Voice For Liberty

Tag: Sue Schlapp

  • 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.

  • Wichita and its political class

    The discussion at yesterday’s Wichita City Council meeting provided an opportunity for citizens to discover the difference in the thinking of the political class and those who value limited government and capitalism.

    At issue was Mid-Continent Instruments, Inc., which asked the city for a forgivable loan of $10,000. It received the same last week from Sedgwick County. According to city documents, the State of Kansas through its Department of Commerce is also contributing $503,055 in forgivable loans, sales tax exemptions, training grants, and tax credits.

    At the city council meeting Clinton Coen, a young man who ran for city council earlier this year, spoke against this measure, which he called corporate welfare.

    In response to Coen, Council Member James Clendenin (district 3, south and southeast Wichita) asked if we should ignore companies that want to do business here, or should we allow them to leave? Implicit in the question is that the threat dangled by Mid-Continent is real: that unless the city gives them $10,000, they will expand somewhere else. How citizens and council members feel about this issue largely depends on their perceived genuineness of this threat.

    When Coen recommended that the city cut spending, Clendenin said “I can guarantee you, from what I have seen, this city government has cut a tremendous amount of spending.” When pressed by Coen for examples of cuts, he demurred. Clendenin also said that the $10,000 is needed to show the city’s commitment to the company.

    Perhaps coming to the rescue of her younger and less experienced colleague, Council Member Janet Miller asked City Manager Bob Layton how much has been cut from the budget, and he replied “we’ve cut over $20 million in the general fund over three years.”

    In saying that, Layton is using the language and mind-set of bureaucrats and politicians. In this world, it’s a cut if spending does not rise as fast as planned or hoped for. As you can see from the accompanying chart, Wichita general fund spending has not been cut in recent years. It has risen in each of the last three years, and plans are for it to keep rising.

    Wichita general fund spending

    This illustrates a divide between the thinking of the political class and regular people. Blurring the distinction between plans and reality lets politicians and bureaucrats present a fiscally responsible image — they cut the budget, after all — and increase spending at the same time. It’s a message that misinforms citizens about the important facts.

    Miller also praised the return on investment the city receives for its spending on economic development, citing Wichita State University Center for Economic Development and Business Research and the cost-benefit calculations it performs. These calculations take the cost of providing the incentives and compare it to the returns the city and other governmental entities receive.

    What is rarely mentioned, and what I think most people would be surprised to learn, is that the “returns” used in these calculations is manifested in the form of increased tax revenue. It’s not like in the private sector, where business firms attempt to increase their sales and profits by providing a product or service that people willingly buy. No, the city increases its revenue (we can’t call it profit) by collecting more taxes.

    It’s another difference between the political class and everyone else: The political class craves tax revenue.

    Aside from this, the cost-benefit calculations for the city don’t include the entire cost. The cost doesn’t include the county’s contribution, the majority of which comes from residents of its largest city, which is Wichita. Then, there’s the half-million in subsidy from the state, with a large portion of that paid for by the people of Wichita.

    But even if you believe these calculations, there’s the problem of right-sizing the investment. If an investment of $10,000 has such glowing returns — last week Sedgwick County Commissioner Jim Skelton called the decision a “no-brainer” — why can’t we invest more? If we really believe this investment is good, we should wonder why the city council and county commission are so timid.

    Since the applicant company is located in his district, Council Member Pete Meitzner (district 2, east Wichita), praised the company and the state’s incentives, and made a motion to approve the forgivable loan. All council members except Michael O’Donnell (district 4, south and southwest Wichita) voted yes.

    Going forward

    While the political class praises these subsidies and the companies that apply for them, not many are willing to confront the reality of the system we’re creating. Some, like O’Donnell and Sedgwick County Commissioner Richard Ranzau, have recognized that when government is seen as eager to grant these subsidies, it prompts other companies to apply. The lure of a subsidy may cause them to arrange their business affairs so as to conform — or appear to conform — to the guidelines government has for its various subsidy programs. Companies may do this without regard to underlying economic wisdom.

