Transit in Wichita isn’t working very well, and it is expensive.
A recent editorial in the Wichita Eagle proclaims, “If Wichita genuinely wants to be a vibrant, modern city, we have to improve our public transportation.” 1 This was inspired by the recent story of a Wichita State University employee chronicling his experience riding the bus to work for a week. The Eagle reported: “What Lucas found riding the bus for a week was that his regular 11-mile, 17-minute car commute was, on average, an hour and 35 minutes on Wichita Transit. Each way.” 2
There is little doubt that relying on the regular scheduled bus service in Wichita is frustrating for most riders. Some find it unusable. Given that, how much do we pay for transit?
The National Transit Database holds annual profiles for transit agencies. They are not easy to locate, and the numbers are presented in very fine print. I’ve excerpted some data for Wichita for 2017 and present tables nearby. (Clicking may produce larger versions.)
Of note: Fares account for 13.5 percent of operating revenue, not including the costs of buses, which are a capital expense. Someone else pays a lot of the expenses: For operating expenses, 51.4 percent comes from state and federal sources. For capital expenses, 82.4 percent is from federal sources.
For scheduled bus service, the cost per passenger mile is $1.44. and the cost of an unlinked passenger trip is $8.08. (An “unlinked passenger trip” is counted whenever someone boards a bus. For someone who rides a bus downtown and transfers to another bus — like the WSU employee — that counts as two unlinked trips. Two in the morning, then another two in the afternoon, for a total of four unlinked trips each day, or $32.32 for the day.)
Most of these costs for scheduled bus service are fixed in nature, meaning that they don’t increase with additional passengers. With more passengers, these costs on a per-mile or per-trip basis will fall, and if the additional passengers pay fares, the portion of expenses paid by fares will rise.
The costs for bus service in Wichita are not out of line with other similar cities, although costs rose rapidly in Wichita for 2016 and 2017, as can be seen in the nearby chart. (This chart comes from an interactive visualization of national transit data that I developed. Click here learn more about the data and to access the visualization.)
$8.08 per unlinked trip is a lot. $32.32 per day to travel to and from work is a lot. It seems like we ought to be able to provide better service. But I think Wichita provides about the same level of service as other similar cities.
An interactive visualization of data over time from the National Transit Database. Now with data through 2017.
Do you wonder how much it costs to run your transit system? The National Transit Database holds data for transit systems in the U.S. I’ve gathered some key statistics and presented them in an interactive visualization.
In the case of Wichita, we see that “OpExp per PMT” for 2017 was $1.44. This is total operating expense per passenger mile traveled. It’s not the cost to move a bus a mile down the street. It’s the cost to move one passenger one mile. And, it is operating cost only, which means the costs of the buses are not included.
Some definitions used in the database:
UZA: The name of the urbanized area served primarily by a transit agency.
UPT: Unlinked passenger trips. “The number of passengers who board public transportation vehicles. Passengers are counted each time they board a vehicle no matter how many vehicles they use to travel from their origin to their destination.”
PMT: Passenger miles traveled.
Total OpExp: Total operating expense.
Click here learn more about the data and to access the visualization.
Data from the annual report for USD 259, the Wichita, Kansas, public school district.
The Comprehensive Annual Financial Report for USD 259, the Wichita public school district, provides a look at trends over the years. The document, along with those from previous years, is available here. Here are some highlights from the CAFR for the year ending June 30, 2018, known as fiscal year 2018.
(Click charts for larger versions.)
The following chart shows data from the CAFR along with my calculations. I took two data series, “total revenue” and “sum of state and local revenue,” then divided by FTE enrollment and adjusted for inflation. (The inflation adjustments cast past dollar values in terms of current-dollar equivalents, meaning past values are usually reduced.) I plot the sum of state and local revenue because in 2015 there was a change in the way some taxes were allocated. Plotting the sum of the two removes the effect of the change.
While USD 259 — and schools generally — complain about funding cuts, the following chart shows funding nearly always increases, and over time, by quite a bit.
The following chart shows spending categorized by “instruction” and “instructional support” per student in inflation-adjusted dollars. Capital spending is not included in this chart.
In 2006, USD 259 spent $579 per student (inflation-adjusted) on administration. For 2018 the figure is $927. Could the Wichita public school district cut administration spending to 2006 levels, on a per-student, inflation-adjusted basis?
