Voice For Liberty

Tag: Rhonda Holman

  • Kansas tax overhaul skeptics

    In yesterday’s Wichita Eagle, editorial writer Rhonda Holman expresses her skepticism that income tax cuts in Kansas will do much good for the state.

    First, of all, there’s one very good reason to reduce taxes in Kansas — and everywhere: doing that lets people keep more of their own money, and keeps it in the productive private sector. This is good.

    There’s also a dangerous misconception contained in this editorial. Holman mentions the $4.2 billion in sales tax exemptions, referring to the amount of additional sales tax revenue that the state would purportedly collect if the exemptions were eliminated. First, eliminating most of these exemptions is a great idea. But some are not really exemptions at all, at least if we’re talking about a retail sales tax.

    Last year the Kansas Legislative Division of Post Audit looked at these exemptions. Its report is Kansas Tax Revenues, Part II: Reviewing Sales Tax Exemptions.

    The audit described one exemption labeled 79-3606 (m), described as “Ingredient/Component parts: Of items manufactured or produced for sale at retail.” The audit report estimates that for 2009, this exemption cost the state $2,248.1 million in lost sales tax revenue. This is over half the $4.2 billion Holman cited as available to the state by eliminating exemptions.

    But this exemption isn’t really an “exemption,” at least if the sales tax is a retail sales tax designed to be levied as the final tax on consumption. That’s because these goods aren’t being sold at retail. They’re sold to manufacturers who use them as inputs to products that, when finished, will be sold at retail. Most states don’t tax this type of sales. If Kansas decided to tax these transactions, it would place our state’s manufacturers at a severe disadvantage compared to almost all other states.

    There are two other exemptions that fall in this category of inputs to to production processes, totaling an estimated $461 million in lost revenue.

    Another big-dollar exemption is “items already taxed” such as motor fuel. This is an estimated $232.5 loss in revenue. Two other categories of exemptions are purchases made by government, or purchase made by contractors on behalf of government. Together these account for an estimated $449.9 million in lost revenue. If these two exemptions were eliminated, the government would be taxing itself.

    All told, these six exemptions account for $3,391.5 million of the total $4,234.2 million in exemptions for 2009. That’s about 80%.

    So $4.2 billion has shrunk to $842.7 million. That’s still a lot of money, but not near as much as spending advocates would like to have Kansans believe is lying in wait just for the taking.

    By the way, the $4.2 billion figure doesn’t include all the sales tax exemptions given, as the audit looked at only those exemptions placed into statute. Many sales tax exemptions are one-time deals, such as the over $500,000 exemption the Wichita City Council awarded to the developers of a hotel in downtown Wichita.

    In her editorial, Holman wrote that “Brownback likened eliminating the exemptions to raising taxes,” the implication being that the governor would not support eliminating these exemptions. But these exemptions should not have been granted in the first place.

    Holman contends that businesses make location decisions based on “availability of labor and land and the regulatory climate.” Given this, we’re told that Kansas has a skilled work force, we’ve got plenty of inexpensive land, and in many rankings, our regulatory climate is not too bad. That leaves taxes as an additional field on which to compete, and we’re moving in the wrong direction regarding taxes.

    Holman also writes that K-12 education is underfunded. This argument is difficult to sustain in light of the facts, which are that until very recently, Kansas school spending soared.

    Kansas school spending, per studentKansas school spending, per student.

    Instead of spending more on a state school system, we could spend less and give parents more choice by implementing various forms of school choice. Despite the claims of school spending advocates, school choice saves money for the state. Additionally, local districts are actually better off under school choice, as explained in The arithmetic of school choice in Wichita.

    There’s much more Kansas could do to reduce spending, which in turn would let us reduce tax rates without cutting services. First, Kansas makes little use of outsourcing. In Wichita, our one major experiment in outsourcing produced savings greater than anticipated. Yet, we don’t have plans to expand this practice.

    Another thing Kansas must do is to use zero-based budgeting, at least periodically. The current practice is to form new budgets based on last year’s spending. While he was a member of the Kansas House of Representatives, Jason Watkins explained the need, as I reported: “Watkins said that the present system, where each year’s budget is based on the past year’s plus an increase, produces anomalies. He illustrated a case where an agency might be able to get some federal money if the state spends some if its own. It might be, say, a three-year program. So the legislature authorizes and appropriates the funds. Then three years later the federal money is gone, so the program ends because the state funding alone is not sufficient for continuation. But the money the state allocated is still in the agency’s base budget — even through the program no longer exists.”