    We also need to recognize that besides simple greed for public money, businesses have another reason to apply for these subsidies: If a publicly-traded company doesn’t seek them, its shareholders would wonder why the company didn’t exercise its fiduciary duty to do so. But this just perpetuates the system, and so increasing amounts of economic development fall under the direction of government programs.

    While most people see this rise in corporate welfare as harmful — I call it a moral hazard — the political class is pleased with this arrangement. As Meitzner said in making his motion, he was proud that Wichita “won out” over the other city Mid-Continent Instruments considered moving to.

    Another harmful effect of these actions is to create a reputation for having an uncompetitive business environment. Not only must businesses of all types pay for the cost of these subsidies, some face direct competition by a government-subsidized competitor. This is the situation Wichita-area hotels face as a result of the city granting millions in subsidy to a hotel developer to build a Fairfield Inn downtown.

    Even those not in direct competition face increased costs as they attempt to hire labor, buy supplies, and seek access to capital in competition with government-subsidized firms. Could this uneven competitive landscape be a factor that business firms consider in deciding where to locate and invest?

    We can expect to see more government intervention in economic development and more corporate welfare. Former council member Sue Schlapp in April took a job with the Kansas Department of Commerce. Her job title is “senior constituent liaison,” which I think can be better described as “customer service agent for the corporate welfare state.” Her office is in Wichita city hall.

    Increasingly we see politicians and bureaucrats making decisions based on incorrect and misleading information, such as claiming that the city’s general fund budget has been cut when spending has increased. Sometimes they are fed incorrect information, as in the case of a presentation at Sedgwick County Commission that bordered on fraudulent.

    Sometimes, I think, officeholders just don’t care. It’s easiest to go along with the flow and not raise ripples. They participate in groundbreakings and get their photograph in the newspaper and on television that way. Which brings up an important question: why do none of our city’s mainstream media outlets report on these matters?

  • Kansas and Wichita quick takes: Sunday April 10, 2011

    Local elections, qualifications of Wichita’s elected officials. On today’s edition of the KAKE Television public affairs program This Week in Kansas, Wichita State University’s Ken Ciboski, Chapman Rackaway of Fort Hays State University and myself join host Tim Brown to discuss local elections in Kansas. Mention was made of a recent article I wrote that was critical of the educational attainment of some Wichita City Council members. See Education gap on Wichita City Council.

    Steineger, Kansas senator, to address Pachyderms. This Friday (April 15) Kansas Senator Chris Steineger will speak to the members and guests of the Wichita Pachyderm Club on the topic “Using Business Principles to Restructure State and Local Government For Long-Term Efficiency.” Steineger, of Kansas City, has served in the Kansas Senate since 1997 and in December switched his affiliation from the Democratic to Republican party. Steineger has voted with Republicans on fiscal issues for many years. Explaining why he switched parties, he wrote “I am a fiscal hawk who believes Americans have been borrowing, spending, and living beyond their means for too long.” Steineger has spoken at events organized by Americans for Prosperity.

    Washington Monument strategy. At about 11:00 pm Friday night, President Barack Obama spoke on television in front of a window where the Washington Monument could be seen in the background. He said that thanks to the just-struck agreement to continue funding the operations of the federal government, the monument would be open to visitors the next day. This is explicit use of the Washington Monument strategy, in which the response to any proposed cut or slowdown in the growth of government is illustrated in the most painful or visible way. As the Wikipedia entry states: “The most visible and most appreciated service that is provided by that entity is the first to be put on the chopping block.” … The president also said “I would not have made these cuts in better circumstances.”

    Soros conference online. This weekend’s conference of the Institute for New Economic thinking has quite a few papers and videos online at the conference’s website. Surprise: Keynes and his economic theories are revered. Attendees are treated to papers and presentations like this: “It is the interdependence between the rule of law and the production and distribution of goods and services that gives capitalism its unity. The autonomy of the economy is thus an illusion, as is its ability to self-regulate. And we are in the current mess because the scales have tipped slightly too far in favour of this illusion. This shift in the balance represents an inversion of values. Efficiency, it was believed, would be better served if the workings of governments were regulated more tightly (especially in Europe, although the theory originates in America) and if the markets were deregulated to a greater extent. The ingenuity of the financial markets initially, then their blind sightedness, did the rest.” … What?