The Wichita school district has been able to reduce its student/teacher ratios substantially over the last ten to fifteen years. (Student/teacher ratio is not the same statistic as class size.) There have been ups and downs along the way, but for all three school levels, the ratios are lower than they were years ago, and by substantial margins. This means that Wichita schools have been able to increase employment of teachers at a faster rate than enrollment has risen.
On enrollment, the superintendent’s letter says this:
The District’s enrollment trend over the last ten years has reflected an average increase of over 100 students a year. However, budget reduction measures and changes to Kindergarten funding at the state level are beginning to impact this trend. In FY’17, official enrollment decreased by 572 students, or one percent. Official enrollment in FY’18 increased by 80 students, but gains in virtual and alternative programs were offset by a significant decrease in elementary age students. The elementary enrollment decline continued into FY’19, with a loss of over 500 elementary students. Offsetting some of this loss, Secondary enrollment increased by 240 students. The declines in past few years can partially be attributed to cost-cutting measures under the block grant, including denial of out-of-district students, the consolidation of alternative high school programs, and the combination of a longer school day and shorter school year, which many parents viewed as negatively impacting their students. Further, now that the State fully funds all-day Kindergarten, parent who used to enroll students in the District to obtain all-day Kindergarten services can now receive those same services in the surrounding area districts. Additional FY’19 funding allowed the District to return to the longer school year, but it remains unclear if this action will bring back elementary students to the District.’
Kansas assessment results are now reported in four levels. Level 1 indicates that a student shows a limited ability to understand and use the mathematics skills and knowledge needed for college and career readiness. Level 2 indicates that a student shows a basic ability to understand and use the mathematics skills and knowledge needed for college and career readiness. Level 3 indicates that a student shows an effective ability to understand and use the mathematics skills and knowledge needed for college and career readiness. Level 4 indicates that a student shows an excellent ability to understand and use the mathematics skills and knowledge needed for college and career readiness.
For Wichita, the trend is that an increasing proportion of students are at performance level 1. Correspondingly, the proportion at level 2 or better is falling.
Following, a chart of the portion of Wichita public school students testing at performance level 1, the lowest level.
Following, for performance level 2 or better, indicating, “a student shows a basic ability to understand and use the mathematics skills and knowledge needed for college and career readiness.”
Following, for performance level 3 or better, indicating, “a student shows an effective ability to understand and use the mathematics skills and knowledge needed for college and career readiness.”
Following, for performance level 4, indicating, “a student shows an excellent ability to understand and use the mathematics skills and knowledge needed for college and career readiness.”
The City of Wichita plans subsidized development of a sports facility as an economic driver. Originally published in July 2017.
This week the Wichita City Council will consider a project plan for a redevelopment district near Downtown Wichita. It is largely financed by Tax Increment Financing and STAR bonds. Both divert future incremental tax revenue to pay for various things within the district.12
City documents promise this: “The City plans to substantially rehabilitate or replace Lawrence-Dumont Stadium into a multi-sport athletic complex. The TIF project would allow the City to make investments in Lawrence-Dumont Stadium, construct additional parking in the redevelopment district, initiate improvements to the Delano multi-use path and make additional transportation improvements related to the stadium project area. In addition to the stadium work, the City plans to construct, utilizing STAR bond funds, a sports museum, improvements to the west bank of the Arkansas River and construct a pedestrian bridge connecting the stadium area with the Century II block. The TIF project is part of the overall plan to revitalize the stadium area and Delano Neighborhood within the district.”3
We’ve heard things like this before. Each “opportunity” for the public to invest in downtown Wichita is accompanied by grand promises. But actual progress is difficult to achieve, as evidenced by the examples of Waterwalk, Kenmar,and Block One.4
In fact, change in Downtown Wichita — if we’re measuring the count of business firms, jobs, and payroll — is in the wrong direction, despite large public and private investment. 5
Perhaps more pertinent to a sports facility as an economic growth driver is the Intrust Bank Arena. Two years ago the Wichita Eagle noted the lack of growth in the area. 6 Since then, not much has changed. The area surrounding the arena is largely vacant. Except for Commerce Street, that is, and the businesses located there don’t want to pay their share of property taxes. 7
I’m sure the city will remind us that the arena was a Sedgwick County project, not a City of Wichita project, as if that makes a difference. Also, the poor economic performance cited above is for Downtown Wichita as delineated by zip code 67202, while the proposed baseball stadium project lies just outside that area, as if that makes a difference.
