In this episode of WichitaLiberty.TV: John Todd explains how cities in Kansas are seeking additional power to seize property, and tells us why we should oppose this legislation. View below, or click here to view at YouTube. Episode 188, broadcast March 17, 2018.
There is a movement to increase the transparency of government in Kansas, but there’s much to be done, starting with attitudes.
One of the major economic development programs in Kansas is PEAK, or Promoting Employment Across Kansas. 1 It provides benefits to companies when they expand their operations in Kansas, or sometimes when they merely threaten to leave. The recent expansion by Spirit AeroSystems is reported to benefit from $23.5 million in PEAK cash. 2
But finding out how much PEAK benefits are awarded each year is difficult, even though the state relies heavily on this program. It also appears that the Kansas Department of Commerce, the agency that awards and administers PEAK, isn’t aware of how many programs, and at what cost, have been authorized.
At one time a summary of PEAK data was readily available from the state. It covered fiscal years 2010 through 2015. 3 My inquiries late last year to the PEAK program manager for updated information were fruitless, despite many email and telephone messages. None were returned.
But a request to the interim director was answered. The answer is that the data through 2015 was a one-time effort, and there are no reports similar to that with recent data.
The fact that there is no recent data is remarkable. We must wonder if the Department of Commerce cares about things like this, because collecting this data as projects are awarded is not difficult. There aren’t many projects awarded. For the period 2010 through 2015, there were 68 PEAK projects awarded. And just a handful of data items need recording for each project.
But this isn’t done.
I made a request for recent data on PEAK awards, asking for the same data in the previous report: Company Name, Effective Date, Location (County), Proposed Annual Benefit, Benefit Term (Yrs), New or Retained Jobs, Project Payroll, and Additional Project Capital Investment. The response confirmed there is no simple report with the relevant data. I was offered the opportunity to purchase copes of all recent PEAK agreements, estimated to cost $750 to $1,200. Further, these documents would not contain all the data I asked for.
Who is managing?
As part of four initiatives to increase government transparency in Kansas, Governor Jeff Colyer told the legislature, “Third, I will implement performance metrics for Cabinet Agencies so Kansans can see how we perform.” 4 My experience with the Department of Commerce indicates there’s a long way to go. Agencies are not capturing and recording basic data.
Even if the Department of Commerce was capturing this data, there’s still much more analysis to perform. The data I asked for was simply the project parameters at the time PEAK benefits are awarded. The real question is this: Are the projected benefits actually realized?
There ought to be a law
There is a bill this year that would require several state agencies to report on the many programs they administer. It’s titled “HB 2753: An act concerning taxation; relating to income tax credits and sales tax exemptions; periodic review, reports to certain legislative committees.” 5
Kansas taxpayers might have thought this basic management of our tax-funded programs we already in place. It’s especially troubling in that the cost of this management is small. The fiscal note for the bill tells us these agencies already have the capacity to perform this work: “The Insurance Department, Department of Commerce, and Department of Revenue indicate that the administrative costs associated with implementing the provisions of HB 2753 would be negligible and could be absorbed within existing resources. Each agency would be responsible to collect and organize information regarding certain tax credits, incentives, and exemptions on a yearly basis.”
Local governments in Kansas are again seeking expanded power to seize property.
In Kansas, officials of many city governments feel they don’t have enough power to deal with blight. This year, as in years past, there is legislation to expand the power of cities to seize property. 12
John Todd, along with Paul Soutar, made a video to explain the bill and the surrounding issues. It’s just five minutes in length. View it below, or click here to view at YouTube. Todd’s written testimony to the Kansas Legisalture has photographs and examples. It may be viewed here.
Background
Presently, tools are in place. Cities already have much power to deal with blight and related problems. Last year Todd and I, along with others, had a luncheon meeting with a Kansas Senator who voted in favor of expanding cities’ powers. When we told him of our opposition, he asked questions like, “Well, don’t you want to fight blight? What will cities do to fight blight without this bill?” When we listed and explained the many tools cities already have, he said that he hadn’t been told of these. This is evidence that this bill is not needed. It’s also evidence of the ways cities try to increase their powers at the expense of the rights of people. 3
The Governor’s veto. A similar bill passed the legislature in 2016. Governor Brownback vetoed that bill, explaining, “The right to private property serves as a central pillar of the American constitutional tradition.” 4
The Governor’s veto provoked a response from Wichita government officials. It let us know that they are not as respectful of fundamental rights as was Brownback. 5
For example, in remarks from the bench, Wichita City Council Member Pete Meitzner (district 2, east Wichita) said there is no intent to be “aggressive in taking people’s property.” 6 But expanding the power of government — aggression, in other word — is what the bill does. Otherwise, why the need for the bill with its new methods and powers of taking property?