    Economics in one lesson this Monday. On Monday (April 11), four videos based on Henry Hazlitt’s class work Economics in One Lesson will be shown in Wichita. The four topics included in Monday’s presentation will be The Lesson, The Broken Window, Public Works Means Taxes, and Credit Diverts Production. The event is Monday (April 11) 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.

    Wichita City Council this week. On Tuesday, the Wichita City Council considers only consent agenda items. Then, tributes — including video — to outgoing Council Members Paul Gray, Sue Schlapp, and Roger Smith and installation of new members. A new vice mayor will also be selected. … I don’t know if the city will be hosting a luncheon afterward. Two years ago a celebratory luncheon titled “Wichita City Council Changing of the Guard” cost over $1,000.

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

    Law, liberty, and the market symposium this week. This Friday (April 8) a symposium titled “Freedom, Liberty, and the Human Spirit” is offered in Wichita. The event is from 8:30 am to noon, in Alumni Auditorium in the Davis Administration Building on the campus of Friends University. The presenter is John R. Hays, Jr of Austin, Texas. The three sessions are titled Freedom’s not just another word for nothing left to lose; Who’s directing the show, and how can it possibly work without a director; and Markets, liberty, and economic progress. The event is free and open to the public, and attendees should reserve a seat by calling 316-295-5526. The sponsor for the symposium is the Fred C. and Mary R. Koch Foundation.

    Junket for Wichita lame ducks: the costs. Kim Hynes of KWCH Television reports on the expenses incurred by three lame duck Wichita City Council members to attend a training conference. It’s about $8,000. Particularly amusing — if it weren’t so sad — are the remarks made by Roger Smith as he attempts to justify attending a training conference when he — and the other two lame ducks Paul Gray and Sue Schlapp — will serve less than one month after returning from the conference. … It seems that some council members were not very careful with taxpayer funds when looking for airfares, as Gray spent $772.80 and Schlapp $688.80 on plane tickets. Several made the trip spending less than $400 on their ticket, and one for less than $300. Don’t we have a discount air carrier here in Wichita? … Deb Farris of KAKE Television reports, too. In her story Council Member Lavonta Williams and Mayor Carl Brewer attempt to justify the spending for the lame duck members.

  • Kansas and Wichita quick takes: Sunday March 13, 2011

    Wichita city council this week. There is no meeting of the Wichita City Council this week, as most members will be attending a meeting of the National League of Cities in Washington, DC. These conferences are designed to help council members be more effective. But for three of the council members that will be attending, their future service on the council is measured in days, not years. These three lame duck members — Sue Schlapp, Paul Gray, and Roger Smith — will be leaving the council in April when their terms end. Their participation in this conference, at taxpayer expense, is nothing more than a junket — for lame ducks.

    How attitudes can differ. At a recent forum of city council candidates, one candidate mentioned the five or six police officers conducting security screening of visitors seeking to enter Wichita city hall, recognizing that this doesn’t create a welcoming atmosphere for citizens. Vice Mayor Jeff Longwell said he thought the officers are “accommodating and welcoming.” It should be noted that Longwell carries a card that allows him to effortlessly enter city hall through turnstiles that bypass the screening that citizens endure. Further, it’s natural that the police officers are deferential to Longwell, just as most employees are to their bosses. … This attitude of Longwell is an example of just how removed elected officials can be from the citizens — and reality, too. Coupled with the closing of the city hall parking garage to citizens and the junket for lame ducks described above, the people of Wichita sense city hall elected officials and bureaucrats becoming increasingly removed from the concerns of the average person.

