their own programs to greater public scrutiny.” What is the outlook going forward for this committee? Incoming Speaker John Boehner appointed Kentucky’s Hal Rogers as chair. The Journal column says his “spending record rivals that of any free-wheeling Democrat.” A bright spot: reformer Jeff Flake of Arizona is appointed to the committee, but his request to run an investigations subcommittee was not granted. The Journal is not impressed, concluding “Mr. Boehner’s selection of Mr. Rogers is a major disappointment and makes his promises to control spending suspect. If he really wants to change the spending culture, he should unleash Mr. Flake.”

    Slow death for high-speed rail. From Randal O’Toole: “New transportation technologies are successful when they are faster, more convenient, and less expensive than the technologies they replace. High-speed rail is slower than flying, less convenient than driving, and at least five times more expensive than either one. It is only feasible with heavy taxpayer subsidies and even then it will only serve a tiny portion of the nation’s population.”

    Does the New York Times have a double standard? John LaPlante in LaPlante: NY Times leaky double-standard: “Many newspapers in America reprint articles from the New York Times on a regular basis. So their editorial slant is of importance beyond the (direct) readership of the Gray Lady. Compare and contrast how the Times treated two recent leaks: ‘The documents appear to have been acquired illegally and contain all manner of private information and statements that were never intended for the public eye, so they won’t be posted here. — New York Times, on the Climategate emails, Nov. 20, 2009. … ‘The articles published today and in coming days are based on thousands of United States embassy cables, the daily reports from the field intended for the eyes of senior policy makers in Washington. … The Times believes that the documents serve an important public interest, illuminating the goals, successes, compromises and frustrations of American diplomacy in a way that other accounts cannot match.. — New York Times, on the WikiLeaks documents, Nov. 29, 2010.” I’ll let you make the call.

    Wichita Eagle Opinion Line. “The party of the wealthy triumphs again. Congratulations, Republican voters. By extending the handout to the wealthy, you just increased the national debt.” I would say to this writer that action to prevent an increase in income tax from occurring is not a handout. The only way that extending the present tax rates qualifies as a handout is if you believe that the income people earn belongs first to government. This is entirely backwards and violates self-ownership. Further, the national debt — actually the deficit — has two moving parts: the government’s income, and its spending. We choose as a nation to spend more than the government takes in. That is the cause of the deficit.

  • Wichita Community Improvement District policy to be decided

    Tomorrow the Wichita City Council is scheduled to decided the city’s policy on Community Improvement Districts (CID).

    CIDs are a creation of the Kansas Legislature from the 2009 session. They allow merchants in a district to collect additional sales tax of up to two cents per dollar. The extra sales tax is used for the exclusive benefit of the CID.

    One of the main issues to be decided is the issue of warning signage. Some have recommended that consumers be protected from unknowingly shopping in stores, restaurants, and hotels that will be adding extra sales tax to purchases. Developers who want to benefit from CID money say that merchants object to signage, fearing it will drive away customers. Imagine that: people don’t want to pay any more tax than necessary!

    City staff has recommended that a website be used to notify customers of CIDs. This form of notification is so weak as to be meaningless.

    One of the follies in Wichita government economic development policy is the categorization of costs into eligible and non-eligible costs. The proceeds from programs like CIDs and tax increment financing may be used only for costs in the “eligible” category. I suggest that we stop arbitrarily distinguishing between “eligible costs” and other costs. When city bureaucrats and politicians use a term like “eligible costs” it makes this process seem benign. It makes it seem as though we’re not really supplying corporate welfare and subsidy.

    As long as the developer has to spend money on what we call “eligible costs,” the fact that the city subsidy is restricted to these costs has no economic meaning. Suppose I gave you $10 with the stipulation that you could spend it only on next Monday. Would you deny that I had enriched you by $10? Of course not. As long as you were planning to spend $10 next Monday, or could shift your spending from some other day to Monday, this restriction has no economic meaning.

    The rise of CIDs is an example of the city working at cross-purposes with itself, as many of the CIDs are for the benefit of hotels and other tourist attractions. Now we have the situation where we spend millions every year subsidizing airlines so that airfares to Wichita are low. Then we turn around and add extra tax to visitors’ hotel bills and perhaps the shops and restaurants they visit. Vice Mayor Jeff Longwell approves this as a wise strategy.

