Voice For Liberty

Tag: Kansas Policy Institute

  • Kansas and Wichita quick takes: Tuesday July 5, 2011

    Kansas can choose its future path. Kansas has a choice to make, writes Dave Trabert, President of Kansas Policy Institute: “‘Rich States, Poor States’ is loaded with good policy advice but perhaps the greatest takeaway is that economic prosperity is a matter of choice. Some states choose to create an environment that encourages economic activity; others choose to put a higher value on government growth, which discourages job creation.” The choice we have to make is based on Kansas’ middle-of-the-road ranking in Rich States, Poor States: The ALEC-Laffer Economic Competitiveness Index, a new edition of which was recently released. It is, writes Trabert: “We can either choose to continue the tax-and-spend mentality that continues to drive jobs away or we can choose to become prosperous.” More is at Rich State or Poor State — It’s a Matter of Choice . … Trabert will be speaking in Wichita on this topic this Friday, see the next item.

    Kansas budget to be topic. This Friday’s meeting (July 8th) of the Wichita Pachyderm Club features Dave Trabert, President of Kansas Policy Institute, speaking on the topic “How Kansas ranks in the Rich States, Poor States Economic Competitive Index, and how our state’s ranking can be improved by stabilizing the Kansas budget.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … Upcoming speakers: On July 15, Jon Hauxwell, MD, speaking on “Medicinal Cannabis.” On July 22, U.S. Representative Mike Pompeo of Wichita on “An update from Washington.” On July 29, Dennis Taylor, Secretary, Kansas Department of Administration and “The Repealer” on “An Overview of the Office of the Repealer.”

    Year of school choice. The Wall Street Journal, in a Review and Outlook piece, notes the progress made throughout the country in advancing greater freedom for parents in educational opportunities for the children. Of particular note is expansion of existing programs in Milwaukee and Indiana. … Schools choice is important, writes the Journal, but alone is not sufficient: “Choice by itself won’t lift U.S. K-12 education to where it needs to be. Eliminating teacher tenure and measuring teachers against student performance are also critical. Standards must be higher than they are. But choice is essential to driving reform because it erodes the union-dominated monopoly that assigns children to schools based on where they live. Unions defend the monopoly to protect jobs for their members, but education should above all serve students and the larger goal of a society in which everyone has an opportunity to prosper.” … In Kansas, reform measures such as these are rarely mentioned, as the state’s education establishment is content with keeping inner-city and disadvantaged kids in poor schools. While Kansas has some good schools, these are largely located in well-to-do suburbs in Johnson County and surrounding Wichita. Families with money, therefore, have opportunities for school choice (of a sort). Poor families don’t have this choice. … In Kansas, tinkering with the teacher tenure formula is all that has been accomplished this year regarding school reform. This is in a state that ranks very low among the states in policies relating to teacher effectiveness, according to the National Council on Teacher Quality. … Kansas Governor Sam Brownback campaigned with an education platform, but it contained mostly weak measures that appeared to be designed by the education establishment. So far Brownback has not come forth with proposals for meaningful reform of schools in Kansas.

    How much does a stimulus job cost? According to the Council of Economic Advisors, all appointed by President Barack Obama, $278,000. If that’s not bad enough, analysis from The Weekly Standard finds that now, the stimulus program is working in reverse: “In other words, over the past six months, the economy would have added or saved more jobs without the ‘stimulus’ than it has with it. In comparison to how things would otherwise have been, the ‘stimulus’ has been working in reverse over the past six months, causing the economy to shed jobs.” Why might the stimulus not be working? Borrowing the money and then “spending it mostly on Democratic constituencies” is to blame, writes Jeffrey H. Anderson.

    More ‘Economics in One Lesson.’ Next Monday (July 11th) Americans For Prosperity Foundation is sponsoring a continuation of the DVD presentation of videos based on Henry Hazlitt’s classic work Economics in One Lesson. The event is Monday from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. The event’s sponsor is Americans for Prosperity, Kansas. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

  • Economist: Kansas must improve its competitive position

    Last week the American Legislative Exchange Council released the fourth edition of Rich States, Poor States: The ALEC-Laffer Economic Competitiveness Index. This is an important study by authors Arthur B. Laffer, Stephen Moore, and Jonathan Williams that identifies states that use “best practices to enable states to drive economic growth, create jobs, and improve the standard of living for their citizens.” On Friday Williams was in Wichita and spoke to a group of business and political leaders at an event sponsored by Kansas Policy Institute and Wichita Independent Business Association.

    Williams said that there is reason for optimism in Kansas, but the news is not all good for our state. ALEC calculates economic outlook rankings, which is a “forecast based on a state’s current standing in 15 policy variables, each of which is influenced directly by state lawmakers through the legislative process, looking at states’ forecast for growth. In this ranking, Kansas fell from 25th to 27th among the 50 states in one year. A lot of this, Williams said, was due to the statewide sales tax increase of one cent per dollar which took effect on July 1, 2010. That will “leave a mark on competitiveness,” he added.

    Williams praised a bill in the Kansas Legislature this year which would have used increases in tax revenue to buy down the income tax rate. That bill, SB 1, known as the March to Economic Growth Act, passed the House of Representatives but did not advance out of committee in the Senate. This bill was important, Williams said, as one of the key findings of the Rich States, Poor States report is how important low income taxes are for economic growth.

    Kansas has a choice to make, Williams told the audience. Kansas could become a growth state like Texas, which has gained four Congressional seats over the last ten years. (Kansas has four seats. States gain Congressional seats when they grow in population more rapidly than other states.) Also, according to co-author Stephen Moore, Texas has created 40 percent of all jobs created during the recent economic recovery. Moore attributes part of Texas’ growth to having no personal income tax and living within its means.

