Voice For Liberty

Tag: Wichita city council

  • Public sector employees doing well

    Below, Steven M. Greenhut tells how — despite a poor economy — public sector employees are doing quite well. I don’t think the problem is quite as bad here as it is in Greenhut’s home state of California. But just this week the Wichita City Council voted, in spite of a tight budget that has produced layoffs and outsourcing of city employees, a one-time payment of two percent of their annual salary to Wichita municipal court judges. This was made in lieu of merit pay.

    Greenhut’s recent book is Plunder!: How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation. I’m looking forward to reading it.

    The economy is struggling, the unemployment rate is high, and many Americans are struggling to pay the bills. But one class of Americans is doing quite well: government workers. Their pay levels are soaring, they enjoy unmatched benefits, and they remain largely immune from layoffs, except for some overly publicized cutbacks around the margins.

    As I document in my new book, Plunder!, government employees of all stripes have manipulated the system to spike their pensions. The old deal seemed fair: public employees would earn lower salaries than Americans working in the private sector, but would receive a somewhat better retirement and more days off. Now, public employees get higher average pay, far higher benefits, and many more days off and other fringe benefits. They have also obtained greatly reduced work schedules, thus limiting public services even as pay and benefits shoot ever higher. The new deal is starting to raise eyebrows, thanks to efforts by groups such as the California Foundation for Fiscal Responsibility, which publishes the $100,000 Club, a list of thousands of California government retirees with six-figure, taxpayer-guaranteed incomes.

    The story doesn’t end with the imbalance in pay and benefits. Government workers also enjoy absurd protections. The Los Angeles Times published a recent series about the city’s public school district, which doesn’t even try to fire incompetent teachers and is seldom able to get rid of those credibly accused of misconduct or abuse.
    The real scandal is a two-tier society where government workers enjoy benefits far in excess of those for whom they supposedly work. It’s past time to start cleaning up the mess by reforming retirement systems and limiting the public unions’ power.

    Steven M. Greenhut is director of the Investigative Journalism Center and News Bureau at the Pacific Research Institute. He is also a Goldwater Institute Senior Fellow.

  • Wichita Municipal Court judges should be elected

    At today’s meeting of the Wichita City Council, John Todd makes the case that Wichita Municipal Court judges should be elected by the people rather than appointed by the council. Before John spoke, there was some confusion on the bench as to whether public comment would be taken for this item.

    Before you appoint Municipal Court Judges today, I request that you give consideration to changing the City’s Charter Ordinance in a manner that would require the election of Wichita Municipal Court Judges by the Citizens of Wichita.

    During last spring’s municipal elections the issue of the election of Municipal Court Judges was brought up with no objection to it being raised by any of the candidates. And, the citizens I have visited with about this issue are very supportive of the election process that clearly provides for a clear-cut separation of powers between the legislative branch, the City Council, and the judicial branch, the Municipal Court.

    As you are probably aware, Municipal Court Judges have more power over citizens than most people know about. The court can levy hundreds of dollars in fines against citizens, and can send them to jail for up to one year, and surprisingly, there is no stenographic record of the court proceedings.

    The perception of a free and independent judiciary starting at the Municipal Court level is essential to providing citizens the assurance that they have a place where they can go to protect their rights and be assured they will receive the due process of law that they expect under our system of government.

    The election of Municipal Court judges by the people would certainly help insure the people that their judiciary is free and independent of the influences of the legislative and executive branches of city government.

    The election of Municipal Court Judges is the right thing to do. It returns control of the Municipal Courts to the people and makes the Judiciary branch of city government accountable to them. I ask you to initiate legislation today that would allow the citizens of Wichita to elect their Municipal Court Judges. I believe the election of Municipal Court judges is a process that can be achieved by Charter Ordinance under the City’s home rule powers.

  • Oklahoma City sales tax passes; model for Wichita

    On Tuesday, voters in Oklahoma City passed a new sales tax to fund downtown improvements. It passed by a vote of 54 percent to 46 percent.

    The tax will be used to fund improvements such as a 70-acre downtown park ($130 million), a new convention center ($280 million), mass transit initiatives ($130 million), health and wellness aquatic centers for senior citizens ($50 million), and other things.

    The tax was promoted as not really a “new” tax, as it is timed to replace an existing tax of the same amount that is expiring.

    Wichita’s plans for downtown revitalization will need some sort of funding, and the Oklahoma City tax — its name is MAPS 3 — has been promoted by John Rolfe, President and CEO of Go Wichita Convention & Visitors Bureau, as “interesting.” Other downtown leaders have spoken favorably of a sales tax for funding downtown improvements.