And once government is granted new powers, government nearly always finds ways to expand the power and put it to new uses. Even if we believe Meitzner — and we should not — he will not always be in office. Others will follow him who may not claim to be so wise and restrained in the use of government power.
Government expands and liberty recedes. Government continuously seeks new ways to expand its powers through enabling concepts like blight. Did you know the entire suburban town of Andover is blighted? 7 Across the country, when governments find they can take property with novel and creative interpretations of blight, they do so. 8
It’s easy to sense the frustration of government officials like Wichita Mayor Jeff Longwell. In his remarks, he asked opponents of SB 338 “what they would do” when confronted with blight. That is a weak argument, but is advanced nonetheless. Everyone has the right — the duty — to oppose bad legislation even if they do not have an alternate solution. Just because someone doesn’t have a solution, that doesn’t mean their criticism is not valid. This is especially true in this matter, as cities already have many tools to deal with blight.
In this episode of WichitaLiberty.TV: Dave Trabert of Kansas Policy Institute joins Bob and Karl to discuss his new book What Was Really the Matter with the Kansas Tax Plan –- The Undoing of a Good Idea. View below, or click here to view at YouTube. Episode 186, broadcast March 3, 2018.
What Was Really the Matter with the Kansas Tax Plan
New Book Outlines Tax Lessons from Kansas “Experiment”
Tax relief opponents have repeatedly pointed to the 2012 Kansas tax plan as their primary example of why tax cuts do not work. But, other states like North Carolina, Indiana, and Tennessee contemporaneously, and successfully, cut taxes. What was different about the Kansas experience?
The answer to that question is multi-dimensional according to a new book from Kansas Policy Institute, entitled What Was Really the Matter with the Kansas Tax Plan — The Undoing of a Good Idea. The book covers the six years between the conception of Brownback’s tax cuts in 2011, the tax package being signed into law in 2012 and later repealed with the largest tax hike in state history in 2017. It documents the many mistakes that occurred, a toxic political undercurrent, and several unrelated economic circumstances that negatively impacted the budget and multiple misconceptions along the way.
Author and KPI president Dave Trabert says, “Much of what went wrong was avoidable. We hope citizens and legislators across the nation can learn from the mistakes made in Kansas as they strive to create the best path forward for everyone to achieve prosperity with lower taxes.”
The final chapter of the book is “Lessons Learned” and includes these big lessons:
Don’t cut revenue and increase spending.
Explain why tax relief is necessary (i.e., what are the consequences of not reducing the tax burden).
Develop a comprehensive plan to balance the budget on less tax revenue, with room for the unpredictable but inevitable misfortunes (like plummeting oil and farm commodity prices).
Have the right systems in place, including performance-based budgeting and a reliable revenue estimating process.
To ensure that lawmakers have this information as they work in statehouses around the country, nearly 8,000 complimentary copies are being distributed to every state legislator across the country in partnership with The Heartland Institute.
Danedri Herbert, an experienced journalist currently writing for the online publication “The Sentinel,” co-authored the book and former U.S. Senator Tom Coburn of Oklahoma wrote the Foreword. Coburn writes, “This is a very important book, not only for state and national legislators who try to represent citizens instead of special interests, but also for taxing and spending watchdogs in the press and those involved with good government citizen activist groups.”
What Was Really the Matter with the Kansas Tax Plan is published by Jameson Books, Inc. and copies will be available on Amazon.
Trabert concludes, “Kansas could have successfully cut taxes as other states have done. The undoing of a very good idea—allowing citizens to keep more of their hard-earned money—gets to the crux of the serious state and national challenges we face: policy takes a back seat to politics. The efforts of many elected officials are not on solving problems in ways that create the best path forward for all Americans to achieve prosperity, but on maintaining and consolidating power.”
In this episode of WichitaLiberty.TV: The Sentinel’s Danedri Herbert joins Bob Weeks to discuss the upcoming gubernatorial debate, the Kansas Legislature’s website and transparency, and accountability in government. View below, or click here to view at YouTube. Episode 184, broadcast February 17, 2018.
Is the state’s leading expert on school funding truly knowledgeable, or is he untrustworthy?
Recent events have found Kansas Department of Education’s Deputy Commissioner Dale Dennis in the news regarding a possible mistake or misapplication of school funds. The school spending establishment has rushed to his rescue, with Kansas National Education Association, Kansas Association of School Boards, United School Administrators of Kansas, Kansas School Superintendents Association, and American Federation of Teachers Kansas issuing a joint statement. Dale Dennis, says the statement, is “the best friend public education and the kids of Kansas have had.” He is described as “the most trustworthy, honest, and respected advocate for children and schools.”