    The other course is for Kansas to become accustomed to its mediocre, middle-of-the-pack ranking. But we may not want to live with the loss or prosperity that comes with this ranking. Williams cited research by KPI that show that Kansas was the only state to have a net loss of private sector jobs over the last year. All other states had at least some job growth.

    In ranking states on economic outlook, three of our our neighboring states — Colorado (number 6), Missouri (9), and Oklahoma (14) are in the top 15 states. This, said Williams, makes Kansas’ mediocre ranking of 27th look even worse.

    Williams outlined some principles that lead to effective tax policy. First, taxes ought to be simple. Complicated tax systems require much effort and cost to comply with, and are a deadweight loss to the economy.

    Transparency is important. It should be clear who is paying the tax. Williams said that business taxes violate this principle, as businesses pass on taxes to customers, employees, and investors.

    Neutrality — not using tax policy to select winners and lowers — is important, as government has a terrible record of success, and it leads to corruption in the manner of choosing winners.

    Predictability is important, and institutional controls like the taxpayer bill of rights or a super majority requirement to raise taxes help in this regard.

    Finally, tax policies must be pro-growth.

    Williams also said that increasing spending is not a good answer to economic problems. The ARRA (federal stimulus program of 2009) allowed states to live beyond their means for two years, and the money had many strings attached. Maintenance of effort requirements forced states to abandon good budgeting practices, and set states up to fail once the stimulus money stopped. In Kansas, the budget shortfall at the start of the legislative session in January was about $550 billion, and most of that was due to the end of the stimulus money.

    In analyzing tax policy, Williams told of how many people insist on using static analysis to predict the outcome of changes to tax policy. He showed the famous Laffer Curve, made prominent by co-author Arthur Laffer. The concepts illustrated by the curve include these: At an income tax rate of zero, the government collects no tax revenue. At a tax rate of 100 percent, again the government collects no revenue, as no one will work if all their earnings go to taxes. Between these two rates, revenue will rise as the tax rate is increased, until at some point tax revenue begins to fall with increasing tax rates. Eventually people figure out it just doesn’t pay to work any longer after the tax rate becomes too high.

    It’s important, therefore, to include human behavior and reaction to changes in tax policy. This is dynamic analysis — realizing that as tax rates change, people alter their behavior. Static analysis, on the other hand, doesn’t take this into account. Williams recounted an example as told in the book Flat Tax Revolution: Using a Postcard to Abolish the IRS by Steve Forbes:

    In 1989, Bob Packwood (R-OR) requested a revenue forecast from Congress’s Joint Committee on Taxation (JCT) on a hypothetical tax increase raising the top rate to 100 percent on incomes over $200,000. The JCT responded by forecasting increased revenues of $204 billion in 1990 and $299 billion in 1993. Essentially, the JCT predicted that people would continue to work even if the government taxed them out of every penny they earned.

    Williams said that only about ten states use a method of analysis different from static analysis when considering tax policy changes. Therefore, pro-growth tax policies often don’t get a good revenue score and are rejected for that reason. But the static models don’t take into account that as tax rates decrease, revenue may increase, or not decline as much as static models predict.

    On the state pension crisis, Williams said that official estimates understate the magnitude of the actual problem, as government accounting standards do not require states to fully recognize the full magnitude of recent investment losses. The losses may be spread over several years. Further, he said that states generally use an assumed rate of return that is greater than what is likely to be realized. He said that legendary investor Warren Buffet has recommended that state use six percent as their future earnings assumption. Kansas uses eight percent. Over long periods of time, which is the timeframe of pension plans, this difference in returns produces a large change in earnings.

    For more information on this report and its findings for Kansas, see Rich States, Poor States released for 2011. The report is available to read in its entirety at no cost at Rich States, Poor States: The ALEC-Laffer Economic Competitiveness Index.

  • Parents and teachers deceived about Kansas school funding

    By Dave Trabert, Kansas Policy Institute.

    “Deceived” is a strong word but there’s no polite way to describe the way parents and teachers are being misled about the nature of school funding in Kansas. Some school boards, administrators, media and even some legislators are saying that state support of public schools is at 1992 levels; others are just saying state aid is declining next year. None of that is true.

    State support is increasing by $86 million next year, and that’s on top of a $261 million increase this year. Kansas Legislative Research reports that state spending on public schools was $2.710 billion last year; this year it is $2.971 billion and next year’s budget is $3.057 billion. And by the way, next year’s spending will be more than twice what it was in 1992.

    Some pieces of state funding are slightly declining next year because others are growing more than the overall funding increase. According to the school finance formula, amounts required for Special Education, pension payments and the state’s portion of local bond payments are deducted from total aid; the remaining balance is then distributed according to the formula on a weighted per-pupil basis. Since the increases in those “off the top” items are greater than the $86 million increase in total state aid, a reduction in base state aid was necessary. Still, total aid from state, federal and local sources will still be about $12,000 per pupil next year, which would be a 5 percent reduction since FY 2009. (Federal aid is returning to pre-stimulus levels but local aid should be slightly higher.)

    This minor reduction over the last three years is caused by the worst recession this state has seen in decades. We’ve lost over 70,000 private sector jobs in the last three years and average annual employment in 2010 was less than in 1998. Based on the change in income tax receipts, corporate earnings plummeted 49 percent between 2007 and 2010. The resources to insulate public schools from economic reality simply aren’t available.

