Tag Archives: Economics

WichitaLiberty.TV: Russ McCullough, Ottawa University and Gwartney Institute

In this episode of WichitaLiberty.TV: Dr. Russ McCullough of Ottawa University introduces us to the Gwartney Institute and explains the importance of economic freedom. View below, or click here to view at YouTube. Episode 194, broadcast April 28, 2018.

Shownotes

Dr. Russ McCullough is the Wayne Angell Chair of Economics at Ottawa University in Kansas. He is also the Founder/Director of the Gwartney Institute for Freedom, Justice and Human Flourishing — A think tank that explores the evidence of social institutions around the world including faith and economics. He joined OU in 2011 coming from Iowa State University where he earned his PhD in Public Economics and taught classes while pursuing many entrepreneurial endeavors.

He completed his BA degree at St. Cloud State University in Minnesota where he grew up. While working on his dissertation in 1997, he was offered co-ownership in a real estate firm he worked at through school that specialized in college student housing. Property management and real estate sales eventually grew into having a few agents under his brokerage license. Shortly thereafter his daily activities focused more on real estate development which included multi-family housing, commercial mixed-use buildings and subdivisions. Real estate served as a catalyst into other business ventures including a construction company, a restaurant, a boutique hotel and an equestrian center.

Russ has studied and taught the economic principles of Fredrick Bastiat to his students in a course he developed called Entrepreneurial Economics. In addition to Bastiat, this class includes readings from Frederick Hayek, Ludwig Von Mises, Israel Kirzner and Ayn Rand.

Business patterns in Kansas counties

Census data shows that some counties in Kansas are growing faster than others.

Each year the United States Census Bureau publishes County Business Patterns (CBP). The Bureau describes the data as follows:

County Business Patterns (CBP) is an annual series that provides subnational economic data by industry. This series includes the number of establishments, employment during the week of March 12, first quarter payroll, and annual payroll. This data is useful for studying the economic activity of small areas; analyzing economic changes over time; and as a benchmark for other statistical series, surveys, and databases between economic censuses. Businesses use the data for analyzing market potential, measuring the effectiveness of sales and advertising programs, setting sales quotas, and developing budgets. Government agencies use the data for administration and planning. 1

What does this data tell us about counties in Kansas? I gathered the data back to 2005 and made the data in an interactive visualization available here. In the nearby illustration I show the data for large Kansas counties, starting in 2010. (In the visualization you may adjust all these parameters.) The data is indexed so that we can see relative changes independent of the size of the county.

In the chart, we can see that some Kansas counties are doing better than others. Notably, Sedgwick County shows a decline in employees and payroll in 2016.

Example from the visualization showing Kansas counties. Click for larger.


Notes

  1. United States Census Bureau. County Business Patterns (CBP). Available at https://www.census.gov/programs-surveys/cbp/about.html.

County Business Patterns (CBP)

Each year the United States Census Bureau publishes County Business Patterns (CBP). The Bureau describes the data as follows:

County Business Patterns (CBP) is an annual series that provides subnational economic data by industry. This series includes the number of establishments, employment during the week of March 12, first quarter payroll, and annual payroll. This data is useful for studying the economic activity of small areas; analyzing economic changes over time; and as a benchmark for other statistical series, surveys, and databases between economic censuses. Businesses use the data for analyzing market potential, measuring the effectiveness of sales and advertising programs, setting sales quotas, and developing budgets. Government agencies use the data for administration and planning. 1

This interactive visualization presents this data back to 2005, for NAICS code 00, which is “Total for All Sectors.” Click here to access.

Example from the visualization. Click for larger.


Notes

  1. United States Census Bureau. County Business Patterns (CBP). Available at https://www.census.gov/programs-surveys/cbp/about.html.

Why Wichita may not have the workforce

If Wichita-area companies can’t fill jobs, the declining labor force may be the reason. Who is responsible?

The Chung Report has a recent article noting the low unemployment rate in Wichita. That may make it difficult to fill jobs: “Wichita also has a low unemployment rate, which has seen steep decline in the past five years and now sets at 3.9 percent, below the national average of 4.1 percent. So even if companies are dead set on hiring, do we have the available workforce?” 1

It’s a useful article. But where it could be better, especially when discussing how Wichita companies will find workers to fill anticipated new jobs, is to note the shrinking Wichita labor force.

