Voice For Liberty

Tag: Kansas Policy Institute

  • Kansas news digest

    News from alternative media around Kansas for February 16, 2010.

    Supreme Court denies motion to reopen Montoy case

    (Kansas Liberty) “The Kansas Supreme Court decided today that it would not be reopening the Montoy school funding case. … Reopening the Montoy case would have saved the districts a significant amount of time and money.”

    Committee considers school consolidation

    (Kansas Liberty) “Small district complains that community economically relies on schools, Representative says towns should not solely rely on taxpayer dollars to function.”

    Groups launch government transparency Web page

    (Kansas Liberty) “Americans for Prosperity and the Kansas Policy Institute have teamed up to provide an online transparency tool that will allow Kansas residents to see exactly how the government uses their taxpayer dollars.”

    Joe the Plumber Campaigns For 4th Dist. Candidate Jim Anderson

    (State of the State KS) “Joe ‘The Plumber’ Wurzelbacher talks about his role in the 2008 Presidential election and why he is endorsing 4th Congressional District candidate Jim Anderson (R).”

    Senate Education Debates Catastrophic Aid For School Districts

    (State of the State KS) “The Senate Education Committee debated changes to catastrophic aid for school districts after claims jumped to $12 million in 2009 and are estimated to be $47 million this year.”

    Rep. Jim Ward Discusses Education Funding and Budget Solutions

    (State of the State KS) “Rep. Jim Ward (D) talks about budget options. He is the House Assistant Minority Leader.”

    House panel rejects proposed tax-break moratorium

    (Kansas Reporter) “TOPEKA, Kan. – Kansas House Taxation committee members rejected a state panel’s recommended three-year moratorium on new sales, property and other tax exemptions.”

    Sales tax plan hurts low income Kansans, critics say

    (Kansas Reporter) “TOPEKA, Kan. – A Kansas panel’s proposal to streamline sales tax exemptions in the state would hurt many of the state’s most fragile citizens, critics told state legislators.”

    Supreme Court denies schools’ bid to reopen funding suit

    (Kansas Reporter) “TOPEKA, Kan. – Kansas’ Supreme Court Friday rejected a request by 74 Kansas schools to reopen a landmark school financing case and allow the schools to seek a reversal of recent state school funding cuts.”

    House committee rejects moratorium on tax credits or exemptions

    (Kansas Health Institute news service) “TOPEKA – The House Taxation Committee concluded hearings Tuesday on a bill that would repeal sales tax exemptions for non-profits and charities and eliminate the state exemption on the sale of residential utilities.”

    People who lost state-funded social services tell their stories

    (Kansas Health Institute news service) “TOPEKA – Daniel Perez is a single parent. His 18-year-old son, Danny, is severely autistic. When left alone, Danny will spend hours crinkling cellophane. ‘It’s what he likes to do,’ his father said.”

    Government payrolls show continuing, long-term growth as private sector jobs decline

    (Kansas Watchdog) “Kansas continues to lose private sector jobs as it adds more taxpayer-funded government jobs, a trend mirrored at the national level. The private sector lost 57,900 jobs between December 2007 and December 2009 while government added 3,200 jobs in Kansas according to the U.S. Bureau of Labor Statistics (BLS).”

    Fuzzy “Facts” vs Freedom in Smoking Ban Debate

    (Kansas Watchdog) “There’s almost no debate that smoking is unhealthy, but there’s plenty of debate about whether and how to implement a statewide ban on smoking in public to reduce exposure to second-hand smoke. Interested citizens, lobbyists and speakers filled the Health and Human Services hearing room in the Docking building Wednesday.”

    LPA School Consolidation Audit Points the Way for Savings

    (Kansas Watchdog) “Monday’s Legislative Post Audit school consolidation report found the state could save as much as $138 million per year by consolidating smaller school districts. … Several district superintendents filed objections to the report, most citing a desire for local control of consolidation decisions and a desire to avoid the challenges of working with other districts. LPA auditors stated, ‘None of the issues they raised prohibit consolidation.’”

  • Ad spotlights rise in Kansas taxes, spending

    A second ad from the Kansas Policy Institute illustrates the rapid rise in Kansas general fund revenues and spending in recent years. Click on Money Management 102 to view.