    Schools have a number of alternatives to avoid changes that impact classrooms. Inflation increased 10.4 percent between 2005 and 2010 but per-pupil operating costs outside the classroom jumped 17.7 percent. That’s $112 million above inflation.

    Also, most districts didn’t spend all of the revenue they received over the last five years; cash reserves in current operating funds (not counting capital and bond payments) increased by $317 million and most of that money is state and local tax dollars that were intended to operate schools. Many districts claimed they couldn’t use those unspent aid dollars because some of it was restricted.

    But there’s no question now that they can spend the money. A new law permits the transfer of unencumbered carryover cash balances from a group of twelve funds to be used for any operating purpose. There are no restrictions on how the money can be used and most districts have three or four times the amount needed to offset the change in base state aid per pupil.

    Parents and teachers deserve the truth. State support of public schools is rising next year and districts have options to avoid direct classroom impacts. We hope they choose to do so.

    Dave Trabert is president of the Kansas Policy Institute.

  • Kansas and Wichita quick takes: Wednesday June 22, 2011

    RightOnline, Netroots Nation. The past weekend featured two conferences for online activists: Americans for Prosperity Foundation’s RightOnline and Netroots Nation, sponsored by labor unions. I attended and made two presentations at RightOnline, the conference for those in favor of liberty and economic freedom. 1,655 people attended, according to AFP. I saw some events of the Netroots conference on C-SPAN, including a session with President Barack Obama’s White House Communications Director Dan Pfeiffer. In the session, Obama was criticized many times, and at one point the audience booed. More coverage is at A tale of two political conferences, PICKET: Right Online and Netroots conferences wrap up with few run-ins, Digital Conferences, Blue and Red, in Minneapolis

    The Atlantic Magazine’s Lies: Of Breitbarts, Kochs, and RightOnLine. Warner Todd Huston of Publius’ Forum examines a piece in The Atlantic that covered the recent RightOnline conference in Minneapolis and found it to be lacking. He found: “Unfortunately, the whole thing was filled with opinions stated as fact, misconstructions of facts, and outright lies. Sadly, along with the rest of the Old Media, it seems as if the veracity of The Atlantic has taken a hit in this bad Obama economy. … Now, what would have made Dupuy’s piece actually informative would have been a discussion of the real differences between the Nutrooters and RightOnLine. And there are quite a few. Netroots Nation is chock full of some very wonky programs. The lefties drill down to the deepest Internet facts, figures, and capabilities. On the other hand, RightOnLine has since day one sufficed with Twitter 101, blogging 101, and other beginner’s programs meant to help their local activists learn how to use the Internet to further conservative ideas. RightOnLine has not made arcane wonkiness a part of its programs like Netroots Nation has. The fact is the two conferences are very different in character in this respect.” More at The Atlantic Magazine’s Lies: Of Breitbarts, Kochs, and RightOnLine.

    Fed downgrades economic outlook. Wall Street Journal: “Federal Reserve officials downgraded their assessment of the U.S. economy’s performance Wednesday, but gave no indication they intend to take new steps to boost growth and jobs. … The recovery is continuing at a moderate pace, though ‘somewhat more slowly’ than previously expected, officials said in a statement following the Federal Open Market Committee meeting, echoing remarks made by Fed Chairman Ben Bernanke in a speech earlier this month.” Further: “Though the Fed is less comfortable with the economic outlook, it has less leeway to take new steps to fix it. That’s because underlying inflation also has crept up, making the central bank leery of injecting more money into the financial system.”

    Tax the rich. Burton Folsom: “Economist Alan Reynolds has recently called attention to the latest pronouncement from Robert Reich, the former Secretary of Labor. ‘A 70 percent marginal tax rate on the rich’ is Reich’s solution for the cash crunch in the federal government today. Let the rich pick up the tab. That assumes, of course, that the rich will continue to work hard if they have to send almost three-fourths of their earnings to Uncle Sam. They won’t. They never have. And you wouldn’t either.” … Reynolds’ article in the Wall Street Journal is Why 70% Tax Rates Won’t Work. In it, Reynolds writes: “All this nostalgia about the good old days of 70% tax rates makes it sound as though only the highest incomes would face higher tax rates. In reality, there were a dozen tax rates between 48% and 70% during the 1970s. Moreover — and this is what Mr. Reich and his friends always fail to mention — the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%.”

    Wichita speaker list announced. The Wichita Pachyderm Club has announced its lineup of speakers for July. The club, which is a Republican club, seeks to provide programs that are informative and that provide members with a variety of viewpoints on important contemporary issues, and historical issues, too. Sometimes this leads to controversy, as there are those who believe that only Republicans and those who parrot the “official” party line should speak at Pachyderm. Although I am not a Pachyderm officer or board member, this month features a speaker, Dr. Jon Hauxwell, who is speaking based on my recommendation and invitation, and whose topic is likely to generate controversy again. The speakers for July: On July 8, Dave Trabert, President, Kansas Policy Institute, on “Stabilizing the Kansas Budget.” On July 15, Jon Hauxwell, MD, speaking on “Medicinal Cannabis.” On July 22, U.S. Representative Mike Pompeo of Wichita on “An update from Washington.” On July 29, Dennis Taylor, Secretary, Kansas Department of Administration and “The Repealer” on “An Overview of the Office of the Repealer.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    FairTax meeting in Wichita. This Thursday (June 23) supporters of FairTax will meet in Wichita. According to event organizers, attendees will hear “new information about the status of the FairTax movement at the national level and how it might affect the Presidential race in 2012.” More from organizers: “The FairTax is a unique solution to the urgent need to create jobs and grow the economy. America now has 35 million Americans under employed or unemployed. The economic disaster was unnecessary and can be reversed by completely repealing our horrible and destructive tax system and replace it with the FairTax.” … While I am sympathetic with their cause, I am not enthusiastic about the FairTax — a national sales tax — for one important reason: it doesn’t address the real problem of a government that is too large and collects too much tax revenue. One of the main platforms of Fairtax is that it would collect the same revenue as the existing tax regime: “dollar-for-dollar federal revenue neutrality.” I quote Murray N. Rothbard on this: “But the libertarian must never support any new tax or tax increase. For example, he must not, while advocating a large cut in income taxes, also call for its replacement by a sales or other form of tax. The reduction or, better, the abolition of a tax is always a noncontradictory reduction of State power and a significant step toward liberty; but its replacement by a new or increased tax elsewhere does just the opposite, for it signifies a new and additional imposition of the State on some other front. The imposition of a new or higher tax flatly contradicts and undercuts the libertarian goal itself.” … The meeting is at 7:00 pm Thursday at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. The event’s sponsor is FairTaxKC.org.