    Wichitans can count on a similar sales tax being proposed for whatever projects the year-long downtown planning process calls for. Oklahoma City’s experience will surely be used to promote a similar tax in Wichita.

  • Wichita city council discusses economic development incentives

    Last week a Wichita company that’s expanding made an application for industrial revenue bonds and accompanying property tax abatements. The company’s application wasn’t timely, and for that reason is not likely to receive the requested help. The discussion surrounding the item provides insight into city council members’ ideas about the role of the city in economic development.

    Industrial revenue bonds, or IRBs, are not a loan from the city, and the city does not make any guarantee that the bonds will be repaid. The primary benefit to the recipient of IRBs is that the property purchased with the bonds will generally be exempt, in whole or in part, from property taxes for some period. Also, the company may not have to pay sales tax on the property purchased with the bonds.

    The agenda report for this item is at Request for Letter of Intent for Industrial Revenue Bonds, Michelle Becker, Inc. (District V).

    In introducing the item, the city’s economic development chief Allen Bell said that because the project has already started construction, it falls outside the guidelines for the city’s IRB program. The construction is 85% to 90% complete.

    A question by council member Sue Schlapp established that if the company had made application before the building was started, the application would have been approved as routine.

    She also asked that if we approve this action today, will we have to go back and look at other businesses that are in the same place? Wichita City Manager Bob Layton asked that the council establish guidelines that if a project has already started, a project is not eligible for this type of assistance.

    There was also some discussion about whether this company would move away from Wichita if the tax abatement was not granted. Since the building is already under construction, Bell said this is evidence that the company is intending to stay in Wichita. “It’s difficult to think of an incentive as something that’s given after the fact,” he said.

    A question by council member Paul Gray established that there have not been many cases where companies have asked for tax breaks retroactively, according to Bell’s answer. Bell also said that he didn’t think that approving the current application would spur an avalanche of similar requests.

    Gray also noted that we can create economic disparities between companies by granting incentives, so how do we justify doing this? Bell’s answer was that an important consideration is bringing business from out of state instead of taking business away from other local companies.

    Layton added that an important consideration is whether the project can more forward without public assistance.

    Council member Jeff Longwell remarked that “we really don’t have that many tools in our toolbox for emerging businesses.” Bell agreed.

    In later discussion, Longwell said “I hate to penalize this emerging company … I should have got them in on this process long before we did and we wouldn’t even be having this argument. So I suppose I am at fault in part of this delay.”

    Gray said that because we’re not competing against another community for this company — the normal use of incentives — he can’t support this application.

    Council member Janet Miller said that the appropriate time to look at incentives is, as the manager said, when we think a company can’t move forward without the incentive. She also noted that we’re being asked to approve an action for which we’re going to soon have a policy against.

    Schlapp, indicating a desire to approve the incentive, asked for justification: “We have a company here that doesn’t need an incentive but wants an incentive … can somebody justify that?”

    Longwell said it’s not as simple as a need and a want. He said the applicant is a smart, well-managed company. But we shouldn’t use the qualifier of helping only the companies that couldn’t succeed without the city’s help. “Why not reward some some of those companies that are very well managed and run smart and have the ability to grow even more with our help than without it?” Again he referred to the lack of tools for emerging businesses. “We ought to be helping these types of companies that we think can truly prosper even more with our help … I think they fully warrant our help because they’re successful …”

    Mayor Carl Brewer said that we have a proven track record of trying to help businesses and to get businesses to come to our area. He agreed with Longwell in that we need additional tools to use for economic development, as other communities have been competing successfully. We don’t have the same tools that other communities have, he said.

    Longwell suggested the city visit with the applicant about her financing. He made a motion to defer this item. Council member Williams asked about the impending completion of the project, since it’s scheduled to be completed at the end of December. The answer from the manager was that with regard to IRBs, the project would not be eligible after it’s complete. The motion passed with Council member and Vice-mayor Jim Skelton opposed.

    Analysis

    What’s striking about the discussion are these two things:

    First, many council members and some city staff believe that the city doesn’t have enough “tools in the toolbox” for shoveling incentives on companies for economic development purposes. Evidently the ability to grant exemptions from property taxation — and not only the city’s property tax levy, but also that of the county, school district, and state — along with the ability to make outright gifts of money is not enough.

    Second, many council members and some city staff believe that they can determine which companies are worthy of incentives.