    Developers say that Wichita will lose deals if businesses don’t have the ability to charge extra sales tax without the prior knowledge of customers. I would suggest we lose deals because of another reason: our high business property taxes. According to the Minnesota Taxpayers Association, commercial property in Wichita is taxed an an effective rate of 2.801 percent per year. The national average is about 1.9 percent, meaning the rate in Wichita is 47 percent greater.

    These high commercial property taxes have driven developers such as Colby Sandlian and others out of Wichita. They continue to develop properties outside of Wichita and Kansas — in Sandlian’s case, over $100 million in commercial development outside of Kansas since 1989.

    These high business taxes mean that the state and cities must concoct schemes like CIDs and other economic development giveaways in order to attract business to Wichita. This places governmental bodies like the Wichita City Council in the position of selecting which business firms it will invest in, when there’s no way the Council has the knowledge and incentive structure needed to make these decisions.

    If we will lose deals because a special class of merchants can’t charge extra sales tax, then we have a big problem.

    If we will lose deals because we’re afraid to notify consumers — in advance — of the taxes they will pay, we have a big problem.

    Finally perhaps the simplest public policy issue is this: If merchants feel they need to collect additional revenue from their customers, why don’t they simply raise their prices? Why the roundabout process of the state collecting extra sales tax, only to ship it back to the merchants in the CID?

  • Kansas and Wichita quick takes: Sunday December 5, 2010

    Wichita City Council this week. Tuesday’s city council meeting has a busy agenda. First is the Community Improvement District policy, which was deferred from November 2. I believe the major issue to be resolved is requiring signage on stores or businesses that will be charging extra sales tax. It’s possible there might be a majority on the council who want the warning signs. Developers are opposed, saying that notification in advance drives off customers. Gee, who could have known that people don’t like paying taxes? The city is proposing a web site that identifies all CIDs, but this is a weak form of consumer notification that is pretty much useless, as correctly identified by council member Lavonta Williams. … There’s an appeal of a ruling that a woman has three horses on her property when rules allow one. … Several companies are requesting industrial revenue bonds and relief from paying property taxes: Bombardier Learjet, Cessna, and Coleman. … Go Wichita Convention & Visitors Bureau will ask that its contract with the city be renewed. This is one of the organizations that has refused to fill my records requests, stating that they are not a “public agency” as defined in the Kansas Open Records Act. Go Wichita is budgeted to receive $2,121,390 from the city this year. The agenda report is available at this link.

    DAB agendas missing. On Monday, four of the city’s six District Advisory Boards will meet. As of this moment, three of these boards don’t have their agenda available on the city’s website. Only the DAB for district 6 has its agenda available on the city’s website: The lack of availability of DAB agendas is an issue that the city should work to resolve.

    Kansas legislators learn about education reform. Kansas Senator Julia Lynn reports on a trip by several legislators: “Five Kansas legislators received a wake up call after attending the National Summit on Education Reform in Washington DC. The big take away? Kansas is embarrassingly behind on education reform initiatives including the broader concept of choice, charter school legislation, tax credit and special needs scholarship programs and a myriad of educational technology and digital learning applications. … The focus of the conference centered on the need for nationwide reform calling out our present system of public education as factory model driven by the interests of adults and a monopoly that is neither efficient nor responsive. Burdened by outdated and ineffective systems like tenure, collective bargaining, and social promotion, our system is outdated and ineffective. Worse, the model is not capable of educating diverse children to be successful in a competitive world. Governor Jeb Bush, convener of the conference and founder of the Foundation for Excellence in Education, stated in his opening remarks that ‘We are at a tipping point. We must move towards reform that puts the needs of the child first through customization of education to the diversity of the child’. … Reform of our system will not occur overnight nor will it be comfortable. It will require hand-to-hand combat with those vested in the old factory model system so corrupted by interests of teachers unions and the education establishment.” It is not news to readers of this site that Kansas is lagging in education reform. See Florida school choice helps public schools, for example.