    Obama: Technology seen as job killer. “The story goes that Milton Friedman was once taken to see a massive government project somewhere in Asia. Thousands of workers using shovels were building a canal. Friedman was puzzled. Why weren’t there any excavators or any mechanized earth-moving equipment? A government official explained that using shovels created more jobs. Friedman’s response: ‘Then why not use spoons instead of shovels?’ That story came to mind last week when President Obama linked technology to job losses. ‘There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers,’ he said. ‘You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.’ The president calls this a structural issue — we usually call it progress.” … Russell Roberts goes on to explain that productivity — doing more with less, including less labor — leads to lower costs to business. The Left, of course, says this simply means more profits for business. But in competitive markets, businesses will find they must lower their costs, and that means a higher standard of living for consumers. New jobs get created as people now have more money to spend on new products and services that didn’t exist before, or were so expensive that only the rich could afford them. More at Obama vs. ATMs: Why Technology Doesn’t Destroy Jobs.

    Even quicker. Rasmussen: Just 8% Approve of Job Congress Is Doing: “Voter approval of Congress’ job performance has now fallen to a near five-year low.” … How to Run Public Schools in the 21st Century: Our current models are bad for taxpayers — and calamitous for kids. … The dignity of personal choice: Choosing lifesaving care — or not — shouldn’t be left to bureaucrats. … The Fiscal Pledge We Need: Cut, Cap, Balance: Congress has never failed to increase the debt limit. This makes having a debt limit functionally useless. … Initiative and Referendum under attack, says John Fund: “Politicians always claim to support democracy, but they often come up with creative ways to limit the influence of pesky voters. Now members of the political class in several states are going after voters’ most powerful tool.” See Fund: Power to the People? How Déclassé. … A Shovel-Ready Punch Line: “This is a staggering indictment of the president, the team he assembled, and the journalists who accepted this administration’s arrogant assertions that they knew exactly what to do, how to do it, and what would happen as a result.”

  • Kansas and Wichita quick takes: Monday June 13, 2011

    Wichita City Council. This week the Wichita City Council considers these items: The council will deliberate a contract in the amount of $50,000 with the Kansas World Trade Center for economic development services. KWTC’s mission is to “promote and facilitate international trade through education, communication and research.” … The council will be asked to approve cultural funding allocations approved by the Cultural Funding Committee. The source of these funds is the city’s dedicated property tax for the arts, which is estimated to bring in $3,165,897 next year. The best thing the council could do for citizens is to forgo this funding, reduce taxes, and let citizens choose how to allocate their funds based on their own preferences. Instead, we have a committee deciding which arts Wichitans should be taxed to pay for. … The council will be asked to approve spending $194,849 on a contract with a firm to produce the Wichita bicycle master plan. … Another contract to be considered spends $87,253 to produce a transit community outreach and input study. … As always, the agenda packet is available at Wichita city council agendas.

    Arts jobs lost already? The Wichita Eagle’s Rhonda Holman is already bemoaning the lost arts jobs, writing this about Kansas Governor Sam Brownback: “He alone bears the responsibility for five lost jobs today as the Kansas Arts Commission’s funding runs out.” A few of the comments left to the article got the economics right, reminding Holman that these jobs at the Kansas Arts Commission are government jobs, not arts jobs. This is a distinction that is often overlooked by our state’s largest newspaper.

    American politics, viewed from down under. James Paterson, an Australian, writes about the inability of left-wing media to understand a conservative grassroots political movement: “Ever since the rise of the Tea Party in the United States and the community revolt against the Gillard Government’s carbon tax, progressive journalists and commentators have struggled to grapple with the idea of a grassroots political movement that isn’t left wing. More used to anti-war moratoriums and union-led protests for equal pay or refugee rights, many left-leaning journalists appear to be on a mission to uncover the ‘real’ cause of public dissent from their favoured big-government agenda, particularly regarding climate change.” Paterson notes how the media has latched on to Charles and David Koch as the driving force behind this political movement. But, he writes: “But political movements can’t just be conjured up at the behest of billionaire businessmen, media moguls or talk-show hosts. And they certainly can’t be directed exclusively by them to serve their commercial interests. If that were the case, what took them so long? Why did the Koch brothers — who were involved in libertarian activism as early as the 1970s — not ‘create’ the Tea Party to tackle US President Jimmy Carter, or Bill Clinton, decades ago?” A good question, I might add. Concluding: “As much as it might disappoint some commentators, most conservative philanthropists are simply passionate about the philosophy of individual liberty and personal freedom, just as others are committed to human rights or finding a cure for cancer. Surprisingly, even ordinary people can subscribe to these beliefs, and they don’t need to be told by a reclusive billionaire or wacky media personality how to think.”