Consider, however: The goals of these institutions are more spending on schools, less accountability for schools, and stamping out any movement towards school choice. And Dale Dennis accommodates this, especially more spending. This is the basis of the complaint, that he authorized more spending than the legislature intended in statute.
On Facebook, Kansas public school spending advocates mislead about the level of school spending. Click for larger.No matter how this dispute resolves, Dale Dennis is not trustworthy and honest. Below is a description of a speech he gave to the Hutchinson Rotary Club last year. He portrayed a number called “base state aid per pupil” as all that the state spends on schools. The reality is that the state spends much more. Presenting base state aid as though it was all the state spends is misleading. It’s a lie.
Base state aid is a fairly low figure and it has not kept up with inflation. But total state (and local) spending is much higher and has risen. This is why Dale Dennis is not trustworthy and honest. This is fake government.
But because Dennis is willing to paint Kansas school finances untruthfully and in a way that makes it look like spending is low and has declined, the public school spending establishment loves him. They cite his figures. And then: Who can argue with the Kansas Department of Education Deputy Commissioner?
What can argue with Dennis are the facts. Here’s how to refute Dale Dennis: View spending numbers from the Kansas State Board of Education.
Following, from April 2017, analysis of Dale Dennis and his speech to the Hutchinson rotary Club.
Fake government spawns fake news
Discussions of public policy need to start from a common base of facts and information. An episode shows that both our state government and news media are not helping.
A recent Hutchinson News article1 started with this:
Once you wake up to where Kansas was in 1992 at funding schools and what it needs to do to get caught up, said the Kansas Department of Education’s Deputy Commissioner Dale Dennis, it’s a shocker.
In 1992, base state aid per pupil was $3,600. That amount, taking into account the Consumer Price Index, would be the equivalent of $6,001.12 in 2013. Base state aid, however, has been frozen at $3,852 since 2014-15.
“The numbers are shocking, shocking,” Dennis told the Hutchinson Rotary Club at its Monday luncheon meeting at the Hutchinson Town Club.
Why is a speech by a government bureaucrat, as covered in a major newspaper, important? It illustrates two problems we face in understanding, discussing, and debating important matters of public policy.
First, can government be truthful and accurate? Dale Dennis — the state’s top official on school finance — certainly knows that the numbers he presented do not accurately characterize the totality of school spending in Kansas. But the problem is even worse than that. To use base state aid as the indicator of state spending on schools is deceptive. It’s deceptive in that, after adjusting for inflation, base state aid has declined. But total state aid to school districts has increased.
Base state aid is a false indicator of total spending on schools by the state. It’s fake — fake government. And for a newspaper to uncritically present this as news illustrates the second problem we face.
Background on base state aid and school spending
Kansas school spending, showing base state aid and total state aid. See article for notes about 2015. Click for larger.Base state aid per pupil — the statistic Dennis presented — is an important number.2 It’s the starting point for the Kansas school finance formula used before the 2015-2016 (fiscal 2016) school year, and something like it may be used in a new formula.3
Base state aid, however, is not the only important number. To calculate the funding a school district receives, weightings are added. If students fall into certain categories, weightings for that category are added to determine a weighted enrollment. That is multiplied by base state aid to determine total state aid to the district. 4
While this may seem like a technical discussion that doesn’t make a difference, it’s very important, because some of the weightings are large. The at-risk weighting, intended to cover the additional costs of teaching students from low-income families, started at five percent in 1993. In other words, for every student in this category, a school district received an extra five percent of base state aid. The value of this weighting has risen by a factor of nine, reaching 45.6 percent starting with the 2008-2009 school year.
There’s also the high-density at-risk weighting. Starting with the 2006-2007 school year districts with a high concentration of at-risk students could receive an extra weighting of four percent or eight percent. Two years later the weightings were raised to six percent and ten percent. (This formula was revised again in 2012 in a way that may have slightly increased the weightings.)
Kansas school spending, showing ratio of total state aid to base state aid. See article for notes about 2015. Click for larger.Kansas school spending. See article for notes about 2015. Click for larger.The weightings have a large effect on school funding. For example: During the 2004-2005 school year, base state aid was $3,863 and the at-risk weighting was ten percent. An at-risk student, therefore, generated $4,249 in state funding. (Other weightings might also apply.)
Ten years later base state aid was $3,852 — almost exactly the same — and the at-risk weighting was up to 45.6 percent. This generates funding of $5,609. For a district that qualified for the maximum high-density at-risk weighting, an additional $404 in funding was generated. (These numbers are not adjusted for inflation.)