Here is a table of data for the Wichita MSA from the Bureau of Labor Statistics Local Area Unemployment Statistics (LAUS) program. 2 It is part of the Bureau’s Current Population Survey (CPS), which is a “monthly survey of households conducted by the Bureau of Census for the Bureau of Labor Statistics.” 3

I chose the year ending January 2011 as a comparison point, as it is near the low point of the great recession. Since then, the unemployment rate has fallen greatly, and is just half the rate of 2010.

But that isn’t the total story. It isn’t even the most important part of the story. Since the unemployment rate is a ratio, it has two moving parts, specifically the number of unemployed people and the number of people in the labor force. (The labor force, broadly, is the number of persons working plus those actively looking for work.)

It is possible that the unemployment rate falls while the number of people employed falls or rises slowly. This is the general trend in Wichita for the past seven years or so. The nearby table illustrates this. The labor force has fallen, and by a lot, while employment growth has been modest.

In fact, of the changes, we can say that 35.2 percent of the change in the unemployment rate is due to new jobs, while 67.8 percent of the change is due to a smaller labor force.

So when Wichita leaders ask “Do we have the workforce?” the answer might be no. The next question ought to be “Why not?”

Our leaders are quick and eager to take credit for economic development gains. But what about the shrinking labor force caused by the many of the same leaders and their policies?

As the proverb says, “Success has many fathers, while failure is an orphan.”


Notes

  1. The Chung Report. Predicting Future Jobs. Available at https://thechungreport.com/where-are-all-the-new-jobs/.
  2. Bureau of Labor Statistics. Local Area Unemployment Statistics (LAUS) program. Available at https://www.bls.gov/lau/.
  3. Bureau of Labor Statistics. Current Population Survey. Available at https://www.bls.gov/cps/.

Kansas and national jobs, March 2018

Over the past year, Kansas job growth trailed the nation, except in government.

Click for larger.
On April 20 the Bureau of Labor Statistics released employment figures through March 2018. 1

The nearby table shows Kansas and national figures in various categories, for March 2018 and one year before.

Overall, Kansas jobs grew at a rate about half that of the nation. A notable exception is government jobs, where Kansas grew by 0.51 percent compared to the nation at 0.26 percent.


Notes

  1. Bureau of Labor Statistics. State Employment and Unemployment Summary. Available at https://www.bls.gov/news.release/laus.nr0.htm.

Intrust Bank Arena loss for 2017 is $4,222,182

As in years past, a truthful accounting of the finances of Intrust Bank Arena in downtown Wichita shows a large loss.

The true state of the finances of the Intrust Bank Arena in downtown Wichita are not often a subject of public discussion. Arena boosters cite a revenue-sharing arrangement between the county and the arena operator, referring to this as profit or loss. But this arrangement is not an accurate and complete accounting, and it hides the true economics of the arena. What’s missing is depreciation expense.

There are at least two ways of looking at the finance of the arena. Nearly all attention is given to the “profit” (or loss) earned by the arena for the county according to an operating agreement between the county and SMG, a company that operates the arena. 1

This agreement specifies a revenue sharing mechanism between the county and SMG. For 2107, the accounting method used in this agreement produced a profit, or “net building income,” of $1,000,829 to be split (not equally) between SMG and the county. The county’s share was $300,414. 2

While described as “profit” by many, this payment does not represent any sort of “profit” or “earnings” in the usual sense. In fact, the introductory letter that accompanies these calculations warns readers that these are “not intended to be a complete presentation of INTRUST Bank Arena’s financial position and results of operations in conformity with accounting principles generally accepted in the United States of America.” 3

Intrust Bank Arena Payments to Sedgwick County. Click for larger.
That bears repeating: This is not a reckoning of profit and loss in any recognized sense. It is simply an agreement between Sedgwick County and SMG as to how SMG is to be paid, and how the county participates.

A much better reckoning of the economics of the Intrust Bank Arena can be found in the 2017 Comprehensive Annual Financial Report for Sedgwick County. 4 This document holds additional information about the finances of the Intrust Bank Arena. The CAFR, as described by the county, “… is a review of what occurred financially last year. In that respect, it is a report card of our ability to manage our financial resources.”

Regarding the arena, the CAFR states:

The Arena Fund represents the activity of the INTRUST Bank Arena. The facility is operated by a private company; the County incurs expenses only for certain capital improvements or major repairs and depreciation, and receives as revenue only a share of profits earned by the operator, if any, and naming rights fees. The Arena Fund had an operating loss of $4.3 million. The loss can be attributed to $4.5 million in depreciation expense.

Financial statements in the same document show that $4,522,596 was charged for depreciation in 2017.

