Tag Archives: Wichita Chamber of Commerce

Wichita mayor promotes inaccurate picture of local economy

Wichita city leaders will latch onto any good news, no matter from how flimsy the source. But they ignore the news they don’t like, even though it may come from the U.S. Census Bureau, U.S. Bureau of Labor Statistics, or U.S. Bureau of Economic Analysis.

In his media briefing today, Wichita Mayor Jeff Longwell cited an article promoting the purportedly recession-proof and growing Wichita-area economy. 1

Based on the article 2 Longwell cited Wichita’s low unemployment rate and growing job count.

One quote from the article highlights Wichita’s low unemployment rate: “In 2018, the city saw unemployment fall to 3.5 percent — the lowest it’s been since May 1999.” Here’s some data regarding this claim:

In the table, we see that the unemployment rate (monthly average) for 2018 is nearly unchanged from 1999. Also nearly unchanged for these 19 years are the civilian labor force and number of jobs. Both values are slightly lower now. This is not “steady job growth.”

The article the mayor relies upon doesn’t reflect the economic reality in Wichita. It isn’t even close. Yet the mayor and other city officials have heavily promoted this article on social media.

Mayor Longwell also said, “We want to celebrate some of our successes because it has not been easy to get here and it’s been very intentional, and the things that we’re doing that help make Wichita a great place to live but more importantly a place where we can ride out a potential recession that may hit the rest of the country at some point in time and we think that’s a great place for us to be right now.”

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Regarding recessions and being “recession-proof:” The usual definition of a recession is two consecutive quarters of declining economic activity as measured by gross domestic product. For the nation, the last recession ended in 2009. For metropolitan areas like Wichita GDP data is not available quarterly. Annual data, however, tells us that since 2011 — well after the end of the last national recession — Wichita has had two separate years in which real GDP declined, 2013 and 2017. 3

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That’s like two recessions in Wichita at a time the national economy was growing. Is that recession-proof?

The mayor also presented a forecast that Wichita will add 2,700 jobs in 2019. The source of this forecast is the Center for Economic Development and Business Research at Wichita State University. 4

For the Wichita metropolitan area economy, adding 2,700 jobs in a year represents 0.9 percent job growth. Is that good? Nationally, the economy is expected to continue strong growth, although perhaps slightly slower than in 2018, in which nonfarm jobs grew by 1.8 percent. 5 Nationally, job growth is forecast at 1.7 percent for 2019. 6 Wichita’s forecast rate of 0.9 percent is 53 percent of the national rate — barely more than half.

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The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. 7 Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs. Yet, City of Wichita officials tout “steady job growth.”

It’s not only jobs and output. Personal income has grown only slowly. 8

The Wichita metropolitan area population is growing, but at a rate slower than most metro areas. From 2010 to 2017, the Wichita metro area grew in population by 2.3 percent. For all U.S. metro areas, the population growth was 6.5 percent. Of the 382 metropolitan areas, Wichita ranked 245. Considering just the change from 2016 to 2017, Wichita’s population grew by 0.1 percent, ranking 268 of the 382 metro areas. All U.S. metro areas grew by 0.8 percent over the same period.

For net domestic migration, Wichita experienced a loss of 2.9 percent of its population from 2010 to 2017. This ranked 295 among metro areas. For 2016 to 2017, Wichita lost 0.5 percent, ranking 293, nearly unchanged from the larger earlier period. 9

This slow population growth and out-migration is happening at the same time Wichita-area leaders tell us that we have great momentum going forward. But the data — domestic migration, employment, gross domestic product, and personal income — don’t support what our leaders tell us.


Notes

  1. City of Wichita Mayor Jeff Longwell’s Media Briefing January 31, 2019.
  2. Handy, Emily. The 7 Most Recession-Proof Cities in the US. Livability. January 22, 2019. Available at https://livability.com/topics/careers-opportunities/the-7-most-recession-proof-cities-in-the-us.
  3. U.S. Bureau of Economic Analysis, Total Real Gross Domestic Product for Wichita, KS (MSA) RGMP48620, retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/RGMP48620, January 31, 2019.
    The All industry total includes all Private industries and Government. Real GDP by metropolitan area is an inflation-adjusted measure of each metropolitan area’s gross product that is based on national prices for the goods and services produced within the metropolitan area.
    Also: U.S. Bureau of Economic Analysis, Real Gross Domestic Product GDPCA, retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/GDPCA, January 31, 2019.
  4. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision.
  5. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm.
  6. Yandle, Bruce. Block out the noise: Here’s the 2019 economic outlook. Available at https://www.washingtonexaminer.com/opinion/block-out-the-noise-heres-the-2019-economic-outlook.
  7. Weeks, Bob. Wichita employment to grow in 2019. Available at https://wichitaliberty.org/economics/wichita-employment-to-grow-in-2019/.
  8. “For all metropolitan areas in the United States, personal income rose by 4.5 percent. For the Wichita metro area, the increase was 2.3 percent. Of 383 metropolitan areas, Wichita’s growth rate was at position 342.’ Weeks, Bob. *Personal income in Wichita rises, but slowly. Available at https://wichitaliberty.org/economics/personal-income-in-wichita-rises-but-slowly/.
  9. Weeks, Bob. Wichita migration not improving. Available at https://wichitaliberty.org/economics/wichita-migration-not-improving/.

Wichita, a recession-proof city

Wichita city officials promote an article that presents an unrealistic portrayal of the local economy.

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An article promoting the Wichita economy 1 was noticed and promoted by official City of Wichita sources.

A tweet came from the official @CityofWichita Twitter account and reads “We have been named one of the top two recession-proof cities in the nation by @Livability. Wichita was praised for its ability to withstand turbulence in the national economy, steady job growth and the state’s low income-to-debt ratio.” 2

Those who retweeted this include the Wichita Regional Chamber of Commerce, Wichita Economic Dev (“Promoting, building and preserving Wichita’s economic strength to ensure Wichita is the preferred location for new, existing and expanding organizations.”), and Scot Rigby, who is who is Assistant City Manager, Director of Development Services for the City of Wichita. City officials also shared the article of the city’s Facebook page. 3 That post has been shared 169 times.

One quote from the article highlights Wichita’s low unemployment rate: “In 2018, the city saw unemployment fall to 3.5 percent — the lowest it’s been since May 1999.” Here’s some data regarding this claim:

In the table, we see that the unemployment rate (monthly average) for 2018 is nearly unchanged from 1999. Also nearly unchanged for these 19 years are the civilian labor force and number of jobs. Both values are slightly lower now. This is not “steady job growth,” as Wichita officials proclaim.

