Voice For Liberty

Tag: Flint Hills Center for Public Policy

  • Kansas Policy Institute site launched

    The Flint Hills Center for Public Policy, a Kansas-based think tank, recently changed its name to the Kansas Policy Institute. Now the organization’s website, formerly at www.flinthills.org, has changed. The new site is Kansas Policy Institute at www.kansaspolicy.org.

    From the new site: Kansas Policy Institute is an independent non-profit organization that advocates for free enterprise solutions and the protection of personal freedom. Our work is focused on state and local economic issues in Kansas with particular emphasis on education, fiscal policy and health care. We empower citizens and legislators with credible research and creative ideas to promote a low-tax, pro-growth environment that preserves the ability to provide high quality services.

  • Kansas Policy Institute releases ‘Kansas Primer on Education Funding’

    Recently the Kansas Policy Institute (formerly known as the Flint Hills Center for Public Policy) released “A Kansas Primer on Education Funding.” This is a four-volume set of research, with volumes one and two available at present.

    Volume One is titled “History of Education Finance.” It’s written by Gregory L. Schneider, who is Associate Professor of History at Emporia State University, and also author of the recently-published book The Conservative Century: From Reaction to Revolution

    A direct link to the document is A Kansas Primer on Education Funding: Volume I History of Education Finance. Or, read the document below (I recommend clicking on “fullscreen”):

    A Kansas Primer on Education Funding: Volume I History of Education Finance

  • ‘Kansas Reporter’ launched

    This week the Kansas Policy Institute announced the launch of KansasReporter, a news service covering Kansas government. Combined with some other relatively new sources of news, analysis, and commentary — Kansas Liberty, Kansas Watchdog, State of the State, Kansas and a few older sources like Kansas Meadowlark and Voice For Liberty in Wichita — Kansans should be better-equipped to know what’s going on in our state, and to become more involved in our state and local governments.

    Following is its press release.

    KansasReporter launches online news service

    Topeka, Kan., Dec. 9 – KansasReporter is pleased to announce the December 9 launch of its state capital news bureau.

    KansasReporter is an online news service providing original reporting on Kansas government. The state capital bureau in Topeka is staffed by two full-time, experienced journalists. Their work will be published online at and accessible for everyone to read. It is also available as a free “wire service” to all media outlets.

    KansasReporter is a project of Kansas Policy Institute. KPI President Dave Trabert says, “We launched this service to help fill a void created by the unfortunate reduction in media resources devoted to state government news coverage. The closing of Harris News Service’s Topeka bureau earlier this year and other cutbacks have reduced information available to citizens and media outlets outside the Topeka area at a critical time. The mission is to ensure that government is held accountable to all Kansans and to examine issues from all sides. We recognize that being founded by a public policy organization raises legitimate questions of balance. The purpose of KansasReporter is not to promote a particular viewpoint but to provide vigorous and credible reporting on all sides of stories. We encourage readers to hold us accountable to our mission and welcome their constructive criticism.”

    Brian R. Hook leads the coverage as bureau chief. He will oversee editing and also report on a daily basis. With more than 15 years of journalism experience, he worked as a freelance journalist for the last ten years. He reported for dozens of publishers, including Financial Times, Dow Jones, McGraw-Hill, Kiplinger’s and U.S. News & World Report. He started his career in TV news at KAKE-TV in Wichita, before moving to Oklahoma City and then to St. Louis, helping to launch a new, prime-time newscast at KTVI.

    Gene Meyer is the new reporter for KansasReporter.org. Meyer spent 25 years reporting for the Kansas City Star. While at the Star he reported and co-wrote a series of stories regarding Kansas pension fund investment practices that led to enactment of state legislation to increase safeguards for public employees’ retirement savings. In addition to reporting for a commodity news service out of Leawood, Kan., Meyer worked for the Wall Street Journal from its Chicago bureau covering agricultural futures markets for the newspapers and Dow Jones News Wire.