Trends of events and attendance at Intrust Bank Arena. Click for larger.
If we subtract SMG payment of $300,414 from depreciation expense, we learn that the Intrust Bank Arena lost $4,222,182 in 2016.

Depreciation expense is not something that is paid out in cash. That is, Sedgwick County did not write a check for $4,522,596 to pay depreciation expense. Instead, depreciation accounting provides a way to recognize and account for the cost of long-lived assets over their lifespan. It provides a way to recognize opportunity costs, that is, what could be done with our resources if not spent on the arena.

But not many of our civic leaders recognize this, at least publicly. We — frequently — observe our governmental and civic leaders telling us that we must “run government like a business.” The county’s financial report makes mention of this: “Sedgwick County has one business-type activity, the Arena fund. Net position for fiscal year 2017 decreased by $4.3 million to $156.3 million. Of that $156.3 million, $146.0 million is invested in capital assets. The decrease can be attributed to depreciation, which was $4.5 million.5 (emphasis added)

At the same time, these leaders avoid frank and realistic discussion of economic facts. As an example, in years past Commissioner Dave Unruh made remarks that illustrate the severe misunderstanding under which he and almost everyone labor regarding the nature of spending on the arena: “I want to underscore the fact that the citizens of Sedgwick County voted to pay for this facility in advance. And so not having debt service on it is just a huge benefit to our government and to the citizens, so we can go forward without having to having to worry about making those payments and still show positive cash flow. So it’s still a great benefit to our community and I’m still pleased with this report.”

The contention — witting or not — is that the capital investment of $183,625,241 (not including an operating and maintenance reserve) in the arena is merely a historical artifact, something that happened in the past, something that has no bearing today. There is no opportunity cost, according to this view. This attitude, however, disrespects the sacrifices of the people of Sedgwick County and its visitors to raise those funds. Since Kansas is one of the few states that adds sales tax to food, low-income households paid extra sales tax on their groceries to pay for the arena — an arena where they may not be able to afford tickets.

Any honest accounting or reckoning of the performance of Intrust Bank Arena must take depreciation into account. While Unruh is correct that depreciation expense is not a cash expense that affects cash flow, it is an economic reality that can’t be ignored — except by politicians, apparently. The Wichita Eagle and Wichita Business Journal aid in promoting this deception.

The upshot: We’re evaluating government and making decisions based on incomplete and false information, just to gratify the egos of self-serving politicians and bureaucrats.

Reporting on Intrust Bank Arena financial data

In February 2015 the Wichita Eagle reported: “The arena’s net income for 2014 came in at $122,853, all of which will go to SMG, the company that operates the facility under contract with the county, Assistant County Manager Ron Holt said Wednesday.” A reading of the minutes for the February 11 meeting of the Sedgwick County Commission finds Holt mentioning depreciation expense not a single time. Neither did the Eagle article.

In December 2014, in a look at the first five years of the arena, its manager told the Wichita Eagle this: “‘We know from a financial standpoint, the building has been successful. Every year, it’s always been in the black, and there are a lot of buildings that don’t have that, so it’s a great achievement,’ said A.J. Boleski, the arena’s general manager.”

The Wichita Eagle opinion page hasn’t been helpful, with Rhonda Holman opining with thoughts like this: “Though great news for taxpayers, that oversize check for $255,678 presented to Sedgwick County last week reflected Intrust Bank Arena’s past, specifically the county’s share of 2013 profits.” (For some years, the county paid to create a large “check” for publicity purposes.)

That followed her op-ed from a year before, when she wrote: “And, of course, Intrust Bank Arena has the uncommon advantage among public facilities of having already been paid for, via a 30-month, 1 percent sales tax approved by voters in 2004 that actually went away as scheduled.” That thinking, of course, ignores the economic reality of depreciation.

Even our city’s business press — which ought to know better — writes headlines like Intrust Bank Arena tops $1.1M in net income for 2015 without mentioning depreciation expense or explaining the non-conforming accounting methods used to derive this number.

All of these examples are deficient in an important way: They contribute confusion to the search for truthful accounting of the arena’s finances. Recognizing depreciation expense is vital to understanding profit or loss, we’re not doing that.


Notes

  1. Management Agreement between Sedgwick County and SMG. August 1, 2007. Available here.
  2. Minutes of the Sedgwick County Commission, February 14, 2018.
  3. Management Agreement between Sedgwick County and SMG.
  4. Sedgwick County. Comprehensive Annual Financial Report of the County of Sedgwick, Kansas for the Year ended December 31, 2017. Available at https://www.sedgwickcounty.org/media/39501/2017-cafr.pdf.
  5. Ibid.