  • The resolve of the Wichita City Council

    The Wichita Eagle’s Rhonda Holman concedes that opponents of subsidy for Wichita hotel developers may prevail in a petition drive and possible special election, and remarks: “If so, they will have made an ideological point most people already agree with — that it would be best if developers paid for downtown development.” (Press ahead downtown, September 18, 2011 Wichita Eagle)

    Holman is referring to a refund of 75 percent of the transient guest tax that the hotel is seeking. This subsidy is estimated to be worth $134,000 per year for 15 years, or $2,010,000 in total.

    Despite her recognition of the will of the people, editorialist Holman encourages the Wichita City Council to proceed in a direction opposite. Settling for something other than the best, by her own admission.

    It’s the “reality,” Holman says. She trusts the arguments of developers who have a $15 million motive to gain various forms of taxpayer subsidy. She says there is presently “tight financing,” her contention being that developers can’t get loans for their projects.

    She may not be reading the reporting in her own newspaper. Recently the Eagle reported on the local lending situation: “Bankers said they want to make loans and would gladly do so, if companies wanted them. … Borrowers still have to have a business plan and creditworthiness. Demand has been way down.”

    Bankers will loan to creditworthy borrowers, says the Eagle. The reasonable conclusion is that the Douglas Place developers are not creditworthy. So, Holman wants the Wichita taxpayer to provide financing, and most of the city council is willing to buy these flimsy arguments.

    On Sunday evening, Council Member Michael O’Donnell (district 4, south and southwest Wichita) called into the Gene Countryman radio program. He said: “With the editorial that was in the paper today from Rhonda Holman, I was just shocked that she thinks that it would prevail, that Americans for Prosperity — their argument would prevail on the ballot. To me, that seems counter-intuitive, that means that the elected officials aren’t following what the will of the people is. And that’s why we’re sent to city council.”

    O’Donnell said that the Eagle “should be picking up on that part of this equation: that we are electing people that aren’t going with the mood of the voters.”

    He further explained that the Douglas Place developers now have a problem. If they proceed with the hotel project without receiving one of the subsidies they insisted they need — what does that say about their honesty and integrity? Were they asking for the subsidy simply because they thought the city would grant it?

    And if they can proceed without this subsidy, what about the other subsides? Are they truly necessary?

    If the city grants subsidies that turn out not to be necessary — as if any subsidy is really ever necessary — what does that say about our city bureaucratic staff, our mayor, and our city council?

    I think we know what it says. The campaign contributions given by these developers are a stain upon the reputation of Wichita.

    By the way, when someone says their opponents are “ideological,” immediately you know their arguments are weak. Merriam-Webster defines “ideology” as “1: visionary theorizing; 2a : a systematic body of concepts especially about human life or culture b: a manner or the content of thinking characteristic of an individual, group, or culture c: the integrated assertions, theories and aims that constitute a sociopolitical program.”

    The use of the term “ideological” is almost always used in a negative way, as Holman has done when referring to Americans for Prosperity. None of these things, however, are negative — unless they describe your political opponents. When Holman and most city council members believe that downtown development can happen only when propped up by taxpayer spending and subsidy, and believe that this is a good thing and a proper use of government: isn’t that an ideology?

  • Wichita City Council bows to special interests

    Yesterday’s meeting of the Wichita City Council revealed a council — except for one member — totally captured by special interests, to the point where the council, aided by city staff, used a narrow legal interpretation in order to circumvent a statutorily required public hearing process.

    The issue was a downtown hotel to be developed by a team lead by David Burk of Marketplace Properties. The subsidies Burk wants, specifically tax increment financing (TIF), require a public hearing to be held. The city scheduled the hearing for September 13th.

    That schedule, however, didn’t suit Burk. In order to provide him a certain comfort level, the council agreed to issue a letter of intent stating that the council intends to do the things that the public hearing is supposed to provide an opportunity for deliberation.

    I, along with others, contend that this action reduces the September 13th public hearing to a meaningless exercise. This action is not good government, and it’s not open and transparent government, despite the claims of Mayor Carl Brewer. It goes against our country’s principle of the rule of law, part of which holds that our laws are more important than any single person.

    Several times council members — and once city attorney Gary Rebenstorf — explained that the letter of intent is non-binding on either party. But: No matter what information is presented at the September public hearing, no matter how strong public opinion might be against the incentives involved, is there any real likelihood that the council would not proceed with this plan and its incentives, having already passed a letter of intent to do so? I think there is very little possibility of that.

    Persuasive arguments will be made that since the city issued a letter of intent, and since the developers may have already taken action based on that letter, it follows that the city is obligated to pass the plan. Otherwise, who would ever vest any meaning in a future letter of intent from this city?

    During the discussion, no one was able to explain adequately why a letter of intent — if it is non-binding and therefore does not commit the city — was asked for by the developers. Despite the lawyerly explanation of Rebenstorf and council members — including the mayor — the letter does have meaning. Practically, it has such a powerful meaning that it makes the holding of the public hearing on September 13th a mere charade, a meaningless exercise in futility.