  • Kansas and Wichita quick takes: Tuesday November 16, 2010

    Future of California. George Gilder, writing in the Wall Street Journal, lays out a grim future for California based on voters’ refusal to overturn AB 32, the Global Warming Solutions Act. Of the requirement to reduce greenhouse gas emissions in the state, Gilder writes: “That’s a 30% drop followed by a mandated 80% overall drop by 2050. Together with a $500 billion public-pension overhang, the new energy cap dooms the state to bankruptcy.” He says that AB 32 may not be necessary at all: “The irony is that a century-long trend of advance in conventional ‘non-renewable’ energy — from wood to oil to natural gas and nuclear — has already wrought a roughly 60% drop in carbon emissions per watt. Thus the long-term California targets might well be achieved globally in the normal course of technological advance. The obvious next step is aggressive exploitation of the trillions of cubic feet of low-carbon natural gas discovered over the last two years, essentially ending the U.S. energy crisis.” … Referring to green energy radicals, Gilder writes: “Their economic model sees new wealth emerge from jobs dismantling the existing energy economy and replacing it with a medieval system of windmills and solar collectors. By this logic we could all get rich by razing the existing housing plant and replacing it with new-fangled tents.” Which reminds me of when I criticized those who promote wind power for its job creation: “After all, if we view our energy policy as a jobs creation program, why not build wind turbines and haul them to western Kansas without the use of machinery? Think of the jobs that would create.” An economic boom to those along the Santa Fe Trail, no doubt.

    All the billionaires. An amusing commentary — amusing until you realize what it really means — by Scott Burns in the Austin American-Statesman takes a look at how long the wealth of America’s billionaires could fund the federal government deficit. The upshot is that there are about 400 billionaires, and their combined wealth could fund the deficit for about nine months. What’s sobering about this? All this wealth would go to fund only the deficit — that portion of federal spending above revenue for the year. There’s still all the base spending to pay for. And the wealth of these people, which in many cases is in the substance of the companies they founded or own — Microsoft, Oracle, Koch Industries, Wal-Mart, Google, etc. — would be gone.

    Kansas has sold assets before. In this year’s session of the Kansas Legislature, there was a proposal to sell state-owned assets in order to raise funds and reduce costs. Kansas Reporter’s Rachel Whitten reports it’s been done before, with success.

    Where are the airlines? James Fallows of The Atlantic regarding the new “groping” TSA screenings at airports. Echoing Wichitan John Todd from last week, one reader writes: “And again, where are the airlines? When TSA begins to drive away customers, they’ll react, is the stock answer. I would argue that it already does drive away customers (certainly if the emails I receive are any indication), but what of those it ‘merely’ makes angry? There’s something wrong with a business model that accepts angry and harassed customers as an acceptable option to no customers at all.” Wichitan Mike Smith writes in: “Tomorrow, the U.S. Senate is having a hearing regarding the TSA’s new procedures that I hope results in the procedures being rescinded. If your readers want to make last minute contact with Kansas Senators Pat Roberts and Sam Brownback (who is on the committee with TSA oversight), I urge them to do so.”

    Next for the tea party. Patrick Ruffini in National Review looks at the future of the tea party. Ruffini notes the difficulty in maintaining the momentum of grassroots efforts. Both Bush and Obama have faced this. He cautions: “The experience should provide a cautionary tale to the Tea Partiers, with their more humble origins: Hitch yourself to established power institutions at your own peril.” But other, newer organizations have sprung up to help tea party activisits: “Ned Ryun, executive director of American Majority — one of the more promising new institutions that have risen up around the Tea Party movement — wants to ignore Washington and go local. ‘What the movement is really about, quite frankly, is the local leaders, and I’ve made a point with American Majority of going directly to them, and ignoring the so-called national leaders of the movement,’ he told me. ‘I think the national leaders are beside the point; if they go away, the movement still exists. If the local leaders go away, the movement dies.’” Kansas is one of the states that American Majority has been active in since its inception. American Majority plans to be involved at the local government level in the 2012 elections.

    The new naysayers. President Obama and others have criticized Republicans for being the party of “No.” Now that some of the president’s deficit reduction commission recommendations are starting to be known, there’s a new party of “No.” Writes Ross Douthat in the New York Times: “But Erskine Bowles and Alan Simpson performed a valuable public service nonetheless: the reaction to their proposals demonstrated that when it comes to addressing the long-term challenges facing this country, the Democrats, too, can play the Party of No.”

    Community Improvement Districts spread to Overland Park. As reported in Kansas Reporter, Overland Park is considering whether to create its first Community Improvement District. In this case, the district — which allows merchants within to charge extra sales tax for their own benefit — would benefit a proposed residential and retail complex. More about these tax districts may be found here.

  • Kansas and Wichita quick takes: Monday October 18, 2010

    Last day to register to vote. Today is the last day to register to vote in the November general election in Kansas. Contact your county election office for details.

    Democratic foreign campaign money. “Democratic leaders in the House and Senate criticizing GOP groups for allegedly funneling foreign money into campaign ads have seen their party raise more than $1 million from political action committees affiliated with foreign companies. … Republicans with groups under fire from the White House say the hefty campaign contributions illustrate Democratic hypocrisy.” More at The Hill: Dems have raised more than $1 million this cycle from foreign-affiliated PACs. Related: Axelrod, Gibbs keep up Dems’ offensive on Chamber donations.