    Private property and the price system. In The Science of Success, Charles Koch succinctly explains the importance of private property and prices to market economies and prosperity, how government planning can’t benefit from these factors, and the tragedy of the commons: “Private property is essential for both a market economy and prosperity. There cannot be a market economy without private property, and a society without private property cannot have prosperity. To ensure ongoing innovation in satisfying people’s needs, there must be a robust and evolving system of private property rights. Without a market system based on private property, no one can know how to effectively allocate resources. This is because they lack the information that comes from market prices. Those prices depend on voluntary exchanges by owners of private property. Prices and the resulting profit and loss guide entrepreneurs toward satisfying the needs of consumers. Through this system, consumers are able to direct entrepreneurs in efficiently allocating resources through knowledge and incentives in a way no central authority can. … The biggest problems in society have occurred in those areas thought to be best controlled in common: the atmosphere, bodies of water, air, streets, the body politic and human virtue. They all reflect aspects of the ‘tragedy of the commons’ and function much better when methods are devised to give them characteristics of private property.”

    Toward a free market in education. From The Objective Standard: “More and more Americans are coming to recognize the superiority of private schools over government-run or ‘public’ schools. Accordingly, many Americans are looking for ways to transform our government-laden education system into a thriving free market. As the laws of economics dictate, and as the better economists have demonstrated, under a free market the quality of education would soar, the range of options would expand, competition would abound, and prices would plummet. The question is: How do we get there from here?” Read more at Toward a Free Market in Education: School Vouchers or Tax Credits?. … This week in Kansas a committee will hold a hearing on HB 2367, known as the Kansas Education Liberty Act. This bill would implement a system of tax credits to support school choice, much like explained in the article.

    Are lottery tickets like a state-owned casino? This week a committee in the Kansas House of Representatives will hear testimony regarding HB 2340, which would, according to its fiscal note, “exempt from the statewide smoking ban any bar that is authorized to sell lottery tickets under the Kansas Lottery Act.” The reasoning is that since the statewide smoking ban doesn’t apply to casinos because it would lessen revenue flowing to the state from gaming, the state ought to allow smoking where lottery tickets are sold, as they too generate revenue for the state.

    Money, Banking and the Federal Reserve. This month’s meeting of the Wichita chapter of Americans for Prosperity, Kansas features a DVD presentation from the Ludwig von Mises Institute titled “Money, Banking and the Federal Reserve.” About the presentation: “Thomas Jefferson and Andrew Jackson understood “The Monster.” But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates.” The event is Monday (March 14) 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. 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.

    Wichita-area legislators to meet public. Saturday (March 19th) members of the South-Central Kansas Legislative Delegation will meet with the public. The meeting will be at Derby City Hall, 611 Mulberry Road (click for map), starting at 9:00 am. Generally these meetings last for two hours. Then on April 23 — right before the “wrap-up session” — there will be another meeting at the Wichita State University Hughes Metropolitan Complex, 5015 E. 29th Street (at Oliver).

    Pompeo to meet with public. If you don’t get your fill of politics for the day after the meeting with state legislators, come meet with United States Representative Mike Pompeo, who is just completing two months in office. Pompeo will be holding a town hall meeting at Maize City Hall, 10100 W. Grady (click for map) starting at 1:00 pm on Saturday March 19th.

    Losing the brains race. Veronique de Rugy writing in Reason: “In November the Organization for Economic Cooperation and Development (OECD) released its Program for International Student Assessment scores, measuring educational achievement in 65 countries. The results are depressingly familiar: While students in many developed nations have been learning more and more over time, American 15-year-olds are stuck in the middle of the pack in many fundamental areas, including reading and math. Yet the United States is near the top in education spending.” … A solution is to introduce competition through markets in education: “Because of the lack of competition in the K–12 education system. Schooling in the United States is still based largely on residency; students remain tied to the neighborhood school regardless of how bad its performance may be. … With no need to convince students and parents to stay, schools in most districts lack the incentive to serve student needs or differentiate their product. To make matters worse, this lack of competition continues at the school level, where teacher hiring and firing decisions are stubbornly divorced from student performance, tied instead to funding levels and tenure.” The author notes that wealthy families already have school choice, as they can afford private schools or can afford to move to areas with public schools they think are better than the schools in most urban districts.

    Teachers unions explained. A supporter of the teachers unions is questioned about her belief that the unions need more money and power. In Kansas, the teachers union in the form of Kansas National Education Association (KNEA) and its affiliates consistently opposes any attempt at reform.