    It’s not just me and a handful of others who contend this. The Wichita Eagle’s Rhonda Holman, who is usually in favor of all forms of public spending on downtown, wrote: “Even though the letter of intent will be nonbinding, it risks making the Sept. 13 public hearing on tax-increment financing seem like a pointless afterthought.”

    In his remarks, City Manager Bob Layton explained that the meeting was the first time for council members to “formally vet this project and all of the incentives.”

    He added: “If the council were to say, for instance, there were two or three pieces of that that you had discomfort with, that would then put everyone on notice that the deal may not go forward.” He said this is the purpose of today’s action, and he added that the action is non-binding.

    I would suggest that since the council, with the exception of Council Member Michael O’Donnell (district 4, south and southwest Wichita), found no problems with issuing the letter of intent, it has no problems with the deal, and this is what makes the September public hearing, as Holman said, a “pointless afterthought.”

    Astonishingly, the manger said while this is “not intended to be the normal process,” he said that he “kind of like it” as it gave an initial opportunity to gauge the sentiment of council members.

    I’m glad the manager didn’t mention the sentiment of the public, as with little notice as to the content of the deal and its incentives, citizens had no meaningful opportunity to prepare.

    An example of the contorted logic council members use to justify their action: Council Member Jeff Longwell (district 5, west and northwest Wichita) explained that issuing letters of intent is a common practice in real estate deals. He confused, however, agreements made between private parties and those where government is a party. Private parties can voluntarily enter into whatever agreements they want. But agreements with government are governed by laws. Yesterday, the city council announced its intent to do something for which it is required to hold a public hearing. That didn’t violate the letter of the law, but it certainly goes against its spirit and meaning. Longwell said he has no problem with that.

    Their bureaucratic enablers helped out, too. Wichita Downtown Development Corporation President Jeff Fluhr, in his testimony, said we are working towards becoming a “city of distinction.” That we are, indeed — a city distinguished by lack of respect for the rule of law and its disregard for citizens in favor of special interests.

    A few observations from the meeting follow.

    Public investment

    In response to a question from the mayor, Allen Bell, Wichita’s Director of Urban Development, said that the ratio of private dollars to public dollars for this project is about 2.2 to 1. Whether these numbers are correct is doubtful. It will take an analysis of the deal to determine the true numbers, and the details have been available for only a short time. But if correct, this ratio falls well short of the stated goals. Two years ago, when agitation for a new round of downtown planing started, boosters spoke of a ratio of 15 to 1. Eventually planners promised a ratio of 5 to 1 private to public investment for downtown. This project, while of course is just a single project and not the entirety of downtown development, doesn’t reach half that goal.

    Order of events and media coverage

    During the meeting, Council Member Pete Meitzner (district 2, east Wichita) conceded that “the order of events is confusing.”

    Before that, Council Member Janet Miller (district 6, north central Wichita) claimed that there had been much media coverage of the proposed hotel, and that the public was actually getting two opportunities to talk about this project. She said that the media had published information about today’s meeting and the public hearing on September 13th.

    Miller is gravely mistaken. Until a Wichita Eagle article on Saturday, I saw no mention of the letter of intent, and no detail of the form of subsidies to be considered for this project. The city’s list of legal notices contains no mention of the action that was taken at this meeting.

    Questions not answered

    During my remarks to the council, I related how last year the Wichita Eagle alleged that David Burk, the managing member of this project — and I quote here: “Downtown Wichita’s leading developer, David Burk, represented himself as an agent of the city — without the city’s knowledge or consent — to cut his taxes on publicly owned property he leases in the Old Town Cinema Plaza, according to court records and the city attorney.”

    This Eagle article and a companion article went on to quote these people as having trouble with and being concerned, to varying degrees, with Burk’s acts: City Attorney Gary Rebenstorf; City Council member Jeff Longwell; City Council Member Lavonta Williams, now serving as vice mayor; then-Vice Mayor Jim Skelton, now on the Sedgwick County Commission; and City Manager Robert Layton.

    In particular, the manager said, according to the Eagle, that anyone has the right to appeal their taxes, but he added that ‘no doubt that defeats the purpose of the TIF.’”

    The manager’s quote is most directly damaging. Despite the fact that nearly all the property taxes Burk pays directly enriches himself and only him, he still doesn’t want to pay them. And according to the Wichita Eagle — not me — he engaged in deception in order to reduce them.

    None of the four people in the council chambers — Rebenstorf, Longwell, Williams, and Layton — explained their apparent change of mind with regard to Burk’s acts.

