Voice For Liberty

Tag: Regulation

  • Wichita job growth

    Wichita job growth

    Wichita economic development efforts viewed in context.

    Greater Wichita Partnership is the organization with primary responsibility for economic development in the Wichita area. Data provided by GWP shows that since 2004, GWP takes credit for creating an average 1,847 jobs per year through its economic development efforts. 1

    To determine whether this is an impressive amount, we need context.

    Over the past ten years the labor force for the Wichita MSA has averaged 314,877 each month (in May 2017 it was 306,809), and there were an average of 295,785 people working each month (May 2017 value was 293,763).

    So one level of context is that the jobs for which GWP credits itself amount to 1,847 of 295,785 jobs, or 0.6 percent of the number of people working.

    Click for larger.
    Another way to look at this level of job creation is to consider it in relation to the number of hires. Over the past ten years, the national average monthly rate of hires is about 3.4 percent, meaning that each month 3.4 percent of jobs have a new person filling them, or the jobs are newly-created. With an average of 295,785 people working in the Wichita MSA each month, this means that about 10,057 jobs have a new worker, each month. That’s 120,684 per year. With GWP taking credit for 1,847 jobs, this means that GWP’s efforts are responsible for 1.5 percent of the new hires each year.

    Another context: Employment in the Wichita MSA reached a peak of 312,100 in July 2008. In June 2017 it was 298,800. To get back to the peak, Wichita needs 13,300 new jobs. At the GWP rate of 1,847 per year, it will take seven more years to recover.

    All this shows that the efforts of our economic development machinery are responsible for small proportions of the jobs we need to create. This assumes that the data regarding jobs and investment that GWP provides is correct.

    Here’s one example of problems with the data GWP provides. GWP reported that companies made investments of $1.2 billion in 2016 when the average for years before that was $138 million. That looks like an impressive jump. This figure, however, contains over one billion dollars of investment by Spirit Aerosystems projected to occur over the next five years. Not in 2016, but possible over the next five years. Yet GWP presents this investment as through it occurred in 2016.

    Furthermore, when Spirit asked the city for authority to issue $280 bonds over five years, it told the city this would result in 349 new jobs over the same time period. That’s creating jobs at the rate of 70 per year. These jobs are welcome, but we need thousands of jobs per year. 2

    Does GWP deserve credit? GWP says, “We only incorporate data and dollar amounts from projects which we helped attract, retain or expand; we do not include announcements that we have not assisted with.” 3 “Helped” and “assisted” are not very precise. How much “help” did Spirit need to decide to remain in Wichita, except for hundreds of millions of dollars in forgiven taxes? That is something the people of Wichita pay for, not GWP.

    We must also be concerned about the reliability of GWP statistics. Earlier this year GWP was prominently promoting on its website the success of NetApp, a technology company. The problem is that NetApp never met the job creation numbers GWP promoted, and in fact, had been downsizing its Wichita operations. 4

    Still, GWP promoted NetApp as a success. An important question is, the NetApp jobs that were announced but never created: Are they included in the jobs and investment totals GWP provides? We don’t know, because GWP will not disclose the data used to build its report.

    There are other instances of GWP’s predecessor, Greater Wichita Economic Development Coalition (GWEDC), promoting Wichita as home to companies that had closed their Wichita facilities, or were in the process of closing. 5

    GWP also promotes this on its website: “Downtown Wichita is work central, boasting 26,000 daytime workers in the financial, healthcare, education, oil & gas and creative services industries.” This claim of 26,000 workers is based on blatant misuse and misrepresentation of U.S. Census data, and GWP leadership has known of this for several months. 6 Still, the use of incorrect data remains.

    Capacity to create

    When the Wichita area offered incentives to a company that planned to add 50 jobs, the president of the chamber of commerce told commissioners that staff worked very hard to acquire these jobs. He called it “a great moment” in economic development. 7 But 50 jobs, while welcome, is just a drop in the bucket compared to what Wichita needs.

    For Spirit to create 349 jobs over five years, we must let the company escape paying property tax and sales tax on $280 million of property.

    For BG Products to add 11 well-paying jobs, we must let them avoid paying $204,280 per year in property taxes and $368,417 in sales tax.

    In order to prepare the incentives package for another company, several events took place. There was a visit to the company. Then another visit and tour. Then economic development officials helped the company apply for benefits from the Kansas Department of Commerce. Then these officials worked closely with Wichita city staff on an incentive package. City documents stated that the expansion will create 28 jobs over the next five years. Obtaining these jobs took a lot of effort from Wichita and Kansas economic development machinery. Multiple agencies and fleets of bureaucrats at GWEDC, the City of Wichita, Sedgwick County, and the State of Kansas were involved. Wichita State University had to be involved. All this to create 5.6 jobs per year for five years.

    This illustrates a capacity problem. Acquiring these jobs took a lot of bureaucratic effort, which has a cost. It required expensive incentives. Occasionally the city works with a large number of jobs, as in the recent case of Cargill. But those jobs required many expensive incentives, and no jobs were created. The incentives and effort were spent simply to persuade Cargill to remain in Wichita instead of moving elsewhere.

    All this assumes, of course, that the incentives are necessary. Either that, or there is a larger problem. If companies can’t afford to make investments in Wichita unless they receive exemptions from paying taxes, we must conclude that taxes are too high. It’s either that, or these companies simply don’t want to participate in paying for the cost of government like most other companies and people do.

    Civic leaders say that our economic development policies must be reformed. So far that isn’t happening. Our leaders say that we will no longer use cash incentives. But cash incentives like forgivable loans were a minor part of the incentives Wichita and the State of Kansas used. Furthermore, forgiveness of taxes is just as good as receiving cash. 8

    The large amount of bureaucratic effort and cost spent to obtain relatively small numbers of jobs lets us know that we need to do something else to grow our local economy. We need to create a dynamic economy, focusing our efforts on creating an environment where growth can occur organically without management by government. Dr. Art Hall’s paper
    Embracing Dynamism: The Next Phase in Kansas Economic Development Policy provides much more information on the need for this. 9

    In particular, Hall writes: “Embracing dynamism starts with a change in vision. Simply stated, the state government of Kansas should abandon its prevailing policy vision of the State as an active investor in businesses or industries and instead adopt the policy vision of the State as a caretaker of a competitive ‘platform’ — a platform that seeks to induce as much commercial experimentation as possible.” But our economic development policies are that of an “active investor,” and the cost of incentives increases the cost of experimentation.