So even though base state aid remained (almost) unchanged, funding targeted at certain students rose, and by a large amount.
Over time, values for the various weightings grew until by 2014 they added 85 percent to base state aid. A nearby chart shows the growth of total state aid as compared to base state aid. (Starting in fiscal 2015 the state changed the way local tax dollars are counted. That accounts for the large rise for the last year of data in the chart. For school years 2016 and 2017, block grants have replaced the funding formula, so base aid and weightings do not apply in the same way.)
What have we learned?
We’re left wondering a few things:
Did Deputy Superintendent Dale Dennis tell the audience that base state aid is just part of the school funding landscape, and not reflective of the big picture? Did he tell the audience that total state aid to schools has increased, and increased substantially? If so, why wasn’t it mentioned in the article?
If Dale Dennis did not tell the audience these things, what conclusions should we draw about his truthfulness?
Why didn’t the Hutchinson News article explain to readers that base state aid is not an accurate or total indicator of total state spending on schools?
What is the duty of reporters and editors? We’re told that experienced journalists add background and context to the news — things that the average reader may not know. (This article is designated as “Editor’s Pick” by the Hutchinson News.)
By the way, the Wichita Eagle, on its opinion page, cited in a positive and uncritical manner the Hutchinson News article.5 This is notable as the writer of the Eagle piece, opinion editor Phillip Brownlee, was a certified public accountant in a previous career. This is someone we should be able to trust to delve into numbers and tell us what they mean. But that isn’t the case.
Whatever your opinion on the level and trend of school spending, we need to start the discussion from a common base of facts and information. From this episode, we see that both our state government and news media are not helping.
For the fiscal 2016 and 2017 school years, the formula was replaced by block grants. ↩
AMENDMENTS TO THE 1992 SCHOOL DISTRICT FINANCE AND QUALITY PERFORMANCE ACT AND THE 1992 SCHOOL DISTRICT CAPITAL IMPROVEMENTS STATE AID PROGRAM (FINANCE FORMULA COMPONENTS), Kansas Legislative Research Department, May 20, 2014 http://ksde.org/Portals/0/School%20Finance/amends_to_sdfandqpa_2015.pdf↩
In this episode of WichitaLiberty.TV: Vice president and policy director of Kansas Policy Institute James Franko joins Karl Peterjohn to discuss Governor Brownback’s State of the State Address for 2018. Topics include schools and Medicaid expansion. Bob Weeks hopes to be back next week. View below, or click here to view at YouTube. Episode 179, broadcast January 13, 2018.
From the Wichita Pachyderm Club: Local government officials present their legislative priorities. Appearing are James Clendenin for the City of Wichita, Dave Unruh for Sedgwick County, and Sheril Logan for the Wichita Public School District. This was recorded December 22, 2017.
In this episode of WichitaLiberty.TV: Kansas Representative John Whitmer joins Karl Peterjohn and Bob Weeks to discuss current issues in state government, and why he supports Wink Hartman for governor. View below, or click here to view at YouTube. Episode 173, broadcast November 18, 2017.
Kansas Senate President Susan Wagle addressed members and guests of the Wichita Pachyderm Club on November 10, 2017. School finance and the Kansas Supreme Court was a prominent topic.
A look at actual spending on Kansas highways, apart from transfers.
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.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 2017, which ended June 30, 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.
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.
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 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 2016 it had grown to $514.519 million.
KDOT spending, major road programs. Click for larger.
In this episode of WichitaLiberty.TV: Speaker of the Kansas House of Representatives Ron Ryckman joins hosts Bob Weeks and Karl Peterjohn to discuss current governmental affairs in Kansas. View below, or click here to view at YouTube. Episode 162, broadcast August 20, 2017.
In this episode of WichitaLiberty.TV: Jonathan Williams, chief economist at American Legislative Exchange Council (ALEC), joins Bob Weeks and Karl Peterjohn to discuss what ALEC does, and then topics specific to Kansas. View below, or click here to view at YouTube. Episode 159, broadcast July 30, 2017.
Kansas Legislative Research Department, one of four nonpartisan agencies that provide support services for the Kansas Legislature, 1 has released its annual highlights of legislation document for the 2017 session.
This is a 12-page document that provides short summaries of each bill. KLRD also publishes lengthier summaries of legislation.
Click here to access Kansas Legislative Research Department publication page, or click here to directly access the 2017 highlights document.
A Kansas public policy group celebrates tax increases. But it isn’t enough, and more reform is required.
Kansas Center for Economic Growth has promoted higher taxes in Kansas for many years, and this year it got its wish. Here are a few remarks based on its self-congratulatory article titled “Happy Fiscal New Year, Kansas.”