  • Cabela’s CID should not be approved in Wichita

    This week outdoor retailer Cabela’s will ask the Wichita City Council to create a Community Improvement District (CID) for its benefit. Creating the CID would allow Cabela’s — the only store in the proposed CID — to collect tax of an additional 1.2 cents per dollar sales from customers. Proceeds of one cent per dollar, less a handling fee, will be given to Cabela’s for its exclusive use, with 0.2 cents per dollar to be used for street and highway improvements near the proposed CID.

    CIDs should be opposed as they turn over tax policy to the private sector. We should look at taxation as a way for government to raise funds to pay for services that all people benefit from. An example is police and fire protection. Even people who are opposed to taxation rationalize paying taxes that way.

    But CIDs turn tax policy over to the private sector for personal benefit. The money is collected under the pretense of government authority, but it is collected for the exclusive benefit of the owners of property in the CID.

    This is perhaps the worst aspect of CIDs. Landlord and merchants already have a way to generate revenue from their customers under free exchange: through the prices posted or advertised for their products, plus consumers’ awareness of the sales tax rates that prevail in a state, county, and city.

    But the most consumers will never be aware that they paid an extra tax for the exclusive benefit of the CID. (A bill working its way through the Kansas legislature may require detailing of sales taxes on cash register receipts.)

    The Wichita city council had a chance to provide transparency to shoppers by requiring merchants in CIDs to post signs informing shoppers of the amount of extra tax to be changed in the store. But CID advocates got the city council to back down from that requirement. CID advocates know how powerful information is, and they along with their allies on the city council realized that signage with disclosure would harm CID merchants. Council Member Sue Schlapp succinctly summarized the subterfuge that must accompany the CID tax when she said: “This is very simple: If you vote to have the tool, and then you vote to put something in it that makes the tool useless, it’s not even any point in having the vote, in my opinion.” She voted against the signage requirement.

    We should ask Cabela’s why their business model is so flimsy that allowing them to collect one percent additional from their customers makes the difference between feasibility and not. Cabela’s is notorious throughout the country for seeking all sorts of corporate welfare, and the CID is not likely to be the only subsidy the company seeks to extract from the city, county, school district, and/or state. It’s all in their business plan, as revealed in the company’s 2004 IPO filing: “Historically, we have been able to negotiate economic development arrangements relating to the construction of a number of our new destination retail stores, including free land, monetary grants and the recapture of incremental sales, property or other taxes through economic development bonds, with many local and state governments.”

    Cabela’s and its supporters note that part of the 1.2 cents per dollar extra tax to be charged will be used to improve the intersection at Greenwich and K-96. The need of an upgrade there should be questioned. A Cabela’s spokesman told the Wichita Eagle that easy access to the store from the highway is needed because shoppers “come in with the big pickups, the Rvs.” We should note that there exists a full-service intersection with traffic signals less than one mile from the Cabela’s site. For half of the distance, Greenwich road is three lanes in each direction.

    The proposed intersection can be viewed as an unnecessary public improvement — a sweetener to the deal — that doesn’t cost Cabela’s anything. Interestingly, the city’s adopted capital improvement plan for 2009 to 2018 contains “private contributions of $8.4 million for an interchange at K-96 and Greenwich Road.”

    We also have to recognize the harmful effect of a subsidy granted to one company on its competitors. In this case, the city’s response is likely to be “let the competitors apply for a CID.” This pressure — where merchants of all types see other merchants benefiting from the state collecting taxes for their own benefit — is leading to “CID sprawl,” a term coined by Susan Estes. This accurately represents the natural result of the irresistible urge of the CID: charging your customers more and blaming it on the government.

    In particular, a major competitor to Cabela’s is Gander Mountain in the downtown WaterWalk development. This store benefits from taxpayer subsidy, and if it were to close, Wichita taxpayers would be liable for bond payments. Further, the store is considered an anchor for the struggling development. A closed store surely would not be good for WaterWalk’s future.

    Finally, Lynda Tyler, who is running for city council against current council member and Vice Mayor Jeff Longwell, wrote this letter which appeared in the Wichita Eagle. The questions she raises deserve answers.