By the way, this STAR bonds district is an expansion of an existing district which contains the WaterWalk development. That development has languished, with acres of land having been available for development for many years. We’ve also found that the city was not holding the WaterWalk developer accountable to the terms of the deal that was agreed upon, to the detriment of Wichita taxpayers. 8
Following, selected articles on the economics of public financing of sports stadiums.
The Economics of Subsidizing Sports Stadiums
Scott A. Wolla, “The Economics of Subsidizing Sports Stadiums,” Page One Economics, May 2017. This is a project of the Federal Reserve Bank of St. Louis. Link.
“Building sports stadiums has an impact on local economies. For that reason, many people support the use of government subsidies to help pay for stadiums. However, economists generally oppose such subsidies. They often stress that estimations of the economic impact of sports stadiums are exaggerated because they fail to recognize opportunity costs. Consumers who spend money on sporting events would likely spend the money on other forms of entertainment, which has a similar economic impact. Rather than subsidizing sports stadiums, governments could finance other projects such as infrastructure or education that have the potential to increase productivity and promote economic growth.”
What economists think about public financing for sports stadiums
Jeff Cockrell, Chicago Booth Review, February 01, 2017. Link.
“But do the economic benefits generated by these facilities — via increased tourism, for example — justify the costs to the public? Chicago Booth’s Initiative on Global Markets put that question to its US Economic Experts Panel. Fifty-seven percent of the panel agreed that the costs to taxpayers are likely to outweigh benefits, while only 2 percent disagreed — though several panelists noted that some contributions of local sports teams are difficult to quantify.”
Publicly Financed Sports Stadiums Are a Game That Taxpayers Lose
Jeffrey Dorfman. Forbes, January 31, 2015. Link.
“Once you look at things this way, you see that stadiums can only justify public financing if they will draw most attendees from a long distance on a regular basis. The Super Bowl does that, but the average city’s football, baseball, hockey, or basketball team does not. Since most events held at a stadium will rely heavily on the local fan base, they will never generate enough tax revenue to pay back taxpayers for the cost of the stadium.”
Sports Facilities and Economic Development
Andrew Zimbalist, Government Finance Review, August 2013. Link.
“This article is meant to emphasize the complexity of the factors that must be evaluated in assessing the economic impact of sports facility construction. While prudent planning and negotiating can improve the chances of minimizing any negative impacts or even of promoting a modest positive impact, the basic experience suggests that a city should not expect that a new arena or stadium by itself will provide a boost to the local economy.
Instead, the city should think of the non-pecuniary benefits involved with a new facility, whether they entail bringing a professional team to town, keeping one from leaving, improving the conveniences and amenities at the facility, or providing an existing team with greater resources for competition. Sports are central to cultural life in the United States (and in much of the world). They represent one of the most cogent ways for residents to feel part of and enjoy belonging to a community. The rest of our lives are increasingly isolated by modern technological gadgetry. Sport teams help provide identity to a community, and it is this psychosocial benefit that should be weighed against the sizeable public investments that sports team owners demand.”
Professional Sports as Catalysts for Metropolitan Economic Development
Robert A. Baade, Journal of Urban Affairs, 1996. Link.
“To attract or retain a team, cities are offering staggering financial support and rationalize their largesse on economic grounds. Do professional sports increase income and create jobs in amounts that justify the behavior of cities? The evidence detailed in this paper fails to support such a rationale. The primary beneficiaries of subsidies are the owners and players, not the taxpaying public.”
“Ten years ago, Elizabeth Stevenson looked out at the neighborhood where a downtown arena would soon be built and told an Eagle reporter that one day it could be the ‘Paris of the Midwest.’ What she and many others envisioned was a pedestrian and bike-friendly neighborhood of quaint shops, chic eateries and an active arts district, supported by tens of thousands of visitors who would be coming downtown for sporting events and concerts. It hasn’t exactly turned out that way. Today, five years after the opening of the Intrust Bank Arena, most of the immediate neighborhood looks much like it did in 2004 when Stevenson was interviewed in The Eagle. With the exception of a small artists’ colony along Commerce Street, it’s still the same mix of light industrial businesses interspersed with numerous boarded-up buildings and vacant lots, dotted with ‘for sale’ and ‘for lease’ signs.” Lefler, Dion. 5 years after Intrust Bank Arena opens, little surrounding development has followed.Wichita Eagle. December 20, 2014. Available at http://www.kansas.com/news/local/article4743402.html. ↩
The cost of fixing an oversight in the design of Naftzger Park in downtown Wichita is rising, and again we’re not to talk about it, even though there are troubling aspects.