Regarding jobs, the article states: “In 2019, job growth is predicted to be positive and steady, and the city anticipates adding 2,700 new jobs.” As a source, the article cites an article from KSN News, which states: “For 2019, the job growth is expected to jump modestly by 0.9 percent, meaning 2,700 new jobs are predicted to come to the city.” 4

This is an accurate report of what the WSU forecast said, except it doesn’t come from the Wichita State University School of Business, as the article reports. Instead, the source is the Center for Economic Development and Business Research at Wichita State University. 5

Is 0.9 percent job growth good? Nationally, the economy is expected to continue strong growth, although perhaps slightly slower than in 2018. 6 Nationally, job growth is forecast at 1.7 percent for 2019. 7 Wichita’s forecast rate of 0.9 percent is 53 percent of the national rate.

The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs. Yet, City of Wichita officials tout “steady job growth.”

It’s not only employment that has been bad news. In 2017 the Wichita economy contracted. 8 Personal income has grown only slowly. 9

We really must wonder what Wichita officials are thinking and where they get their data.

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Notes

  1. Handy, Emily. The 7 Most Recession-Proof Cities in the US. Livability. January 22, 2019. Available at https://livability.com/topics/careers-opportunities/the-7-most-recession-proof-cities-in-the-us.
  2. Twitter, January 22, 2019. https://twitter.com/CityofWichita/status/1087832893274157059.
  3. https://www.facebook.com/cityofwichita/posts/2120892451290077.
  4. KSN News. WSU releases employment forecast for city, state. Available at https://www.ksn.com/news/local/wsu-releases-employment-forecast-for-city-state/1691787634.
  5. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision.
  6. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm.
  7. Yandle, Bruce. Block out the noise: Here’s the 2019 economic outlook. Available at https://www.washingtonexaminer.com/opinion/block-out-the-noise-heres-the-2019-economic-outlook.
  8. “For 2017, the Wichita metropolitan area GDP, in real dollars, fell by 1.4 percent. Revised statistics for 2016 indicate growth of 3.8 percent for that year. Last year BEA reported growth of -1.4 percent.” Weeks, Bob. Wichita economy shrinks, and a revision. Available at https://wichitaliberty.org/economics/wichita-economy-shrinks-and-revision/.
  9. “For all metropolitan areas in the United States, personal income rose by 4.5 percent. For the Wichita metro area, the increase was 2.3 percent. Of 383 metropolitan areas, Wichita’s growth rate was at position 342.’ Weeks, Bob. *Personal income in Wichita rises, but slowly. Available at https://wichitaliberty.org/economics/personal-income-in-wichita-rises-but-slowly/.

Wichita migration not improving

Data from the United States Census Bureau shows that the Wichita metropolitan area has lost many people to domestic migration, and the situation is not improving.

The Wichita metropolitan area population is growing, but at a rate slower than most metro areas. From 2010 to 2017, the Wichita metro area grew in population by 2.3 percent. For all U.S. metro areas, the population growth was 6.5 percent. Of the 382 metropolitan areas, Wichita ranked 245.

Considering just the change from 2016 to 2017, Wichita’s population grew by 0.1 percent, ranking 268 of the 382 metro areas. All U.S. metro areas grew by 0.8 percent over the same period.

For net domestic migration, Wichita experienced a loss of 2.9 percent of its population from 2010 to 2017. This ranked 295 among metro areas. For 2016 to 2017, Wichita lost 0.5 percent, ranking 293, nearly unchanged from the larger earlier period.

This slow population growth and out-migration is happening at the same time Wichita-area leaders tell us that we have great momentum going forward. But the data — domestic migration, employment, gross domestic product, and personal income — don’t support what our leaders tell us.

I get it: We want to be optimistic about our future. But a false optimism is dangerous. It makes us complacent, even proud, when actual accomplishments don’t support that. We may be led to believe that what our leaders are doing is working, when it isn’t working. That is dangerous.

Politicians and bureaucrats can’t be trusted to be frank and truthful about this. They want to be reelected and keep their jobs. Their actions let us know they value their jobs more than the prosperity of Wichitans.

Wichita employment to grow in 2019

Jobs are forecasted to grow in Wichita in 2019, but the forecasted rate is low.

The forecast for Wichita metro area employment in 2019 calls for modest growth of 0.9 percent, according to the Center for Economic Development and Business Research at Wichita State University. 1 This follows growth of 0.8 percent in 2018. 2

Nationally, the economy is expected to continue strong growth. 3

The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs.

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Of Wichita job growth in 2018, the CEDBR forecast notes, “This marked a return to the level of growth experienced in the Wichita area from 2012 to 2016, after experiencing a contraction in overall employment in 2017.” The average annual rate of job growth for those years in Wichita was 0.83 percent. It was 1.82 percent for the nation, which is 2.2 times the rate for Wichita.

CEDBR also notes, “Wichita’s unemployment rate declined throughout 2018 to a low of 3.5 percent in October 2018, the lowest unemployment rate for the area since 1999.” We should note that this decline is primarily due to a declining labor force in Wichita, rather than robust job growth.


Notes

  1. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision.
  2. Employment figures are not available for December 2018, so I use a crude estimate for that month.
  3. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm.

Sedgwick County income and poverty

Census data show Sedgwick County continuing to fall behind the nation in two key measures.

Data released today from the United States Census Bureau through the Small Area Income and Poverty Estimates (SAIPE) Program shows Sedgwick County median household income continues to fall farther behind the nation.

In 1989, median household income in Sedgwick County was greater than that for Kansas and the nation. In 2017, however, Sedgwick County has fallen behind both.

In 1989, the all-age poverty rate in Sedgwick County was less than the national rate, but now it is higher.

As can be seen in the nearby charts produced by the Census Bureau’s visualization tool, the trend in economic performance between Sedgwick County and the nation started diverging around the time of the last recession. As time passes, the gap between the two generally grows larger, with Sedgwick County falling farther behind.

Courtesy U.S. Census Bureau. Click for larger.
Courtesy U.S. Census Bureau. Click for larger.

Wichita employment, October 2018

For the Wichita metropolitan area in October 2018, jobs are up, the labor force is up, and the unemployment rate is down, compared to the same month one year ago. Seasonal data shows a slowdown in the rate of job growth.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a mostly improving employment situation for the Wichita Metropolitan Statistical Area.