    Is Cabela’s revenue estimate accurate?

    On the surface, the community improvement district for Cabela’s seems pretty simple: Those who shop at the store will help pay for the store and the K-96 on-ramps through an extra sales tax. But look at the numbers.

    The Eagle reported that the CID is expected to generate $17.2 million over 22 years (Feb. 16 Business Today). That means it would generate an average of $781,818 per year. At 1.2 cents per dollar of sales, the Wichita store would have to have yearly sales of $65.1 million per year.

    Cabela’s does not release its per store sales numbers, but according to an Aug. 23, 2007, Barron’s article, Cabela’s averaged about $348 in sales per square foot. On an 80,000-square-foot store, that would be $27.8 million of sales per year. That is less than half of the amount estimated for the Wichita store.

    If we issue general obligation bonds and build the ramps based on an inflated number, it would be the taxpayer who stands to lose. If the city also issues revenue bonds based on the inflated numbers, there could be a disaster, too, if the store does $26 million instead of $65 million in sales.

  • Kansas and Wichita quick takes: Friday February 18, 2011

    Wichita-area legislators to meet public. Tomorrow members of the South-Central Kansas Legislative Delegation will meet with the public. Tomorrow’s meeting is in the Sunflower Room of the Sedgwick County Extension Education Center, 21st and Tyler Rd, at 9:00 am. Generally these meetings last for two hours. The first of these meetings, two weeks ago, was focused more on hearing the concerns of citizens rather than allowing legislators to speak a lot. … Two other meetings have been scheduled. One is on March 19th — right before the legislature adjourns for its break — at Derby City Hall, 611 Mulberry Road. Then on April 23 — right before the “wrap-up session” — at the Wichita State University Hughes Metropolitan Complex, 5015 E. 29th Street (at Oliver).

    This Week in Kansas. On This Week in Kansas Joe Aistrup of Kansas State University and co-author of of the new book on Kansas politics Kansas Politics and Government: The Clash of Political Cultures, Richard Schrock of Emporia State University and Education Frontlines, and myself join host Tim Brown to discuss immigration and abortion bills in Kansas, concealed carry on college campus, and public schools medicating students. This Week in Kansas airs on KAKE-TV channel 10 at 9:00 am Sunday.

    Mandatory union political spending questioned. From Derrick Sontag of Americans for Prosperity, Kansas: “It was Thomas Jefferson who said, ‘To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors is sinful and tyrannical.’ On that note the Kansas Legislature is considering House Bill 2130, commonly referred to as ‘paycheck protection.’ Money derived from public employee union membership dues, for example, is often spent on functions outside of bargaining and administrative activity. That’s certainly the prerogative of a union but the problem is in some instances members may not choose to support union political activity, yet their money is going towards just that. … This is not a bill designed to eliminate unions. Rather it provides workers the ability to protect themselves from financially supporting political candidates they otherwise wouldn’t support. The unions that effectively present their case as to why political activity should occur will more than likely earn the financial support of a number of its members. Members of public employee unions should have the right to fully safeguard against their money being spent on political causes and candidates they don’t support.”

    Tom Woods: Rollback. This week I traveled to Kansas State University to attend a lecture by Thomas E. Woods, Jr.. His topic, mostly, was his new book Rollback: Repealing Big Government Before the Coming Fiscal Collapse. Of the book, Woods explains: “The book does two things. First, it lays bare the true fiscal position of the U.S. government, and shows why some kind of default is not merely possible but inevitable. … By far the more central part of the book is this: the critical first step for reversing this mess and checking the seemingly unstoppable federal advance is to stick a dagger through the heart of the myths by which government has secured the confidence and consent of the people. We know these myths by heart. Government acts on behalf of the public good. It keeps us safe. It protects us against monopolies. It provides indispensable services we could not provide for ourselves. Without it, America would be populated by illiterates, half of us would be dead from quack medicine or exploding consumer products, and the other half would lead a feudal existence under the iron fist of private firms that worked them to the bone for a dollar a week. Thus Americans tolerate much government predation because they have bought into the myth that state intervention may be an irritant, but the alternative of a free society would be far worse.”