    Rasmussen polls from last week. 55% Favor Repeal of Health Care Law: “The majority of U.S. voters continue to favor repeal of the new national health care law but are slightly less emphatic about the impact the law will have on the country. Confidence in home ownership falls: “Now more than ever, homeowners expect to see the value of their home go down over the next year. A new Rasmussen Reports survey finds that 32% expect the value of their home to decrease over the next year, the highest finding since Rasmussen Reports began asking the question regularly in December 2008.” Generic Congressional ballot: “With just three weeks to go until Election Day, Republicans hold an eight-point lead on the Generic Congressional Ballot. Polling for the week ending Sunday, October 10, shows that 47% of Likely Voters would vote for their district’s Republican congressional candidate, while 39% prefer the Democrat.”

    Waiting for Superman to open in Wichita. Opens October 22 at the Warren Theater on East 13th in Wichita. Check the website for show times. Of the film, the Wall Street Journal wrote: ” The new film “Waiting for ‘Superman’” is getting good reviews for its portrayal of children seeking alternatives to dreadful public schools, and to judge by the film’s opponents it is having an impact. Witness the scene on a recent Friday night in front of a Loews multiplex in New York City, where some 50 protestors blasted the film as propaganda for charter schools.” In Kansas, the Wichita Eagle printed an op-ed penned by the education bureaucracy status quo — Sharon Hartin Iorio, dean of the Wichita State University College of Education in this case — to inoculate Wichitans against the effects of what I am told is a powerful film. Let’s hope this film gets Kansans to thinking about public schools in our state, as Kansas is way behind the curve on innovation, compared to other states.

    Democratic political activists wanted. Craigslist ad: “The Kansas Coordinated Campaign (Democrat) seeks passionate and hard-working persons to do paid door-to-door voter contact in Sedgwick. This is not a fundraising position, and is exclusively focused on ensuring that Democratic voices are heard this November.” Pay is $9/hour. An earlier ad from September: “Looking for several energetic people to work with a small campaign and make sure that Kansas voices are heard in the government! Looks great on resumes, etc. Must be able to work 8-12 hours a week (weekends and/or evenings). Registered Democrats only, no felony convictions.” That job advertised pay of $10/hour.

    Energy to be topic at Wichita Pachyderm. This Friday’s meeting of the Wichita Pachyderm club will feature John A. McKinsey speaking on the topic “Cap and Trade: What is the economic and regulatory impact of Congressional legislation?” The public is welcome at Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Trackers at work. The Kansas City Star explains the role of trackers in political campaigns: “Martin’s job is to follow and film political opponents — and try to catch them in a misstep. Trackers like Martin, who works for the Kansas Democratic Party, have become a fixture of modern political campaigns. They now are so common that many political consultants say campaigns are behind the times if they don’t employ one.” In the Kansas fourth Congressional district campaign, Democrat Raj Goyle employes a tracker to follow Republican Mike Pompeo. At the several events where I’ve seen him, he hasn’t asked a question. Here’s some video, apparently shot by the tracker himself, in which Republican National Chairman Michael Steele has a little good-natured fun at the tracker’s expense at a Pompeo campaign event. When asked by me, the Pompeo campaign would not reveal if they use a tracker.

    Kansas owes — a lot. From Kansas Budget Watch, a project of the Institute for Truth in Accounting: “One of the reasons Kansas is in this precarious position is state officials used antiquated budgeting and accounting rules to determine payroll costs. Truthful accounting would include in the payroll costs the portion of pension benefits employees earn every year they work. Accurate accounting provides that these real and certain expenses be reported on the state’s budget, balance sheet and income statement when earned, not when paid. Because the pension benefits are not immediately payable in cash, Kansas’ politicians have ignored most of these costs when calculating ‘balanced’ budgets. More than $8.5 billion of these and other costs have been pushed into the future, and thus onto your children’s and grandchildren’s backs.” See Financial State of Kansas for more. Whenever the shortfall of funding KPERS, the Kansas Public Employee Retirement System, is mentioned, public sector employees attack the messenger rather than facing the reality of the situation. Their strategy, as it is for a majority of legislators, is to pass along this funding shortfall to a future generation. This is dishonest, and a reason why the public employee pension system needs reform — now.