Project Wichita, remember Visioneering Wichita

As Project Wichita gets ready to gather information and set goals, let’s be aware that we’ve done this before, and not long ago.

Project Wichita is a new initiative to do something about the future of Wichita. I hope it works. But we’ve been down this road before, and I don’t know of anything created that has been of lasting value.

That past effort was Visioneering Wichita. I’d supply a link to its website, but the site went stale from lack of updates. Eventually it was abandoned, although its remnants may be found at archive.org. (Visioneering Wichita does have a Facebook page, although it hasn’t been updated for eight years.)

Here’s one of the goals that Visioneering Wichita created for the city:

Income Growth: The Wichita MSA must increase its focus on those non-manufacturing job sectors that generate higher pay. Since 2002, the Wichita per capita income as a percent of the United States per capita income has slowly increased, and in 2006 and 2007, the value exceeded 100%, for the first time since 1987.16 In spite of the recent uptick in Wichita’s per capita income as a percentage of the United States, it is expected that it will continue the longer term decline c until: a) the decline in manufacturing jobs stops b) the gap between the United States and Wichita in non-manufacturing earnings per job begins to decrease and c) the gap in minority income is decreased. 1

Charts from Visioneering Wichita, May 2009. Click for larger.

Per Capita Personal Income, Wichita and Visioneering Peers. Click for larger.
I’ve gathered data on per capita personal income through 2016, the latest year for a full year of data, and prepared charts similar to those Visioneering used. Wichita per capita personal income continues to be lower than the cities identified as Visioneering peers, except for Oklahoma City. In fact, Wichita per capita personal income was lower in 2016 than in 2014.

Wichita and United States Per Capita Personal Income. Click for larger.
Comparing Wichita to the nation, we see that Wichita took a downturn the past few years.

Personal Income, Wichita and Visioneering Peers. Click for larger.
Per capita measures, while useful, are not without caveats that need to be understood and considered. For example, if half the people of Wichita moved to other cities, the per capita income would not change if the income of those who left was evenly distributed compared to the original distribution.

Staff of the Visioneering Wichita project used to provide updates on these statistics from time to time. The last update provided to officials that I can recall was in 2013.

Wichita civilian labor force through January 2018. Click for larger.
Speaking of moving from Wichita, one of the things our region needs to address is the shrinking labor force. Data from the Bureau of Labor Statistics shows that the Wichita labor force is on the decline, while it is rising for the nation.

Of the declining labor force, Wichita government and civic leaders use this in two different, and conflicting, ways. First, the declining labor force means that even though job growth is very low, the unemployment rate has dropped, and by a lot. This improved unemployment rate is trumpeted by politicians and bureaucrats. Second, we see concern that Wichita may not have the workers necessary to fill jobs in expanding companies like Spirit Aerosystems. This is used to promote increasing spending on incentives and training infrastructure.

Wichita manufacturing jobs, through January 2018. Click for larger.
By the way, the Visioneering report mentioned the decline in manufacturing jobs. The data shows that since the end of the Great Recession, the number of manufacturing jobs in the Wichita area is slowly declining, while rising for the nation at the same time.

Perhaps the best thing Project Wichita could do is to reveal the truth about the Wichita economy and the economic development infrastructure we’ve built. The Chung Report has done a bit of this. But I don’t think our civic leaders act as through they know and understand. It is against their self-interest to admit that what they’ve done hasn’t been working.


Notes

  1. Visioneering Wichita Revised Vision Document, May 2009.

Sorting and polarizing in America

American cities are changing with domestic migration. Kansas data excerpted.

A new study looks at the characteristics of migrants in America — that is, individuals and families moving one city to another. 1 (“City” in this context means a consolidated statistical area, metropolitan statistical area, or micropolitan statistical area.)

The author explains: “Domestic migration across U.S. metropolitan areas is selective: in-migrants to expensive metros tend to have higher incomes and educational attainment than out-migrants, while the opposite is true in the least expensive metros. This pattern contributes to the process of polarization across U.S. metros.”

The data is fascinating. Consider the household income of in-migrants and out-migrants. For the Wichita CSA, the median household income of in-migrants is $36,998, and for out-migrants, $38,814. The difference is -$1,186. This doesn’t necessarily mean that Wichita is becoming poorer, as this data is only for households migrating to and from Wichita. (The figures are the average values for the years 2005 to 2016.)

This result is not surprising, as the study notes a correlation between housing prices and a positive difference in migrant income. As Wichita has relatively low housing prices, a negative difference in migrant income is natural, according to the study data.