KCEG wrote: “Kansas is now better positioned to provide great schools”
Wait a moment. I thought Kansas already has great schools. That’s what the Kansas public school establishment tells us.
And I think that the author made a mistake here. Instead of writing about “public schools,” the author mentions — simply — “schools.” Usually the Kansas public school establishment is careful to qualify their plea for more school spending with “public.” To them, spending on private schools or charter schools is money wasted, money that should have gone to public schools. Fortunately, and amazingly, the tax credit scholarship program, a program limited to students currently in low-performing schools, was expanded slightly. 1
If KCEG really wanted to promote great schools in Kansas, it would embrace school programs such as charter schools.
KCEG: “vibrant communities”
Here, KCEG believes that taking more money from the private sector through taxation and letting government spend it is “vibrant.” But how does government work? In a democracy, a majority forces its will on the minority. Or, special interest groups intensely lobby for benefits at the expense of everyone else. Or, a form of the precautionary principle tamps down sparks of innovation in government bureaucracies, like public schools. Government is the opposite of “vibrant,” which the dictionary defines as “full of energy and enthusiasm.”
KCEG: “It also phases in the restoration of an important tax credit and three deductions that were eliminated in 2012 to pay for tax breaks for the wealthy.”
In 2012 everyone’s taxes were cut. Aside from that, we don’t pay for tax cuts. We pay for the cost of government.
When someone says we must pay for tax cuts, it presumes that tax cuts have a cost. The only way this makes sense is if we believe that the state has first claim on our incomes. The state takes what it says it needs, and we get to keep the rest. If the government is ever persuaded to reduce its claim on our incomes, that has a cost that must be paid in some way.
But for those who believe in self-ownership, this is nonsense. It’s the people who “give” tax money to the government, not the government who “gives” it back in the form of tax cuts. If the government cuts taxes, the government gives us nothing. It simply takes less of what is ours in the first place.
But the attitude of many government officials is the opposite. In 2006 Kansas cut taxes on business equipment and machinery. At the time, the Wichita Eagle reported: “Gov. Kathleen Sebelius, a Democrat, who first proposed the business machinery tax cut, agreed. ‘We’re not giving away money for the sake of giving it away,’ she said. ‘I’m hoping that the economic growth will actually help fund the school plan that we just passed.'” (emphasis added)
(By the way, this sounds like Sebelius was planning for tax cuts to pay for themselves.)
KCEG: “This means looking beyond income tax reforms and rebalancing Kansas’ ‘three-legged stool’ by addressing problems with the state’s sales tax and property tax.”
The three-legged stool is one of the most inappropriate analogies ever coined. If the state of Kansas were to develop an additional source of tax revenue, say by slapping a tariff on Budweiser imported from Missouri or Coors imported from Colorado, we’d hear spending advocates like KCEG speaking of the virtue of a stable four-legged chair. Many states thrive without one of our three legs, the income tax. And if we’re looking for stability, as Hineman mentions, income taxes are quite volatile compared to the other legs. 2
KCEG: “To pay for the Governor’s irresponsible and steep income tax cuts”
Again, we don’t have to pay for tax cuts. But there was irresponsible behavior, that being to continue to spend and avoid serious attempts at spending reform.
KCEG: “In response to the ongoing budget crisis, the sales tax was increased in 2015 to offset lagging state revenue. This affected every Kansan in every county, but especially hurt low-income residents.”
Here, KCEG is correct. The state should not have raised the sales tax, and the state needs to work on lowering the sales tax rate on groceries. For more on this topic, see Wichita sales tax hike would hit low income families hardest and Kansas sales tax has disproportionate harmful effects.
(Actually, KCEG is not totally correct. The sentence should have ended with “… to continue to pay for wasteful state spending because the governor and legislature would not seriously consider spending reform.”)
KCEG: “And because of the gamble with income tax cuts”
There was no gamble with income tax cuts, the governor’s boastful claims notwithstanding. 3 The tax cuts did what tax cuts should do: Leave more money in the hands of the people it belongs to.
KCEG: “As a result, property taxes shot up as communities struggled to keep up with the demand for basic services.”
If taxation was shifted from the state level to local levels, that in itself is not bad. In fact, it keeps taxing and spending more closely controlled at the local level, without communities having to fight in Topeka for a share of the state budget pie.
KCEG: “If we want to fully recover from the past five years, tax reform must address sales and property tax problems in addition to income tax issues.”
KCEG doesn’t say what are the problems with sales and property taxes. But I think I know what they believe: These two forms of taxation are too low. They don’t raise enough money from the right people.