Total nonfarm employment rose from 296,900 last October to 299,000 this October. That’s an increase of 2,100 jobs, or 0.7 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 1.7 percent.

The unemployment rate was 3.3 percent, down from 3.5 percent one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by 719 persons (0.2 percent) in October 2018 from September 2018, the number of unemployed persons rose by 283 (2.7 percent), and the unemployment rate was unchanged at 3.5 percent. The number of employed persons not working on farms rose to 298,219 in October from 297,783 the prior month, an increase of 436 persons, or 0.1 percent.

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Wichita employment, September 2018

For the Wichita metropolitan area in September 2018, jobs are up, the labor force is up, and the unemployment rate is down, compared to the same month one year ago.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area.

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The best numbers for Wichita are the total nonfarm employment series, which rose from 294,400 last September to 299,600 this September. That’s an increase of 5,200 jobs, or 1.8 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.)

The unemployment rate fell to 3.3 percent, down from 3.9 percent one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by 1,315 persons (0.4 percent) in September 2018 from August 2018, the number of unemployed persons fell by 398 (3.6 percent), and the unemployment rate fell to 3.5 percent from 3.6 percent. The number of employed persons not working on farms rose to 298,510 in September from 296,797 the prior month, an increase of 1,713 persons, or 0.6 percent.

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Click charts for larger versions.

Wichita employment, August 2018

For the Wichita metropolitan area in August 2018, jobs are up, the unemployment rate is down, and the labor force is smaller, compared to the same month one year ago.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area.

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The best numbers for Wichita are the total nonfarm employment series, which rose from 291,300 last August to 296,000 this July. That’s an increase of 4,700 jobs, or 1.6 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.)

The unemployment rate fell to 3.8 percent, down from 4.6 percent from a year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by five persons from July 2018, and the number of unemployed persons fell by 511 (4.7 percent), and the unemployment rate fell to 3.6 percent from 3.8 percent. The number of employed persons not on farms rose to 296,366 in August from 295,810 the prior month, an increase of 556 persons, or 0.2 percent.

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Click charts for larger versions.

Wichita, not that different

We have a lot of neat stuff in Wichita. Other cities do, too.

In New York Magazine, Oriana Schwindt writes in “The Unbearable Sameness of Cities: What my journey across the United States taught me about indie cafés and Ikea lights.”

I couldn’t stop noticing. I’d go on to see the same in Colorado Springs, in Fresno, in Indianapolis, in Oklahoma City, in Nashville.

And it wasn’t just the coffee shops — bars, restaurants, even the architecture of all the new housing going up in these cities looked and felt eerily familiar. Every time I walked into one of these places, my body would give an involuntary shudder. I would read over my notes for a city I’d visited months prior and find that several of my observations could apply easily to the one I was currently in.

In his commentary on this article, Aaron M. Renn wrote: “While every company tries its hardest to convince you of how much different and better it is than every other company in its industry, every city tries its hardest to convince you that it is exactly the same as every other city that’s conventionally considered cool.”

Later in the same piece, he wrote:

A challenge these places face is that the level of improvement locally has been so high, locals aren’t aware of how much the rest of the country has also improved. So they end up with an inflated sense of how much better they are doing versus the market. … People in these Midwest cities did not even know what was going on in the next city just 100 miles down the road. They were celebrating all these downtown condos being built. But the same condos were being built everywhere. … But even today people in most cities don’t really seem to get it that every city now has this stuff. Their city has dramatically improved relative to its own recent past, but it’s unclear how much it’s improved versus peers if at all.

Does this — the sameness of everywhere — apply to Wichita? Sure. Everyone thinks Wichita is different from everywhere else. We have a flag! A warehouse district! A Frank Lloyd Wright house! The NCAA basketball tournament! We’re (probably) getting a new baseball team and stadium!

We even have, as Schwindt does in cataloging what you’ll find in every single city mid-size and above, “Public murals that dare you to pass them without posing for a pic for the ‘gram.”

So many other places have this stuff, too.

It isn’t bad that Wichita has these things. But the danger, as Renn notes, is that these things don’t distinguish Wichita. As much as we wish otherwise, these things are probably not going to reverse the course of the declining Wichita economy. If you don’t believe the Wichita economy is declining, consider that our GDP in 2016 was smaller than in the year before. Wichita metro employment growth was nonexistent during 2017, meaning it’s unlikely that GDP grew by much. (In January 2017 total non-farm employment in the Wichita MSA was 295,000. In January 2018 it was the same. See chart here.)

Even things that might really have a positive effect on the economy, like the Wichita State University Innovation Campus, are far from unique to Wichita. But developments like this are pitched to Wichitans as things that will really put Wichita on the map. A prosperous future is assured, we are told.

It’s great to love your city. But we can’t afford to be lulled into complacency — a false recognition of achievement — when all the data says otherwise.

We need a higher measure of honesty from our leaders. It might start with the mayor and the chair of the county commission, but the mayor seems terribly misinformed, as is the commission chair. Institutions that we ought to respect, like the local Chamber of Commerce, have presided over failing economic development but refuse to accept responsibility or even to acknowledge the facts. Worse, the Chamber spends huge amounts of money on blatantly dishonest campaigns against those candidates that don’t support its programs. Those programs, by the way, haven’t worked, if the goal of the Chamber is to grow the Wichita economy.

Taxers prefer Hugh Nicks for Sedgwick County Commission

Those who supported higher sales taxes in Wichita also support one Sedgwick County Commission District 4 Republican candidate exclusively.

In 2014 the Wichita Metro Chamber of Commerce, now known as the Wichita Regional Chamber of Commerce, managed a campaign to persuade voters to institute a sales tax in the City of Wichita. The sales tax was to be one cent per dollar for five years, estimated to raise about $400 million in total. Of that, $250 million was to pay for enhancing the ASR water supply project, $80 million for job creation, and lesser amounts for bus transit and street repair.

The sales tax failed to pass, with 62 percent of voters saying no. Since then, the wisdom of voters in rejecting the tax has become evident. For example, the city has developed a plan to provide the same benefits for water supply for over $100 million less.

During the 2014 campaign the sales tax boosters raised campaign money through an organization named Yes Wichita Inc. Over one hundred people and companies contributed $321,527 in cash, and the Chamber of Commerce added $50,818 as an in-kind contribution.