Last week the Wichita City Council was scheduled to consider an item regarding the rebuild of Wichita City Council. That item was removed from the agenda the day before the meeting. It now appears on the agenda for the February 12 meeting, and with a higher price tag.
(“Consider” is not quite the right term, as the item was on the council’s consent agenda. That’s where items are passed in bulk, usually without discussion.)
As the city explains in the agenda packet for this week, “Naftzger Park currently has a small pond that acts as a storm water retention facility during rain events. Proposed improvements to Naftzger Park will eliminate the pond and all available storm retention. The project does not include funding for replacing the retention capacity.” The cost is given as $115,000, up from last week’s $85,000.
As explained last week, this seems like a major oversight in the original project plans. The city has regulations regarding stormwater retention that private sector developers must follow. Didn’t any city planners consider these regulations as the project was planned? Didn’t any council member or bureaucrat look at the plans and wonder about stormwater drainage? Wasn’t there a highly-regarded architect designing the park? What about TGC Development, the developer of the surrounding property, to whom the city effectively outsourced the development of Naftzger Park? The construction manager?
Of note: This week the agenda tells us this: “Funding is available for transfer due to the scope of project being adjusted to remove some the structural repairs and the abutment treatment after discussion with the railroad were not successful.” This sounds like structural repairs were planned but not executed. This deserves discussion, but with the item being on the consent agenda, discussion is not likely.
Of further note: The February 5 agenda stated, “Funding is available for transfer due to underruns of bid items upon project completion and favorable bid pricing.” This made it sound like all planned work was completed and the city spent less than budgeted, even if through happenstance. This week we’re being told something different.
An incentive program in Wichita should cause us to question why investment in Wichita is not feasible without subsidy.
At its February 5, 2019 meeting, the Wichita City Council will consider an item regarding economic development in Delano. The owner of a building there has applied for financial assistance under the city’s facade improvement program.
The purpose of the facade improvement program, according to city documents, is to provide “low-cost loans and grants” to help improve the appearance of buildings “located in defined areas needing revitalization, including the City’s core area.”
The matter before the council this week is to accept the petition of the property owner and set February 19, 2019 for the public hearing.
Undoubtedly council members will praise the property owner for deciding to invest in Wichita. I’m glad he is, and it sounds like the project will improve the Delano area. But the need for this item raises a few questions regarding public policy in Wichita that are more important than any single project.
First, city documents state: “The Office of Economic Development has reviewed the economic (‘gap’) analysis of the project and determined there is a financial need for incentives based on the current market.” In other words, the city has determined that this project is not economically feasible unless it receives a government subsidy. Will any council members ask why is it not possible to renovate a building in the core of Wichita without subsidy? What factors in Wichita — specifically Delano — make it impossible to have investment like this without subsidy?
Second: Wichita officials, especially Wichita Mayor Jeff Longwell, tell us that the city doesn’t use cash as an economic development incentive. But this proposal includes a cash grant of $30,000. This is not a low-cost loan that must be repaid. Instead, it is an incentive, a gift — and it’s cash.
The cost of the Naftzger Park makeover is rising, will be paid for with borrowed funds, and possibly handled without public discussion.
The cost of the Naftzger Park project in downtown Wichita is rising, according to an item the Wichita City Council will consider at its Tuesday February 5, 2019 meeting. According to city documents, an additional $85,000 is needed for stormwater retention, a function the former pond provided.
This seems like a major oversight in the original project plans. The city has regulations regarding stormwater retention that private sector developers must follow. Didn’t any city planners consider these regulations as the project was planned? Didn’t any council member or bureaucrat look at the plans and wonder about stormwater drainage? Wasn’t there a highly-regarded architect designing the park? What about TGC Development, the developer of the surrounding property, to whom the city effectively outsourced the development of Naftzger Park? The construction manager?