—
Notes
“On and after July 1, 2018, the bill amends the definition of “public school” within the TCLISS Program Act to mean a school identified by KSBE as one of the lowest 100 performing schools with respect to student achievement. It also amends the definition of “qualified school” to require accreditation on and after July 1, 2020. Accreditation must be by KSBE or a KSBE-recognized national or regional accrediting agency. Additionally, the bill expands eligibility for the tax credit to individuals and places an annual cap of $500,000 on contributions.” Kansas Legislature. SB 19: Creating the Kansas school equity and enhancement act, summary. Available at http://www.kslegislature.org/li/b2017_18/measures/sb19/. ↩
Another Kansas legislator explains why raising taxes was necessary. So he says.
Many members of the Kansas Legislature are writing pieces defending their decision to vote for higher taxes. Don Hineman is one. His explanation merits more than average attention, as he is the Majority Leader of the Kansas House of Representatives. This week the Topeka Capital-Journal published his op-ed Rep. Don Hineman: Why tax reform was necessary. It deserves comment.
Hineman wrote: “This return to common sense tax policy resulted from legislators listening to their constituents and fulfilling the promises they made during 2016 campaigns.”
There may have been some candidates who campaigned on a platform of higher taxes. But most used more subtle language, such as Hineman’s use of the phrase “common-sense tax policy.” Does anyone know what that means? Does it mean the same thing to everyone? Besides, raising taxes was just one issue for most candidates and campaigns. And, voters must vote for candidates, not specific policies. As Justice Antonin Scalia told us, “Campaign promises are, by long democratic tradition, the least binding form of human commitment.” An example comes from Hineman’s web page, which states one of his four core values is “Respect for private property rights.” He has respect for your property, unless that property happens to be your money. Then he wants more.
Hineman: “… restore our state to firmer fiscal ground.”
This could have been done with spending cuts, too.
Hineman: “… a group of 88 representatives and 27 senators from across the political spectrum voted to override the governor’s veto.”
Here, Hineman refers to the coalition of Republicans and Democrats that passed the tax bill notwithstanding the governor’s veto. Because members of both major parties voted the same way, it’s described as nonpartisan. It’s meant as a good thing. But most of the Republicans who voted for higher taxes qualify as Democrats in many ways. They dismiss the Republican Party platform and embrace most aspects of the Democratic Party and progressive goals. There is no “spectrum.” Regarding taxation and the size of government, they’re pretty much the same color. Kansas Policy Institute confirms: “The Freedom Index published by Kansas Policy Institute has repeatedly shown the legislative political division to not be about Democrats and Republicans but about legislators’ view of the role of government, and the above June 2 update of 2017 Freedom Index certainly bears that out. With a score of 50 percent being considered neutral, there are 13 Senators at the top of the list with positive scores and 13 Senators at the bottom of the list — and every one of them is a Republican.” 1
Hineman: “Brownback’s tax plan abandoned the ‘three-legged stool’ approach to funding government, which had served Kansas well for decades by relying on a stable balance of income, sales and property.”
The three-legged stool is one of the most inappropriate analogies ever coined. If the state of Kansas were to develop an additional source of tax revenue, say by slapping a tariff on Budweiser imported from Missouri or Coors from Colorado, we’d hear spenders like Hineman speaking of the virtue of a stable four-legged chair. Many states thrive without one of our three legs, the income tax. And if we’re looking for stability, as Hineman mentions, income taxes are quite volatile compared to the other legs. 2
As far as serving Kansas well: There are a variety of ways to look at the progress of Kansas compared to the nation, but here’s a startling fact: For the 73rd Congress (1933 to 1935) Kansas had seven members in the U.S. House of Representatives. (It had eight in the previous session.) Until 1992 Kansas had five. Today Kansas has four members, and may be on the verge of losing one after the next census. This is an indication of the growth of Kansas in comparison to the nation.
” … sweep from the highway fund … rejected the governor’s short-term fixes as being neither responsible nor conservative …”
In this (heavily edited) sentence, Hineman complains about sweeping money from the state’s highway fund. But: Even after raising taxes, the budget just passed by the legislature continues sweeps from the highway fund in the amount of $288,297,663 in fiscal year 2018. For fiscal year 2018, the total of the quarterly sweeps is $293,126,335. 3
Hineman: “The fiscal strain created by the 2012 tax cuts caused public schools to suffer, increasing class sizes and reducing program offerings.” Kansas school spending. See article for notes about 2015. Click for larger.The nearby chart shows Kansas school spending, per pupil, adjusted for inflation. It’s easy to see that since 2011, spending has been remarkable level. There was a change in 2015 that shifted the way some school funding was credited, but in total, not much changed.