These people and companies contributed money to persuade voters to raise taxes in Wichita. In some cases, a lot of money: $100,818 from the Wichita Chamber of Commerce, $40,000 from Intrust Bank, and $25,000 from Westar Energy.

Some of these people and companies have also contributed to a candidate for the Sedgwick County Commission District 4 Republican primary election. I examined campaign finance reports for matches. It isn’t an exact science. The data is not filed in a way that can be readily analyzed by a computer in a spreadsheet or database. Sometimes donations are made in a company name, and sometimes by owners or executives of the same company. There are spelling errors and variations in how company names are reported. So I may have failed to notice matches, and there is a small chance that I made erroneous matches.

Based on my research, I found that all the pro-tax people and companies who also contributed to Sedgwick County Commission District 4 Republican candidates had one thing in common: They contributed to Hugh Nicks exclusively. His opponent, Richard Ranzau, received no contributions from the pro-tax people and companies, based on my analysis.

Separately, the Wichita Regional Chamber of Commerce PAC has spent $45,148 on political candidates through August 1 of this year. Of that, $36,665 was spent in favor of one candidate, Hugh Nicks. That’s 81.2 percent spent on one candidate from an organization that contributed $100,818 towards higher taxes. (See Wichita Chamber PAC spends heavily for Hugh Nicks.)

What does this mean: Those who want higher sales taxes in Wichita contribute to Hugh Nicks for Sedgwick County Commission, and he alone? It is a coincidence, mere serendipity?

In his campaign literature, Hugh Nicks says “Taxes Are High Enough.”

But the evidence is clear: Those who want higher taxes prefer Hugh Nicks.

Following, a table showing the commonality between contributors to the Yes Wichita sales tax campaign in 2014 and Hugh Nicks. Click for a larger version.

Wichita Chamber PAC spends heavily for Hugh Nicks

The Wichita Regional Chamber of Commerce PAC dedicates a large portion of its spending on placing its crony in office.

In the contest for Sedgwick County Commission District 4, the Wichita Chamber of Commerce is spending heavily on one candidate.

Through its political action committee, the Chamber has spent $45,148 on political candidates through August 1 of this year. (There could be more spending before the August 7 primary. We don’t know.)

Of that, $36,665 was spent in favor of one candidate, Hugh Nicks. (The Chamber PAC’s finance report designates these expenditures as in favor of Nicks.)

That’s 81.2 percent spent on one candidate.

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Besides the spending on Nicks, the Chamber PAC sent money to legislative and statewide candidates. Most contributions were for $500, with the most notable exception being Governor Jeff Colyer at $2,000.

Really, the Chamber’s spending hasn’t been so much in favor of Hugh Nicks as it has been against his opponent Richard Ranzau.

And this campaigning by the chamber has been largely based on outright lies and absurd leaps of logic regarding Ranzau’s record. Their record is documented on the pages of Voice for Liberty. (Click here to read the articles.)

Instead of denouncing the lies and distortions told on his behalf by the Wichita Chamber PAC, candidate Hugh Nicks embraces the PAC’s endorsement.

We’d like to be able to trust the Wichita Chamber of Commerce. We want to trust our business and civic leaders. We want the Chamber and its surrogates and affiliates like Greater Wichita Partnership to succeed in building the Wichita economy.

But the Chamber is shaming itself in this campaign, and spending a lot of money to do that.

It would be one thing if the Chamber and its surrogates were successful in economic development efforts in the region. But if you’ve been following analyst James Chung — and it seems like everyone has — he’s delivered a sobering message: The Wichita economy has not been growing. “[Wichita has been] stuck in neutral for about three decades, with basically no growth, amidst the landscape of a growing U.S. economy,” he said. (In fact, in 2016 the Wichita economy shrank from the previous year, and numbers for 2017 don’t look much better.)

Chung says we need to change our ways. In his June visit he said, and the Chung Report wrote, “Every market signal points to the same conclusion: The manner in which Wichita is operating during this critical point in our history is just not working.”

When James Chung (and others) says our manner of operation is not working, it’s the Wichita Chamber of Commerce and its ecosystem that must assume a large portion of blame.

Having failed the people of Wichita, now we know just how much the Chamber wants to put Hugh Nicks on the Sedgwick County Commission.

Wichita employment, June 2018

For the Wichita metropolitan area in June 2018, jobs are up, the unemployment rate is down, and the labor force is smaller, compared to the same month one year ago.

Data released this week by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area.

Click for larger.

The best numbers for Wichita are the total nonfarm employment series, which rose from 294,900 last June to 297,900 this June. That’s an increase of 3,000 jobs, or 1.0 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.)

Of note, the same series of data for the nation rose from 147,578,000 to 150,057,000 over the same time, an increase of 1.7 percent.

The unemployment rate fell to 4.0 percent from a year ago. Part of the improvement in the unemployment rate is due to a slightly smaller labor force.

Considering seasonally adjusted data from the household survey, the labor force rose slightly from May 2018, and employment was unchanged. This is a slowdown of a positive trend in the previous three months.

Click charts for larger versions.

Wichita Chamber PAC spending on Hugh Nicks

The Wichita Regional Chamber of Commerce PAC dedicates a large portion of its spending on placing its crony in office.

There is an updated version of this containing data from new reports. Click here.

In the contest for Sedgwick County Commission District 4, the Wichita Chamber of Commerce is spending heavily on one candidate.

Through its political action committee, the Chamber has spent $39,925 on political candidates through July 26 of this year. (There could be more spending before the August 7 primary. We don’t know.)

Of that, $31,442 was spent in favor of one candidate, Hugh Nicks. (The Chamber PAC’s finance report designates these expenditures as in favor of Nicks.)

That’s 78.8 percent spent on one candidate.

Besides the spending on Nicks, the Chamber PAC sent money to legislative and statewide candidates. Most contributions were for $500, with the most notable exception being Governor Jeff Colyer at $2,000.

Really, the Chamber’s spending hasn’t been so much in favor of Hugh Nicks as it has been against his opponent Richard Ranzau.

And this campaigning by the chamber has been largely based on outright lies and farcical leaps of logic regarding Ranzau’s record. Their record is documented on the pages of Voice for Liberty.

We’d like to be able to trust the Wichita Chamber of Commerce. We want to trust our business and civic leaders. We want the Chamber and its surrogates and affiliates like Greater Wichita Partnership to succeed in building the Wichita economy.