    Kansas Policy Institute
    Kansas Policy Institute is a non-profit organization that advocates for free enterprise solutions and the protection of personal freedom. It also operates KansasWatchdog, KansasOpenGov and KansasVotes.

    Contact information for KansasReporter is Brian R. Hook, Bureau Chief
    Topeka Office: 785.408.6100
    Email: brhook@kansaspolicy.org

  • Kansas news digest

    News from alternative media around Kansas for October 26, 2009.

    Kansans will have to pay to support health care in states favored by Democrats

    (Kansas Liberty) Special treatment and favors pollute health care reform bill: “Senate Democrats have worked in extra provisions to the reform plans that would give their states special advantages, including financial assistance with Medicaid costs, additional Medicare benefits and extra tax breaks for some residents. Republicans point out that these advantages will shift some of the costs of the plan to other states, including Kansas. Majority Leader Harry Reid, D-Nevada, has been instrumental in adding in extra benefits for himself and for his Democratic colleagues.”

    Financial crisis may finally make schools ‘participate in cuts’

    (Kansas Liberty) Last week’s meeting centered on discussing possible ways to make additional cuts, and many conservative Republicans are continuing to look at K-12 as a way to decrease state spending. The committee also discussed the possibility of school consolidation to save funds, identifying state agencies that could possibly be scaled back or eliminated, and possibilities for spurring job growth within the state as a way to increase revenues. … Democrats had already started planting the idea that tax increases are necessary.

    Flint Hills Changes Name to Kansas Policy Institute

    (Kansas Watchdog) “The Flint Hills Center for Public Policy has changed its name to the Kansas Policy Institute. The non-profit, non-partisan organization will continue to pursue the same free market interests under the new name.”

    Kansas is Headed for a Budgetary Train Wreck

    (Kansas Watchdog) “Educators say K-12 schools need $70 million more in 2010. And the state is expecting a budget shortfall of $500 million or more in 2010 — even without factoring in requests for more spending. One way to help fix the problem might be more honest reporting on the nature of the state’s budgetary woes.”

    Labette Community College President reimbursed with tax dollars for political donation

    (Kansas Watchdog) “Labette Community College president George Knox donated $500 to the campaign of State Treasurer Dennis McKinney according to a report by KOAM TV. A donation to a political candidate by a private citizen is not unusual, but KOAM TV reported that LCC trustee Mike Howerter questioned the reimbursement claim for the political donation by the college president.”

    Letter from the Newsroom: Health Insurance Edition

    State of the State Kansas takes a look at health insurance this week, featuring video interviews with Kansas Senator Jim Barnett, Kansas Insurance Commissioner Sandy Praeger, Mary Beth Chambers from Blue Cross Blue Shield of Kansas, and others.

  • Pachyderms to host panel on Republican Party’s future

    At this Friday’s meeting of the Wichita Pachyderm Club, the topic is “What does the Republican Party have to look like to be successful in 2010?”

    This meeting will feature a panel of

    • Kelly Arnold: Sedgwick County Republican Party Chair
    • Jason Watkins: State Representative for 105th district
    • Dave Trabert: President of the Flint Hills Center for Public Policy
    • Derrick Sontag: Kansas State Director Americans for Prosperity.

    The moderator will be John Todd, Vice President, Wichita Pachyderm Club.

    Each panelist will be asked to make a 2 to 3 minute introductory comment, followed by group discussion with the audience.

    All are welcome to attend Pachyderm meetings. Lunch is $10, or you may attend the meeting only for $3. The meeting starts at noon, although those wishing to order lunch are encouraged to arrive by 11:45. The location is Whiskey Creek Steakhouse at 233 N. Mosley in Old Town. You can view a map of this location by clicking on Google map of 233 N. Mosley.