    Another thing we can do to help organically grow our economy and jobs is to reform our local regulatory regime. Kansas Policy Institute released a study of regulation and its impact at the state and local level. This is different from most investigations of regulation, as they usually focus on regulation at the federal level.

    Business Perceptions of the Economic Impact of State and Local Government Regulation coverThe study is titled “Business Perceptions of the Economic Impact of State and Local Government Regulation.” It was conducted by the Hugo Wall School of Public Affairs at Wichita State University. Click here to view the entire document.

    Following is an excerpt from the introduction by James Franko, Vice President and Policy Director at Kansas Policy Institute. It points to a path forward.

    Surprising to some, the businesses interviewed did not have as much of a problem with the regulations themselves, or the need for regulations, but with their application and enforcement. Across industries and focus group sessions the key themes were clear — give businesses transparency in what regulations are being applied, how they are employed, provide flexibility in meeting those goals, and allow an opportunity for compliance.

    Sometimes things can be said so often as to lose their punch and become little more than the platitudes referenced above. The findings from Hugo Wall are clear that businesses will adapt and comply with regulations if they are transparent and accountable. Many in the public can be forgiven for thinking this was already the case. Thankfully, local and state governments can ensure this happens with minimal additional expense.

    A transparent and accountable regulatory regime should be considered the “low hanging fruit” of government. Individuals and communities will always land on different places along the continuum of appropriate regulation. And, a give and take will always exist between regulators and the regulated. Those two truisms, however, should do nothing to undermine the need for regulations to be applied equally, based on clear rules and interpretations, and to give each business an opportunity to comply. (emphasis added)

    Creating a dynamic economy and a reformed regulatory regime should cost very little. The benefits would apply to all companies — large or small, startup or established, local or relocations, in any industry.

    Our civic leaders say that our economic development efforts must be reformed. Will the path forward be a dynamic economy and reformed regulation? Or will it be more bureaucracy, chasing jobs a handful at a time?

    —
    Notes

    1. Greater Wichita Partnership – 2017 Investment Request. Part of the February 15, 2017 Sedgwick County Commission meeting. Available at https://goo.gl/hk6RHB. ↩
    2. “Spirit is now requesting a new Letter of Intent (LOI) to issues IRBs in an amount not to exceed $280,000,000 for a period of five years. … Spirit projects it will create 349 new jobs over the next five years as a result of these expansions. In addition to the $280,000,000 Spirit expects to invest in facilities over the next five years, it also projects approximately $825,000,000 of capital investment in new machinery and equipment for a total capital investment in excess of $1 billion dollars.” Wichita City Council agenda packet for May 3, 2016. ↩
    3. Personal correspondence from Andrew Nave, GWP executive vice president of economic development. ↩
    4. Weeks, Bob. Greater Wichita Partnership. Available at https://wichitaliberty.org/wichita-government/greater-wichita-partnership/. ↩
    5. Weeks, Bob. Wichita economic development not being managed. Available at https://wichitaliberty.org/wichita-government/wichita-economic-development-managed/. ↩
    6. “The claim of 26,000 workers in downtown Wichita is based on misuse of data so blatant it can be described only as malpractice.” Weeks, Bob. Downtown Wichita jobs, sort of. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-jobs/. ↩
    7. Weeks, Bob. Economic development in Sedgwick County. Available at https://wichitaliberty.org/sedgwick-county-government/economic-development-sedgwick-county/. ↩
    8. Weeks, Bob. Contrary to officials, Wichita has many incentive programs. Available at https://wichitaliberty.org/wichita-government/contrary-officials-wichita-has-many-incentive-programs/. Also: Fact-checking Yes Wichita: Boeing incentives. Available at https://wichitaliberty.org/wichita-government/fact-checking-yes-wichita-boeing-incentives/. ↩
    9. See also Weeks, Bob. Wichita to grant property and sales tax relief. Available at https://wichitaliberty.org/wichita-government/wichita-grant-property-sales-tax-relief/. ↩

  • More Cargill incentives from Wichita detailed

    More, but likely not all, of the Cargill incentives will be before the Wichita City Council this week.

    A division of Cargill, Cargill Meat Solutions Corporation, is moving from an office on North Main Street in downtown Wichita to the site of the former Wichita Eagle building, also in downtown Wichita. Last year it was widely reported that Cargill was considering moving this division to another city. Reports of incentives offers to Cargill from other cities spurred the City of Wichita to offer its own incentives if Cargill would remain in Wichita. This week the city council will consider additional subsidies and incentives besides those already offered. 1

    As summarized in the agenda packet:

    “In exchange for Cargill’s commitment, the City has negotiated the following:

    • Issue Industrial Revenue Bonds (Letter of Intent approved April 18, 2017) 100% property tax abatement; 5+5 year basis
    • Sales tax exemption
    • Acquisition of a 15 year parking easement for public access to the garage in the evenings and on weekends (estimated cost of $6,500,000)
    • Expedited plan review (50% reduction in time)
    • Reduced permitting fees (50%) (estimated savings of $85,000)
    • Assign a project manager/ombudsman for a single point of contact for the company”

    Industrial Revenue Bonds

    In April the city council approved a letter of intent regarding Cargill’s participation in the Industrial Revenue Bond program. 2 The city won’t be lending Cargill money. Instead, IRBs are a (convoluted) method whereby local governments are able to forgive the payment of property taxes. For the case of Cargill, city documents from April state the tax forgiveness could be worth $1,359,531 per year. 3 This would be shared by these taxing jurisdictions in these annual amounts, again according to city documents:

    • City of Wichita: $378,450
    • Sedgwick County: $340,958
    • USD 259, the Wichita Public School District: $622,723
    • State of Kansas $17,400

    The property tax savings will probably be greater, if Cargill spends as much as it has agreed to spend and the appraiser values the building accordingly. Rough calculations indicate tax savings as much as $1,755,000 per year. 4

    Cargill has agreed to make an annual Payment-In-Lieu-Of-Taxes (PILOT) of $413,900, according to city documents.