    California parent trigger attacked. California has a new and innovative school reform law called the “parent trigger.” If a majority of the parents for a school sign a petition calling for the trigger to be invoked, the school must undergo one of several reform measures, such as, as described in Locking the Parent Trigger: “close the school and let the students enroll in a higher-performing campus nearby; convert the school to an independent charter; fire half the teaching staff and replace the administration; extend school hours and revise the curriculum under a federally recommended turnaround plan; or adopt an ‘alternative governance’ model, which could include anything from establishing a school-site council to handing over the school to the local district superintendent.” The City Journal article tells of an effort by the state’s anti-choice education establishment to interfere with and overturn the law.

    Medical board’s powers. Many are not aware of the role of the Independent Payment Advisory Board, or IPAB, which was established by the Patient Protection and Affordable Care Act. This board is charged with holding down the costs of medical care under ObamaCare. In his column Government by the ‘experts’ George Will describes some of this board’s extreme powers, such as the board’s proposals becoming law unless Congress takes action to oppose, and that action requires three-fifths majority vote. He quotes U.S. Supreme Court Justice Antonin Scalia: “I anticipate that Congress will find delegation of its lawmaking powers much more attractive in the future. … I foresee all manner of ‘expert’ bodies, insulated from the political process, to which Congress will delegate various portions of its lawmaking responsibility. How tempting to create an expert Medical Commission … to dispose of such thorny, ‘no-win’ political issues as the withholding of life-support systems in federally funded hospitals.” … This topic of Congress brushing aside its responsibility to make tough decisions came up in my recent interview with U.S. Representative Mike Pompeo of Wichita, in which I reported: “Pompeo said that over the last 25 or 30 years Congress has been unwilling to create ‘substantive markers’ in legislation. Instead, it creates vague laws and funds administrative agencies to implement them. These agencies are less accountable than elected officials, and Congress has handed over much authority to them.”

    Chief Justice to speak in Wichita. This Friday (June 17th) the Wichita Pachyderm Club features Honorable Lawton R. Nuss, Kansas Supreme Court Chief Justice, speaking on the topic “The State of the Kansas Courts.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … Upcoming speakers: On June 24, Jim Mason, Naturalist at the Great Plains Nature Center will have a presentation and book signing. Mason is author of Wichita’s Riverside Parks, published in April 2011. On July 1 there will be no meeting due to the Independence Day holiday. On July 8, Dave Trabert, President, Kansas Policy Institute, on “Stabilizing the Kansas Budget.”

    More ‘Economics in One Lesson.’ Tonight (June 13) Americans For Prosperity Foundation is sponsoring a continuation of the DVD presentation of videos based on Henry Hazlitt’s classic work Economics in One Lesson. The event is Monday (June 13) at 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. The event’s sponsor is Americans for Prosperity, Kansas. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

    Climate change resource launched. The Heartland Institute has launched an online resource dedicated to providing information about climate change and related topics. Titled ClimateWiki, Heartland writes that the website “covers an immensely complicated subject with hard scientific facts, not the scare-mongering and politicization found at Wikipedia, other ‘alarmist’ climate research sites and the mainstream media.” … Heartland will host the International Conference on Climate Change later this month.

  • Rich States, Poor States author to be in Wichita

    Kansas Policy Institute and the Wichita Independent Business Association are hosting a breakfast event featuring Jonathan Williams, one of the authors of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.

    This annual publication looks at each of the 50 states and evaluates them on several areas of economic competitiveness. Last year, Kansas ranked 40th for “Economic Performance Rank” and 25th for “Economic Outlook Rank.” It is feared that Kansas may fare even worse this year.

    The report is a source of much useful information. For example, did you know that Kansas has 696.3 public employees for each 10,000 people? That ranks us 48th among the states. That’s good news if you’re a public employee union organizer, but bad for everyone else.

    The event is at 7:30 am on Friday June 24th at Pioneer Balloon (5000 E. 29th St. N., across from the WSU Metro Complex). The cost is $10. Click here to RSVP by email, or call 316-201-3264.

  • What’s really the matter with Kansas

    By Dave Trabert, Kansas Policy Institute.

    A May 22 story in the Wichita Eagle about the Kansas Legislature’s lack of focus on job creation in the just-concluded legislative session provides great insight into the economic stagnation the Sunflower State has suffered over the last decade.

    According to the Kansas Department of Labor, between April 2008 and April 2011 the state lost 73,200 private sector jobs, 500 state government jobs and 500 local government jobs. Last year, despite warnings from two academic studies that a sales tax increase would cost thousands of jobs, legislators did it anyway — and sure enough, between July 1, 2010 and April 30, 2011 we lost 5,000 private sector jobs (seasonally adjusted according to the Bureau of Labor Statistics for comparability). State government employment didn’t change over that time frame.

    So what was the focus of that lengthy article? The loss of government jobs. Private sector jobs were barely mentioned.

    The Eagle article spoke of a large number of state job cuts without mentioning that the majority were vacant positions. But there was no mention of last year’s legislative action that destroyed private sector jobs by raising the sales tax so government could spend more money.

    That pretty much sums up the job problem in Kansas for the last decade: lots of concern about protecting government and not much more than lip service for the private sector.

