Tag Archives: Wichita city government

Wichita checkbook updated

Wichita spending data presented as a summary, and as a list.

As part of an ongoing transparency project, I asked the City of Wichita for check register data. I’ve made the data available in a visualization using Tableau Public. This visualization is updated with data through August 13, 2019.

Of note, the city does not make this data available on its website.

To learn more about this data and use the visualization, click here.

Example from the visualization. Click for larger.

Campaigning on Wichita as recession-proof

The City of Wichita and Mayor Jeff Longwell shouldn’t be using flimsy evidence that is contrary to actual economic data.

Earlier this year Wichita city officials promoted an article that praised the Wichita economy. 1 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

Now Wichita Mayor Jeff Longwell is using this in his campaign to be reelected mayor.

The problem is that this claim of Wichita being recession-proof isn’t true. I explain in more detail in Wichita, a recession-proof city.

Here are two charts of actual economic data. The first chart shows the change in real gross domestic product for the Wichita metropolitan statistical area and the nation.

Click for larger.

Notice that since the Great Recession ended in 2009, there have been three separate years in which Wichita GDP declined. Since a recession is defined as a period of declining GDP, Wichita is obviously not recession-proof.

As for the “ability to withstand turbulence in the national economy,” these three years of shrinking Wichita GDP were years when the national economy expanded.

As for “steady job growth,” here is a chart of annual job growth for the Wichita metropolitan statistical area and the nation.

Click for larger.

Since the end of the Great Recession, there have been two years in which Wichita lost jobs while the nation was gaining jobs. This happened most recently in 2017, while Longwell was mayor. Since the end of the Great Recession, Wichita has created jobs at a much slower pace than the nation. Wichita has been doing better last year and this year, although recent months have shown a loss of jobs. 3


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. Weeks, Bob. Wichita jobs and employment, June 2019. https://wichitaliberty.org/economics/wichita-jobs-and-employment-2019-06/.

Wichita jobs and employment, June 2019

For the Wichita metropolitan area in June 2019, the labor force is up, the number of unemployed persons is up, the unemployment rate is down, and the number of people working is up when compared to the same month one year ago. Seasonal data shows declines in labor force and jobs from May.

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

Click charts and tables for larger versions.

Total nonfarm employment rose from 297,300 last June to 302,600 this June. That’s an increase of 5,300 jobs, or 1.8 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation grew by 1.5 percent. The unemployment rate in June 2019 was 3.6 percent, down from 4.1 percent one year ago.

Considering seasonally adjusted data from the household survey, the labor force fell by 317 persons (0.1 percent) in June 2019 from May 2019, the number of unemployed persons fell by 269 (2.3 percent), and the unemployment rate was down to 3.6 percent from 3.7 percent in May. The number of employed persons not working on farms fell to 299,144 in June from 299,192 the prior month, a decline of 47 persons, or 0.0 percent.

The following chart of the monthly change in labor force and employment shows a general decline over the past year, then three consecutive months of losses for both measures.

The following chart of changes from the same month one year ago shows six consecutive months of decline in the rate of growth of both employment and labor force. The values are growing, but at a slower pace each month since January.

On Wichita water, Longwell is right about one thing

A city hall news event sought to counter a news story that highlighted problems with Wichita’s water supply, but it seemed more like a political campaign event.

In yesterday’s press briefing, Wichita Mayor Jeff Longwell addressed concerns raised in a recent Wichita Eagle article regarding Wichita water infrastructure. 1

Longwell pushed back against the article’s reporting, perhaps the most concerning being: “Wichita’s entire water system has a ‘significant risk’ of failure and lacks redundancy, meaning if a major asset fails, it can’t be fixed without shutting the whole plant down.” The article also reported, “Deferred maintenance has piled up over the years.”

The mayor presented an infographic produced by the city showing steps the city has taken since 2011 to maintain existing water infrastructure and prepare for the future. (Curiously, this is available on the city’s Facebook page but not at wichita.gov, the city’s website.) According to him, the city has been managing the city’s water needs effectively.

This, however contradicts a statement the city council issued in 2015, when Longwell was mayor. As part of the Wichita-Sedgwick County Community Investments Plan, the city council concluded: “Decades of under-investment and deferred maintenance in Wichita’s water, sewer and stormwater infrastructure requires the City to be aggressive in protecting what assets it already has (especially replacing aging pipe infrastructure) and making future water and sewer facility enhancements to meet required treatment and discharge standards.” 2

(Of course, we could conclude that the statement and plan from 2015 doesn’t have any real meaning, which if true, causes me to wonder why we undertake these exercises.)

The mayor also addressed the 2014 proposed Wichita city sales tax, $250 million of which was earmarked for a water project. The mayor correctly explained that that money was not to repair existing infrastructure or build a new main water processing plant. Instead, it was to expand the Aquifer Storage and Recovery system and build an additional pipeline from it to the city. That would have provided what the city called “drought protection.”