    Burk, who addressed the council immediately after I asked if he cared to explain his actions, decided to avoid the issue. In his shoes, I probably would have done the same, as there is no justification for the acts the Eagle accused him of doing. He, and his political and bureaucratic enablers in Wichita city hall, have to hope this issue fades.

    Campaign contributions

    Council member O’Donnell asked about a parking garage to be built at a cost of $6 million to the city: Will the city be putting this project out to competitive bid? Bell replied no, that is the developer’s request. City attorney Rebenstorf added that there is a charter ordinance that exempts these types of projects from bidding requirements.

    O’Donnell said that awarding the construction contract to a company that has made campaign contributions to all council members (except him) “seems a little questionable.”

    The company in question is Key Construction. Its principals regularly appear on campaign finance reports, making the maximum allowed contribution to a wide variety of candidates. Similarly, Burke and his wife also frequently make the maximum contribution to city hall candidates.

    O’Donnell is correct to publicize these contributions. They emit a foul odor. In our political system, many people make contributions to candidates whose ideology they agree with, be it conservative, liberal, or something else.

    But Burk and others routinely make the maximum contribution to all — or nearly all — candidates, even those with widely varying political stances. How can someone explain Burk’s (and his wife’s) contributions to liberals like Miller and Williams, and also to conservatives like Longwell, Meitzner, and former council member Sue Schlapp?

    The answer is that Schlapp and Longwell, despite their proclamations of fiscal conservatism, have shown themselves to be willing to vote for any form of developer welfare Burk and others have asked for. They create tangled webs of tortured logic to explain their votes. Meitzner, along with his fellow new council member James Clendenin (district 3, south and southeast Wichita), seems to be following the same path.

    Several council members and the mayor took exception to O’Donnell’s raising of this matter. Clendenin, for his part, objected and said that the public has had over 30 days to consider and take exception with this project. This contention, like Miller’s, isn’t supported by any facts that I am aware of. It appears that the first mention of any of the details of the plan and the subsidies is contained in a MAPC agenda that appears to have been created on July 29. Besides not being 30 days in advance, the MAPC agenda is an obscure place to release what Clendenin believes is adequate public notice.

    Regarding the issue of campaign contributions, the mayor — without mentioning his name — strongly criticized O’Donnell for bringing up this matter. Many people watching this meeting felt that the extreme reaction of Brewer and others to O’Donnell’s observation reveals a certain uneasiness regarding these contributions. I don’t believe the mayor and council members are taking illegal bribes, although when any city is enriching people with millions of dollars of developer welfare there is always that threat, and in some cities and states such practices are commonplace.

    The fact remains, however, that there is a small group of campaign contributors who — over and over — ask for and receive largess from city hall.

    The mayor’s criticisms

    In his comments, Mayor Brewer accused opponents of providing only partial facts about matters, because the full facts did not support their case. He was referring to my remarks that a lawsuit brought against the city by a party who felt the city had reneged on a letter of intent was litigated all the way to the Kansas Supreme Court. In my remarks I didn’t mention who won that case — the city did — and the mayor believes this is an example of slanting the facts.

    The mayor went on to make accusations of “grandstanding” from some of the public and “some council members” because there are cameras in the council chambers. He mentioned that news media are present at every meeting and that council meetings are broadcast on television.

    The mayor should take notice, however, that most people who care about public affairs and policy are severely disappointed with news media coverage of city hall events. The resources of news gathering agencies, especially newspapers, are severely depleted as compared to the past. In my coverage of a talk given by former Wichita Eagle editor Davis Merritt, I wrote this: “A question that I asked is whether the declining resources of the Wichita Eagle might create the danger that local government officials feel they can act under less scrutiny, or is this already happening? Merritt replied that this has been going on for some time. ‘The watchdog job of journalism is incredibly important and is terribly threatened.’ When all resources go to cover what must be covered — police, accidents, etc. — there isn’t anything left over to cover what should be covered. There are many important stories that aren’t being covered because the ‘boots aren’t on the street anymore,’ he said.” See Former Wichita Eagle editor addresses journalism, democracy, May 11, 2009.

    In addition, Bill Wilson, the reporter the Wichita Eagle sent to cover the meeting, has a documented bias against the concept of free markets, and against those who believe in them.

    The mayor, when delivering his criticism, does not use the names of those he criticizes. It would be useful if he did, but it would mean he has to take greater accountability for his remarks.

    Following are links to excerpts of testimony from the meeting — perhaps examples of the “grandstanding” the mayor complained about: John Todd, Shirley Koehn, and Bob Weeks.

  • Despite subsidy program, Wichita flights are declining

    Supporters of the Kansas Affordable Airfares Program are proud of the program’s success. But looking at the statistics uncovers a troubling trend that is obscured by the facts used to promote the program.