  • To Kansas school spending advocates, criticism comes fast and loose

    As the debate over the funding of Kansas public schools goes on, sometimes facts get lost in the shuffle, and school spending advocates sometimes invent “facts” in order to score political points by criticizing those working to bring inconvenient facts to light.

    Besides spending advocates, journalists can get caught up in this. In a recent news story in the Hays Daily News, the paper reported a claim made by Linda Kenne, Victoria USD 432 superintendent. Here it is:

    One particular corporation seems to drive the efforts. Kenne said, “Koch Industries’ address is the same as the Kansas Policy Institute.” “Do you want the state to be owned by Koch Industries?” she asked.

    The reporter of this story, Dawne Leiker, quoted a government official who said something. I guess that constitutes news. But responsible reporting and journalism requires that there be at least some factual basis underlying the statement, or the reporter needs to say so. In this case, the facts are that the two organizations do not share the same address.

    It’s worth noting that Leiker writes for the leftist blogs Everyday Citizen and Kansas Free Press. At Everyday Citizen you may read her poem Ode to Conservatism, in which she likens conservatives to “pit bulls, bedecked with luscious lips” who are offended by the existence of poor people, and that opportunity goes to those who beg for it, presumably from rich conservatives.

    It’s tempting to feel a little empathy for school spending advocates like superintendent Kenne, as Kansas Policy Institute has uncovered and given publicity to large fund balances that schools could be using if they want to. And it’s not just KPI that says so. Kansas Deputy Commissioner of Schools Dale Dennis agrees.

    But that’s not an excuse for playing fast and loose with facts.

    Kenne may be taking her cue from the Kansas National Education Association (or KNEA, the teachers union). It, along with the Kansas Association of School Boards (KASB), is at the forefront of defending the status quo in Kansas public school spending — that being a rapid rise. Their lobbyists and publications also show little regard for facts when scoring political points by criticizing those who uncover facts inconvenient for them.

    As an example, a recent edition of “Under the Dome Today” referred to the “Kansas Policy Institute whose board of directors includes Koch Industries executives.” The facts are that of the members of the KPI Board of Trustees, two are former Koch industries employees. Neither has worked there for many years.

    Misreporting simple facts like this should give us reason to question the facts used to support their larger and more important arguments.

    Underlying this is the puzzle as to why Wichita-based Koch Industries is the subject of so much criticism from Kansas school spending advocates. With some 2,100 employees in Wichita and owning a large amount of property, Koch Industries and its employees pay many millions in taxes that go to school districts and other functions of government.

    The company is involved in other ways, too. In 1991, Charles and Elizabeth Koch founded (and a Koch Family Foundation continues to fund) Youth Entrepreneurs Kansas, which “teaches free enterprise fundamentals through hands-on experiences and encourages students to start their own business, enhance their business skills for future career opportunities and continue into higher education.” YEK is present in many Wichita and surrounding area public schools.

    As another example of Koch Foundation generosity, a page on the Wichita public school website tells of Education EDGE Koch Focus mini-grants given to support classroom projects in several areas.

    Further, a recent letter appearing in the Wichita Eagle told of this: “Thanks to the support of USD 259’s administration, the financial generosity of the Koch foundation, and the expertise of Gilder Lehrman and the Bill of Rights Institute, programs such as these are having a profound positive impact on history and civics education.”

    We need to carefully examine the facts and arguments advanced by school spending advocates. They could also learn to say “thank you” now and then.

  • State budget ‘gap’ is all about perspective

    By Dave Trabert, Kansas Policy Institute

    When businesses or individuals talk about cutting their expenses, it means they are going to spend less money that they did in the past. But when governments talk about budget cuts they often have a different perspective: they are spending less than they had hoped to but not necessarily less than the year before. For example, we often heard how Kansas schools had to cut their budgets last year but they still spent $12,660 per pupil, or 3.9% more than the previous year.

    “Gap” is another example of how the meaning of words differs depending upon one’s perspective. When it’s said that a tax increase is needed to close a $400 million budget “gap” in the 2011 state budget, one might reasonably assume that that means recession-driven revenue declines have created a “gap” that needs to be filled to maintain the same level of spending.