The study supplies data for all areas in the nation. I’ve isolated data for Kansas and present it here. Where is Lawrence? It’s part of the Kansas City-Overland Park-Kansas City, MO-KS CSA.

Click for pdf version.


Notes

  1. Romem, Issi. Characteristics of Domestic Cross-Metropolitan Migrants. Available at https://www.buildzoom.com/blog/characteristics-of-domestic-cross-metropolitan-migrants.

Project Wichita right to look ahead at city’s future

We can understand self-serving politicians and bureaucrats. It’s what they do. But a city’s newspaper editorial board ought to be concerned with the truth.

In February the Wichita Eagle editorialized about Project Wichita, a ramping-up effort to do something about the future of Wichita. 1 It’s worthwhile to take a look at the op-ed, if only to learn something about the quality of Wichita Eagle editorial writing.

I understand civic boosterism; the desire to paint a positive image of the future. But this rosy outlook has to be based, at least loosely, on facts. Following, a look at a few claims made in the editorial.

“Our downtown is becoming more of a destination and place to live.”
The problem is this: Wichita economic development officials use a circuitous method of estimating the population of downtown Wichita, producing a number much higher than Census Bureau estimates. Downtown Wichita, the city’s economic development agency responsible for downtown, says the population of downtown is 2,138, which is far — really far — outside the range the Census Bureau gives. For more about this, see Living in downtown Wichita.

As far as a destination for business, the U.S. Census Bureau tracks business trends by zip code. For zip code 67202, which is downtown Wichita, results since 2007 show fewer business establishments, fewer people working downtown, and lower earnings generated in downtown Wichita. In all cases, the trend is lower. For more about this, see Downtown Wichita business trends.

Further, Wichita leaders have exaggerated the number of people working in downtown. For years our leaders told us there were 26,000 daytime workers in downtown Wichita. But this claim is based on misuse of data so blatant it can be described only as malpractice. In fact, this figure is now omitted from the state of downtown reports. No one will accept responsibility for this mistake. See Downtown Wichita jobs, sort of and Downtown Wichita report omits formerly prominent data.

“But Wichita feels pretty good about itself, which suggests the community is at the perfect time to think about its future.”
I have to say, we’ve been hoodwinked, and by our top leaders. Recently both the mayor of Wichita and chair of the county commission penned upbeat editorials praising our economy. See Mayor Longwell’s pep talk and Sedgwick County’s David Dennis on economic development.

But the reality is quite different. See:

Given this, why do the mayor, county commission chair, and our newspaper’s editorial board say what they do? The first two are politicians, but we ought to ask that our newspaper seek the truth, not personal political gain.

“It will get more serious in March, when students and volunteers from Wichita State University’s Public Policy and Management Center …”
This is the same organization on which the city relies for many services, including the gathering of public input in past campaigns like the 2014 sales tax election. The city seemed sure that tax would pass, but voters rejected it by a wide margin. 2

“Public Policy director Misty Bruckner and her group will deliver feedback and conclusions to Project Wichita’s four co-chairs.”
A few years ago Bruckner co-authored a paper titled “Citizen Attachment: Building Sustainable Communities.” 3 My reporting on it was titled Wichita needs more, and willing, taxpayers. An excerpt: “Increasingly, citizens are retreating from their responsibilities to community and demanding more from government than they are willing to pay for. But changes in local government behavior can be instrumental in reversing this trend, by strengthening citizens’ commitment to the well-being of their communities. Citizens who are committed to community are more willing to accept responsibility for the well-being of their fellow citizens and are also more likely to join with government and other parties to improve their communities. Citizens who are committed to community are also more willing taxpayers — that is, when government demonstrates that it can be trusted to invest public resources in ways that strengthen the community. The central thrust of this model is getting citizens and governments to work together, but realistically, many communities will require new revenue — including additional tax dollars — if they are to assemble the critical mass of resources necessary for meaningful change. Accordingly, citizens who are willing to pay increased taxes are an important component of building sustainable communities.” (emphasis added)

Please don’t fault me for being cynical when I suspect that this entire operation is designed to prepare Wichitans (or the region) for a tax increase.

“Community input will be as wide as the city limits.”
Wait a moment. I thought we were supposed to think regionally.

“Project Wichita seems similar to Visioneering Wichita …”
I wonder if anyone remembers anything positive that resulted from Visioneering Wichita. After a few years, the organization’s website went stale, and staff discontinued making presentation to the city council and county commission See Visioneering asks for money. Let’s ask these questions.