The extra cost is proposed to come from savings realized in another nearby project. That requires a waiver of policy, according to the agenda: “Staff requested waiver of City Council Policy No. 2 regarding the use of projects savings to allow this transfer of funds.”
On top of that, this money will be borrowed. An accompanying resolution (number 19-048) provides the authorization: “Section 2. Project Financing. All or a portion of the costs of the Project, interest on financing and administrative and financing costs shall be financed with the proceeds of general obligation bonds of the City.”
Borrowing this money, even though it is a small amount, is a significant public policy issue. The city decided to use tax increment financing (TIF) to pay for this project. City officials pitch this as a method of financing that costs the general public nothing, as the TIF bonds are repaid from a project’s future property taxes.
In this case, as the surrounding development by TGC starts to pay higher property taxes, these taxes would be used to pay for Naftzger Park. (Never mind who pays for the public services the development will consume.)
But now, some expenses of the project have been shifted away from TIF to the general city.
The equitable way of handling this is to charge this expense to the TIF district. Either that, or to the responsible parties whose oversight, we now see, was lacking.
By the way, this item is on the consent agenda, meaning there will be no discussion unless a city council member requests the item to be “pulled” for discussion and a potentially separate vote. (A consent agenda is a group of items that are voted on in bulk with a single vote. An item on a consent agenda will be discussed only if a council member requests the item to be “pulled.” If that is done, the item will be discussed. Then it might be withdrawn, voted on by itself, or folded back into the consent agenda with the other items. Generally, consent agenda items are considered by the city to be routine and non-controversial, but that is not always the case.)
Following, an excerpt from the February 5, 2019 city council agenda:
Background: Naftzger Park currently has a small pond that acts as a storm water retention facility during rain events. Proposed improvements to Naftzger Park will eliminate the pond and all available storm retention. The project does not include funding for replacing the retention capacity.
Analysis: With the elimination of the existing pond, underground on-site storage is necessary to prevent a negative impact on the area storm sewer system and the surrounding developments during rain events.
Financial Considerations: Currently, the Stormwater Utility does not have funding available for these improvements. Staff proposes transferring $85,000 in General Obligation bond funding from the Douglas Underpass project. Funding is available for transfer due to underruns of bid items upon project completion and favorable bid pricing. Staff requested waiver of City Council Policy No. 2 regarding the use of projects savings to allow this transfer of funds. The total budget for the stormwater retention facility would be $85,000 and the revised budget for Douglas Underpass would be $2,015,000.
Data regarding State of Kansas agency spending presented in an interactive visualization.
The source of this data is KanView, the Kansas transparency portal, through its download center. Data from multiple years are combined into one database. Data starts with fiscal year 2011.
Of this data, KanView advises: “Agency expenditure data is available by Agency Fund Type, Agency Primary Expenditure Accounts, and by Agency Program.” The various views of the visualization show this data arranged in these ways.
Regarding accounts, KanView offers this explanation:
State expenditures are classified at a primary, intermediate, and detail level account codes. These classifications facilitate the various levels of reporting detail required for budgetary, financial, management, or other reports.
Seven primary expenditure classifications are prescribed. Intermediate classifications are assigned within each primary classification. Within each intermediate classification is the detail classifications used to code accounting transactions.
The prescribed primary classifications are:
Salaries and Wages: Amounts paid to, or on behalf of, elected or appointed state officials and employees.
Contractual Services: Payments for communications, freight and express, printing and advertising, rentals, repairing and servicing, employee travel expense reimbursement, utilities, and professional or other services.
Commodities: Payments for consumable supplies, maintenance materials and parts, and other miscellaneous purchases.
Capital Outlay: Payments for machinery, equipment, land, vehicles, buildings and other major purchases.
Grants, Claims and Shared Revenue: Disbursements for grants, claims, shared revenue and other related disbursements where the disbursing agency does not receive a direct service or tangible asset.
Debt Service: Payments of principal, interest and service charges on borrowed money.
Non-Expense Items: Disbursements for refunds, advances, investments and other disbursements not properly classified as governmental expenditures.
Expense Transfers: Agency use of transfer account codes is generally only on interfund transactions between state agencies. Transfers move cash from one fund to another fund within the State Treasury.
The function view identifies expenditures for high-level activities and programs of the State, upon selecting a high-level function, specific programs within this function can then be displayed for a particular state agency.