    The article painted a dire picture for education but failed to mention that total state spending on K-12 will increase by more than $100 million next year. Mandatory spending increases on school employee retirement benefits, special education programs and school bond payments prompted a reduction in the starting point of the funding formula (base state aid), but legislators also passed a law allowing districts to make up the difference in base state aid. Districts are allowed to transfer carryover cash balances from a variety of funds for operational purposes — and all but one district started this year with enough money in those funds to do so. Most, in fact, have more than $1,000 per pupil in those funds. Districts have the ability to avoid the layoffs mentioned in this article, so why did the reporter and the people he interviewed fail to mention it?

    The reporter also didn’t provide readers with the context of the education job cuts. Statewide, there are 4.6% more teachers in the wake of the cuts than there were in 2005, and all other school employment is up by 8.6%, while enrollment is up just 3.1%. It’s a shame that those people lost their jobs but it would be nice to see just as much concern for unemployed private sector workers.

    The Rural Opportunity Zones created by the Kansas Legislature are a good step forward, but the change that would create more jobs than any other effort — eventually eliminating the income tax — was killed in the Senate. The Senate wouldn’t even allow it to be discussed.

    Kansas will continue to suffer the economic stagnation we’ve seen over the last decade until we stop valuing government jobs over private sector jobs. That’s what is really the matter with Kansas.

    Dave Trabert is the President of the Kansas Policy Institute.

  • In Kansas Legislature this year, opportunities for saving were lost

    This year the Kansas Legislature lost three opportunities to improve the operations and reduce the cost of state government. Three bills, each with this goal, were passed by the House of Representatives, but each failed to make through the Senate, or had its contents stripped and replaced with different legislation.

    Each of these bills represents a lost opportunity for state government services to be streamlined, delivered more efficiently, or measured and managed.

    Kansas Streamlining Government Act

    HB 2120, according to its supplemental note, “would establish the Kansas Streamlining Government Act, which would have the purpose of improving the performance, efficiency, and operations of state government by reviewing certain state agencies, programs, boards, and commissions.” Fee-funded agencies — examples include Kansas dental board and Kansas real estate commission — would be exempt from this bill.

    In more detail, the text of the bill explains: “The purposes of the Kansas streamlining government act are to improve the performance, streamline the operations, improve the effectiveness and efficiency, and reduce the operating costs of the executive branch of state government by reviewing state programs, policies, processes, original positions, staffing levels, agencies, boards and commissions, identifying those that should be eliminated, combined, reorganized, downsized or otherwise altered, and recommending proposed executive reorganization orders, executive orders, legislation, rules and regulations, or other actions to accomplish such changes and achieve such results.”

    In testimony in support of this legislation, Dave Trabert, President of Kansas Policy Institute offered testimony that echoed findings of the public choice school of economics and politics: “Some people may view a particular expenditure as unnecessary to the fulfillment of a program’s or an agency’s primary mission while others may see it as essential. Absent an independent review, we are expecting government employees to put their own self-interests aside and make completely unbiased decisions on how best to spend taxpayer funds. It’s not that government employees are intentionally wasteful; it’s that they are human beings and setting self-interests aside is challenge we all face.”

    On February 25 the bill passed the House of Representatives by a vote of 79 to 40. It was referred to the Senate Committee on Federal and State Affairs, where it did not advance.

    Privatization and public-private partnerships

    Another bill that did not advance was HB 2194, which in its original form would have created the Kansas Advisory Council on Privatization and Public-Private Partnerships.

    According to the supplemental note for the bill, “The purpose of the Council would be to ensure that certain state agencies, including the Board of Regents and postsecondary educational institutions, would: 1) focus on the core mission and provide goods and services efficiently and effectively; 2) develop a process to analyze opportunities to improve efficiency, cost-effectiveness and provide quality services, operations, functions, and activities; and 3) evaluate for feasibility, cost-effectiveness, and efficiency opportunities that could be outsourced. Excluded from the state agencies covered by the bill would be any entity not receiving State General Fund or federal funds appropriation.”

    This bill passed by a vote of 68 to 51 in the House of Representatives. It did not advance in the Senate, falling victim to a “gut-and-go” maneuver where its contents were replaced with legislation on an entirely different topic.

    Opposing this bill was Kansas Organization of State Employees (KOSE), a union for executive branch state employees. It advised its “brothers and sisters” that the bill “… establishes a partisan commission of big-business interests to privatize state services putting a wolf in charge of the hen house. To be clear, this bill allows for future privatization of nearly all services provided by state workers. Make no mistake, this proposal is a privatization scheme that will begin the process of outsourcing our work to private contractors. Under a privatization scheme for any state agency or service, the employees involved will lose their rights under our MOA and will be forced to adhere to the whims of a private contractor who typically provides less pay and poor benefits. Most workers affected by privatization schemes are not guaranteed to keep their jobs once an agency or service is outsourced.”

    Note the use of “outsourcing our work.” This underscores the sense of entitlement of many government workers: It is not work done for the benefit of Kansans, it is our work.

    Then, there’s the warning that private industry pays less. Most of the time representatives of state workers like KOSE make the case that it is they who are underpaid, but here the argument is turned around when it supports the case they want to make. One thing is probably true: Benefits — at least pension plans — may be lower in the private sector. But we’re now painfully aware that state government has promised its workers more pension benefits than the state has been willing to pay for.