“Unlike Visioneering, Project Wichita isn’t headed by city or county government.”
Visioneering Wichita was led by the Chamber of Commerce, not government. Local governments made financial contributions to Visioneering, just as they are also contributing to Project Wichita. 4


Notes

  1. Wichita Eagle Editorial Board. Project Wichita right to look ahead at city’s future. Available at http://www.kansas.com/opinion/editorials/article198178899.html.
  2. Ryan, Kelsey. Voters soundly defeat Wichita sales tax proposal. Available at http://www.kansas.com/news/politics-government/election/article3567045.html.
  3. See http://www.gfoa.org/sites/default/files/GFR_OCT_10_24.pdf.
  4. Wichita Business Journal. Sedgwick County Commission approves Visioneering Wichita funding. Available at https://www.bizjournals.com/wichita/blog/2012/12/sedgwick-county-commission-approves.html.

WichitaLiberty.TV: Larry Reed, Foundation for Economic Education

In this episode of WichitaLiberty.TV: Lawrence W. Reed, President of Foundation for Economic Education, joins Bob and Karl to discuss the connection between liberty and character, our economic future, and I, Pencil. View below, or click here to view at YouTube. Episode 191, broadcast April 7, 2018.

Shownotes

Wichita employment down, year-over-year

At a time Wichita leaders promote forward momentum in the Wichita economy, year-over-year employment has fallen.

Today the Bureau of Labor Statistics released employment statistics through February 2018. 1

One of the tables released is “Over-the-year change in total nonfarm employment for metropolitan areas, not seasonally adjusted,” which shows changes in jobs from February 2017 to February 2018. 2 For this time period for the Wichita metropolitan area, the number of nonfarm jobs fell from 294.7 thousand to 292.3 thousand, a decline of 2,400 jobs or 0.8 percent.

In February, 313 metropolitan areas had over-the-year increases in nonfarm payroll employment, 69 had decreases, and 6 had no change.

Over the same period, the unemployment rate in the Wichita MSA fell from 4.6 percent to 4.1 percent. The labor force fell from 309,336 to 304,886.


Notes

  1. Bureau of Labor Statistics. Metropolitan Area Employment and Unemployment Summary. Available at https://www.bls.gov/news.release/metro.nr0.htm.
  2. Bureau of Labor Statistics. Over-the-year change in total nonfarm employment for metropolitan areas, not seasonally adjusted. Available at https://www.bls.gov/web/metro/metro_oty_change.htm.

Kansas highways set to crumble, foresees former budget director

Duane Goossen, former high Kansas government official, says the state’s highways are in trouble. What is his evidence?

In a recent op-ed, Duane Goossen laments the lack of spending on Kansas roads and highways. 1 His focus is his claimed lack spending on maintenance, which, he says, will lead to much larger repair bills in the future.

“But now the Kansas road system is truly threatened.” He raises the common “Bank of KDOT” criticism, writing “The highway fund became a convenient source of cash.”

KDOT transfers from sales tax . Click for larger.
It’s true, as Goossen writes, that a lot of money has been transferred from the highway fund to the general fund. At the same time, the amount of sales tax dollars transferred from the general fund to the transportation fund has risen, and by a factor of five over one decade.

But it isn’t true that Kansas highways are crumbling from lack of spending on maintenance.

Kansas Highway Conditions, through 2017. Click for larger.
Here’s a chart of the conditions of Kansas roads and highways. 2 It shows that, for interstate highways, the percent of the system in good condition has been pretty level since 2001. For non-interstate highways, the percent in good condition fell starting in 2004, but has rebounded.

Based on these charts, there’s no factual basis to claim that Kansas roads and highways are deteriorating.

KDOT spending, major road programs. Click for larger.
KDOT spending, total road programs. Click for larger.
KDOT transfers. Click for larger.
KDOT funding sources, partial. Click for larger.
But Goossen looks to the future, claiming that a lack of spending now will lead to big bills later. Now, it’s important to know that while money has been transferred from the highway fund, that alone doesn’t tell us about the level of spending on maintenance. Looking at actual spending instead of transfers to and from, we find that for fiscal year 2017, spending on three categories (Maintenance, Preservation, and Modernization) was nearly unchanged from the year before, while spending on the category Expansion and Enhancement fell by 31 percent.

For these four categories — which represent the major share of KDOT spending on roads — spending in fiscal 2017 totaled $738.798 million. That’s down 14 percent from $857.133 million the year before, and up from a low of $698.770 million in fiscal 2010. 3

And adjusted for inflation, spending on maintenance programs has declined somewhat, including in the years when Goossen held high office. These declines, however, are far short of setting up Goossen’s prediction of calamity.