  • Lawrence Journal-World headline doesn’t deliver

    Yesterday’s edition of the Lawrence Journal-World has the headline ‘Buried treasure’ claims debunked. The headline and article refer to a report issued by the Flint Hills Center for Public Policy and covered in my post Kansas funds have large, unneeded balances.

    The dictionary says that “debunk” means “to expose the sham or falseness of.” The article doesn’t come anywhere near fulfilling this promise.

    The article is based on a quotation from Kansas state budget director Duane Goossen: “The key point that I would make is that while the report uses the word ‘unencumbered,’ and seems to suggest that that means somehow the balances in these funds are unplanned for, not budgeted for, or are there for the discretionary use of the agencies that hold the funds — that is not correct.

    In my reading of the report, I don’t see where the claims that Goosen “debunks” are made. The central finding of the Flint Hills research is that there’s a lot of unencumbered money in these funds, and that these balances, for the most part, have grown rapidly.

    The growth of these balances is the strongest evidence that many of these funds are collecting more money — be it in the form of taxes or fees — than needed to support the funds’ mission. The Journal-World article doesn’t address this issue at all.

    As an aside, the comments left to this article on the newspaper’s website criticize the authors without addressing any of the substance.

  • Clarifications to Kansas unencumbered fund balances report

    Last week the Flint Hills Center for Public Policy released a groundbreaking research report detailing the several billion dollars hidden away in Kansas state government funds. My reporting on this, along with links to the study document, is at Kansas funds have large, unneeded balances.

    There’s been a bit of pushback. Some officials have said they simply don’t believe the research. Others quibble over definitions of terms and have said — perhaps mistakenly — that there are more restrictions on specific fund balances than are actually in effect.

    Dave Trabert, president of the Flint Hills Center, has released the following response and clarification regarding some of these issues.

    It’s not all in special revenue funds. Only $241 million of the $1.955 billion in unencumbered cash is in fee funds (from licensing fees paid by barbers, chiropractors, CPAs, etc., student fees paid to universities, certification fees paid by farmers, oil & gas well owners, etc. etc.); somehow, people have been led to believe that all of the money has built up in fee funds. That clearly is not true. Some of the cash is in other types of funds but the source of a great deal of the money is from tax collections. (It’s difficult to say with certainty in the case of some funds based simply on the name of the fund, so the exact amount coming from taxes is not known … much more investigation is needed).

    “Special” can be very misleading. To some, it means that the revenue source is something other than taxes; others use it to refer to money in a fund created to track a particular type of expenditures. In both cases, the “special” designation has been used to at least imply that the money can’t be used for anything else, which may be true in a few cases but most often is not. “Special” means different things to different people and is not a legal definition.

    “Spoken for” is a meaningless phrase. This is another label that has no accounting or legal basis. The sheer fact that agencies have plans to use the leftover money has no legal bearing, and in fact the current and previous governors have swept carryover money out of funds for other purposes. The Government Accounting Standards Board says that unless a specific statute prevents money in a particular fund from being redeployed, it can be. Anyone who says this leftover cash can’t be used for any other purpose should be forced to cite the pertinent statute.

    Even unencumbered cash in bond funds may legitimately be available for other uses — it is not uncommon for bond funds to take in more money than needed to meet obligations. Even at the local level where, for example, schools levy a specific tax to pay off construction bonds, there is a legal mechanism for returning excess collections to taxpayers. Whether that actually takes places is another matter, but mechanisms for returning excess money to taxpayers exist.

    Unencumbered defined. The accounting definition of unencumbered funds is funds that are not subject to any mortgage, lien, charge and/or encumbrance (whether equitable or otherwise) or any other creditor claims whatsoever. This is the definition used in our analysis and we must presume that state agencies and their accountants properly differentiate between encumbered and unencumbered.

    The fact that money is in a designated fund is, in itself, meaningless — there is a perhaps natural assumption that once money is put into a fund, it can’t be used for any other purpose. However, unless restricted by statute, the money is otherwise available to be used for other purposes.