    Performance measures

    Another bill that didn’t pass the entire legislature was HB 2158, which would have created performance measures for state agencies and reported that information to the public. The supplemental note says that the bill “as amended, would institute a new process for modifying current performance measures and establishing new standardized performance measures to be used by all state agencies in support of the annual budget requests. State agencies would be required to consult with representatives of the Director of the Budget and the Legislative Research Department to modify each agency’s current performance measures, to standardize such performance measures, and to utilize best practices in all state agencies.” Results of the performance measures would be posted on a public website.

    This bill passed the House of Representatives by a nearly unanimous vote of 119 to 2, with Wichita’s Nile Dillmore and Geraldine Flaharty the two nay votes. In the Senate, this bill was stripped of its content using the “gut-and-go” procedure and did not proceed intact to a vote.

    Opposition to these bills from Democrats often included remarks on the irony of those who were recently elected on the promise of shrinking government now proposing to enlarge government through the creation of these commissions and councils. These bills, however, proposed to spend modest amounts increasing the manageability of government, not the actual range and scope of government itself. As it turns out, many in the legislature — this includes Senate Republicans who initiated or went along with the legislative maneuvers that killed these bills — are happy with the operations of state government remaining in the shadows.

    These proposals to scale back the services that government provides — or to have existing services be delivered by the private sector — mean that there will be fewer government employees, and fewer members of government worker unions. This is another fertile area of gathering support for killing these bills.

    State workers and their supporters also argue that fewer state workers mean fewer people paying state and other taxes. Forgotten by them is the fact that the taxes taken to pay these workers means less economic activity and fewer jobs in the private sector. And, in fact, Kansas has seen the number of government workers — at all levels — rise.

    As to not wanting performance measures: Supporters of the status quo say that people outside of government don’t understand how to make the decisions that government workers make. In one sense, this may be true. In the private sector, profitability is the benchmark of success. Government has no comparable measure when it decides to, say, spend some $300 million to renovate the Kansas Capitol. But once it decides to do so, the benchmark and measurement of profitability in executing the service can be utilized by private sector operators. Of course, private contractors will be subject to the discipline of the profit and loss system, something again missing from government.

    Curiously, Kansas Governor Sam Brownback didn’t use his prestige and influence to support these bills, at not publicly. Perhaps next year, an election year not only for the House but also for the entire membership of the Senate, will be different.

  • Kansas and Wichita quick takes: Monday May 23, 2011

    Wichita City council. As it is the fourth Tuesday of the month, the Wichita City Council handles only consent agenda items. The council will also hold a workshop. Consent agendas are usually reserved for items thought to be of non-controversial nature. Today’s Wichita Eagle spotlights one item where the city is proposing to hire an outside firm to inspect the roof of the airport for damage from last September’s storm. Some, including Council Member Michael O’Donnell (district 4, south and southwest Wichita) wonder why the city can’t do the inspection with it’s own engineering staff and resources. … Of further note is that the city proposes to use general obligation bonds to borrow the funds to pay for this inspection. This is similar to last December, when the city decided to also use bonds to borrow money to pay for an analysis of nine aging fire stations and what repairs and upgrades they might require. While borrowing to pay for long-term capital projects is fine, this is borrowing for thinking about long-term projects. … The workshop will cover Century II parking meters, something involving the North Industrial Corridor, and a presentation on next year’s budget. The detailed agenda packet is at Wichita City Council May 24, 2011. No similar information is available for the workshop topics. … Next week is the fifth Tuesday of a month and the day after a holiday, so there’s two reasons to explain why there won’t be a city council meeting next week.

    Sedgwick County Commission. In its Wednesday meeting, the Sedgwick County Commission will consider approval of the county’s portion of the Hawker Beechcraft deal. In order to persuade Hawker to stay in Kansas rather than move to Louisiana, the State of Kansas offered $40 million in various form of incentive and subsidy, and it was proposed at the time that the City of Wichita and Sedgwick County each add $2.5 million. Last week the Wichita City Council approved its share, which can only be described as corporate welfare. It was widely reported that Hawker had received an offer, said by some to be worth as much as $400 million, to move to Louisiana. But that offer was not a valid threat of Hawker leaving Kansas, as in a December 2010 television news report, Louisiana’s governor said “they couldn’t guarantee the number of jobs that would have been required for them to come here.” … The meeting agenda is at Sedgwick County Commission, May 25, 2011.

    Kobach on voter reform in Wall Street Journal. Today’s Wall Street Journal opinion section carries a piece by Kris W. Kobach, who is Kansas Secretary of State. The title is The Case for Voter ID: You can’t cash a check, board a plane, or even buy full-strength Sudafed over the counter without ID. Why should voting be different? In it, Kobach writes Kansas is the only state with all of these elements of voter ID reform: “(1) a requirement that voters present photo IDs when they vote in person; (2) a requirement that absentee voters present a full driver’s license number and have their signatures verified; and (3) a proof of citizenship requirement for all newly registered voters.” In support of the need for these reforms, Kobach provides evidence of the prevalence of election fraud. He also cites evidence that there is already widespread possession of the documents necessary to vote: “According to the 2010 census, there are 2,126,179 Kansans of voting age. According to the Kansas Department of Motor Vehicles, 2,156,446 Kansans already have a driver’s license or a non-driver ID. In other words, there are more photo IDs in circulation than there are eligible voters. The notion that there are hundreds of thousands of voters in Kansas (or any other state) without photo IDs is a myth.” … Some critics of these reforms fear that they will suppress voter turnout, and primarily that of Democratic Party voters. Kobach counters: “If election security laws really were part of a Republican scheme to suppress Democratic votes, one would expect Democrats to fight such laws, tooth and nail. That didn’t happen in Kansas, where two-thirds of the Democrats in the House and three-fourths of the Democrats in the Senate voted in favor of the Secure and Fair Elections Act. They did so because they realize that fair elections protect every voter and every party equally. No candidate, Republican or Democrat, wants to emerge from an election with voters suspecting that he didn’t really win. Election security measures like the one in my state give confidence to voters and candidates alike that the system is fair.” … The bill is HB 2067, and is the easiest way to understand it is by reading the supplemental note.