    In addition to the property tax exemption, the IRBs also carry a sales tax exemption for purchases related to construction. City documents give an estimated value of $2,026,291 for the sales tax Cargill will not have to pay. 5

    Parking easement

    At one time, it was thought that the city would build a parking garage and let Cargill use it an no cost, or at a greatly reduced cost. Instead, the city now proposes that Cargill build the garage and the city will acquire an easement. This has sounded almost benign, but now we realize that the city will pay Cargill an estimated $6.5 million. In return, the city will be able to use up to approximately 700 parking spaces outside of Cargill business hours.

    Is this a good deal for the city? The city has agreed to pay $9,286 for the use of each parking space. 6 For comparison, recently the city rehabilitated the parking garage at 215 S. Market at a cost of $17,609 per parking space. The city rents 180 of these to a nearby company at the rate of $35 per month, which is $420 per year. 7

    To repeat: The city has agreed to pay Cargill $9,286 for something it charges others $420 per year.

    It is not known whether the city will charge fees to the public to use the garage. It is also unknown whether there is much demand for public parking at the Cargill location, but present market conditions would suggest there is not much additional demand.

    Expedited plan review, reduced fees, and ombudsman

    The city has agreed to cut permit fees and speed response time for approvals. 8

    This incentive — the need for it and its value to Cargill — is an explicit admission that City of Wichita regulations are burdensome. If not, why would the city devote time and expense to helping Cargill obtain relief from these regulations?

    Consider this aspect of public policy: Cargill is a large company with — presumably — fleets of bureaucrats and lawyers trained to deal with burdensome government regulation. These costs can be spread across a large company, meaning that Cargill can afford to overcome burdensome regulations.

    But what about the small companies that don’t have fleets of bureaucrats and lawyers? Small companies that can’t spread the costs of regulation across a large volume of business? What will the city do for these companies? This is especially important because the spirit of entrepreneurship the city wants to cultivate is most commonly found in small, young, companies — the type of company without fleets of bureaucrats and lawyers.

    The city says it would do for any company what it is doing for Cargill. Except: How are companies supposed to know to ask for regulatory relief, streamlining, and a discount on fees?

    If the city really wants to help all companies, it would — at its own initiative — cut fees and reduce response time across the board, for everyone. Until then Wichita offers special regulatory treatment for special circumstances, which widens the gulf between the haves and have-nots. 9

    Other subsidy programs

    The agenda packet for the city council meeting doesn’t mention this, but from the state of Kansas Cargill is likely to receive PEAK benefits. Under this program, the Kansas state withholding tax deducted from Cargill employees’ paychecks will be routed back to Cargill. 10 (Not all; only 95 percent.) Some very rough calculations show that PEAK benefits might be worth some $2 million annually to Cargill. 11

    Ironically, with the recent increases in Kansas income taxes, PEAK is even more valuable to Cargill.

    Is this needed?

    In the past, economic development subsidies of this type were justified by local governments as necessary to recruit new companies to the area. These subsidies, however, are used simply to retain a company that is already located in downtown Wichita.

    The city has asked Wichita State University’s Center for Economic Development and Business Research to produce benefit/cost ratios. They show that the costs the city, county, and state incur will generate benefits that exceed these costs. For the school district, costs exactly equal benefits — a remarkable coincidence.

    The reasoning and calculation behind these benefit/cost ratios is opaque. The general idea is that spending by a company spawns other spending that results in economic benefit and growth. That’s true. It’s important to know, however, that this benefit also occurs when companies move to Wichita or expand in Wichita, without the benefit of economic development subsidies.

    The question, then, becomes are these incentives necessary? Would Cargill have moved to another city if not for these incentives? It’s only if Cargill would have left Wichita that the benefit/cost ratios have any meaning.

    The City of Wichita says Cargill received lucrative offers from other cities. But these offers have not been seen, to my knowledge. We’re left to take the word of Cargill that it received offers from other cities, and that it would have moved from Wichita if not for Wichita’s incentives.

    Cargill, as we’ve seen, has a multi-million dollar motive. City of Wichita officials also have a large motive, as do officials and politicians at the state level. The politicians and bureaucrats want to — need to — be seen as doing something to improve the economy. It costs none of them one dime to pay these incentives. But the Cargill building will fulfill their ediface complex when they preside at groundbreaking and ribbon-cutting ceremonies.

    If Wichita leaders wanted to gain the trust of Wichitans, to have us believe and understand that these incentives are necessary to keep Cargill in Wichita, the city could reveal the other offers Cargill received. Cargill itself could reveal offers it received from other cities. These actions would help Wichitans understand whether these incentives are truly needed. But the world of economic development incentives is a murky swamp.

    Finally, Mayor Jeff Longwell, other council members, and city hall bureaucrats tell us that the city has moved beyond cash incentives. Cash will not be paid for jobs, they say.

    But forgiving a tax bill is just like paying cash. Discounting the cost of permits is just like paying cash. Paying $6.5 million to use a company’s parking garage during hours the company has no use for it: How is that different from simply paying the company a cash incentive?

    Perhaps the mayor and others have a different understanding of the economics of transactions than I.