    Federal funds are listed separately. Some agencies have argued that their federal funds are restricted and not available for other purposes; they are right; that’s why we provided a separate list. Ironically, most agencies’ federal funds balances are negative, which means their total balances from state funds are even higher. For example, the Department of Health & Environment has a total unencumbered balance of $188 million, including federal funds with a negative balance of $13 million; their state unencumbered balance is therefore $201 million.

    The existence of this leftover cash hasn’t been shared with most legislators and the public. Can anyone think of a good reason for this to be a closely held secret?

    Trabert says he’s available anytime to answer questions on the study but he prefers that specific accounting questions be directed to Steve Anderson, the CPA who wrote the analysis or another CPA who works with government accounting. Steve can be reached at stevea@aracpas.com or 405-923-8875. Contact Trabert at dave.trabert@flinthills.org or 316-634-0218.

  • Kansas funds have large, unneeded balances

    Yesterday the Flint Hills Center for Public Policy released research that shows that the state of Kansas has large unencumbered balances, representing excess funds needlessly collected from Kansans in the form of taxes and fees.

    The numbers are staggering, with over 1,600 state funds holding between $2 billion and $3 billion in excess balances, depending on the method used to determine reasonable balances.

    The report, titled “Analysis of State Unencumbered Fund Balances in Kansas” was prepared by the accounting firm Anderson, Reichert & Anderson. The author, Steven J. Anderson, has extensive experience in government and its accounting. The report may be read by clicking on Analysis of State Unencumbered Fund Balances in Kansas.

    Investigative journalist Paul Soutar’s reporting on this report may be read at Buried Treasure.

    I spoke with Dave Trabert, president of the Flint Hills Center a few days ago about this research. He said that many state agencies have collected more fees than they have spent. These funds are considered “unencumbered.” That is, there is no claim on them. This doesn’t mean, however, that the state or agency can transfer or spend these funds in any way they want.

    Trabert said that often money is held in funds that, by law, can’t be transferred into other funds and used, perhaps resulting in lower taxes for Kansans. But, he said “the same result can be accomplished by simply reducing the amount going into the fund and forcing the agency to spend down their surplus.”

    The effect of this would be a reduction in taxes and fees that Kansans must pay. The amount of money involved is huge.

    The Flint Hills Center used two methods to calculate how much money could have been returned to taxpayers since fiscal year 2003, a period of six years. One method estimated about $2 billion in excess funds that could have been returned. The other estimated about $3 billion. Both methods leave sufficient balances in these funds for the state to conduct its business.

    In context, for a state that has a population of 2.8 million, these balances that could have been returned over this period amount to $1,071 per person, using the $3 billion figures. Or, for every household in Kansas, $2,890.

    Where is this money, I asked Trabert. It’s in bank accounts, he said. Who is aware of this? Trabert said that some legislators have been stunned to learn of these balances.

    There are people who know this money exists, Trabert said. But not everyone believes. In a KAKE television news story, Kansas senator Jean Schodorf, who is considering a run for the U.S. Congress, said she didn’t believe these numbers.

    In the same report an official from Wichita State University gave the example of a student housing fund. Fees collected for that fund, she said, can be used only for student housing.

    But if funds are accumulating in this fund and not being spent, this is strong evidence that too much money is being collected. The fees are too high.

    What are the implications of this report, I asked Trabert. “As shocking as it is, it’s really good news. … We can get away from this either/or situation: Either we raise taxes, or we have to give up a lot of services. … We just need to figure out how to make better use of what we have. We can have lower taxes and good services.”

    This analysis doesn’t include school districts, counties, or municipalities, except for a handful of cities that participate in a state-administered investment fund.

    Kansas lawmakers and the governor, as well as the press, primarily focus on the state’s general fund. There’s a reason for that, as it is the single largest fund, and the fund over which the legislature and governor have the most immediate control. In contrast, the “All funds” budget — that’s where the funds that are the subject of this research are held — is often treated as something over which we have no control.