    $100 million in cuts. It’s two years old, but this video places a proposal by President Barack Obama to cut $100 million from the federal budget in context. As the video explains, the scale of numbers so large — millions, billions, trillions — are often difficult to grasp. … Currently some Republicans in Congress are trying to cut $100 billion (1,000 times as much) from the federal budget, and it’s a difficult process. Even a cut of this size is not enough. As Tom Woods recently wrote in Rollback: Repealing Big Government Before the Coming Fiscal Collapse: “America is staring default in the face, and the boldest proposal we hear is for trimming $100 billion. That’s like taking three dollars off a trip to the moon.”

    Brownback plan ignored in Wichita. At this week’s meeting of the Wichita City Council I explained to council members a few points of Kansas Governor Sam Brownback’s economic development plan and how several actions the council was considering were directly in opposition to that plan. No council member asked a question. No Wichita news media reported on how the council ignored the governor’s plan. Especially troubling is how the Wichita Eagle had two reporters attending the meeting, yet there was no mention in that newspaper as to how the council voted several times against the principles of the Brownback plan. … Especially puzzling are the votes of Sue Schlapp, who held a leadership role in the Brownback campaign. Video and more is here.

    National League of Cities junket defended. Speaking of Schlapp and other city council members, the Wichita Eagle printed a letter from the Executive Director of the National League of Cities defending the value of the conference for city council members. Fair enough. But the problem is that Wichita is sending council members to the conference who will serve less than one month after the conference. These council members — Sue Schlapp, Paul Gray, and Roger Smith — ought to refrain from spending taxpayer money on this trip, which is a junket for lame ducks.

  • Kansas and Wichita quick takes: Wednesday February 9, 2011

    ACLU leader to speak in Wichita. On Friday (February 11) the speaker at the meeting of the Wichita Pachyderm Club will be Doug Bonney, who is Chief Council and Legal Director for the American Civil Liberties Union of Kansas and Western Missouri. His topic will be “150 Years of Kansas Liberty.” This speaking invitation has caused a bit of controversy, with some Pachyderm Club members — and non-members — criticizing the selection of a speaker whose group is associated with liberal political causes. But the invitation is in line with the club’s mission of political education, as stated on the national Pachyderm website: “To promote practical political education and the dissemination of information on our political system.” Previous speakers who don’t fit the club’s Republican Party affinity have included Democrats WSU political science professor Dr. Mel Kahn and Kansas school board member Dr. Walt Chappell, and Jack Cole of Law Enforcement Against Prohibition, whose mission is to end the war on drugs. All these speakers provided valuable information and education. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Information added to KansasOpenGov.org. KansasOpenGov.org, a government transparency initiative provided by the Kansas Policy Institute, has added new sections of data to its offerings. Added this week are checkbook and payroll registers for school districts in Topeka, Wichita, Great Bend, Colby, and Pittsburg. An interesting observation: Wichita has two union stewards on the payroll. The Wichita school district says the cost of compensation, benefits, etc. are reimbursed by the union, but while serving as union employees, they continue to build up seniority and earn credit towards their taxpayer-funded pensions. More information from KPI is at More districts added — taxpayers have new tools.

    “The Citizen” launches. This week a new print newspaper launched covering Kansas City and the states of Kansas and Missouri. It’s available in an online version, too. Named the citizen, it describes itself as “We’re a new monthly newspaper for the Kansas City metro area. Our first issue is available right now. Are we biased? Yes — just like every other newspaper and magazine. Are we different? Yes — because we’re not afraid to admit that things like a love of freedom and a belief in personal responsibility matter, and they inform what we choose to cover. We’re free to readers and ad-supported.”

    Economic development in Wichita explained. Maybe. You be the judge, as Wichita Mayor Carl Brewer and city council member Janet Miller explain. Video here.