    The program provides taxpayer-funded grants to airlines so that they will provide low-cost service to cities in Kansas. The thought is that by propping up a discount carrier, other airlines will be forced to reduce their fares. By far the largest consumer of these subsidies is Airtran Airways in Wichita. For this goal, the program has worked, probably. We have to say “probably” because we can never know what would have happened in the absence of this program. But it is quite likely that fares are at least somewhat lower than would they would be otherwise.

    But lower fares is not the only measure of success. The number of available flights is a measure, too, and a very important one for many people.

    The problem is that subsidy boosters state that the number of flights has increased. For example, on a page that is part of the Sedgwick County official website, the claim is made that the affordable airfares program “offers more flights to both east and west coasts.”

    In the agenda packet for the July meeting of the Regional Economic Area Partnership of South Central Kansas — that’s the body that administers the affordable airfares program — board members were presented this information: “In presenting its proposal Sedgwick County provided evidence documenting that low-fare air service to eastern and western U.S. destinations through Wichita Mid-Continent Airport had been successful in providing more air flight options, more competition for air travel, and affordable air fares for Kansas.”

    Later that document describes selection criteria for deciding which airlines will receive grants. The first goal listed is “more air flight options,” which is further described as the number of scheduled, daily nonstop and one-stop flights.

    Certainly enticing a new airline carrier to town by paying them a subsidy increases the number of flights that carrier will offer, as before the subsidy, they offered none. But the experience of Wichita shows that the affordable airfares program is causing an overall loss of flight options in Wichita.

    It’s true that when the airline subsidy started, funded at first only by the City of Wichita, the number of flights departing from Wichita increased. That’s not remarkable. That was the stated goal of the program, and if we paid AirTran a subsidy and they didn’t provide flights, that would have been a problem.

    But the history of flights before the subsidy program is not the only important measure, although supporters of the program like the Wichita Eagle’s Rhonda Holman make use of it when she recently wrote this about the program and an audit of it conducted by Kansas Legislative Division of Post Audit: “Even so, the audit put the return on the state’s investment at $2.32-to-$1, cited 38 percent growth in passenger counts between 2000 and 2009, and said ‘fares have decreased, while the number of passengers and the number of available flights have increased.’”

    Yes, the number of available flights increased upon the arrival of AirTran and the start of the subsidy payments. But the trend since 2005 — about the time the state got involved in the funding and the program matured — is not encouraging. As shown in the accompanying charts, that trend is continually on a downward trajectory. (The charts show two different sets of data for the number of departures from Wichita.)

    The decline in the number of available flights is important, because for some travelers, particularly business travelers, the availability of a seat on an airplane at any price is more important than being able to book a cheap flight a month in advance.

    People may disagree about the wisdom of the airline subsidy program. But we need to recognize that the availability of flights to and from Wichita is declining, and has been declining for a number of years.

    We often hear of the unintended consequences of government intervention. This is such an example. Compounding the problem is the refusal of the program’s supporters — both within and outside of government — to recognize it, at least publicly.

    Monthly departures from WichitaMonthly departures from the Wichita airport
    Number of daily departures from the Wichita airport by air carriers (excluding weekends)Number of daily departures from the Wichita airport by air carriers (excluding weekends)

  • 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.

  • Arts won’t go away in Kansas

    Supporters of government-funded art in Kansas are lashing out at Kansas Governor Sam Brownback for his decision to cancel funding for the Kansas Arts Commission. An example is the Wichita Eagle’s Rhonda Holman in her editorial A state for the arts?

    In her editorial Holman makes the claim that eliminating the Kansas Arts Commission exposes Kansas to the risk of losing federal and other funds. Many government art supporters state that the loss of funds in a certainty. But as I wrote earlier this year when I covered a hearing before a Kansas Senate committee, Kansas Legislative Research Department made inquiries to the Arts Alliance and the NEA. The answers from both agencies indicate that it is unclear as to whether the new Kansas Arts Foundation would be eligible to receive grants. In particular, the NEA answered, according to Legislative Research, “the potential exists for Kansas to forfeit its ability to receive National Endowment for the Arts funding depending on how the new entity in structured …”

    A related — and more important to public policy — question is why do we send tax money to Washington, only to have to jump through federally-designed hoops to get it back? We shouldn’t argue for the perpetuation of such a system just so we can receive matching grants.

    Holman and others make the case that the arts funding that Brownback canceled is small — “minuscule in the context of the state’s $13.8 billion budget,” she wrote. It’s not only a financial matter, although this factor alone is reason enough to cancel this funding. The arguments of supporters of this funding, small amount that it is, illustrate some of the worse aspects of government and public policy.