    Sales tax changes could scuttle grocery store CID. A proposal by Kansas Senator Dick Kelsey to eliminate the sales tax on groceries in Kansas could have an impact on a Wichita grocery store’s plans. The store, a Save-A-Lot proposed to be built in Planeview, would use the state’s Community Improvement District law to allow it to collect an extra two cents per dollar sales tax. Question: If the state stopped taxing groceries, could the store still collect the two cents per dollar CID tax? I’m guessing the answer is no. The store’s developer made the point that many of the stores customers use the food stamp program, so they don’t pay tax anyway. And non-grocery items like household supplies would still be taxed (probably), so there’s some sales tax and CID tax there. Here’s an example of how relying on government and politicians adds extra uncertainty and risk to entrepreneurial activity, as if market risk wasn’t enough already. Although I would say that those like Rob Snyder, the developer of the proposed store, who seek government subsidy to back their ventures can hardly be classified as entrepreneurs — at least not the type we need more of.

    TIF for rich, bit not for poor? A letter writer in yesterday’s Wichita Eagle writes: “Tax-increment financing districts have been used to provide millions of dollars to developers in their attempts to revitalize downtown Wichita. Blocking $400,000 for Planeview implies that buildings downtown are of far greater importance than the concern for human beings living in one of the poorest communities in Sedgwick County.” This is an issue the city has to grapple with, although it was the county commission that rejected the formation of the TIF district. The writer continues with a moral plea: “What has happened to our morality and our concern for and recognition of the needs of those who are less fortunate?” Morality is one of the reasons why I and my friend John Todd have opposed all TIF districts, regardless of location and purpose. That, and the fact that they don’t work — if growth in the entire community is the goal, instead of enriching specific people.

    Organist Massimo Nosetti. Tuesday Italian organist Massimo Nosetti will perform a recital as part of the Rie Bloomfield Organ Series. The recital starts at 7:30 pm in Wiedemann Recital Hall (map), on the campus of Wichita State University. Cost is $10.

    Wichita Eagle Opinion Line. “Am I the only one offended by Russ Meyer’s comment that ‘Anybody who is dumb enough to run against Carl (Brewer) is not qualified to be the mayor of Wichita’? When did Meyer become God?”

  • Wichita’s alphabet soup of ‘tax tricks’

    Thank you to Marian Chambers of Wichita for submitting this letter. It also appeared in today’s Wichita Eagle.

    I want to commend the courage shown by the October 10 Sunday Wichita Eagle editorial “Get control of incentives.” It takes some intestinal fortitude to speak out against the “tax tricks” (wonderful description) that have been foisted on the city and county taxpayers already burdened by federal, state, and property taxes.

    Wichita is a wonderful place to live. But some of our leaders seem to be threatening our historic legacy by burdening us with an alphabet soup of “tax tricks”; so far, I have counted TIF, STAR, and CID (not to mention the broader state version of EDX and PEAK). The alphabet soup of “incentives” has the same result, regardless of the letters: taking money from taxpayers without them seeing it in their paychecks.

    I have no objection to paying straightforward taxes that provide the services we all need and expect: firefighters, police, roads, water, sewers, emergency vehicles, basic schools for our children and basic coverage for our elderly. But “incentives” masquerading as hidden taxes do not promote a quality of life for our citizens.

    The Eagle has taken a courageous stand in drawing attention to these ugly, hidden taxes.

  • In Wichita Planeview neighborhood: Yes, we have!

    Developers of a proposed Save-A-Lot grocery store in Wichita’s Planeview neighborhood have made the case that without two forms of subsidy, the store won’t be profitable and won’t be built.

    There is a counterexample, however. On Hillside, just south of Pawnee and just across the street from Planeview, sit two grocery stores that together occupy 13,000 square feet of space. This is close in size to the proposed Save-A-Lot store’s 16,500 square feet.

    While the developer says the Save-A-Lot store can’t be profitable without over $800,000 of taxpayer subsidy, the existence of these grocers proves that it can be done. They are in business, earning a profit, and doing so without government subsidy. The City of Wichita, apparently, is not aware of these success stories, or doesn’t care.

    Reviewing the September 14th meeting of the Wichita City Council gives us an idea of how little the city cares how its actions affect existing business.

    At that meeting, Rob Snyder, developer of the proposed Save-A-Lot store, said he has “researched every possible way” to make the project work. Without the subsidy, he said, there won’t be a grocery store. But the existence of several grocery stores in or near Planeview, operating profitably without government subsidy, shows that Snyder’s claims are false.