But the Chamber is shaming itself in this campaign, and spending a lot of money to do that.

It would be one thing if the Chamber and its surrogates were successful in economic development efforts in the region. But if you’ve been following analyst James Chung — and it seems like everyone has — he’s delivered a sobering message: The Wichita economy has not been growing. “[Wichita has been] stuck in neutral for about three decades, with basically no growth, amidst the landscape of a growing U.S. economy,” he said. (In fact, in 2016 the Wichita economy shrank from the previous year, and numbers for 2017 don’t look much better.)

Chung says we need to change our ways. In his June visit he said, and the Chung Report wrote, “Every market signal points to the same conclusion: The manner in which Wichita is operating during this critical point in our history is just not working.”

When James Chung (and others) says our manner of operation is not working, it’s the Wichita Chamber of Commerce and its ecosystem that must assume a large portion of blame.

Having failed the people of Wichita, now we know just how much the Chamber wants to put Hugh Nicks on the Sedgwick County Commission.

Hugh Nicks on character and respect in Sedgwick County

In the campaign for a Sedgwick County Commission position, character is an issue.

On his Facebook campaign page for Sedgwick County Commission, candidate Hugh Nicks wrote: “This election is about numerous issues, with jobs being #1. But quality of character is a strong second.” 1

A value that Hugh Nicks promotes on his campaign website and in printed material is “Debate respectfully.” 2

It’s richly ironic that Nicks makes character an issue, because his campaigning is rife with outright lies and logic-twisting distortions about his opponent Richard Ranzau.

And if Hugh Nicks values respectful debate, he could elevate the discourse by stopping the lies.

This campaign has gone beyond the usual character-bashing and self-promotion we expect.

It’s not only Nicks himself that is campaigning dishonestly. The Wichita Regional Chamber of Commerce PAC is also lying and distorting.

It’s true that the Chamber PAC is campaigning for Nicks (and against Ranzau) independently. The PAC speaks for itself.

But if Hugh Nicks is aware of the dishonest campaigning by the Chamber PAC, there’s nothing to stop him from publicly denouncing and disavowing the Chamber. That would be a positive display of character, showing he values truth more than holding political office.

(If Nicks is not aware, or if he doesn’t realize the Chamber PAC’s campaigning is dishonest, that itself is a problem.)

Instead, Nicks embraces and promotes the Chamber PAC’s endorsement.

Hugh Nicks, should he lose the election next week, will fade from public attention. But the Wichita Regional Chamber of Commerce and its PAC won’t. The Chamber will still be involved in civic life and political campaigns.

That’s too bad. The people of Wichita want to trust their business and civic leaders. We want the Chamber and its surrogates and affiliates like Greater Wichita Partnership to succeed in shepherding the Wichita economy.

But the Chamber is shaming itself in this campaign.

The record of the Hugh Nicks campaign

Allegation: On July 23, 2018, Hugh Nicks wrote on his campaign’s Facebook page: “Richard Ranzau has spent the last 8 YEARS saying ‘NO’ to our safety. Voting against support for law enforcement.” An article from the Wichita Business Journal is then linked to. The subject of the article was the proposed WSU Law Enforcement Training Center.

Truth: The article reports that Richard Ranzau and all commissioners voted to defer a decision on the training center for one week. Then, Ranzau and all commissioners voted in favor of building the center. For more on this, see Hugh Nicks and the law enforcement training center.

Allegation: Hugh Nicks wrote this on his campaign’s Facebook page, referring to Richard Ranzau: “And even questioned the need for handicapped-accessible recreational options.”

Truth: Richard Ranzau asked questions about a proposed ADA-compliant fishing dock with a cost of $53,500. The next week commissioners were told that the dock cost was just $26,162, with other things like site prep, a sidewalk, and an access road adding up to $53,500. With this additional information, Ranzau and all commissioners approved the project. For more on this, see Hugh Nicks and the Sedgwick County fishing dock.

Allegation: In a campaign mailing paid for by the Wichita Regional Chamber of Commerce Political Action Committee, Richard Ranzau is criticized: “Ranzau also suggested that Wichita annex a large local job-creating aerospace employer to generate more tax revenue.”

Truth: This claim is based on a farcical interpretation of what the commissioner actually said. Richard Ranzau did not suggest that Wichita annex Spirit Aerosystems. He merely illustrated that property taxes within the City of Wichita are higher than those outside the city. For more on this, see Wichita Regional Chamber of Commerce PAC mailing.

Allegation. On his Facebook page, Hugh Nicks accuses Richard Ranzau of “Voting against our community’s children and babies.”

Truth: Regarding the WIC program, no needy women or children went without the ability to use this program. The commission voted to reduce spending on administrative costs. The commission does not have the authority to set qualifications for participating in the program, nor does the commission set the level of benefits, that is, the amount of money and services participants receive. The county merely administers the program according to federal and state guidelines. For more on this, see Hugh Nicks: Misinformed, or lying?

Allegation: On Facebook, Hugh Nicks wrote: “He was the ONLY ‘NO’ vote for funding the Greater Wichita Partnership.”

Truth: The article Nicks uses as evidence states: “Sedgwick County Commissioner Richard Ranzau took on the Greater Wichita Partnership on Wednesday, questioning why the public-private economic development coalition needs more county money to focus its strategy.” This extra funding was to pay for a consultant to focus on a strategic plan and regional strategy. It wasn’t for funding the basic operations of GWP.

Allegation: On Facebook, Hugh Nicks wrote: “He was the ONLY ‘NO’ vote for the county’s investment at Spirit AeroSystems to create 1,000 new high-paying jobs.”

Truth: In a television interview, Ranzau said that no economic development official could tell him that the incentives were necessary for the Spirit project to proceed in Wichita. One fellow commissioner said the incentive was needed to “show Spirit we care.”


Notes

  1. Nicks For County Commission Facebook page, July 27, 2018. Available at https://www.facebook.com/NicksForCountyCommission/posts/2027095350699179.
  2. http://www.nicks4commissioner.com/, viewed August 1, 2018.

WichitaLiberty.TV: Sedgwick County Commission District 4

In this episode of WichitaLiberty.TV: Candidates and parties involved in the Republican party primary for Sedgwick County Commission District 4. Efforts were made to reach both candidates plus representatives of the Wichita Regional Chamber of Commerce PAC, as it is advertising in this contest. Only candidate Richard Ranzau agreed to appear. View below, or click here to view at YouTube. Episode 203, broadcast July 28, 2018.