    Government funded arts supporters promote the government funding as an investment that pays off for Kansas taxpayers. They have studies that say it does. But these studies have little credibility, as shown in Arts funding in Kansas. These studies purportedly show that spending on the arts has a magic power that is not present when people spend their own money on the things they value most highly. But these studies, like most, rely on several economic fallacies. Henry Hazlitt, writing in Economics in One Lesson, explains.

    Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine — the special pleading of selfish interests. While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for then plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

    The proposed funding for the arts commission is a clear illustration of the problem with many pleas for public funding. A small group of people will benefit powerfully from this spending. What about the rest of us? Government-funded arts supporters make the case that the cost of the funding is just 29 cents per person in Kansas. Who of us will get worked up over such a small cost?

    The Public Choice school of economics calls this the problem of concentrated benefits and dispersed costs. It’s a huge problem.

    Besides the financial aspects of government funding of arts, there’s the artistic issue itself. There are very important reasons to keep government away from art. Lawrence W. Reed wrote in What’s Wrong with Government Funding of the Arts? of the harm of turning over responsibility to the government for things we value and find worthwhile:

    I can think of an endless list of desirable, enriching things in life, of which very few carry an automatic tag that says, “Must be provided by taxes and politicians.” Such things include good books, nice lawns, nutritious food, and smiling faces. A rich culture consists, as you know, of so many good things that have nothing to do with government, and thank God they don’t. We should seek to nurture those things privately and voluntarily because “private” and “voluntary” are key indicators that people are awake to them and believe in them. The surest way I know to sap the vitality of almost any worthwhile endeavor is to send a message that says, “You can slack off of that; the government will now do it.” That sort of “flight from responsibility,” frankly, is at the source of many societal ills today: many people don’t take care of their parents in their old age because a federal program will do it; others have abandoned their children because until recent welfare reforms, they’d get a bigger check if they did.

    The boosters of government arts funding in Kansas make the case that arts are important. Therefore, they say, government must be involved.

    But actually, the opposite is true. The more important to our culture we believe the arts to be, the stronger the case for getting government out of its funding. Here’s why. In a statement opposing the elimination of the Kansas Arts Commission, former executive director Llewellyn Crain explained that “The Kansas Arts Commission provides valuable seed money that leverages private funds …”

    This “seed money” effect is precisely why government should not be funding arts. David Boaz explains:

    Defenders of arts funding seem blithely unaware of this danger when they praise the role of the national endowments as an imprimatur or seal of approval on artists and arts groups. Jane Alexander says, “The Federal role is small but very vital. We are a stimulus for leveraging state, local and private money. We are a linchpin for the puzzle of arts funding, a remarkably efficient way of stimulating private money.” Drama critic Robert Brustein asks, “How could the [National Endowment for the Arts] be ‘privatized’ and still retain its purpose as a funding agency functioning as a stamp of approval for deserving art?” … I suggest that that is just the kind of power no government in a free society should have.

    We give up a lot when we turn over this power to government bureaucrats and arts commission cronies. Again I turn to David Boaz, who in his book The Politics of Freedom: Taking on The Left, The Right and Threats to Our Liberties wrote this in a chapter titled “The Separation of Art and State”:

    It is precisely because art has power, because it deals with basic human truths, that it must be kept separate from government. Government, as I noted earlier, involves the organization of coercion. In a free society coercion should be reserved only for such essential functions of government as protecting rights and punishing criminals. People should not be forced to contribute money to artistic endeavors that they may not approve, nor should artists be forced to trim their sails to meet government standards.

    Government funding of anything involves government control. That insight, of course, is part of our folk wisdom: “He who pays the piper calls the tune.” “Who takes the king’s shilling sings the king’s song.”

    Around the country Kansas is being portrayed by government arts supporters as having taken a giant step backwards. For those who value the tenets of classical liberalism — liberty, individualism, skepticism about power, spontaneous order, free markets, limited government, and peace, to name a few — Kansas has moved forward, although I don’t imagine for a moment that all these attributes were motivators for Brownback’s decision. It’s sad and telling that arts supporters, who often claim to express the human soul and condition through their art — a viewpoint that ought to be sympathetic to classical liberalism — are not able to grasp the importance of this decision.

  • Kansas arts funding supporters are misinformed, or worse

    Supporters of Kansas government arts funding are either misinformed or lying about the facts they use to make their case for continuation of taxpayer support of the arts.

    Advocates of Kansas state government funding for arts make the case that if Governor Brownback succeeds in his plan to turn the Kansas Arts Commission into a non-profit organization, Kansas will be the only state without a government arts commission.

    A Wichita Eagle editorial referred to Kansas becoming the “only state in the country without at least a quasigovernmental arts agency,” although writer Rhonda Holman qualified her remarks with “according to arts advocates.”