    —
    Notes

    1. City of Wichita. Agenda Packet for July 18, 2017. Approval of Development Agreement with Cargill Meat Solutions Corporation. ↩
    2. Weeks, Bob. Industrial revenue bonds in Kansas. http://wichitaliberty.org/kansas-government/industrial-revenue-bonds-kansas/. ↩
    3. City of Wichita. Council agenda packet for April 18, 2017. ↩
    4. “The Office Building will consist of approximately 170,000 square feet space to be used primarily for Class A office space at an estimated construction cost of approximately $71,736,290, including, without limitation, land acquisition costs and the costs of construction of the Parking Garage.” Agenda packet for July 18, 2017. But the city has limited the value of the IRBs at $60 million. Calculation: $60,000,000 x 25% assessment rate for commercial property x approx. 117 mill rate / 1000 = $1,755,000 tax savings per year. ↩
    5. Weeks, Bob. Cargill subsides start forming. Available at https://wichitaliberty.org/wichita-government/cargill-subsides-start-forming/. ↩
    6. $6,500,000 / 700. ↩
    7. Weeks, Bob. Why is this man smiling? Available at https://wichitaliberty.org/wichita-government/man-smiling/. ↩
    8. “Section 4.03. Approvals. The City agrees to provide a 50% reduction in the fees charged by the City for permits and approvals, including plan review, utility and building permitting fees, for all matters related to the Project. The City also agrees to reduce the response time for approval of building plans from the standard 30 days to 15 days for all matters related to the Project.” Also: “The reduction in the permitting fees will be paid from the Economic Development fund.” ↩
    9. Weeks, Bob. Regulation in Wichita, a ‘labyrinth of city processes.’ Available at https://wichitaliberty.org/regulation/regulation-wichita-labyrinth-city-processes/. ↩
    10. Weeks, Bob. In Kansas, PEAK has a leak. http://wichitaliberty.org/kansas-government/kansas-peak-leak/. ↩
    11. For the first year of the agreement, Cargill is expected to have 750 or more employees at an average salary of $66,814. That annual salary / 26 pay periods = $2,570 biweekly. For a family with two children (this is just a guess and could be way off), there are two withholding allowances, so $2,570 – ($86.54 x 2) = $2,397. Using the new withholding tables for married workers (another assumption), bi-weekly withholding is $48.17 + 5.7% x ($2,397 – $1,298) = $48.17 + $62.64 = $110.81. That means $2,881 annual withholding, so Cargill’s 95% share is $2,737. For 750 employees, this is an annual subsidy to Cargill of $2,052,750. ↩
  • WichitaLiberty.TV: The regulatory and administrative state

    WichitaLiberty.TV: The regulatory and administrative state

    In this episode of WichitaLiberty.TV. Fred L. Smith, Jr. is the founder of the Competitive Enterprise Institute. He explains the problems with excessive regulation and a large administrative state. Episode 145, broadcast April 2, 2017. View below, or click here to view at YouTube.

    Shownotes

  • Year in Review: 2016

    Year in Review: 2016

    Here are highlights from Voice for Liberty for 2016. Was it a good year for the principles of individual liberty, limited government, economic freedom, and free markets in Wichita and Kansas?

    Also be sure to view the programs on WichitaLiberty.TV for guests like journalist, novelist, and blogger Bud Norman; Radio talk show host Joseph Ashby; David Bobb, President of Bill of Rights Institute; Heritage Foundation trade expert Bryan Riley; Radio talk show host Andy Hooser; Keen Umbehr; John Chisholm on entrepreneurship; James Rosebush, author of “True Reagan,” Jonathan Williams of American Legislative Exchange Council (ALEC); Gidget Southway, or Danedri Herbert; Lawrence W. Reed, president of the Foundation for Economic Education; and Congressman Mike Pompeo.

    January

    Kansas legislative resources. Citizens who want to be informed of the happenings of the Kansas Legislature have these resources available.

    School choice in Kansas: The haves and have-nots. Kansas non-profit executives work to deny low-income families the school choice opportunities that executive salaries can afford.

    Kansas efficiency study released. An interim version of a report presents possibilities of saving the state $2 billion over five years.

    Wichita Eagle Publisher Roy Heatherly. Wichita Eagle Publisher Roy Heatherly spoke to the Wichita Pachyderm Club on January 15, 2016. This is an audio presentation.

    Pupil-teacher ratios in the states. Kansas ranks near the top of the states in having a low pupil-teacher ratio.

    Kansas highway conditions. Has continually “robbing the bank of KDOT” harmed Kansas highways?

    Property rights in Wichita: Your roof. The Wichita City Council will attempt to settle a dispute concerning whether a new roof should be allowed to have a vertical appearance rather than the horizontal appearance of the old.

    Must it be public schools? A joint statement released by Kansas Association of School Boards, United School Administrators of Kansas, Kansas School Superintendents’ Association, and Kansas National Education Association exposes the attitudes of the Kansas public school establishment.

    Kansas schools and other states. A joint statement released by Kansas Association of School Boards, United School Administrators of Kansas, Kansas School Superintendents’ Association, and Kansas National Education Association makes claims about Kansas public schools that aren’t factual.

    After years of low standards, Kansas schools adopt truthful standards. In a refreshing change, Kansas schools have adopted realistic standards for students, but only after many years of evaluating students using low standards.

    Brownback and Obama stimulus plans. There are useful lessons we can learn from the criticism of Kansas Governor Sam Brownback, including how easy it is to ignore inconvenient lessons of history.

    February

    Spending and taxing in Kansas. Difficulty balancing the Kansas budget is different from, and has not caused, widespread spending cuts.

    In Sedgwick County, choosing your own benchmarks. The Sedgwick County Commission makes a bid for accountability with an economic development agency, but will likely fall short of anything meaningful.

    This is why we must eliminate defined-benefit public pensions. Actions considered by the Kansas Legislature demonstrate — again — that governments are not capable of managing defined-benefit pension plans.

    Kansas transportation bonds economics worse than told. The economic details of a semi-secret sale of bonds by the State of Kansas are worse than what’s been reported.

    Massage business regulations likely to be ineffective, but will be onerous. The Wichita City Council is likely to create a new regulatory regime for massage businesses in response to a problem that is already addressed by strict laws.

    Inspector General evaluates Obamacare website. The HHS Inspector General has released an evaluation of the Obamacare website HealthCare.gov, shedding light on the performance of former Kansas Governor Kathleen Sebelius.

    Kansas highway spending. An op-ed by an advocate for more highway spending in Kansas needs context and correction.

    Brookings Metro Monitor and Wichita. A research project by The Brookings Institution illustrates the poor performance of the Wichita-area economy.

    March

    Wichita: A conversation for a positive community and city agenda. Wichita City Manager Robert Layton held a discussion titled “What are Wichita’s Strengths and Weaknesses: A Conversation for a Positive Community and City Agenda” at the February 26, 2016 luncheon of the Wichita Pachyderm Club.

    In Kansas, teachers unions should stand for retention. A bill requiring teachers unions to stand for retention elections each year would be good for teachers, students, and taxpayers.

    In Kansas, doctors may “learn” just by doing their jobs. A proposed bill in Kansas should make us question the rationale of continuing medical education requirements for physicians.

    Power of Kansas cities to take property may be expanded. A bill working its way through the Kansas Legislature will give cities additional means to seize property.