An endorsement from the Wichita Chamber of Commerce

When the Wichita Regional Chamber of Commerce Political Action Committee endorses a candidate, consider what that means.

If you’ve been following analyst James Chung — and it seems like everyone has — he’s delivered a sobering message: The Wichita economy has not been growing. “[Wichita has been] stuck in neutral for about three decades, with basically no growth, amidst the landscape of a growing U.S. economy,” he said. (In fact, in 2016 the Wichita economy shrank from the previous year, and numbers for 2017 don’t look much better.)

Chung says we need to change our ways. In his June visit he said, and the Chung Report wrote, “Every market signal points to the same conclusion: The manner in which Wichita is operating during this critical point in our history is just not working.”

So what needs to change? Chung won’t say, but here are two things:

First, there are some elected officials and bureaucrats who have presided over the stagnation of Wichita. These people need to go.

Second, there are also institutions that are problems, with one glaring example. In one way or another, the Wichita Regional Chamber of Commerce has taken the lead in economic development for many years. In recent years the Chamber ran Greater Wichita Economic Development Coalition. Now the effort has been split off to a non-profit corporation, the Greater Wichita Partnership.

That sounds good, but under the hood it’s the same leadership and the same methods, although with a few new hired hands.

So when James Chung (and others) says our manner of operation is not working, it’s the Wichita Chamber of Commerce and its ecosystem that must assume a large portion of blame.

Not only has the Wichita Chamber manner of operation not been working, its leadership hasn’t been working, either. In 2014 the Chamber showed charts of Wichita job growth as compared to the nation and other cities, and Wichita was near the bottom. The Chamber’s response was to advocate for a Wichita city sales tax, some to be used for economic development, but also for water supply enhancement, street repair, and bus transit improvement.

The Chamber managed the political campaign for the sales tax, and in November 2014, 62 percent of Wichita voters said no.

After this, what did the Chamber do? It had told Wichitans that an economic development fund fed by sales tax revenue was essential. Then, the sales tax vote failed. But that isn’t the only way to fund what the Chamber said we needed. The Chamber could have asked the Wichita city council to raise property taxes, and the council could have done that with a simple majority vote of its members. (Since then it has become more difficult, but still possible, to raise local property taxes.)

Or, the city could have raised franchise fees. These are like a sales tax added to utility bills. This could also have been accomplished with a simple majority vote of the council. The council could do it today, if its members wanted to.

None of these possibilities were pursued, at least to my knowledge. The Wichita Chamber of Commerce, after advocating for a sales tax it said was essential, gave up after defeat. It recommended that Wichitans vote to impose a sales tax themselves, but when it came to something it could have accomplished — new taxes through city council votes — the Chamber backed away.

The Chamber then formed the Greater Wichita Partnership. But many of the people who supported the Chamber’s sales tax are directing the operations of GWP, serving its strategic advisory team and the more-exclusive executive board.

This includes the president and CEO of the Wichita Chamber, who was also president during the sales tax campaign.

The Chamber endorsements

So when the Wichita Regional Chamber of Commerce PAC supports candidates, spends money on their behalf, and issues endorsements, what should voters think?

Voters should remember that the Wichita Chamber has presided over the wreckage of the Wichita economy, its leaders still call the shots, and still wants to raise taxes, I believe.

Plus, these people will not accept responsibility for the harm they have caused.

This is a shame, because we want to be proud of our civic leadership. We want to have faith in our elected officials and bureaucrats.

But that isn’t the case in Wichita. Keep this in mind when considering candidates endorsed by the Wichita Regional Chamber of Commerce PAC.

Wichita Regional Chamber of Commerce PAC mailing

In a campaign for Sedgwick County Commission, the Wichita Regional Chamber of Commerce PAC whips up a lie in order to criticize a candidate.

In a postcard paid for by the Wichita Regional Chamber of Commerce Political Action Committee, Richard Ranzau is criticized: “Ranzau also suggested that Wichita annex a large local job-creating aerospace employer to generate more tax revenue.”

This claim is based on a farcical interpretation of what the commissioner actually said.

Excerpt from Wichita Regional Chamber of Commerce PAC mailing. Click for larger.

The postcard references as the source of the remarks, “Sedgwick County Commissioners Meeting Transcript, 4/18/18.” If you look at this transcript, here’s what Ranzau said: 1

Additionally, Spirit is not in the city of Wichita. It’s an industrial district, this is an agreement between the city and Wichita. If they would be annexed by the City of Wichita, taxes would go up by over nine mills. Okay. So that saves them $532,000 a year over the 20 years of this evaluation, I mean that’s $10.6 million. I think we should get credit for doing that to help them out. Okay? There’s other things that are out there that haven’t been quantified, and there’s things like I’ve say at the state level that should still come to fruition later on.

The problem with the Wichita Chamber PAC’s claim is this: Ranzau did not suggest that Wichita annex Spirit. He merely illustrated that property taxes within the City of Wichita are higher than those outside the city.

(Here’s the data: The total mill levy in the industrial district where Spirit is currently located is 114.895. The new facility, in the Wichita city limits, has a mill levy of 124.244. So, within Wichita, the tax rate is higher by 9.349 mills. 2)

The Wichita Chamber Regional PAC has attributed to Ranzau something he did not say. The Chamber’s PAC’s claim is not even close to what Ranzau said.

The Wichita Regional Chamber of Commerce PAC is lying. It should retract the accusation and apologize not only to Richard Ranzau, but also to the voters of Sedgwick County. It is they who are harmed by lies such as this.

Hugh Nicks is Ranzau’s opponent in the August primary election. The Wichita Chamber PAC supports Nicks with mailings like this. Let’s ask Hugh Nicks if he supports the Wichita Regional Chamber PAC lying about Ranzau.


Notes

  1. Board of Sedgwick County Commissioners. Meeting detail, April 18, 2018. Available at https://sedgwickcounty.legistar.com/MeetingDetail.aspx?ID=602255&GUID=CCB97C42-38F7-421C-85C5-05676B65D89B.
  2. “The total mill levy in the industrial district is 114.895. The new facility, in the City limits, has a mill levy of 124.244. So, within the City, the tax rate is higher by 9.349 mills. Tax levies in the industrial district include County Fire, Township and South Central Kansas Library District. They total 23.318 mills. Tax levies in the City limits exclude these three and add 32.667 mills for the City of Wichita. Spirit’s tax savings due to the lower tax rate is approximately $532,000.” Email from Brent Shelton, Economic Development & Tax System Director, Sedgwick County Division of Finance. April 12, 2018.