    But that is not the case. The Consensus Revenue Estimate calls for general fund revenues to decline by $122.2 million. Governor Parkinson’s budget proposal calls for spending to increase $380 million; that’s 7% more than we’ll spend this year and $1.1 billion more than we spent in FY 2005. From a revenue, or taxpayer, perspective, the gap is $122.2 million — not $400 million.

    It really does come down to perspective. Most of the proposed expenditure increase is to replace declines in federal stimulus money, so from the government’s perspective there is less money to spend unless taxes are increased. (Another way to replace those federal tax dollars is to become more efficient and reduce spending without cutting services, but the bureaucracy doesn’t seem interested in that option.)

    Governor Parkinson is proposing a significant spending increase but he deserves no blame for redefining the meaning of “gap;” his budget proposal was very forthright in explaining his rationale for spending more money. (OK, maybe he could have corrected those who are overstating the amount of the “gap” but at least he didn’t start it.)

    Whether we should raise taxes to increase spending as the governor and others are proposing is a legitimate topic of debate that needs to be held out in the open, but taxpayers need to know the truth about the details in order to make informed decisions.

    You can download more commentaries, news and publications at www.kansaspolicy.org.

  • Kansas property tax reform proposed

    The Kansas Policy Institute has released a proposal for property tax reform in Kansas that will protect property owners from what some call “stealth” tax increases. These increases result from the fact that the property tax system has two factors or moving parts: appraised valuations, and the mill levy (or tax rate). Governments — the state and local units such as counties, cities, school districts, fire districts, townships, etc. — may not increase their mill levies, but when appraised values rise, property owners pay more tax and more revenue flows from the private sector to government.

    Representative Steve Brunk, a Republican who represents Bel Aire and parts of far northeast Wichita, is the bill’s sponsor in the legislature.

    At a press conference announcing the proposal, Rep. Brunk noted that in an age of lengthy and complex bills that no one can understand, the enabling legislation for this reform is a page and a half, double spaced. (Read the bill and other information about this proposal at Kansas Policy Institute Property Tax Reform Data.)

    Brunk said that legislators on both sides of the aisle appreciated the simplicity of the bill. He also said that legislators liked protecting people that are in their homes, giving them the ability to accumulate wealth in their property, instead of having that wealth drained away by rising property taxes.

    Dave Trabert, president of KPI, presented findings that from 1997 to 2008, total property taxes collected in Kansas increased by 92%, which is three times the rate of inflation and over 11 times the increase in population during the same period.

    This rapid rise in property tax collections closely matches my research on taxes paid to the Wichita school district, where I found that from 1999 to 2007, taxes paid to the district increased by 91%.

    Elected officials have not voted to implement all of this increase, although there have been increases in the tax rates, or mill levy. Rising property appraisals have accounted for much of the increase.

    The reform proposed by KPI and Brunk includes these factors:

    Total property taxes on existing property will not increase without voter approval. Appraised values may rise, depending on market factors, but if they do, the mill levy will move proportionally in the opposite direction so that total tax revenue is unchanged.

    Appraised values may not increase uniformly. Individual property owners may find that their property changed value at a different rate than the average. This is a factor that is different from last year’s proposal. In that plan, all property increased in appraised value at the same rate, which some criticized as unfair and possibly unconstitutional.

    This proposed legislation excludes the 20 mills collected by the state for schools, the 1.5 mills collected for the state building fund, and any mill rate increase approved by voters from adjustment.

    Even with the mill levy being adjusted so that tax collections on existing property is unchanged, governments would still experience increased revenue. That’s because new construction has been increasing the tax base by about three percent per year. That is not affected by this proposed legislation.

    Finally, voters could approve increases in the mill levy (tax rate) at any time.

    KPI has conducted opinion surveys that show broad support for property tax reform.

    Last year Brunk and KPI (then known as the Flint Hills Center for Public Policy) proposed a property tax reform measure known as Proposition K. The proposal this year incorporates feedback and concerns expressed last year.

    In particular, the exemption of the 20 mill statewide property tax for schools from this proposed legislation may help convince school spending advocates to support this measure. Additionally, measures like bond issues that are passed by voters are not affected. Increases in school districts’ local options budget would be affected, as these would need to be put to a vote of the people, and existing mill levies would be subject to change.