    Wichita TIF district disbands; taxpayers on the hook. A real estate development in College Hill was not successful. What does this mean for city taxpayers?

    Kansas and Colorado, compared. News that a Wichita-based company is moving to Colorado sparked a round of Kansas-bashing, most not based on facts.

    In Wichita, the phased approach to water supply can save a bundle. In 2014 the City of Wichita recommended voters spend $250 million on a new water supply. But since voters rejected the tax to support that spending, the cost of providing adequate water has dropped, and dropped a lot.

    Wichita Eagle, where are you? The state’s largest newspaper has no good reason to avoid reporting and editorializing on an important issue. But that’s what the Wichita Eagle has done.

    April

    Wichita on verge of new regulatory regime. The Wichita City Council is likely to create a new regulatory regime for massage businesses in response to a problem that is already addressed by strict laws.

    Wichita economic development and capacity. An expansion fueled by incentives is welcome, but illustrates a larger problem with Wichita-area economic development.

    Rich States, Poor States, 2106 edition. In Rich States, Poor States, Kansas continues with middle-of-the-pack performance, and fell sharply in the forward-looking forecast.

    In Wichita, revealing discussion of property rights. Reaction to the veto of a bill in Kansas reveals the instincts of many government officials, which is to grab more power whenever possible.

    ‘Trump, Trump, Trump’ … oops! An event in Wichita that made national headlines has so far turned out to be not the story news media enthusiastically promoted.

    Wichita doesn’t have this. A small Kansas city provides an example of what Wichita should do.

    Kansas continues to snub school choice reform that helps the most vulnerable schoolchildren. Charter schools benefit minority and poor children, yet Kansas does not leverage their benefits, despite having a pressing need to boost the prospects of these children.

    Wichita property tax rate: Up again. The City of Wichita says it hasn’t raised its property mill levy in many years. But data shows the mill levy has risen, and its use has shifted from debt service to current consumption.

    AFP Foundation wins a battle for free speech for everyone. Americans for Prosperity Foundation achieves a victory for free speech and free association.

    Kansas Center for Economic Growth. Kansas Center for Economic Growth, often cited as an authority by Kansas news media and politicians, is not the independent and unbiased source it claims to be.

    Under Goossen, Left’s favorite expert, Kansas was admonished by Securities and Exchange Commission. The State of Kansas was ordered to take remedial action to correct material omissions in the state’s financial statements prepared under the leadership of Duane Goossen.

    May

    Spirit Aerosystems tax relief. Wichita’s largest employer asks to avoid paying millions in taxes, which increases the cost of government for everyone else, including young companies struggling to break through.

    Wichita mayor’s counterfactual op-ed. Wichita’s mayor pens an op-ed that is counter to facts that he knows, or should know.

    Electioneering in Kansas?. An op-ed written under the banner of a non-profit organization appears to violate the ban on electioneering.

    Wichita city council campaign finance reform. Some citizen activists and Wichita city council members believe that a single $500 campaign contribution from a corporation has a corrupting influence. But stacking dozens of the same $500 contributions from executives and spouses of the same corporation? Not a problem.

    In Wichita, more sales tax hypocrisy. Another Wichita company that paid to persuade you to vote for higher taxes now seeks to avoid paying those taxes.

    Wichita student/teacher ratios. Despite years of purported budget cuts, the Wichita public school district has been able to improve its student/teacher ratios.

    June

    KPERS payments and Kansas schools. There is a claim that a recent change in the handling of KPERS payments falsely inflates school spending. The Kansas State Department of Education says otherwise.

    Regulation in Wichita, a ‘labyrinth of city processes’. Wichita offers special regulatory treatment for special circumstances, widening the gulf between the haves and have-nots.

    They really are government schools. What’s wrong with the term “government schools?”

    July

    Kansas City Star as critic, or apologist. An editorial in the Kansas City Star criticizes a Kansas free-market think tank.

    State and local government employee and payroll. Considering all state and local government employees in proportion to population, Kansas has many, compared to other states, and especially so in education.

    Kansas government ‘hollowed-out’. Considering all state and local government employees in proportion to population, Kansas has many, compared to other states, and especially so in education.

    In Wichita, Meitzner, Clendenin sow seeds of distrust. Comments by two Wichita city council members give citizens more reasons to be cynical and distrusting of politicians.

    David Dennis, gleeful regulatory revisionist. David Dennis, candidate for Sedgwick County Commission, rewrites his history of service on the Kansas State Board of Education.

    Say no to Kansas taxpayer-funded campaigning. Kansas taxpayers should know their tax dollars are helping staff campaigns for political office.

    Roger Marshall campaign setting new standards. Attacks on Tim Huelskamp reveal the worst in political campaigning.

    Wichita Metro Chamber of Commerce on the campaign trail. We want to believe that The Wichita Metro Chamber of Commerce and its PAC are a force for good. Why does the PAC need to be deceptive and untruthful?

    August

    Which Kansas Governor made these proposals?. Cutting spending for higher education, holding K through 12 public school spending steady, sweeping highway money to the general fund, reducing aid to local governments, spending down state reserves, and a huge projected budget gap. Who and when is the following newspaper report referencing?

    Wichita Business Journal editorial missed the news on the Wichita economy. A Wichita business newspaper’s editorial ignores the history of our local economy. Even the history that it reported in its own pages.

    Sedgwick County Health Department: Services provided. Sedgwick County government trimmed spending on health. What has been the result so far?

    School staffing and students. Trends for the nation and each state in teachers, administrators, and students, presented in an interactive visualization.

    Intrust Bank Arena loss for 2015 is $4.1 million. The depreciation expense of Intrust Bank Arena in downtown Wichita recognizes and accounts for the sacrifices of the people of Sedgwick County and its visitors to pay for the arena.

    School spending in the states. School spending in the states, presented in an interactive visualization.

    September

    Kansas construction employment. Tip to the Wichita Eagle editorial board: When a lobbying group feeds you statistics, try to learn what they really mean.

    Wichita has no city sales tax, except for these. There is no Wichita city retail sales tax, but the city collects tax revenue from citizens when they buy utilities, just like a sales tax.