Major State Functions include: General Administration, Human Resources, Education, Public Safety, Agriculture and Natural Resources, Highways and Other Transportation, Health and Environment, Economic Development, Lottery, and Universities.
For funds, KanView explains:
A “fund” is the fundamental unit of accounting designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. Fund View initially displays the major fund types denoting the high-level purpose of the underlying funds as classified in the statewide accounting and reporting system. Upon selecting a major fund type, specific funds can then be displayed for a particular state agency. Each agency fund is further segregated by individual accounts (for budgetary or other legal requirements) which provides an additional level of classification.
Valid major fund types and descriptions are:
State General Fund: The primary operating fund of the State. It accounts for all financial resources of the State except those required to be accounted for in another fund. The state general fund is primarily supported by tax revenue.
Special Revenue Funds: Funds established for specific purposes normally specified by state statutes, or in the case of federal grants, for purposes specified by the federal government. These funds are primarily supported by user fees or grants.
Capital Projects Funds: Funds established to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds.
Debt Service Funds: Funds established to account for the accumulation of resources and the payment of long term debt principal and interest.
Enterprise Funds: Funds established to account for activities that are generally of a business nature where goods or services a sold to the general public or similar customer groups.
Internal Service Funds: Funds established to account for goods and services provided to other state agencies or internal departments on a cost-reimbursement basis.
Trust and Agency Funds: Trust funds contain monies received, held, and disbursed by the State acting as a trustee, agent, or custodian. Agency funds contain monies collected by the State as an agent and disbursed to other governments, businesses or individuals.
Component Units Funds: Funds of component unit(s). A component unit is a legally separate organization for which the primary government is financially accountable.
This visualization is experimental. I would appreciate feedback on views of this data that would be useful.
Data regarding State of Kansas payments to vendors.
The source of this data is KanView, the Kansas transparency portal, through its download center. Data from multiple years are combined into one database. Data starts with July 1, 2010.
KanView says this data shows “payments made to vendors from all state agencies and include the following key data elements: fiscal year, agency (Business Unit), account description, funding, vendor name, document number, payment date and amount.”
This visualization is experimental. I would appreciate feedback on view of this data that would be useful. The visualization may be slow to respond, as it holds 7.3 million rows of data.
A document that hasn’t been made public details savings achieved in Sedgwick County over a recent period of nearly three years.
A document prepared within the Sedgwick County Division of Finance details savings of $6,308,097 over a period of almost three years, starting in November 2015. That is the month when Michael Scholes joined Sedgwick County as County Manger. His last day as manager was November 30, 2018, after being dismissed by the county commission. This document is dated August 29, 2018.
An example of a savings is: “Eliminated 6.0 FTEs and associated funding due to the outsourcing of EMS Billing ($304,027).”
The document contains a summary:
Priority 1 – Safe & Secure Communities had a total savings listed of $3,959,137, where the categories of efficiencies included technology changes, process improvements, consolidation, training, grants to offset costs, and staffing changes.
Priority 2 – Human Services & Cultural Experiences had a total savings listed of $1,931,447, where the categories of efficiencies included technology changes, process improvements, staffing changes, consolidation, training, and collaboration with other entities.
Priority 3 – Communications & Engagement had efficiencies in transparency and elections process with the purchase of new voting equipment.
Priority 4 – Effective Government Organization had a total savings listed of $417,513, where the categories of efficiencies included technology changes, process improvements, and staffing changes.
To the best of my knowledge, this document has not been shared with the public, and is not found on the county’s website. I make it available here.
In this episode of WichitaLiberty.TV: A look at some economic development incentive programs in Wichita and Kansas. Second in a series. Tax increment financing (TIF) is prominent in this episode. View below, or click here to view at YouTube. Episode 219, broadcast November 25, 2018.
Wichita TIF projects: some background. Tax increment financing disrupts the usual flow of tax dollars, routing funds away from cash-strapped cities, counties, and schools back to the TIF-financed development. TIF creates distortions in the way cities develop, and researchers find that the use of TIF means lower economic growth.
Industrial revenue bonds in Kansas: Industrial Revenue Bonds are a mechanism that Kansas cities and counties use to allow companies to avoid paying property and sales taxes.