    In another Wichita Eagle article, Joan Cole repeated this assertion when she wrote “I believe that it is crucial that the Kansas Arts Commission remain a state agency, as exists in every other state.” Cole is vice-chair of the Kansas arts commissioners.

    But Cole and government arts funding advocates are wrong. She and they are either misinformed, or they are lying to advance their cause.

    There is one state with a private arts commission or council, not a state agency. It’s listed on the Kansas Arts Commission page, if Commissioner Cole would care to read it: The Vermont Arts Council. On its website, we learn that “The Vermont Arts Council is the only designated state agency for the arts in the United States that is also a private, not-for-profit, 501(c)3, membership organization.”

    National Endowment for the Arts funding

    While I appreciate the KAC acknowledging what Cole and the Wichita Eagle will not, the KAC is still misinformed. In bold type, it states that if KAC becomes a nonprofit organization, “This entity will not be eligible for funds from The National Endowment of the Arts.”

    Bu the Vermont Arts council — not a state agency, but a nonprofit organization — states: “Our funding comes from the State of Vermont, the National Endowment for the Arts, memberships, and private contributions.”

    There’s another discrepancy.

    Suppose the State of Kansas provides no state funds to an arts agency, which is Brownback’s proposal. Will that rule out receiving NEA funding? Indications are that Kansas officials have asked NEA this question, and NEA hasn’t provided a reason as to why Kansas couldn’t continue to receive funding. Amanda Grosserode, a member of the Kansas House of Representatives, wrote in her newsletter that “enabling legislation for the NEA has also been thoroughly reviewed and no requirement for state funding to match federal funding has been found.”

    In the end, the issue of NEA funding may soon become moot. The National Endowment for the Arts is an example of a federal agency that may be eliminated, or very likely have its budget cut. So there may not be much federal arts funding to worry about.

    In the meantime, Kansans need to ask why government arts supporters are misinformed about simple facts, or they should ask why they are lying to Kansans. Government funding of the arts is bad for two reasons: economic and artistic. Misinformed or lying supporters aren’t helping their cause.

  • In Kansas, prosperity is achievable — if we’re willing to change

    The health of the Kansas economy — past and future — is the subject of some debate, with supporters of big government like the Wichita Eagle’s Rhonda Holman thanking outgoing Governor Mark Parkinson for his promotion of the increase in the statewide sales tax and other forms of economic interventionism. These policies, with the exception of the approval of the expansion of a coal-fired electrical plant, largely carried forward the programs of his predecessor Kathleen Sebelius. As a result, Kansas is in the situation that Dave Trabert of the Kansas Policy Institute describes below.

    Prosperity Is Achievable — If We’re Willing To Change

    By Dave Trabert, President, Kansas Policy Institute

    “The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” — Thomas Sowell, The Hoover Institution, Stanford University

    Sowell’s point about the scarcity of resources is essential to understanding economics, which may be as much about human behavior as supply, demand and other commonly-associated factors. Taxpayers have finite resources, so the more they must pay in taxes, the less they have to spend on goods and services. Accordingly, raising taxes always has a negative impact and especially so when taxes rise faster than the ability to pay.

    Unfortunately, the last ten years were defined by Sowell’s first law of politics. State and local governments in Kansas ignored the implications of finite resources and significantly increased the tax burden. From 2000 to 2009, state and local taxes increased 59 percent but personal income available to pay taxes only rose 44 percent. (The 2010 figures aren’t yet published but last year’s increase in sales, unemployment and property taxes certainly didn’t ease the burden.)

    Predictably, we suffered the consequences.

    Kansas had 18,800 fewer private sector jobs in 2009 than in 2000, a reduction of 1.7 percent. There was job growth prior to the recession but it was well below the national average. From 1998 to 2008 (Kansas employment peaked in April, 2008) private sector jobs increased 7.9 percent nationwide but only 5.2 percent in Kansas. And comparing the performance of low-burden and high-burden states (as ranked by the non-partisan Tax Foundation) makes the implications of defying Sowell’s first law of economics even more clear. The ten states with the highest combined state and local tax burden averaged 6.1 percent private sector job growth, whereas the ten states with the lowest burdens averaged a remarkable 16.5 percent gain.

    Domestic migration (U.S. residents moving in and out of states) is another good measure. Between 2000 and 2009, the ten states with the lowest tax burdens averaged a 3.8 percent population increase from domestic migration; the ten states with the highest burdens lost an average of 3.3 percent. Kansas lost 2.5 percent population from domestic migration.