    CID and other incentives approved in downtown Wichita. The Wichita City Council approves economic development incentives, but citizens should not be proud of the discussion and deliberation.

    Cost per visitor to Wichita cultural attractions. Wichitans might be surprised to learn the cost of cultural attractions.

    GetTheFactsKansas launched. From Kansas Policy Institute and the Kansas Chamber of Commerce, a new website with facts about the Kansas budget, economy, and schools.

    The nation’s report card and charter schools.
    * An interactive table of NAEP scores for the states and races, broken down by charter school and traditional public school.
    * Some states have few or no charter schools.
    * In many states, minority students perform better on the NAEP test when in charter schools.

    School choice and funding. Opponents of school choice programs argue the programs harm traditional public schools, both financially and in their ability to serve their remaining students. Evidence does not support this position.

    October

    Public school experts. Do only those within the Kansas public schooling community have a say?

    Kansas and Arizona schools. Arizona shows that Kansas is missing out on an opportunity to provide better education at lower cost.

    Video in the Kansas Senate. A plan to increase visibility of the Kansas Senate is a good start, and needs to go just one or two steps farther.

    Kansas, a frugal state?. Is Kansas a frugal state, compared to others?

    Topeka Capital-Journal falls for a story. The editorial boards of two large Kansas newspapers have shown how little effort goes into forming the opinions they foist upon our state.

    Kansas revenue estimates. Kansas revenue estimates are frequently in the news and have become a political issue. Here’s a look at them over the past decades.

    Kansas school fund balances.
    * Kansas school fund balances rose significantly this year, in both absolute dollars and dollars per pupil.
    * Kansans might wonder why schools did not spend some of these funds to offset cuts they have contended were necessary.
    * The interactive visualization holds data for each district since 2008.

    In Wichita, developer welfare under a cloud. A downtown Wichita project receives a small benefit from the city, with no mention of the really big money.

    Wichita, give back the Hyatt proceeds. Instead of spending the proceeds of the Hyatt hotel sale, the city should honor those who paid for the hotel — the city’s taxpayers.

    Kansas Democrats: They don’t add it up — or they don’t tell us. Kansas Democrats (and some Republicans) are campaigning on some very expensive programs, and they’re aren’t adding it up for us.

    November

    How would higher Kansas taxes help?. Candidates in Kansas who promise more spending ought to explain just how higher taxes will — purportedly — help the Kansas economy.

    Decoding the Kansas teachers union. Explaining to Kansans what the teachers union really means in its public communications.

    Kansas school spending: Visualization. An interactive visualization of revenue and spending data for Kansas school districts.

    Decoding Duane Goossen. The writing of Duane Goossen, a former Kansas budget director, requires decoding and explanation. This time, his vehicle is “Rise Up, Kansas.”

    Decoding the Kansas teachers union. Decoding and deconstructing communications from KNEA, the Kansas teachers union, lets us discover the true purpose of the union.

    Government schools’ entitlement mentality. If the Kansas personal income grows, should school spending also rise?

    December

    Wichita bridges, well memorialized. Drivers on East Twenty-First Street in Wichita are happy that the work on a small bridge is complete, but may not be pleased with one aspect of the project.

    Gary Sherrer and Kansas Policy Institute. A former Kansas government official criticizes Kansas Policy Institute.

    Wichita to grant property and sales tax relief. Several large employers in Wichita ask to avoid paying millions in taxes, which increases the cost of government for everyone else, including young companies struggling to break through.

    Economic development incentives at the margin. The evaluation of economic development incentives in Wichita and Kansas requires thinking at the margin, not the entirety.

    The Wichita economy, according to Milken Institute. The performance of the Wichita-area economy, compared to other large cities, is on a downward trend.

    State pension cronyism. A new report details the way state pension funds harm workers and taxpayers through cronyism.

    In Wichita, converting a hotel into street repairs. In Wichita, it turns out we have to sell a hotel in order to fix our streets.

    In Wichita, we’ll not know how this tax money is spent. Despite claims to the contrary, the attitude of the City of Wichita towards citizens’ right to know is poor, and its attitude will likely be reaffirmed this week.

  • Decoding the Kansas teachers union

    Decoding the Kansas teachers union

    Decoding and deconstructing communications from KNEA, the Kansas teachers union, lets us discover the true purpose of the union.

    Here, we look at a dispatch from Kansas National Education Association’s “Under the Dome” newsletter from March 14, 2013. It may be found here. The topic of this day was a charter school bill. Kansas has a law that allows charter schools, which are public schools that operate outside many of the rules and regulations that govern traditional public schools. But the Kansas law is written in a way that makes it difficult to form a charter school, and as a result, Kansas has very few charter schools.

    KNEA, the teacher union in Kansas, says: Rep. Ed Trimmer noted that a study provided by the proponents (anti-public school “think tank” Kansas Policy Institute) reported that the worst performing charter schools are in states that have multiple charter school “authorizers” — just like this bill.

    This sentence holds much of the key to understanding the motives of the teachers union, and the rest of the public school spending lobby. First, they use the term “anti-public school.” This lets us know that for all the bluster coming from the teachers union and its allies about the importance of education and Kansas schoolchildren, it is only public schools that interest them. The simple reason is that in private schools and charter schools, the teachers aren’t union members. It is those union members that the union cares about. Other schools where teachers can work free of the union and its influence are competition to the union.

    The use of “think tank” lets us know that the union doesn’t think Kansas Policy Institute is deserving of respect. KPI uses government data to show the true state of Kansas public education, so naturally the teachers union needs to suppress the tellers of truth.

    By the way, I don’t think KPI is “anti-public school.” KPI advocates for school choice, to be sure, but school choice programs comfortably co-exist with public schools in many states. And — let’s remind the teachers union that charter schools are public schools.

    Then the use of “authorizers” in quotes: Charter school authorizers oversee the charter schools they authorized. In Kansas, the only charter school authorizers are local school boards, and they have shown very little willingness to authorize charters. Here’s what is interesting: In some states with good charter school laws, authorizers must hold their charter schools accountable. In Denver, for the 2011 school year, 25 percent of the charters seeking renewal were closed.1 (There, charters are reauthorized every third year.) That type of accountability is rarely seen in the traditional public schools, where poor-performing schools live on, year after year.