Kansas school employment. Click for larger. Kansas school employment ratios. Click for larger.Some people will dismiss spending figures for a variety of reasons. They may say that inflation affects schools differently from everything else, or that these figures don’t include KPERS, or that they do include the cost of facilities. So let’s look at something else: The number of employees compared to the number of students. When we do this, we find that igures released by the Kansas State Department of Education show the number of certified employees rose slightly for the 2016-2017 school year.
The number of Pre-K through grade 12 teachers rose to 30,431 from 30,413, an increase of 0.06 percent. Certified employees rose to 41,459 from 41,405, or by 0.13 percent.4 These are not the only employees of school districts.5
Enrollment fell from 463,504 to 460,491, or 0.61 percent. As a result, the ratios of teachers to students and certified employees to students fell. The pupil-teacher ratio fell from 15.2 pupils per teacher to 15.1. The certified employee-pupil ratio fell from 11.2 to 11.1.
If we look at these ratios over time, we see they are remarkably consistent since 2012. These figures, at least on a state-wide basis, are contrary to the usual narrative, which is that school employment has been slashed, and class sizes are rising rapidly. The pupil-teacher ratios published by KSDE are not the same statistic as class sizes. But if the data shows that the ratio of pupils to teachers is largely unchanged for the past five years and class sizes are rising at the same time, we’re left to wonder what school districts are doing with teachers. And, why are programs being eliminated?
(The relative change in enrollment and employment is not the same in every district. To help Kansas learn about employment trends in individual school districts, I’ve gathered the numbers from the Kansas State Department of Education and present them in an interactive visualization. 67)
Hineman: “Though raising taxes is never easy …”
No. Spenders love to raise taxes. In fact, some legislators warned that the tax hikes are not enough, and that they’ll be back for more. Indeed, projections show spending outpacing revenue in just a few years.
Hineman: “… it was unfortunately the only responsible option available. State government has been cut to the point where there is no reasonable way to reduce spending enough to balance the budget.”
No. One example: The efficiency study commissioned by the legislature recommended savings in the method of acquiring health insurance for public school employees. This was not adopted. Therefore, $47,200,000 in general fund spending is added over what the governor recommended. 89 This was not cutting services or benefits. It was asking school employees to do something differently in order to save money. But, it didn’t happen.
Can Kansas cut spending? There are many states that spend less than Kansas on a per capita basis. 10
Hineman: “Those who parrot the phrase ‘we have a spending problem, not a revenue problem’ have repeatedly failed to offer realistic suggestions for further cuts.”
Hineman is correct in a small way. To balance the budget this year with cuts alone was probably impossible. The lust for spending other people’s money is just too great. But there have been proposals that should have been followed. First, the legislature should have commissioned the efficiency study in 2012 when taxes were cut. That didn’t happen. Then, the legislature should take the efficiency study seriously. But even simple things — like the recommendation of savings through school employee health insurance acquisition reform — are difficult to accomplish, because the spenders don’t want these reforms.
And, in the past there have been responsible plans for reforming spending and the budget. But these plans were not wanted, nor were they realized. 11
Hineman’s criticism shows that it is difficult to cut spending. People become accustomed to other people paying for their stuff. Legislators want to appear to be doing more for their constituents, providing seemingly free stuff while pushing aside the idea of paying for it. And so government grows, at the expense of our liberty and what might have been had the money been left in the productive private sector.