    According to city manager Layton, the city is going to revisit its economic development policies soon. This would be a good time for Wichita to come up with ideas that would benefit all companies, not only those that fall within guidelines that the council or city staff creates. My suggestion, explained in Wichita universal tax exemption could propel growth, is to give all new capital investment a tax abatement for a period of five years.

    At the state level, there has been some discussion about the costs of tax abatements or exemptions. In a recent debate in Wichita, Kansas Secretary of Revenue Joan Wagnon used the term “tax expenditures” to describe these giveaways of the state’s income. The idea is that if the state (or other governmental body) didn’t create tax abatements or exemptions, revenue to the government would be higher. Her debate opponent Alan Cobb said it’s wrong to term these tax giveaways as “expenditures,” as the money belongs to the people first, a position I agree with.

    There is the related issue of these tax abatements or exemptions really being appropriations of money that, if processed through the normal process of legislative hearings, etc., would be noticed for what they are. In Wichita city government we don’t have hearings quite like the Kansas Legislature, but the idea is the same: if this company had asked for a grant from the city for $22,253 (that’s the value of the first year of the requested tax abatement, with a similar figure for the following nine years, less $2,500 a year to the city for administrative fees), citizens — news media too — would quite likely look at this matter differently. Presented as industrial revenue bonds — just what are those anyway? — and a tax abatement, well, it all seems so … so innocent, so municipal.

    A few more observations:

    Council member Jeff Longwell’s confession of being at fault for the lateness of this company’s application should be remembered by voters in the next election, should he decide to seek to retain his current post, or — as some have told me — he seeks the mayorship of the city.

    There’s also Longwell’s use of the term “reward,” in that the city should “reward some some of those companies that are very well managed and run smart.” I’d like to remind him and the rest of the council that the free enterprise system contains a very powerful reward mechanism for companies that do well: profit. That alone is sufficient.

    Coverage from the Wichita Eagle is at Wichita City Council puts off tax breaks for accounting firm.

  • Lord’s Diner debate focused on wrong issues

    At today’s meeting of the Wichita City Council, an item no longer on the agenda still caused some controversy.

    The Lord’s Diner, a charitable organization, had proposed buying a city-owned building at 21st and Grove and making a second site for their effort to feed Wichita’s poor.

    Opposition from community groups, however, drove the Lord’s Diner to withdraw its plans.

    In today’s meeting, council members Sue Schlapp and Paul Gray spoke in favor of the Lord’s Diner’s plans on the basis of its charitable and humanitarian activity.

    Council member Lavonta Williams, who represents the district where the proposed site exists, responded without mentioning the community’s real objection to the plan: they don’t want the type of people the Lord’s Diner serves congregating in the vicinity of the proposed location.

    Mayor Carl Brewer spoke of how this has been a complicated issue. Council members must do the right thing, he said, which may not be the same as what the community wants. He said he recognizes the need to feed everyone, and there are people all over town that need help: “These are people who cannot help themselves.”

    He said that people in key leadership positions said things that were “very bitter, very venomous,” and that citizens should “charge it to the mind and not the heart,” adding that “some people take desperate measures to be able to get what they want.” He asked that citizens not judge an entire community by the actions of a few.

    The mayor said he sees an opportunity, and he urged everyone to work together.

    What hasn’t been mentioned in the debate over this matter is that the proposal by the Lord’s Diner is a lawful use of the property. If we want to have a system that respects private property rights, that’s the only thing that matters.

    Wichita Eagle reporting is at City takes Lord’s Diner proposal off table after diner pulls its offer. An informative blog post by Brent Wistrom is at Council members vent as Lord’s Diner plan sinks.

  • Carlos Mayans addresses state and local issues

    Last Friday immediate past Wichita mayor Carlos Mayans addressed members and guests of the Wichita Pachyderm Club.

    Speaking of his experience as a member of the Kansas House of Representatives, Mayans said that Kansas state spending must be brought under control. Having served under governors from both parties, he said that Republicans spend as much as Democrats. Some people change after they get elected, he said, acting differently in office from how they campaigned. It’s important to hold these people accountable.

    Turning to Medicaid, Mayans said the federal government requires a certain minimum level of coverage. Then, there are 33 optional things that states may decide to cover. Kansas offers 23 of these. Further, the health care bill in the Senate will expand the number of people that are eligible for Medicaid.

    On local issues, the City of Wichita has some challenges ahead, he said. Our local governments are spending too much money with very little accountability to the taxpayers and that tax increases will be suggested to balance the budget.