    The general fund is about half the state’s total spending. This analysis by the Flint Hills Center shows that we need to pay more attention to the other half, and to the balances that are accumulating there.

  • Public effort should benefit all taxpayers, not a select few

    The following article by Dave Trabert, president of the Flint Hills Center for Public Policy, was printed in yesterday’s Wichita Eagle.

    Trabert makes the case for broad-based policies that will benefit all companies, not just those who happen to qualify for government economic development programs.

    A specific example of a small business struggling but not qualifying for assistance was presented by Steve Compton, owner of the Eaton Steakhouse in Wichita. In February he spoke to the Wichita City Council and explained the difficulties his business is facing. He asked the council to consider small businesses just as much as large businesses and corporations when deciding who will receive economic assistance. My post At Wichita City Council, why are some doors open, and others closed? holds Mr. Compton’s remarks. The post In Wichita, let’s have economic development for all holds further information about this.

    At nearly every Wichita city council meeting, the city dishes out economic development favors. Many are in the form of industrial revenue bonds, which allow companies to buy property without paying property tax for some term of years, and in some cases, they can avoid paying sales tax on the purchase. These favors seek to narrow the tax base at the same time politicians like Mayor Carl Brewer promote broadening the tax base. For those companies who can’t qualify for these economic development programs — not to mention residents — their taxes are higher than they would be.

    Public Effort Should Benefit All Taxpayers, Not a Select Few

    Dave Trabert
    Flint Hills Center for Public Policy

    A recent Wichita Eagle commentary by Doug Stanley, vice chairman of the Greater Wichita Economic Development Coalition, made the case for government to invest taxpayer money in developing “shovel-ready” sites to attract a wide range of new employers, especially large industrial and manufacturing companies. He says consultants who work with large employers on site selection give preference to communities that have made the upfront investment to save them time and obviously, a lot of money.

    The logic is that communities want jobs, so some companies and their site consultants use that carrot to entice local and state governments to absorb a portion of their upfront risk. It’s easy to understand what’s in it for the company receiving a taxpayer-funded inducement to build, and these deals certainly give elected officials a chance to show taxpayers that they’re working to create jobs. Some jobs are created if one of these deals gets done and that’s a good thing, but “buying” those jobs is not the best use of taxpayer money.

    First of all, it’s a roll of the dice as to whether spending money on shovel-ready sites will actually result in job creation, and even when it does, it’s not unheard of for some recipients of taxpayer money to close or leave town. Sometimes they even threaten to leave if they don’t get more money for new projects. It’s not unlike betting money in Las Vegas; you might win once in a while but the House is the only winner in the long run. Come to think of it, though, the bettor always wins in this case. If they place a bet on a site and eventually land some jobs, they get the credit; if they lose, well, it wasn’t their money … it belonged to taxpayers.

    The real conundrum, though, is why government and economic development entities place risky bets that only really pay off for a select few instead of going after a sure thing where everyone wins. A new employer coming to town with a few hundred or even a thousand jobs gets a lot of headlines and large employers are certainly important, but they pale in comparison to the jobs provided by small business. According to Dun & Bradstreet data analyzed at YourEconomy.org, 73.5% of Kansans employed in 2007 worked for businesses that employed fewer than 100 people.

    Instead of picking winners and losers, government should be doing things that benefit all taxpayers and employers of all sizes. Find ways to operate more efficiently and reduce property, sales and income taxes. Eliminate a lot of the bureaucratic red tape in the licensing and permitting process. Creating a stable, pro taxpayer environment is the best kind of economic development; instead of costing taxpayers money, it puts money in their pockets.

    There’s no doubt that governments and economic development agencies feel pressure to compete with communities that offer inducements to potential employers, but they should be creating strategies that benefit all taxpayers instead of a select few.