    Tiahrt, former Congressman, to address Pachyderms. This week the Wichita Pachyderm Club features Todd Tiahrt, Former Congressman for the fourth district of Kansas, speaking on the topic “Outsourcing Our National Security — How the Pentagon is Working Against Us.” I suspect the prolonged decision process of selecting where the build the Air Force refueling tanker will be a topic. After the Pentagon awarded to contract to AirBus in 2008, which Boeing protested, the Wall Street Journal wrote: “The Pentagon’s job is to defend the country, which means letting contracts that best serve American soldiers and taxpayers, not certain companies. Defense Department rules explicitly state that jobs cannot be a factor in procurement and that companies from certain countries, including France, must be treated as if they are U.S. firms in contract bids. Such competition ensures that taxpayers get the best value for their money and soldiers get the best technology.” More on this decision is here. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Wichita speaker lineup set. The schedule of speakers for the Wichita Pachyderm Club for the next several weeks is set, and as usual, it looks to be an interesting set of programs. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. Upcoming speakers are: On June 3, Nola Tedesco Foulston, District Attorney, Eighteenth Judicial District of Kansas, speaking on “An office overview and current events at the Eighteenth Judicial District of Kansas District Attorney’s office.” On June 10, John Allison, Superintendent of USD 259, the Wichita public school district, on “An update from USD 259.” On June 17, The Honorable Lawton R. Nuss, Kansas Supreme Court Chief Justice on “The State of the Kansas Courts.” On June 24, Jim Mason, Naturalist at the Great Plains Nature Center will have a presentation and book signing. Mason is author of Wichita’s Riverside Parks, published in April 2011. On July 1, Jay M. Price, Director of the Public History Program at Wichita State University, speaking on “Classes of Values in Kansas History.” On July 8, Dave Trabert, President, Kansas Policy Institute, on “Stabilizing the Kansas Budget.”

    Blue Ribbon Commission coming to Wichita. “Local residents will have an opportunity to voice concerns and offer suggestions on how to improve the state’s court systems during two public meetings next week in Wichita. A panel from the Blue Ribbon Commission (BRC), which was appointed by the Kansas Supreme Court to review the state’s court systems, will listen to public comments during the meetings at 3:00 pm and 7:00 pm, Thursday, May 26, 2011 at Century II, in Room 101, in Wichita. The BRC will examine ways to assure proper access to justice, the number of court locations, services provided in each location, hours of operation, the use of technology, possible cost reductions, and flexibility in the use of court personnel and other resources, and any other topic that may lead to the more efficient operation of our courts.” For more information, see the Blue Ribbon Commission Website.

    School choice cast as civil rights issue. Star Parker, after citing the case of a homeless mother who falsified an address so her child could get into a good school: “Public school reality today for black kids is one that overwhelmingly keeps them incarcerated in failing, dangerous schools. It’s evidence of the indomitable human spirit that, despite horrible circumstances, many poor unmarried black mothers understand the importance of getting their child educated and will do whatever it takes to get their kid into a decent school. … But let’s not forget the bigger picture that the NAACP has consistently opposed school choice and voucher initiatives and has been a stalwart defender of the public school system that traps these kids and prohibits the freedom and flexibility that these mothers seek. … Generally, black establishment politicians and organizations such as the NAACP have defended government public schools and education status quo and sadly have hurt their own communities. Nothing contributes more to the growing income gaps in the country than disparities in education, and the impact continues to grow.” … A common choice of allowing widespread school choice is that poor and uneducated parents aren’t capable of making wise selections of schools for their children.

    Medicare reform necessary. Wall Street Journal in Republicans and Mediscare: Paul Ryan’s GOP critics are ObamaCare’s best friends: “With ObamaCare, Democrats offered their vision for Medicare cost control: A 15-member unelected board with vast powers to set prices for doctors, hospitals and other providers, and to regulate how they should be organized and what government will pay for. The liberal conceit is that their technocratic wizardry will make health care more rational, but this is faith-based government. The liberal fallback is political rationing of care, which is why Mr. Obama made it so difficult for Congress to change that 15-member board’s decisions. Republicans have staunchly opposed this agenda, but until Mr. Ryan’s budget they hadn’t answered the White House with a competing idea. Mr. Ryan’s proposal is the most important free-market reform in years because it expands the policy options for rethinking the entitlement state.” The unelected board referred to is the Independent Payment Advisory Board. With its mission to reduce spending, some have aid this board is the feared “death panel.”

    Science, public agencies, and politics. Cato Institute Senior Fellow Patrick J. Michaels explains the reality of cap-and-trade proposals in this ten minute video. If the Waxman-Markey bill was implemented, world temperature would be reduced by 0.04 degrees. That compares to a forecast increase of 1.584 degrees. If implemented worldwide by the Kyoto nations, the reduction would be 0.08 degrees worldwide. … Michaels says the growth in emissions by China eclipses anything we in America can do. … Michaels echos Dwight Esienhower’s warning that “we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite. The prospect of domination of the nation’s scholars by Federal employment, project allocations and the power of money is ever present — and is gravely to be regarded.” He goes on to explain some of the dangers of “public choice science.”