Wichita in ‘Best Cities for Jobs 2018’

Wichita continues to decline in economic vitality, compared to other areas.

NewGeography.com is a joint venture of Joel Kotkin and Praxis Strategy Group. Its annual “Best Cities for Jobs” project ranks metropolitan areas according to growth in employment.

Of 422 metropolitan areas considered, Wichita ranked 383, dropping 28 spots since the previous year.

Among 100 medium size metropolitan areas, Wichita ranked 93, dropping 5 spots from the previous year.

NewGeography.com uses employment data from the United States Bureau of Labor Statistics from November 2006 to January 2018. 1 Last year’s publication contains a more detailed explanation of how the rankings capture current year-growth, mid-term growth, and momentum. 2

In the analysis for 2017, Wichita had also fallen in ranking.

Wichita has momentum, they say

Despite this news, Wichita leaders are in denial. Recently Greater Wichita Partnership president Jeff Fluhr told a group of young people this:

From the innovation campus at Wichita State University and development along the Arkansas River in downtown, including a new baseball stadium, to the conversations happening now about a new convention center and performing arts facility, Fluhr said the momentum is pushing to keep Wichita on par with the development of other communities around the country.

That development, which has in recent years expanded to incorporate the entire region, is a critical component to attracting and retaining talent — the exact kind of talent in the ICT Millennial Summit crowd. 3

In January Wichita Mayor Jeff Longwell said, “It’s hard to find a time when we’ve had more momentum.” 4

In March Sedgwick County Commissioner David Dennis penned a column for the Wichita Eagle praising the county’s efforts in economic development. 5 Dennis is also chair of the commission this year. In his column, the commissioner wrote: “Economic development is a key topic for the Board of County Commissioners and for me in particular. Right now we have a lot of momentum to make our community a more attractive place for people and businesses.”

At the same time, the Wichita Eagle editorialized: “Wichita’s economy struggled to rebound from the last recession, which held the city back. But there have been positive economic signs of late, including a renewed focus on innovation and regional cooperation. … There also is a sense of momentum about Wichita. Yes, challenges remain, but the city seems to have turned a corner, with even greater things ahead.”6

In announcing his candidacy for Sedgwick County Commission, Wichita city council member Wichita City Council Member Pete Meitzner (district 2, east Wichita) said, “We have enjoyed great progress and growth during my two terms as a City Council member and I plan to do my part to assure Sedgwick County is part of this continued success.” 7

Given all this, it ought to be easy to find economic data supporting momentum, progress, and growth. Besides the NewGeography.com report cited above, let’s look at some other indicators.

Personal income. For the Wichita metropolitan statistical area, personal income in 2016 rose slightly from the 2015 level, but is still below the 2014 level. In real (inflation-adjusted) dollars, personal income fell in 2016. 8

Personal Income Summary, Wichita, through 2016. Click for larger.

Population. In 2000 Wichita was the 80th largest metropolitan area. In 2017 its ranking had fallen to 89. See Wichita metropolitan area population in context for more on this topic.

Trends of business activity in downtown Wichita. Click for larger.
Downtown Wichita. There’s been a lot of investment in downtown Wichita, both public and private. But since 2008 the trend is fewer business establishments, fewer people working downtown, and lower earnings generated in downtown Wichita. Almost every year these numbers are lower than the year before. This is movement in the wrong direction, the opposite of progress. There may be good news in that the number of people living downtown may be rising, but business activity is declining. 9

Employment. While officials promote the low Wichita-area unemployment rate, there is an alternative interpretation. First, the good news: The unemployment rate for the Wichita metro area declined to 3.9 percent in March 2018, down from 4.2 percent in March 2017. The number of unemployed persons declined by 8.3 percent for the same period. 10

Is Wichita’s declining unemployment rate good news, or a byproduct of something else? The unemployment rate is the ratio of the number of unemployed persons to the labor force. While the number of unemployed persons fell, so too did the labor force. It declined by 3,367 persons over the year, while the number of unemployed persons fell by 1,056. This produces a lower unemployment rate, but a shrinking labor force is not the sign of a healthy economy.

A further indication of the health of the Wichita-area economy is the number of nonfarm jobs. This number declined by 1,200 from March 2017 to March 2018, a decline of 0.4 percent. This follows a decline of 0.7 percent from February 2017 to February 2018.

Of the metropolitan areas in the United States, BLS reports that 308 had over-the-year increases in nonfarm payroll employment, 72 (including Wichita) had decreases, and 8 had no change.

Growth in output. The worst news, however, is that the Wichita-area economy shrank from 2015 to 2016. In real (inflation-adjusted) dollars, the Wichita metropolitan area gross domestic product fell by 1.4 percent. For all metropolitan areas, GDP grew by 1.7 percent. Since 2001, GDP for all metropolitan areas grew by 29.3 percent, while Wichita had 12.3 percent growth. 11

Wichita MSA employment, annual change. Click for larger.
The GDP figures are for 2016, and figures for 2017 won’t be available until September. So what happened in 2017? Could 2017 be the genesis of momentum to drive our economy forward?

While GDP figures aren’t available, jobs numbers are. For the year 2016, total nonfarm employment in the Wichita metropolitan area grew by 0.62 percent. For 2017, the growth rate was 0.56 percent — a slowdown in the rate of job growth. These job growth figures are far below the rate for the nation, which were 1.79 and 1.58 percent respectively.

Annual change in job growth, Wichita and USA through 2017. Click for larger.

Furthermore, Wichita’s job growth rate in 2016 was lower than 2015’s rate of 1.07 percent. This is momentum in the wrong direction. Nearby charts illustrate. 12

What to do?

The failure of the Wichita-area economy to thrive is a tragedy. This is compounded by Wichita leaders failing to acknowledge this, at least publicly. While we expect people like the mayor, council members, and the chamber of commerce to be cheerleaders for our city, we must wonder: Do these people know the economic statistics, or do they choose to ignore or disbelieve them?

From private conversations with some of these leaders and others, I think it’s a mix of both. Some are simply uninformed, while others are deliberately distorting the truth about the Wichita economy for political or personal gain. The people who are uninformed or misinformed can be educated, but the liars are beyond rehabilitation and should be replaced.