    Mayans corrected the record over allegations that his actions drove away a Bass Pro Shops store from the struggling WaterWalk development in downtown Wichita. Mayans said that he cut $3 million from a $33 million project: $2 million from the parking garage, and $1 million from the canal. The cuts to the canal made it not as deep and enabled it to be heated in winter, he said. Nothing else was cut by his administration, but now the project is $42 million. Noting the current state of the project, Mayans asked: “And has anything else happened? No.”

    He also reminded the audience that council members Paul Gray, Sue Schlapp, and now-mayor Carl Brewer voted for this plan.

    Mayans said he can understand WaterWalk developer Jack DeBoer’s frustration. At one time DeBoer wanted to tear down the Wichita Boat House to make room for new development. Mayans advised his that the people of Wichita would not go along with this plan, but DeBoer wouldn’t listen.

    There’s also been talk of shifting the plan for WaterWalk to a “civic center,” to include non-profit organizations and museums. Mayans said this would be contrary to the original intent of the city and its representation to taxpayers when the city acquired the land.

    Furthermore, he said that the financing of WaterWalk, because it is based on tax increment financing and sales tax anticipation districts, requires property and sales taxes to be paid in order to fulfill the bonds. Non-profit organizations don’t pay these taxes, so the result would be a continual need for subsidy by the city.

    In answering a question, Mayans said that private developers from out of state have looked at making their own, private investment in downtown Wichita. But the city bureaucracy rejected this effort. Mayans also mentioned the The Cordish Companies of Baltimore (developers of the Power & Light District in Kansas City) as possible development partners in WaterWalk. But Mayans said that Cordish doesn’t like to be involved in projects where the public sector is involved, as there is too much red tape. Also, WaterWalk developers didn’t want outsiders being involved.

    Regarding city council members and the part-time nature of the job, Mayans said that here are at least one or two council members who don’t show up until the day of the council meeting. Then they pick up a packet that may be five hundred pages long.

    On Wichita’s future water needs, Mayans said that Equus Beds Aquifer Storage and Recovery project currently under development has never been tried anywhere else. He said that Wichita should build another lake instead. Wichita sells water at high rates to surrounding cities, he said, and uses this to curtail economic development in other communities.

  • City of Wichita and the Kansas Open Records Act

    At a meeting of the Wichita City Council, it becomes clear that either the city doesn’t understand the meaning of the Kansas Open Records Act, or it has no intention of following it.

  • City council members on downtown Wichita revitalization

    At the meeting of the Wichita City Council last week, several city council members gave their reasons for supporting the planning for the revitalization of downtown Wichita. It’s worthwhile to take a look at two members and their remarks.

    Council member Janet Miller spoke first. (Click on Wichita downtown planning proposal: Janet Miller for video.)

    “We’ve given the free market a chance in downtown,” Miller said. There’s a few things we can disagree with in this statement. First, the market downtown is not very “free.” There are TIF districts overlaying much of downtown, for example. These TIF districts are an example of government interventionism in the extreme, something quite different from free markets.

    Besides this, Miller frames the decision incorrectly. To her, downtown redevelopment is something that must happen, and since people haven’t responded to this decree very well, that’s a failure of the market. But the correct decision point is when people and business decide to be downtown or somewhere else. That’s where we see free markets in action and the decisions people make. Because they make decisions other than what Miller wants them to make, that doesn’t mean that free markets have failed. Instead, people have simply made a decision other than what she believes is the correct decision.

    She also said this: “Without incentives, the free market just doesn’t work.” To which I say: “Where there are incentives, markets are not free.” That’s government interventionism. It’s axiomatic.

    Then, there’s this quote from Miller: “Just like the human body cannot succeed with rot at its core, neither can a city be healthy with rot at its core.” Variations on this nostrum are constantly repeated by government-subsidized downtown revitalization supporters. This analogy is meaningless. I’ve asked the city to supply evidence of this — something more authoritative than the mayor’s vision and dreams — and so far none has been supplied.

    Regarding public and private investment in downtown Wichita: A document published earlier this year showed that public and private investment in downtown Wichita over the past decade is nearly even, or about a one to one ratio. Now Miller says: “I’ve heard the city manager talk about moving us toward a return more in the neighborhood of 15 to one, private contribution to public.”

    So has something new been discovered in the last ten years that allows public-private partnerships to reap such fabulous rewards? It doesn’t seem likely.