    The teachers union says: The Committee reconvened at 1:30 to get a special presentation by anti-public school zealot Dave Trabert of the “think tank” Kansas Policy Institute. Trabert sold his usual snake oil denouncing Kansas public schools as failing most students and thoroughly confused the committee with his talk of NAEP, NCLB, RTTT, state assessments, cut scores and the performance of Texas schools compared to Kansas.

    See? The teachers union doesn’t like to talk about the performance of Kansas schools. Anyone who presents the data is denounced. It’s easy to see why. The U.S. Department of Education, through the National Center for Education Statistics (NCES), conducts the National Assessment of Educational Progress (NAEP) every other year. Known as “The Nation’s Report Card,” it is “the largest nationally representative and continuing assessment of what America’s students know and can do in various subject areas.”2 The important thing to remember is that the test is not under the control of states. It is the same in all states, and allows for state-to-state comparisons. (More about this in a moment.)

    Kansas and Texas NAEP scores. Click for larger.
    Kansas and Texas NAEP scores. Click for larger.
    Nearby is a chart showing performance on the NAEP test. It presents data for grade four reading over time, divided by major categories of race. It shows the percent of students scoring at the level of Basic or better, and on a separate scale, at Proficient or better.

    Looking at the first column of data, labeled “All Students,” we can see that Kansas performs better than Texas in every year. It is this finding that the teachers union and its allies use to promote the goodness of Kansas schools.

    Aggregated data like this can hide some underlying truths. Look at the third column, reporting scores for black students. For “At or above Proficient,” Kansas and Texas students perform nearly the same. For Basic or better, Texas has the clear advantage in most years.

    Similar investigation reveals that for Hispanic students, Texas and Kansas score nearly the same. For white students, Texas scores better than Kansas in each year.

    So which schools are better in fourth grade reading, Kansas or Texas? If you were the parent of a young black child learning to read, Texas is doing a better job. For that matter, if you were the parent of a young white child learning to read, Texas has been doing a better job than has Kansas.

    (By the way, Texas spends less on its schools than Kansas, on a per-pupil basis.3)

    (These charts are derived from an interactive visualization of NAEP scores that I developed. You may access it here to conduct your own investigations.)

    We can see why the teachers union demeans and demonizes those who present data like this.

    The former Kansas school standards for grade four reading, showing Kansas ranking low among the states.
    The former Kansas school standards for grade four reading, showing Kansas ranking low among the states.
    Why are NAEP scores important? Doesn’t the State of Kansas have its own tests? The answer is yes, Kansas has its own tests. And until recently these tests — the standards that the state used to measure achievement — were very weak. That is, Kansas was willing to say students are “proficient” at a much lower level of performance than most other states. In some cases, just a handful of states had lower standards than Kansas. But now the new Kansas standards are more in line with those of other states, and present a more truthful assessment of Kansas schoolchildren. Not surprisingly, scores on the new tests are lower.4

    In the past, the teachers union and its allies used the (generally good) performance on these very weak Kansas tests to conclude that Kansas schools were performing well. But that was a lie.

    The teachers union says: He was joined via Skype by noted ideological researcher Matthew Ladner. Ladner, who greatly admires Jeb Bush and Florida schools was brought to Kansas by Trabert and KPI once before. Only back then his presentation was colored by the fact that he won a “Bunkum Award” from the National Educational [sic] Policy Center (NEPC). The NEPC, located at the University of Colorado is a national consortium of education researchers and academicians who review the reports of think tanks to make sure it is based on sound research standards.

    First, Florida schools perform well on the NAEP, relative to Kansas. If you need convincing, use the visualization of NAEP scores referenced above to compare Florida and Kansas. You’ll find many cases where Florida does better than Kansas.

    (By the way, Florida spends less than Kansas on schools, on a per-pupil base.3 This is the real problem the teachers union and its allies have with Florida and Texas: These states spend less than Kansas.)

    Now: What is the National Education Policy Center (NEPC)? Just like the Kansas teachers union says, it reviews the reports of think tanks. And when it does, its criticisms are routinely shredded when placed under scrutiny. (Example criticism of one NEPC writer: “His review is deeply flawed and significantly misrepresents our data and findings.6) Almost all the reports it finds to be faulty are published by conservative/libertarian think tanks, although I did see a Brookings Institute report criticized.

    Here’s something else: The Kansas teachers union and its allies vigorously attempt to discredit KPI because of its purported funders. If that is a valid concern or criticism, consider this. NEPC’s funders include the National Education Association and the American Federation of Teachers.7 Teachers unions funding research to discredit non-union schools. Who could have figured?

    Now we ask this: Should we hold the Kansas teachers union to the same standards it expects of others?

    —
    Notes

    1. Colorado League of Charter Schools. ↩
    2. National Assessment of Educational Progress. About. Available at nces.ed.gov/nationsreportcard/about/. ↩
    3. U.S. Census Bureau. Annual Survey of School System Finances: Per Pupil Amounts for Current Spending of Public Elementary-Secondary School Systems by State: Fiscal Year 2014. https://factfinder.census.gov/bkmk/table/1.0/en/SSF/2014/00A08. ↩
    4. Weeks, Bob. After years of low standards, Kansas schools adopt truthful standards. https://wichitaliberty.org/wichita-kansas-schools/after-years-of-low-standards-kansas-schools-adopt-truthful-standards/. ↩
    5. U.S. Census Bureau. Annual Survey of School System Finances: Per Pupil Amounts for Current Spending of Public Elementary-Secondary School Systems by State: Fiscal Year 2014. https://factfinder.census.gov/bkmk/table/1.0/en/SSF/2014/00A08. ↩
    6. Jim Kessler, Tess Stovall, and Dee Dee Dolan. A Response to the National Education Policy Center: “NEPC review is fatally flawed.” http://www.thirdway.org/memo/a-response-to-the-national-education-policy-center-nepc-review-is-fatally-flawed. ↩
    7. National Education Policy Center. Support. http://nepc.colorado.edu/support. ↩
  • Kansas benefits from foreign trade

    Kansas benefits from foreign trade

    The Kansas economy benefits greatly from foreign trade, and we should oppose restrictions on trade.