    Limits on state agency advertising proposed. Kansas state treasurer Ron Estes has proposed a ban on appearances by elected officials in public service announcements using state resources 60 days before an election. This was an issue before last year’s election in November, mostly for the treasurer and secretary of state contests. Said Estes: “These public service announcements are intended to educate the citizens of Kansas on the programs available by the state to help serve their best interests. They are not intended to serve as a free campaign commercial for an incumbent before an election.” More information is here. After this issue is handled, I propose a next step: reigning in the agency websites, which functioned as campaign billboards for most elected state agency heads.

    Wichita lame ducks to take junket. As The Wichita Eagle’s Rhonda Holman explains, Wichita city council members with less than a month left to serve should not be traveling to conferences whose nominal mission is to help them be better council members. But Paul Gray, Sue Schlapp and Roger Smith will do just that, based on action taken in yesterday’s council meeting. As Holman writes: “All governing boards should curb junkets for members approaching the exits. Taxpayers should not have to subsidize the air travel, hotel rooms and networking and schmoozing of elected officials whose service is all but over.”

  • Kansas and Wichita quick takes: Tuesday January 18, 2011

    Education reformer to speak in Kansas. Next week the Kansas Policy Institute hosts education reform expert Dr. Matthew Ladner at several events in Kansas. In Wichita, he will speak at a free breakfast event on Tuesday January 25th. Information on that event and those in Topeka and Overland Park can be found at Kansas Policy Institute Upcoming Events. Ladner, of the Goldwater Institute, will speak on the topic “Good to Great — Lessons for Kansas from Florida’s education revolution.” Florida has been at the forefront of education reform in recent years, according to a study by EducationNext. Kansas, on the other hand, ranks very low in studies that look at education reform among the states. An invitation to the Wichita event is here. RSVPs are requested by January 20th.

    Wichita council candidate websites spotted. This is not a comprehensive list of candidates. Instead, these are city council candidates’ websites that have been noticed. District 2, currently held by Sue Schlapp, who may not run due to term limits: Steve Harris, Paul Savage, Charlie Stevens. … District 3, currently held by Roger Smith on an interim basis: Clinton Coen, James Clendenin…. District 4, currently held by Paul Gray, who may not run due to term limits: Joshua Blick, Michael O’Donnell. … District 5, currently held by Jeff Longwell: Jeff Longwell, Lynda Tyler.

    Schools’ funding claims questioned. “Much of the increase in state spending for schools since 2005 has accumulated in cash reserve funds rather than being spent in classrooms, according to an analysis of unencumbered cash reserves held by districts.” The Kansas Watchdog story by Paul Soutar continues: “Carryover cash in accessible district funds has increased by $306 million since 2005, the year the Kansas Supreme Court’s Montoy decision went into effect. Cash in these funds grew to about $743 in 2010, up $187 million since 2008. The carryover, or unencumbered cash, is money appropriated in previous years but not spent and with no claims against it for unpaid bills or other obligations. The cash accumulates in more than 30 distinct funds.” … The balances in these funds rise when money is not spent as fast as it is put in. School districts argue that they need some fund balances — and they do — but the growing balances, year after year for most districts, undermines the claims of school spending advocates.

    Kansas schools rated. “Kansas elementary and secondary schools rose one spot in a new national performance ranking, but are still below the U.S. average and many other states, the publishers of Education Week reported this week. The publication’s 15th annual ‘Quality Counts’ survey of how precollegiate schools are faring across the nation, ranks Kansas’ performance 37th in the nation, up one place from last year’s assessment, but still lower than the national average.” The Kansas reporter story mentions state school board member Walt Chappell and his concern that Kansas’ state-controlled student achievement scores — which show rapidly rising performance — may not be valid or reliable: “Even so, the Education Week rankings and others like them are important, said Walt Chappell, a state board of education member who in the past has expressed skepticism about claims of educational excellence that he believes don’t square with students’ college entrance exams or the state’s double digit high school dropout rates. At the very least, ‘here is another outside observer taking another look at our schools and telling us there is room for improvement,’ Chappell said.”

    Insurance costs on the rise in Kansas. From Kansas Reporter: “Health insurance premiums have gone up 5 to 7 percent in Kansas because of the federal Patient Affordable Care Act, an underwriters’ group official told lawmakers Thursday.” Mandates for increased coverage are seen as a cause.