Then, there’s this, which is really incredible. Goossen criticizes some of the bonds issued by KDOT in recent years, and he is on the mark: “And a portion of that debt has ‘interest only’ payments in the first years, with the principal payments still to come.”

However: The state also issued “interest only” bonds in 2004 and 2010. 4 Who was budget director during these years, as well as Secretary of the Kansas Department of Administration? Duane Goossen. 5 But now Goossen criticizes as irresponsible the same action the state took when he was in high office.

Given the insufficient factual basis for Goossen’s claims — not to mention the blatant hypocrisy — we have to wonder if this article is politically motivated. Perhaps it is, as we see Goossen making the maximum allowed contribution to Kansas Democratic gubernatorial candidate Laura Kelly.

Either that, or Goossen is auditioning for another government job.


Notes

  1. Goossen, Duane. Trouble coming for Kansas highways. Garden City Telegram, March 30, 2018. Available at http://www.gctelegram.com/opinion/20180330/trouble-coming-for-kansas-highways.
  2. Kansas Department of Transportation. 2017 Kansas NOS Condition Survey Report. Available at https://www.ksdot.org/Assets/wwwksdotorg/bureaus/matResLab/pmis/2017/CSR2017_SW.pdf.
  3. Weeks, Bob. Kansas highway spending. Available at https://wichitaliberty.org/kansas-government/kansas-highway-spending-2017/.
  4. Weeks, Bob. Kansas transportation bonds economics worse than told. Available at https://wichitaliberty.org/kansas-government/kansas-transportation-bonds-economics-worse-than-told/.
  5. Goossen, Duane. Kansas Budget blog. Available at http://www.kansasbudget.com/.

WichitaLiberty.TV: Dr. Wolf von Laer of Students for Liberty

In this episode of WichitaLiberty.TV: Dr. Wolf von Laer of Students for Liberty joins Bob and Karl to talk about young people and the cause of liberty. View below, or click here to view at YouTube. Episode 190, broadcast March 31, 2018.

Shownotes

WichitaLiberty.TV: Dr. Tom G. Palmer and the causes of wealth

In this episode of WichitaLiberty.TV: Dr. Tom G. Palmer of Atlas Network joins Bob Weeks to explain why the usual approach to foreign aid isn’t working, and what Atlas Network is doing to change the lives of the poor across the world. View below, or click here to view at YouTube. Episode 189, broadcast March 24, 2018.

Shownotes

Kansas personal income

Personal income in Kansas rose in 2017 at a rate one-third that of the nation.

Personal income in Kansas for 2017 was $138,673 million, according to preliminary estimates released today by the Bureau of Economic Analysis, an agency of the United States Department of Commerce.

Change in personal income, 2016 to 2017. Click for a larger version and the BEA press release.
That is an increase of 1.0 percent from 2016, when personal income was $137,305 million. These are current dollars, not adjusted for inflation. 1

The growth for Kansas — 1.0 percent — ranked 47th among the states. For the nation, personal income rose by 3.1 percent, and for the Plains states, it rose by 1.7 percent.

BEA gives the population of Kansas as 2,913,000, with per capita personal income at $47,603. That ranks 24th among the states, and is 94 percent of the value of personal income for the entire nation, which is $50,392.

Personal income, according to BEA, is “the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.” 2

For Kansas, there were these notable changes in earnings:
Farm: Down by 0.66 percent
Non-durable goods manufacturing: Up by 0.23 percent
Wholesale trade: Up by 0.11 percent
Transportation and warehousing: Up by 0.15 percent
Management of companies and enterprise: Up by 0.15 percent
Health care and social assistance: Up by 0.23 percent
State and local government: Up by 0.21 percent


Notes

  1. Bureau of Economic Analysis. State Personal Income: 2017. Available at https://www.bea.gov/newsreleases/regional/spi/sqpi_newsrelease.htm.
  2. Ibid.

Tax collections by the states

An interactive visualization of tax collections by state governments.

Each year the United States Census Bureau collects data from the states regarding tax collections in various categories. I present this data in an interactive visualization.

The values are for tax collections by the state only, not local governmental entities like cities, counties, townships, improvement districts, cemetery districts, library districts, drainage districts, watershed districts, and school districts.

Of particular interest is the “Total by State” tab. Here you can select a number of states and compare their tax burdens. (Probably three or four states at a time is the practical limit.) This data is presented on a per-person basis.