In this episode of WichitaLiberty.TV: A look at some economic development incentive programs in Wichita and Kansas. First in a series. View below, or click here to view at YouTube. Episode 218, broadcast November 18, 2018.
Industrial revenue bonds in Kansas: Industrial Revenue Bonds are a mechanism that Kansas cities and counties use to allow companies to avoid paying property and sales taxes.
An interactive visualization of Kansas school salaries by district and category.
This visualization holds salaries of Kansas school superintendents, principals, and teachers. The visualization shows the average for each of these categories for each school district. The values are adjusted for inflation to the most current year values. Some data is presented on a per-pupil basis using full-time equivalent student counts.
The visualization includes both tables and charts. The source of the data is Kansas State Department of Education for salaries and enrollments, United States Bureau of Labor Statistics for price levels, and author’s calculations.
An interactive visualization of Kansas school salaries by district and category.
This visualization holds salaries of Kansas school superintendents, principals, and teachers. The visualization shows the average for each employee category for each school district. The visualization includes both tables and charts. Some data is presented on a per-pupil basis using full-time equivalent student counts.
The values are adjusted for inflation to the most current year values.
By Michael Austin
Director, Sandlian Center for Entrepreneurial Government
With a new Kansas Governor-elect and State Legislature, Kansans voted to make a change. Despite many elections however, the Kansas economy has been slowing for the past 40 years. While the new administration cites government as the solution to this problem, history shows that government is primarily the cause. Kansans need of a new way of thinking. They won’t get that from a Democrat or Republican as governor.
Kansas has had a storied life in celebrating freedom and improving its quality of life. Through our abolitionist beginnings to creative developments in industry, Kansas led in economic freedom with Wichita at its center. Legendary Wichitan entrepreneur Colby Sandlian got started in the 1950s, noticing permits for single-family homes averaging 150 a week. At the time, local government zoning staff had fewer than 10 employees. Today, Wichita averages around 45 permits a week with a local government zoning staff of near 50 individuals. While other factors have been at play in Wichita, economic vitality and government bureaucracy seem to have an opposing relationship.
Kansas families are nearly $12,000 poorer than the national average with 172,000 fewer available jobs. Like Wichita, with this sluggish growth, Kansas has more government jobs than the national average. Government is essential to a civilized society, but it can only act through taxes taken from Kansans. The bigger the government, the bigger the burden on families and commerce.
Kansans can’t keep up with inflation because government growth limits employers’ ability to attract qualified employees. Kansas government growth also creates and supports monopolies; forcing low-income consumers to pay higher prices for goods and services. Worst of all, Kansas government growth forces around 10,000 Kansans a year to abandon the state. Other states and countries that provide similar governmental services with fewer taxes entice Kansans to leave. This is likely to get worse under an ObamaCare expansion and record government spending growth, financed with high taxes.
We can give Kansans tools to demand their government return more choices and change course. For this reason, the Kansas Policy Institute created the Sandlian Center for Entrepreneurial Government. It captures the observation above and the entrepreneurial spirit needed to make Kansas a better place to live and work.
Reversing economic immobility, we will show where Kansas is headed if government taxes and spends. We’ll advise how government can better listen to Kansans, helping them keep more of what they earn while enacting the best policy to grow private wages and jobs. We’ll provide pathways to sensible regulations, ensuring public safety and encouraging new innovative businesses to keep prices low for Kansans. Most importantly, we’ll teach public organizations to provide better services at a better price to reverse the trend of out-migration seen in Kansas and Wichita.
For Kansans to live closer to the American dream, they need a responsive government that allows more opportunities and ensures their tax dollars are spent wisely. Politicians come and go, but the principles that can make this a reality never change.
Michael Austin is the Director of the Sandlian Center for Entrepreneurial Government at the Kansas Policy Institute. In this role he is responsible for educating public organizations and the public on taxes and budget, using economic research to turn government inefficiencies into effective policy solutions. Before joining the Sandlian Center, Michael served as an economist in various roles of Kansas state government. As an adviser to former Kansas Governor Sam Brownback, Michael’s work made him the first to discover the drop in commodity and energy prices that plagued Kansas and the region, later termed “The Rural Recession.” Most recently as Chief Economist in the Kansas Department of Revenue, his research and presentation on the Federal Tax Cuts and Jobs Act, and its effects on Kansans jumpstarted discussions ensuring it will be a key concern in the upcoming Kansas legislative session.