    Jobs and people naturally gravitate toward low-burden states where they get to keep more of their hard-earned, finite resources. The next ten years must therefore be defined by Sowell’s first law of economics or Kansas will continue to suffer the consequences. In order to compete for jobs and attract new residents, the state and local tax burden must be reduced — and that means government must spend less.

    Fortunately, there are many ways to reduce spending and still provide essential services. Ineffective and unnecessary programs have to go and government must operate much more efficiently.

    Change won’t be easy but the choice is simple — reduce the tax burden and create an environment that attracts jobs and new taxpayers or preserve big government and continue to suffer the consequences.

  • Kansas and Wichita quick takes: Sunday December 12, 2010

    This week at Wichita City Council. This Tuesday, six speakers have signed up to appear on the public agenda. This is a portion of the meeting where citizens may speak on nearly any topic. Five are speaking on the city’s proposed trash plan, while one is speaking on a city-wide recycling project. … Approval of the city’s legislative agenda will be considered. Probably the greatest threat to economic freedom is this plank: “City of Wichita supports continued use of effective private-public partnerships and the appropriate intervention of state and local governments to spur economic development.” Also the city expresses support for highly subsidized, expensive, and little-used passenger rail service. … Also the council will consider amending the Wichita-Sedgwick County Comprehensive Plan to include Project Downtown: The Master Plan for Wichita. This is the plan that consulting firm Goody Clancy developed for the revitalization of downtown Wichita. The complete agenda report is at Wichita City Council, December 14, 2010.

    Sedgwick County Commission this week. On Wednesday the Sedgwick County Commission will vote on its legislative agenda. The agenda, or platform, is not law, but expresses the sentiment or desire of the commission. Last year Commissioner Karl Peterjohn shepherded through the requirement that voters approve all tax rate increases. This year the same language is proposed, but it may not pass. (The proposed language is this: “All local sales tax increases must be approved by voters under Kansas law. All property tax increases that raise the mill levy should also be required to receive voter approval.”) Some commissioners believe that voters elect them to use their judgment to make decisions on taxes, while other commissioners believe voters should have the final say on something as important as this. The agenda and backup material for Wednesday’s meeting is at Sedgwick County Commission, December 15, 2010.

    Wichita Eagle: Adopt downtown plan. Today’s Wichita Eagle editorial calls for passage of the downtown master plan recently developed by planning firm Goody Clancy. Rhonda Holman argues that a “busier, richer core” will benefit the town economically, adding that “downtown matters too much to be left to chance.” The idea that the core is essential to progress is taken as a given, but when downtown supporters are questioned, no evidence to support this nostrum is given. Also, this concept of “chance” that Holman doesn’t trust could also be described as a dynamic marketplace of ideas and capital, with many diverse players with dispersed knowledge acting to advance their own self-interest by creating things people will freely buy, all coordinated through the magic of the price system. What Wichita — with Holman’s support — plans to do is to replace this with the bureaucratic and political system.

    City planning by “Those Who Know Best.” “While the fixations of trendy planners might not register on the list of things that average Americans think about, these new utopian land-use ideals are filtering down into government agencies and city councils, and might eventually impact the way we all live.” Writing in the Orange County Register, Steven Greenhut quotes the definition of New Urbanism: “New Urbanism is the most important planning movement this century, and is about creating a better future for us all. It is an international movement to reform the design of the built environment, and is about raising our quality of life and standard of living by creating better places to live. New Urbanism is the revival of our lost art of place-making, and is essentially a reordering of the built environment into the form of complete cities, towns, villages and neighborhoods …” He warns: “Whenever some ideologue claims to offer the most important thing since sliced bread and then promises to reorder my life around it, we should all get nervous.” (The downtown Wichita planners do not use the term “New Urbanism,” but they share the same characteristics and goals.) And even more strongly: “The New Urbanists claim to want to give our lives meaning by creating superior urban forms of living, yet they miss the most meaningful things in life because they emphasize architecture over people. Like all totalitarians, they assume that what they prefer is so good and noble that they have the moral right to impose it on everybody else. The rest of us need to take notice now, so there is still time to oppose it.”

    Anderson appointment criticized. KU political science professor Burdett Loomis criticizes the appointment of Steven J. Anderson to be the new Kansas budget director, branding him an “ideologue” that has made “broadside attacks on public education.” Anderson believes in limited government, and his “attacks” on public — let’s be clear here — government schools are advocating school choice through vouchers. In states where vouchers are used, evidence is that public schools improve in response to the competition from private schools that parents can now actually afford. Plus, the state saves money, too. Loomis also criticizes Anderson for uncovering the large unspent fund balances in many Kansas agencies, balances that Loomis seems to doubt exist. Overall, Loomis presents an argument for the status quo in Kansas government, and the potential for change in the direction of restraining its growth has Loomis — in his own words — “concerned — worried, even.”