Data is as collected from the United States Census Bureau, Annual Survey of State Government Tax Collections, and not adjusted for inflation. Visualization created using Tableau Public.

Click here to access the visualization.

Example from the visualization. Click for larger.

Employment in metropolitan areas

An interactive visualization of labor force, employment, and unemployment rate for all metropolitan areas in the United States.

The example from the visualization shown below shows the Wichita Metropolitan Statistical Area and All Metro Areas. Data is through January 2018. Of note regarding Wichita:

  • Since the Great Recession ended, the unemployment rate in Wichita has fallen, as it has nationwide.
  • At the same time, employment (the number of people working) in Wichita, has been steady or rising slightly. Nationwide, employment has been growing.
  • At the same time, the civilian labor force in Wichita has been mostly falling, while rising nationwide.

When using the visualization you can adjust the date range to focus on recent years, or any other time period.

To learn about the data included and to use the visualization, click on Civilian labor force and unemployment by metropolitan area.

Example from the visualization., showing Wichita and All metro areas Click for larger.

Wichita employment down, year-over-year

At a time Wichita leaders promote forward momentum in the Wichita economy, year-over-year employment has fallen.

Today the Bureau of Labor Statistics released employment statistics through January 2018. 1

One of the tables released is “Over-the-year change in total nonfarm employment for metropolitan areas, not seasonally adjusted,” which shows changes in jobs from January 2017 to January 2018. 2 For this time period for the Wichita metropolitan area, the number of nonfarm jobs fell from 292.1 thousand to 291.1 thousand, a decline of 1,000 jobs or 0.3 percent.

Of 382 metropolitan areas, 57 performed worse than did Wichita. For these metro areas, the average growth in jobs was 1.15 percent.

Over the same period the unemployment rate in the Wichita MSA fell from 4.6 percent to 3.7 percent.


Notes

  1. Bureau of Labor Statistics. Metropolitan Area Employment and Unemployment Summary. Available at https://www.bls.gov/news.release/metro.nr0.htm.
  2. Bureau of Labor Statistics. Over-the-year change in total nonfarm employment for metropolitan areas, not seasonally adjusted. Available at https://www.bls.gov/web/metro/metro_oty_change.htm.

Employment in the states

An interactive visualization of the civilian labor force, employment, and unemployment, for each state.

In the example from the visualization shown below, which shows indexed employment growth, you can see that Kansas (the highlighted line) is not faring well. There aren’t many states whose lines are below that of Kansas.

This data is from the Bureau of Labor Statistics, a division of the United States Department of Labor. It is current through January 2018.

Click here to use the visualization and to learn about the meaning of the data series. There are four views of the data, accessible through the tabs along the top. You may select a time frame and any combination of states. By clicking on the color legend, you can emphasize the lines for one or more states. (Ctrl+click to add more than one line.)

Employment status of the civilian noninstitutional population, example showing Kansas highlighted. Click for larger.

Employment status of the civilian noninstitutional population

An interactive visualization of the civilian labor force, employment, and unemployment, for each state.

Source of data is Bureau of Labor Statistics, a division of the United States Department of Labor. The title of the data series is States and selected areas: Employment status of the civilian noninstitutional population, January 1976 to date, seasonally adjusted (TXT). This may be found on the BLS page State Employment and Unemployment (Monthly), specifically the file https://www.bls.gov/web/laus/ststdsadata.txt.

BLS offers these definitions of the data elements in this visualization: 1

  • Civilian labor force. Included are all persons in the civilian noninstitutional population ages 16 and older classified as either employed or unemployed. (See the definitions below.)
  • Employed persons. These are all persons who, during the reference week (the week including the 12th day of the month), (a) did any work as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of their family, or (b) were not working but who had jobs from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job.
  • Unemployed persons. Included are all persons who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment some time during the 4 week-period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.
  • Unemployment rate. The unemployed percent of the civilian labor force [i.e., 100 times (unemployed/civilian labor force)].

Click here to use the visualization. There are four views of the data, accessible through the tabs along the top. You may select a time frame and any combination of states. By clicking on the color legend, you can emphasize the lines for one or more states. (Ctrl+click to add more than one line.)

Employment status of the civilian noninstitutional population, example. Click for larger.
Employment status of the civilian noninstitutional population, example showing Kansas highlighted. Click for larger.


Notes

  1. Bureau of Labor Statistics. Local Area Unemployment Statistics, Frequently Asked Questions. Available at https://www.bls.gov/lau/laufaq.htm#Q03.