    Furthermore, if it is possible to achieve such impressive results from public investment, why is this our goal only now? Shouldn’t we have had this goal earlier? Is this an example of the incompetence of previous city councils, of which Mayor Brewer has been a member for many years?

    Council member Lavonta Williams, in her remarks, said that we must have a plan, comparing the planning of downtown revitalization to planning her classes when she was a schoolteacher. (Click on Wichita downtown planning proposal: Lavonta Williams for video.)

    “Without a plan, there is chaos,” she said, noting that some people think that the things we’ve done downtown may be chaotic. “Hopefully this bond will bring us all together. … Downtown is everybody’s community, but it’s not going to be if you don’t have everybody buying in to what’s going on.”

    She urged citizens to attend meetings so that their comments are validated.

    William’s analogy — downtown planning and running her classroom — is not meaningful. There’s simply no comparison between the two. One is a highly structured situation, while the other is a problem of immense complexity with very little structure. My post Planning downtown Wichita revitalization: an impossible task? summarizes some of the characteristics that make planning such a difficult task. Deluding ourselves that the task is as simple as Williams posits is a sure path to failure.

    Then, I have some news for Williams: not everyone is going to buy in to these plans and the huge public subsidies that will accompany them. We’re not all going to come together on this. As council member Miller recognized in her remarks: “There’s a great variety of opinions on this subject.”

  • Wichita planning puts freedom, prosperity at risk

    Remarks to be delivered to the October 13, 2009 meeting of the Wichita City Council.

    Mr. Mayor, members of the council,

    I’m here today to ask this council to put aside consideration of this proposal. My reasons are not particular to this proposal or planning firm, but rather I am concerned that we believe we have the ability to successfully plan at all.

    Here’s just one reason why I’m concerned: Wichita’s favorite method of financing developments is the TIF district. Recognizing this, the Goody Clancy proposal under the heading “Opportunities” mentions “Continue to employ established TIF funding mechanisms.”

    But as documented by the Wichita Eagle last year, our city has a poor record of financial performance with TIF districts.

    Another reason I’m concerned is that our attempts at downtown redevelopment so far have produced mixed results. In particular, the WaterWalk project in downtown Wichita has so far consumed $41 million in public subsidy, and we have very little to show for it. Shouldn’t we see if we can nurture this project to success before we take on projects that are much larger?

    Then there’s the presumption expressed by city leaders that downtown must be revitalized for the sake of our entire city. Several months ago I asked Mr. Williams to supply me with references that provide evidence for the claimed benefit of downtown redevelopment. At first he referred me to the mayor’s vision statement. But with all due respect, Mr. Mayor, your visions and dreams aren’t evidence.

    We do have a document that describes what’s been built in several cities. But the mere fact that buildings were built or renovated is not evidence of success. In these descriptions there’s no discussion of the cost, or the public subsidy needed to redevelop these downtowns, and importantly, no discussion of the effect on the entire city.

    When we look at the effect of things like TIF districts on an entire city, we find evidence like economists Richard F. Dye and David F. Merriman found. They concluded that yes, development happens in the subsidized TIF district. But it’s often at detriment to the entire city.

    Besides TIF districts, I’m also concerned about the use of other public subsidy, including a sales tax that some are talking about. I’m also concerned about the potential for eminent domain abuse. This summer I traveled to Anaheim, California to learn about a redevelopment district where the city decided not to use these techniques. The article Anaheim’s mayor wrote about this planning effort is subtitled “Foundation of Freedom Inspires Urban Growth.”

    That’s what I’m really concerned about: freedom.

    Why aren’t we satisfied with letting people live where they want to live? Why aren’t we satisfied with letting developers’ capital flow to where they think it finds its most valued use? Why do we think that centralized government planning can do a better job of making decisions and allocating resources than the dispersed knowledge of all the people of Wichita?

    Randal O’Toole has written about the impossibility of the planning task. In his book The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future, he writes this about urban planners: “Because they can build a house, planners think they can design an entire urban area.”

    He expands on the difficulty of the planning task at length in his book.

    These difficulties can be summed up like this: If we think that we can plan the revitalization of downtown Wichita, we ought to heed this quote from Friedrich Hayek’s book The Fatal Conceit: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

    Mr. Mayor and members of the council, our efforts at downtown redevelopment have produced mixed results at best. Yet we have a lot of development — commercial and residential — taking place in Wichita. It’s just not happening downtown. Instead, it’s happening where people want it to happen. It’s happening without TIF districts, public subsidy, or the use of eminent domain.

    Why can’t we be happy with that?