Michael is a New York City transplant, living with his wife and two children in the Lawrence Area. Michael is a Washburn University School of Business Scholar earning his Bachelor of Business Administration and double majored in management and economics. Michael also graduated from the University of Kansas’s Department of Economics with a Master of Arts with honors. Email Michael at Michael.Austin@kansaspolicy.org.
Of the condition of highways, the report notes: “Since the data was first collected in 1983, the percentage of pavement surface in good condition has appreciably increased while the percentage of poor pavement has significantly decreased.”
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, although there is a slight decline recently that is within the range of normal year-to-year variation. For non-interstate highways, the percent in good condition fell starting in 2004, but has rebounded, with a small decline in the most recent year.
Based on these charts, there’s no factual basis to claim that Kansas roads and highways are deteriorating or crumbling.
KDOT notes that the condition report “…also shows that while the last few years have been challenging due to very tight budgets, KDOT and its partners continue to find means to maintain the pavement surface condition.” The most recent financial report from KDOT shows that spending on preservation has fallen significantly the past three years, while spending on maintenance has been level. 3
A look at actual spending on Kansas highways, apart from transfers.
When we look at actual spending on Kansas roads and highways, we see something different from what is commonly portrayed. Kansas Department of Transportation publishes a Comprehensive Annual Financial Report that details spending in four categories. These figures represent actual spending on roads and highways, independent of transfers to or from the highway fund.
For fiscal year 2018, which ended June 30, 2018, spending on two categories (Maintenance and Modernization) rose slightly from the year before, while spending on the categories Preservation and Expansion and Enhancement fell.
For these four categories — which represent the major share of KDOT spending on roads — spending in fiscal 2018 totaled $528.234 million. That’s down 28 percent from $736.781 million the year before, and up from a low of $698.770 million in fiscal 2010.
Again, these are dollars actually spent on highway programs. A common characterization of the way Kansas government is funded is called “robbing the bank of KDOT.” To the extent that characterization is accurate, there is a separate line item titled “Distributions to other state funds” that holds these values. It appears in the nearby table. A chart shows sales tax distributions from the general fund to KDOT, and transfers from KDOT. The two values tack closely over history, and in 2018 were nearly identical values.
Many also criticize Kansas government for slashing highway spending, letting our roads crumble. While total spending on these four programs has been falling (after adjusting for inflation), the decline, until recent years, is minor compared to the hysterical claims of those with vested interests in more government, and especially highway, spending.
Kansas law specifies how much sales tax revenue is transferred to the highway fund. Here are recent rates of transfer and dates they became effective: 1
July 1, 2010: 11.427%
July 1, 2011: 11.26%
July 1, 2012: 11.233%
July 1, 2013: 17.073%
July 1, 2015: 16.226%
July 1, 2016 and thereafter: 16.154%
A nearby chart shows the dollar amounts transferred to the highway fund from sales tax revenue. In 2006 the transfer was $98.914 million, and by 2018 it had grown to $530.765 million.
Kansas has more state government employees per resident than most states, and the trend is rising.
Each year the United States Census Bureau surveys federal, state, and local government civilian employees. 1 The amount of payroll for a single month (March) is also recorded. In this case, I’ve made the data for state government employees available in an interactive visualization.
For 2016, Kansas had 17.90 full-time equivalent state government employees per thousand residents. This ranked 15th among the states. These employees resulted in payroll cost of $979 per resident, which is 21st among the states.
Nearby is an example from the visualization showing state government employment count (full-time equivalent) per thousand residents for Kansas and some nearby states. It shows total employment, and in addition, education employment and hospital employment. (Since nearly all employees in Kansas elementary and secondary schools are employees of local government, not the state, the employees shown are working in higher education. See below for visualizations of local government employees.)
Two things are evident: The level of employment in Kansas is generally higher than the other states, and the trend in Kansas is rising when many states are level or declining. This data counters the story often told, which is that state government employment has been slashed.
If we look at data for state and local government employees, the conclusions are nearly the same.
Click here to learn more and access the visualization.
In the visualization, I’ve multiplied the March payroll number by 12 to produce an approximation of annual payroll. Using each state’s population for each year, I’ve also computed the annual payroll on a per-resident basis and the number of full-time equivalent (FTE) employees per thousand residents.