    Bryan Riley of Heritage Foundation has contributed an extensive analysis of the benefits foreign trade brings to Kansas. Riley is Jay Van Andel Senior Policy Analyst in Trade Policy at Center for Trade and Economics (CTE).

    Riley notes three ways that foreign trade benefits Kansas:

    • Imports provide competitive products for Kansas consumers and manufacturers.
    • Exports benefit Kansas farmers and aerospace workers.
    • Foreign investment supports thousands of Kansas jobs.

    He recommends: “The state’s congressional delegation can best advance the interests of Kansans by opposing protectionist policies and working to remove barriers to international trade and investment.” Specifically:

    These benefits are threatened by U.S. trade barriers that protect politically well-connected companies from competition while driving up prices and threatening jobs in Kansas industries reliant on international trade.

    The state’s congressional delegation can best advance the interests of Kansans by opposing protectionist policies and working to remove barriers to international trade and investment.

    The danger to Kansas, and to the entire country, is that President-Elect Donald J. Trump campaigned on a platform of renegotiating trade agreements and imposing high tariffs if favorable agreements were not obtained. This is the opposite of free trade.

    Concluding, Riley projects a bright future for Kansas — if trade increases:

    Kansas is positioned to prosper from continued growth in trade with the rest of the world as trade barriers are reduced. Physical barriers, such as the limits imposed by canals and ports unable to handle modern cargo ships, and governmental barriers, like limits on shipping and the use of imported inputs, are falling across the globe. The state’s congressional delegation should take the lead in making sure that government-constructed impediments to trade and prosperity fall as well.

    Riley’s paper at Heritage is Trade and Prosperity in the States: The Case of Kansas. He also appeared on WichitaLiberty.TV earlier this year to discuss trade and its importance. See WichitaLiberty.TV: Heritage Foundation’s Bryan Riley on free trade.

  • In Sedgwick County, Norton’s misplaced concern for an industry

    In Sedgwick County, Norton’s misplaced concern for an industry

    In the campaign for Sedgwick County Commission, the incumbent Tim Norton touts his experience, judgment, “intellectual stamina, thirst for data and feedback,” and his efforts in economic development. Following, from January 2013, an example of how uninformed he is regarding basic facts about the Kansas economy.

    In Sedgwick County, Norton’s misplaced concern for an industry

    kansas-gdp-by-industry-for-2010Expressing concern about a large industry that he said is important to Sedgwick County and Kansas, Sedgwick County Commissioner Tim Norton spoke in favor of the need for comprehensive government planning. He cited the commonly-held belief that humans, with their desire for large suburban home lots, are depleting the stock of available farmland.

    Specifically, Norton said “Agribusiness is the third largest economic driver in our community, in our region.”

    But is this true? Using 2010 figures from the Kansas Statistical Abstract, these are the largest industries in Kansas in terms of gross domestic product:

    Agriculture ranks below many other industries, contributing 3.7 percent of Kansas Gross Domestic Product. In most years agriculture would rank even lower, but because of high farm prices in recent years, it ranks higher than it has.

    Norton also expressed concern that humans with large home lots would deplete the land available for agriculture. But he need not worry, as I show in Saving farms from people.

  • Tim Norton: Saving farms from people and their preferences

    Tim Norton: Saving farms from people and their preferences

    In the campaign for Sedgwick County Commission, the incumbent Tim Norton touts his experience, judgment, “intellectual stamina, thirst for data and feedback,” and his efforts in economic development. Following, from January 2013, an example of how uninformed he is. You also see his preference for government regulation over economic and personal freedom.

    Tim Norton: Saving farms from people and their preferences

    Last week at a meeting of the Sedgwick County Commission, Commissioner Tim Norton spoke in favor of the need for comprehensive government planning. In support, he cited the commonly-held belief that humans — especially with their desire for large suburban home lots — are depleting the stock of farmland to the point of being detrimental to agribusiness.

    Here’s part of what Norton said (video below):

    Now I know people don’t like the idea of sprawl and growth rings and all that, but the truth is there is a balance between where people live and preserving our good agricultural lands and how do you make that work. And that’s being able to sustain part of our economy. Agribusiness is the third largest economic driver in our community, in our region, and to say that we’re okay with every five acre tract being taken up by somebody’s rural residence sounds really good if you’re talking only property rights. But if you’re talking about preserving and sustaining agribusiness you gotta have the land and it’s got to be set aside for that enterprise.

    Farms and ranches being driven out of existence by homeowners — that sounds like a problem that might threaten our food supply. But what are the facts?

    First, there is an overabundance of farmland in America. There is so much farmland that we pay farmers billions each year to refrain from planting crops. We pay corn farmers billions in subsidies each year and then use their crops for motor fuel, instead of for making fine Kentucky bourbon and taco shells, as God intended.

    Considering Sedgwick County, as that is what Norton represents: Despite being the second-most populous county in Kansas and home to its largest city and surrounding suburban communities, Sedgwick County ranks fourth among Kansas counties in the number of farms, thirty-fourth in farmland acres, seventh in total harvested cropland acres, thirty-third in market value of harvested crops, sixty-sixth in market value of livestock, and eighty-seventh in pasture acres. (Data from Kansas Farm Facts 2011, reporting on 2007 farm statistics.)

    There’s something else that might ease Commissioner Norton’s concern, if he would only believe in the power of markets over government: That is the price system. If we were truly running short of farmland, crop prices would rise and farmland would become more valuable. Fewer people would be willing to pay the price necessary to have a five-acre home lot.

    In fact, if crop prices were high enough, farmers would be buying back the five-acre lots, or perhaps paying homeowners to rent their yards for planting crops or grazing livestock.

    In either case, markets — through the price system — provide a solution that doesn’t require politicians and bureaucrats. There are many other areas in which this is true, but government nonetheless insists on regulation and control.

  • From Pachyderm: Westar Energy

    From Pachyderm: Westar Energy

    Voice for Liberty radio logo square 02 155x116From the Wichita Pachyderm Club: Don Sherman, Vice President Community Relations and Strategic Partners with Westar Energy introduced Jeff Beasley, Vice President of Customer Care with Westar for an informative presentation titled, “An overview of Westar Energy — Solar, Conservation, Community.”

    This was recorded August 12, 2016. Click here for the audio presentation. Click here for the slides.