    I’m not claiming that Snyder intentionally lied to the city council about the necessity of subsidy for his store. But he has an $800,000 motive to get the council to approve his subsidy. And there’s evidence that corporate welfare like what Snyder requests is not necessary to open and operate a successful grocery store in this part of Wichita.

    During his talk to the council, it became apparent that Snyder thinks corporate welfare is a wise business and political strategy. Snyder lamented the fact that earmarks are now unpopular with the American public and not available to finance his proposed grocery store. An earmark — that is to say, a grant of money paid for by U.S. taxpayers — was used as a large part of the financing for the other Save-A-Lot in Wichita at 13th and Grove. An article by James Arbertha tells of the roll earmarks played in the opening of that store.

    While it may be necessary for Snyder’s store to be propped up by taxpayer subsidy, citizen Wendy Aylworth told council members of the several grocery stores already operating in the Planeview area. Mayor Carl Brewer appeared surprised to learn of these stores and asked Aylworth for their locations.

    The mayor’s surprise is evidence that the city simply does not care about the impact of its corporate welfare policies on existing business. Several people have pointed out to me that these existing stores — with the exception of one large supermarket — are ethnic grocers, although most carry a wide variety of food and household items.

    Is the CID tax necessary?

    One of the issues relating to CIDs is their very necessity. If a business feels it needs to generate additional revenue, why not simply raise its prices? Why is it necessary to have the government collect taxes in order to generate additional revenue for the merchants in the CID?

    Ron Rhodes, who developed the existing Save-A-Lot store in Wichita, addressed the Wichita city council that day. Rhodes referred to the “people who have ability to pay” an extra sales tax, and those who don’t have the ability to pay. Listening to him I couldn’t help be reminded of another slogan: “From each according to his ability, to each according to his needs.”

    Rhodes also spoke of neighborhood pride. But how proud can a neighborhood be when merchants have to rely on corporate welfare to open a store there?

    In later questioning, Rhodes said that a Save-A-Lot store can’t raise its prices due to a “price deck” policy that says that most prices should be uniform in Save-A-Lot stores. This is an internal business policy of Save-A-Lot that should not bind the City of Wichita. It is not relevant to the formation of public policy in Wichita.

    The issue of tax increment financing

    At the same meeting, Greg Ferris, a lobbyist for Snyder, told the council that “there will not be a building on that corner if this is not passed today. There will not be any tax revenue, so we are not taking away any tax money away from schools, police, fire, etc.” He said we have “spent months” trying to figure out how to finance a project in that area. He said that “a grocery store is not going to move into the Planeview area to service those people,” alluding to how a grocery store did not move to the 13th and Grove area until the city subsidized it.

    Ferris contended that there is no city tax money going in to this project that is taken from something else.

    While presenting himself as speaking for the public interest, Ferris is a hired lobbyist for Snyder, the developer of the proposed grocery store. He is being paid to present Snyder’s interests, and those alone. He invokes the standard argument of those seeking corporate welfare through tax increment financing: the “but for” argument. This is the claim that without the benefit of the TIF district, nothing will happen.

    It may be true that without the corporate welfare provided by the TIF district and the CID, Snyder won’t develop the Save-A-Lot store. But that doesn’t mean that it is not possible to run a successful grocery store in that part of town, as we have evidence that it is.

    Ferris’ claim that no tax money from something else will go into this project is false, too. Will the Save-A-Lot store pledge to forgo the use of police, fire, and other city services? As this store wants to escape paying the same taxes that others have to pay, the rest of Wichita has to pay to provide services that Snyder doesn’t want to pay for.

    TIF is not a wise policy. Research on tax increment financing indicates that TIF is a zero-sum game. When someone wins, others lose an equal amount. TIF does not increase the total amount of development that takes place in a city. It simply transfers development from one part of the region to another. This intervention by government may actually decrease the amount of development in a city.

    In the case of Snyder and Ferris, the city’s actions in favoring a politically-connected developer and lobbyist with taxpayer-funded welfare may result in small ethnic grocers and one large established supermarket going out of business. How is this progress?

    The moral hazard

    In visiting with the owner of the large building and one of the grocery stores on Hillside, I asked him if he sought government assistance when developing that property. He answered no, that he didn’t know — speaking in his broken English — “where to dig the money” at that time.

    Now he knows to get a shovel.

    This creates an increasing cycle of dependence on government, particularly Wichita city government, for managing economic development. Entrepreneurship is replaced by bureaucracy and politics, not only for the revitalization of downtown Wichita, but across the city too.