    A benefit of Proposition K — at least to me — was the predictability of assessed valuation increases, as all would increase at a uniform set rate. Furthermore, new construction was to be valued based on actual construction costs instead of an appraiser’s judgment. These measures are not present in this year’s plan.

    Property taxes are different from most other taxes in that citizens must pay property tax even though they may have earned no income with which to pay the tax. The simple act of owning a home requires citizens to pay tax. For those on fixed incomes, that can be a problem.

    We should also remember that renters, in effect, pay property tax too, as taxes are part of the cost structure that landlords face. Further, businesses and utilities pay property tax too, and at far higher rates than homeowners. Anyone who purchases goods, services, and utilities is affected by rapidly increasing property tax rates that these firms pay.

  • Lawsuits and tax increases not necessary to fund Kansas schools

    By Dave Trabert, Kansas Policy Institute President

    A recent commentary by Kansas State Board of Education member David Dennis said educators “…just ask that they (legislators) make their decisions based on accurate information, with the future of our students in mind. “We completely agree, and just ask that educators do the same. Unfortunately, some have been making their case for tax increases and lawsuits with a healthy dose of inaccurate and/or misleading information.

    For example, Mr. Dennis said another Board member “…alleges…” that schools started the current year with $700 million in carryover cash reserves (in addition to money for capital projects and bond payments). This is no allegation, it is a fact that we obtained from the Department of Education. Here are some other facts we discovered that have been confirmed by the Kansas Department of Education (KSDE):

    • Deputy Commissioner Dale Dennis says schools can legally use those reserves for current expenses, freeing General Fund receipts for other purposes.
    • That $700 million total has grown 53% over the last four years, which means that schools haven’t spent all of the money they received.
    • No independent audit of the necessary ending balances in each fund has been performed.

    Certainly some carryover is necessary but the minimum required balances have not been determined, so combined with the fact that these balances have grown 53%, it’s quite likely that a good portion of it could be used to avoid budget cuts.

    Here’s another fact confirmed by KSDE that has been conveniently ignored or distorted:

    • Schools are getting a lot more than $4,012 in Base State Aid Per Pupil (BSAPP). Total aid to schools from state, federal and property tax sources this year is $12,225, or just 3.43% less than last year.

    There is also ample evidence that schools are spending more money than necessary. A July 2009 study by the Legislative Division of Post Audit (LPA) found many districts are much less efficient than others and offered 80 recommendations to save money. The 2010 Commission ordered the study, Phase 2 of which would have sent auditors into schools to help find ways to save money. But districts objected, so the 2010 Commission canceled Phase 2 and now is calling for more state aid to schools, knowing that other options exist.

    Our own study of K-12 expenditures found per-pupil spending in 2007-08 ranged from $9,017 to $25,240. If high-spending districts had been just been at the median cost-per-pupil of similar-sized districts, it would have saved $636 million. The complete analysis is available at www.KansasPolicy.org.

    Mr. Dennis referenced another LPA report that found a correlation between increases in education spending and achievement scores, which he and others have used to justify their demands. They neglect to mention, however, that LPA did not say that higher spending caused test scores to increase. (It’s a well-known research principle that correlation does not imply causation). That same LPA report also said the educational research “…offers mixed opinions about whether increased spending for educational inputs is related to improved student performance.”

    The truth is that these facts and others refute schools’ case for higher spending.

  • Solution to Kansas budget crisis offered

    At a meeting of the South-central Kansas legislative delegation on January 5, 2010, Dave Trabert, president of the Kansas Policy Institute spoke to legislators about ways that Kansas can make it through the upcoming legislative session without raising taxes or cutting essential services. Due to the relatively short time limit given to speakers he was not able to present all his remarks, but his complete remarks are presented here.

    Good evening. My name is Dave Trabert and I’m president of Kansas Policy Institute.

    I can’t imagine what it must be like to be in your positions as you head to Topeka next week, facing large budget shortfalls and being pressured to raise taxes.

    The situation has been framed as a choice between raising taxes or cutting essential services, neither of which are good choices.