According to KSDE, certified employees include Superintendent, Assoc./Asst. Superintendents, Administrative Assistants, Principals, Assistant Principals, Directors/Supervisors Spec. Ed., Directors/Supervisors of Health, Directors/Supervisors Career/Tech Ed, Instructional Coordinators/Supervisors, All Other Directors/Supervisors, Other Curriculum Specialists, Practical Arts/Career/Tech Ed Teachers, Special Ed. Teachers, Prekindergarten Teachers, Kindergarten Teachers, All Other Teachers, Library Media Specialists, School Counselors, Clinical or School Psychologists, Nurses (RN or NP only), Speech Pathologists, Audiologists, School Social Work Services, and Reading Specialists/Teachers. Teachers include Practical Arts/Vocational Education Teachers, Special Education Teachers, Pre-Kindergarten Teachers, Kindergarten Teachers, Other Teachers, and Reading Specialists/Teachers. See Kansas State Department of Education. Certified Personnel.http://www.ksde.org/Portals/0/School%20Finance/reports_and_publications/Personnel/Certified%20Personnel%20Cover_State%20Totals.pdf. ↩
There are also, according to KSDE, non-certified employees, which are Assistant Superintendents, Business Managers, Business Directors/Coordinators/Supervisors, Other Business Personnel, Maintenance and Operation Directors/Coordinators/Supervisors, Other Maintenance and Operation Personnel, Food Service Directors/Coordinators/Supervisors, Other Food Service Personnel, Transportation Directors/Coordinators/Supervisors, Other Transportation Personnel, Technology Director, Other Technology Personnel, Other Directors/Coordinators/Supervisors, Attendance Services Staff, Library Media Aides, LPN Nurses, Security Officers, Social Services Staff, Regular Education Teacher Aides, Coaching Assistant, Central Administration Clerical Staff, School Administration Clerical Staff, Student Services Clerical Staff, Special Education Paraprofessionals, Parents as Teachers, School Resource Officer, and Others. See Kansas State Department of Education. Non-Certified Personnel Report.http://www.ksde.org/Portals/0/School%20Finance/reports_and_publications/Personnel/NonCertPer%20Cov_St%20Totals.pdf. ↩
“The FY 2018 budget assumes savings of $47.2 million from implementation of Alvarez & Marsal efficiency recommendations to include K-12 health benefit consolidation and sourcing select benefit categories on a statewide basis.” Budget Report, p. 17 ↩
“Add $47.2 million, all from the State General Fund, for removing savings associated with A&M recommendations for health insurance and procurement for FY 2018.” Bill Explanation For 2017 Senate Sub. For House Bill 2002, p. 10. ↩
In this episode of WichitaLiberty.TV: Kansas Representative Susan Humphries joins Bob Weeks and Karl Peterjohn to discuss issues in the Kansas Legislature. Humphries represents District 99 in far east Wichita and Andover, and just completed her first term. View below, or click here to view at YouTube. Episode 156, broadcast July 2, 2017.
When reading the writings of former Kansas State Budget Director Duane Goossen, it’s useful to have a guide grounded in reality.
In a look back at the Kansas Legislature this year, former state budget director Duane Goossen has a few opinions. Here are a few, as appeared in the Wichita Eagle, and some counter arguments.
“Kansans, we are done being kicked around.”
No, Kansans are just starting to be kicked around even harder. That’s what higher taxes represent.
“We became famous, the poster state for bad tax policy.”
No, Kansas became the poster state for bad spending policy. Our legislature and governor had several years to find ways to reform spending, but there was not the will to do so. One example: The budget for next year contains $47.2 million in spending because the legislature did not adopt a recommended plan to save money on purchasing health insurance for school employees. That number rises to $89.0 million the following year.
“Kansans wanted their government to work, and wanted public education adequately funded.”
But spending on schools, adjusted for inflation, on a per-student basis, varied very little the past six years. 1 Kansas school employment rose slightly for the current school year, and ratios of employees to pupils fell, also slightly. The ratios of teachers to pupils and certified employees to pupils has been nearly constant in recent years. 2
Another constant refrain is that the state was not spending on highway maintenance. But spending on actual road maintenance programs has risen, with a few ups and downs. (This is spending apart from the sweeps of highway funds.) Additionally, while groups claimed that the state could maintain only 200 miles of roads a year, data from KDOT show that the number of miles maintained has risen for three years, and is well above 2,000 miles per year. 3
“…a discredited ‘trickle down’ tax cut ideology.”
“Trickle down” is not a term that economists use. It has no meaning in economics.
“Certainly, kudos should go to the courageous legislators and legislative leaders who voted to override.”
It is not courageous to raise taxes on anyone, wealthy or not. Courage would have been starting to reform spending five years ago.
“Most citizens prefer not to spend their time thinking about budget and tax policy issues.”
Goossen is correct. Politicians and bureaucrats prefer to work out of the spotlight, especially when raising taxes while showing no resolve to reform spending.
“An even higher percentage of voters expressed concern that the state was not investing enough in education.”
The spending establishment does a very good job convincing people that spending on nearly everything, especially schools, is lower than the reality. As a result, surveys of people across the county, and in Kansas, repeatedly show that the average person has little knowledge of the level of spending in schools and whether spending is rising or falling. 4 This reinforces the previous point.
“Kansas will be climbing out of the Brownback experiment for years.”
Here, Goossen is probably referring to delayed KPERS payments and borrowing from the highway fund. Well. When Goossen was state budget director, the KPERS funding ratio fell year after year. 5 The general fund swept from the highway fund during those years, too. That’s at the same time KDOT was also issuing long-term debt, including some bonds that were interest-only payments for many years. 6 (The state still does this.) To top it off, the budget just passed by the legislature continues sweeps from the highway fund in the amount of $288,297,663 in fiscal year 2018. For fiscal year 2018, the total of the quarterly sweeps is $293,126,335. 7
From the 