Notes

  1. “The methodology for our 2018 ranking largely corresponds to that used in previous years. We seek to measure the robustness of metro areas’ growth both recently and over time, with some minor corrections to mitigate the volatility that the Great Recession has introduced into the earlier parts of the time series. The ranking is based on three-month rolling averages of the U.S. Bureau of Labor Statistics’ ‘state and area’ unadjusted employment data reported from November 2006 to January 2018.” 2018 How We Pick The Best Cities For Job Growth. Available at http://www.newgeography.com/content/005973-2018-how-we-pick-best-cities-job-growth.
  2. 2017 How We Pick The Best Cities For Job Growth. Available at http://www.newgeography.com/content/005618-2017-how-we-pick-best-cities-job-growth.
  3. Daniel McCoy. ICT Millennial Summit: Wichita is having a moment. Wichita Business Journal, November 30, 3017. Available at https://www.bizjournals.com/wichita/news/2017/11/30/ict-millennial-summit-wichita-is-having-a-moment.html.
  4. Heck, Josh. Emerging Leaders panel offers insight into eco-devo strategies. Available at https://www.bizjournals.com/wichita/news/2018/01/11/emerging-leaders-panel-offers-insight-into-eco.html.
  5. David Dennis. Sedgwick County part of drive to strengthen area workforce. Wichita Eagle, March 5, 2018. Available at http://www.kansas.com/opinion/opn-columns-blogs/article203559734.html.
  6. Wichita is moving forward. March 1, 2018. Available at http://www.kansas.com/opinion/editorials/article135573253.html.
  7. Bill Wilson. Wichita council member unveils bid for county commission. Wichita Business Journal, November 30, 3017. Available at https://www.bizjournals.com/wichita/news/2018/02/13/wichita-council-member-unveils-bid-for-county.html.
  8. Weeks, Bob. Wichita personal income up, a little. Available at https://wichitaliberty.org/wichita-government/wichita-personal-income-up-2016/.
  9. Weeks, Bob. Downtown Wichita business trends. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-business-trends/.
  10. Weeks, Bob. Wichita unemployment rate falls. Available at https://wichitaliberty.org/economics/wichita-unemployment-rate-falls-2018-03/.
  11. Weeks, Bob. Wichita economy shrinks. Available at https://wichitaliberty.org/economics/wichita-economy-shrinks/.
  12. In some presentations these figures may differ slightly due to data revisions and methods of aggregation. These differences are small and not material.

Liquor tax and the NCAA basketball tournament in Wichita

Liquor enforcement tax collections provide insight into the economic impact of hosting NCAA basketball tournament games in Wichita.

In Kansas, a tax is collected at liquor stores, grocery stores, and convenience stores on the sale of alcoholic beverages. The same tax is also collected on sales to clubs, drinking establishments, and caterers by distributors. 1 This tax is called the liquor enforcement tax. The rate has been 8 percent since 1983, when it was raised from 4 percent. 2

This tax provides some insight into the level of sales of alcoholic beverages at bars, clubs, and restaurants. It is not a perfect measurement of that, and perhaps not even a very good measurement, as it also includes sales at retail outlets for consumption offsite.

Nonetheless, it’s data we have. The Kansas Department of Revenue provides this data on a monthly basis for each county. With the touted influx of visitors for the NCAA men’s basketball tournament games in Wichita in May — along with the generalized party atmosphere — we might to expect to see these tax collections rise during March. Here’s what happened.

The liquor tax collections exhibit pronounced seasonality, so it’s useful to compare the same month of the previous year, as follows for Sedgwick County:

March 2017: $1,315,653
March 2018: $1,085,214
Change: -$230,439, a decline of 17.5 percent.

Not only was March 2018 lower than March 2017, it was lower than five of the previous six months of March.

The monthly average for the 12 months prior to March 2018 was $1,243,793. March 2018 didn’t meet that standard.

Kansas liquor enforcement tax collections are available in an interactive visualization here.

Liquor enforcement tax collections in Sedgwick County. Click for larger.


Notes

  1. “Liquor Enforcement or Sales Tax. The second level of taxation is the enforcement or sales tax, which is imposed on the gross receipts from the sale of liquor or CMB to consumers by retail liquor dealers and grocery and convenience stores; and to clubs, drinking establishments, and caterers by distributors.”
    Also: “Enforcement. Enforcement tax is an in-lieu-of sales tax imposed at the rate of 8 percent on the gross receipts of the sale of liquor to consumers and on the gross receipts from the sale of liquor and CMB to clubs, drinking establishments, and caterers by distributors.
    A consumer purchasing a $10 bottle of wine at a liquor store is going to pay 80 cents in enforcement tax.
    The club owner buying the case of light wine (who already had paid the 30 cents per gallon gallonage tax as part of his acquisition cost) also now would pay the 8 percent enforcement tax.”
    Kansas Legislative Research Department. Kansas Legislator Briefing Book 2017. Available at http://www.kslegresearch.org/KLRD-web/Publications/BriefingBook/2017Briefs/J-4-LiquorTaxes.pdf.
  2. Kansas Wine & Spirits Wholesalers Association. A Brief Review of Alcoholic Beverages in Kansas. Available at http://www.kwswa.org/KSBeverageAlcoholHistory.pdf.

Effect of NCAA basketball tournament on Wichita hotel tax revenues

Hotel tax collections provide an indication of the economic impact of hosting a major basketball tournament.

The Kansas Department of Revenue has released transient guest tax collections for March 2018. This is a tax added to hotel bills in addition to sales tax. The rate in Kansas is 6.00 percent, although some localities add additional tax to that.

For the city of Wichita, here are the collections:

March 2017: $538,539
March 2018: $543,844
Increase: $5,305 or 0.99 percent

With the hotel tax at 6.00 percent, that increase implies additional sales of $88,417 for the same month of the prior year. (The 2.75% tourism fee that is also added to Wichita hotel bills is paid directly to the city, so it does not appear in the statistics from the Kansas Department of Revenue.)

While an increase from the same month of the previous year is good, the average monthly hotel tax collections for the year before (March 2017 through February 2018) was $590,770.

So March 2018 didn’t exceed the average month of the previous year. It also didn’t exceed March 2016. Whatever was happening in Wichita during that month, the city generated $665,854 in hotel taxes.

Kansas transient guest tax collections are available in an interactive visualization here.

Wichita hotel tax collections. Click for larger.