    I’m here tonight to share some good news: our research strongly indicates that neither of those bad choices is necessary.

    State agencies are probably holding more than enough cash reserves to get us through the immediate crisis … and we can reduce spending without cutting services by making government operate more efficiently.

    I can’t cover everything in 3 minutes, but the highlights are in your packets.

    The first document is a list of unencumbered carryover cash balances held by each state agency. Not counting money set aside for unemployment, the billion in idle cash that belongs to local governments and several other funds, state agencies started this year with over $800 million in carryover cash reserves. Universities had another $300 million.

    Sure, some of it might not be readily available. But no audits have been conducted to prove that they need it. Should we just take their word?

    Next, tax increases. Revenues are down now because of the recession, but taxes increased 40% from 2001 to 2008 … more than double the rate of inflation.

    But what about that $billion in “cuts” and “exemptions”? The Kansas Department of Revenue’s list is the 3rd document … the top 5 amounts are property tax, car tax, EIC, single income rate reductions and food sales tax rebates.

    Do they really believe that these changes caused the budget crisis? Or could it be that spending grew faster than revenues in 4 of the last 5 years?

    And how can you deal with school districts suing taxpayers for more money?

    Well, they also have large cash reserves … not counting capital projects and debt service, they started this year with $700 million left over from prior years … and despite their protests, [Kansas Deputy Commissioner of Education] Dale Dennis says they can access that money … if they want to.

    Schools are also a great example of how government can operate more efficiently.

    We released a study today showing that per pupil expenditures in 2008 ranged from $9,017 to $25,240. If the high spenders had just been at median for similar sized districts, it would have saved $636 million. Legislative Post Audit also says many districts could save a lot of money, offering 80 recommendations last year.

    The State has many viable options to get through this crisis without raising taxes or cutting essential services. That is really good news!

    It won’t be easy, but we can come out of this recession in good shape and ready to take on the competition for jobs and economic growth.

    Kansas Policy Institute stands ready to help. Thanks for your time.

    The just-released study that Trabert referred to is A Kansas Primer on Education Funding, Volume III: Analysis of K-12 Spending in Kansas.

  • What’s missing from the Dennis editorial on Kansas school funds

    Today’s Wichita Eagle carries an editorial by Kansas School Board member David Dennis taking issue with claims that Kansas schools have money that can be spent.

    At issue is the claim made by the Kansas Policy Institute and Kansas School Board member Walt Chappell that Kansas schools have hundreds of millions in funds that could be put to use to meet the current shortfall. See Districts Have Funds To Meet Projected $100 Million Shortfall for an explanation.

    The editorial by Dennis explains some of the major funds and their purpose, and gives their balances on July 1.

    But that’s not sufficient. To simply state that a fund has a balance of $x that is used for a certain purpose tells us nothing about whether that amount is the right amount.

    The evidence we do have tells us that the balances in these funds are more than needed. That’s because they’ve been growing rapidly, by 53 percent over the last four years. The only way the fund balances can grow is if schools aren’t spending the money as fast as it’s going in the funds. Dennis didn’t mention this in his editorial.

    So what Kansas schools could do, in many cases, is to spend down these funds. Kansas Policy Institute President Dave Trabert gave an example where a food service fund might have a balance of $10 million. Then suppose the district believes it will need to spend $15 million on food service. Instead of stocking the fund with $15 million of new funding, add just $5 million (plus a little more). This gives the food service fund the ability to do its job, but it frees up perhaps $10 million to be used for other purposes.

    It’s not only theses two — KPI and Chappell — that say spending down these funds is possible. Kansas Deputy Commissioner of Education Dale Dennis agrees.

    An effect of doing this will be that fund balances will be smaller, requiring schools to be careful. That’s not as comfortable as operating with the cushion of large balances. But these are difficult times, and people across the state are taking extraordinary measures.

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    p class=”note”>The existence of these funds raises a question: Is it necessary to have so many funds? Do they restrict schools from allocating resources efficiently, to where they are most needed?

    Dennis’ editorial also contains a gross mischaracterization that I’m surprised the Eagle let slip by. It’s in this passage: “The base state aid per pupil for the 2009-10 school year, by statute, should be $4,492. This is the primary source of funding for the regular classroom. Due to state aid reductions, we are down to $4,012, an 11 percent reduction.”

    As I wrote in my recent post Wichita schools on the funding decrease, base state aid per pupil is just a portion of total school spending: “It’s base state aid per pupil that was cut by 9.5%, or $421. But base state aid per pupil is only a portion of total school spending. In the case of the Wichita school district, it’s less than one-third of total funding and spending. To put a cut of $421 in context, consider the total spending by USD 259. It’s somewhere around $13,000 per pupil. $421 is 3.2% of that.”

    (The numbers in my illustration were taken from a document supplied by the Wichita public school system, and are slightly different from the numbers Dennis uses. But they’re in the same neighborhood.)

    So while the numbers Dennis uses are correct — as far as they go — it’s misleading to claim that a reduction in base state aid per pupil results in the same percentage decrease in total school spending. It’s dishonest for someone equipped with the knowledge and experience that Dennis has to make such a claim.

    It’s also further evidence of just how difficult it is to get accurate information. Schools have so much money — even in this tough economic climate — that they go out of the way to hide just how much they have. Sometimes school spending advocates are simply uninformed, as was Rep. Melody McCray-Miller last year when she disputed the per-pupil spending of the Wichita public schools.

  • Kansas state budget crisis largely self-inflicted

    Kansas Policy Institute commentary

    What should citizens do when they feel that local news media is not covering issues as they should be covered? You could do as I did, starting Voice For Liberty in Wichita. Others start think tanks like the Kansas Policy Institute and its featured projects Kansas Watchdog and Kansas Reporter.

    Now the Kansas Policy Institute has placed some of its research into our state’s largest newspaper by way of paying for advertisements. Following is the text of an an to appear on Sunday. The ad as it will appear is available at State Budget Crisis Largely Self-Inflicted.

    More information about the data presented in the research is available at KansasOpenGov.org’s data warehouse and KPI’s data warehouse.

    Following is the text of the commentary. The chart doesn’t appear — click on the ad for that.

    State Budget Crisis Largely Self-Inflicted
    Tax Increases and Service Cuts Not Necessary

    Declining revenues have forced dramatic changes in the state budget and prompted calls for tax increases. The revenue declines may be recession-driven but the budget crisis is largely self-inflicted. Recessions are not a matter of ‘if’ but ‘when’ and their inevitable appearance should be part of every government financial plan.

    Responsible budgeting prepares for periodic revenue declines by setting money aside in good years. When downturns in the economy cause revenue declines, you can draw down some reserves to weather the storm without having to dramatically cut services or prolong the recession with tax increases. Crisis is avoided by prudent financial planning.

    Crisis is invited, however, when you allow expenses to grow faster than your income and that is exactly what the State of Kansas has done over four of the last five years.

    Even though total State General Fund (SGF) revenues declined the last two years, FY 2009 SGF revenues were still 23.7% higher than five years prior. Spending, however, was 40.5% higher.

    Imagine how different things would be today if state government had kept spending in check. In fact, had we limited spending to 4.5% annual increases (well above inflation) we would have finished FY 2009 with a $3.0 billion surplus.

    Instead, reminiscent of requests for taxpayer bailouts from irresponsible Wall Street firms, some government officials and others are calling for tax increases.

    Governor Parkinson says further spending reductions simply are not possible. With all due respect, such claims are hard to believe absent confirmation by truly independent analysis. (If you would like to do your own analysis, the complete state check register, state payroll information and retiree benefits are now online at www.KansasOpenGov.org.)

    Regardless, we can work through the existing crisis without cutting essential services or increasing taxes. This fiscal year began with over a billion dollars in unencumbered carryover cash reserves in state agency accounts. Some of that money might not be available but we only need a portion of it right now. Since most balances have been growing annually and the necessary ending balances have not been determined, we can probably find what we need to avoid tax increases or service cuts.

    Excessive spending is to blame for the current budget crisis and it is wrong to ask taxpayers for a bailout. It’s also unnecessary; the state should use a portion of the carryover cash reserves being held by state agencies to get through the immediate problem and implement a full independent review of state spending in search of ways to provide good services at lower costs.

    Now tell us what you think. Send your comments to information@kansaspolicy.org.