It’s important for Longwell to explain that the 2014 sales tax, if it had passed, would not have addressed the issues with the current water plant. This is important because Longwell voted against the sales tax. If today’s voters thought the 2014 sales tax would have fixed the water plant and saw that Longwell voted against it, that might be a negative factor against Longwell.

Which brings us to the final point. The press conference was a thinly disguised campaign event for the mayor, conducted using city facilities and staff, complete with a cartoon-like infographic. If the information is important, the city should present it plainly, not in a cumbersome graphic spread three panels wide that the mayor can post on Facebook and Twitter.

Wichita Eagle reporting on this event is at Wichita on track for new water plant in 5 years, city says.


Notes

  1. Swaim, Chance. Wichita’s water plant: ‘Every hour that thing is running, it could fail.’ Wichita Eagle, July 21, 2019. Available at https://www.kansas.com/news/politics-government/article232826482.html.
  2. Wichita-Sedgwick County Community Investments Plan. Approved by Wichita City Council on December 8, 2015. Available at https://www.wichita.gov/Planning/Pages/Comprehensive.aspx.

Wichita property tax rate: Unchanged

The City of Wichita property tax mill levy was unchanged for 2018.

Wichita mill levy rates. This table holds only the taxes levied by the City of Wichita and not any overlapping jurisdictions.
In 1994 the City of Wichita mill levy rate — the rate at which property is taxed — was 31.290. In 2018 it was 32.667, based on the city’s Comprehensive Annual Financial Report and the Sedgwick County Clerk. That’s an increase of 1.377 mills, or 4.40 percent, since 1994. (These are for taxes levied by the City of Wichita only, and do not include any overlapping jurisdictions.)

The rate for 2018 was unchanged from 2017 and follows two years of small decreases.

Wichita mill levy rates. Click for larger version.
The Wichita City Council does not set the mill levy rate. Instead, the rate is set by the county based on the city’s budgeted spending and the assessed value of taxable property subject to Wichita taxation.

While the city council doesn’t have control over the assessed value of property in its jurisdiction, it does have control over the amount it decides to spend. As can be seen in the chart of changes in the mill levy, the city usually decides to spend more than the previous year’s mill levy generates in taxes. Therefore, tax rates usually rise.

Change in Wichita mill levy rates, year-to-year and cumulative. Click for larger version.
It’s more common for the mill levy to rise rather than to fall. In those years, the council does not take responsibility to the increase, insisting that the rate has not gone up.

An increase of 4.40 percent over more than two decades may not seem like much of an increase. But this is an increase in a rate of taxation, not tax revenue. As property values rise, property tax bills rise, even if the mill levy rate is unchanged.

The total amount of property tax levied is the mill levy rate multiplied by the assessed value of taxable property. This amount has risen, due to these factors:

  • Appreciation in the value of property
  • An increase in the amount of property
  • Spending decisions made by the Wichita City Council

Application of tax revenue has shifted

Wichita mill levy, percent dedicated to debt service. Click for larger version.
The allocation of city property tax revenue has shifted over the years. According to the 2010 City Manager’s Policy Message, page CM-2, “One mill of property tax revenue will be shifted from the Debt Service Fund to the General Fund. In 2011 and 2012, one mill of property tax will be shifted to the General Fund to provide supplemental financing. The shift will last two years, and in 2013, one mill will be shifted back to the Debt Service Fund. The additional millage will provide a combined $5 million for economic development opportunities.”

in 2018 the city budget held this regarding the debt service fund: “In both 2013 and 2014, 0.5 mills were shifted back to the Debt Service Fund.”

Taxes a homeowner pays

Following, a chart and table showing the taxes paid to the City of Wichita for a hypothetical home. This includes changes in the value of the home (based on U.S. Federal Housing Finance Agency, All-Transactions House Price Index for Wichita, KS (MSA) [ATNHPIUS48620Q]) and inflation (based on Consumer Price Index Series II: CUUR0000SA0, U.S. city average, All items, Base Period 1982-84=100, Bureau of Labor Statistics). Click for larger versions.

In Wichita, revision of water history

In 2014 Wichita voters rejected a sales tax which would have provided $250 million to spend on a water project. What were the city’s concerns?

A recent Wichita Eagle article has ignited some revising of history regarding Wichita’s water infrastructure. 1 The article is grim, starting with, “Next time water comes out of your tap, don’t take it for granted. Wichita’s only water treatment plant could fail at any moment.” The article reports on the poor condition of Wichita’s existing water infrastructure, particularly the central water plant.

Wichita recently dealt with spending on a water project. That was in 2014, when the city asked voters to decide on a one cent per dollar sales tax for five years. Of the estimated $400 million the tax would raise, $250 million was earmarked towards water infrastructure. Since voters did not endorse the tax, some have blamed voters for the city’s current problems regarding water infrastructure.

Here, for example, is a social media exchange on Monday. The first person wrote, referring to Wichita Public Works Director Alan King, “Mr King is only now sounding a warning when he knew 8 years ago there was a problem?”

A second person responded: “Wrong Wrong Wrong. King has been yelling about this since he got here. Remember the temporary sales tax for the water where the citizens obeyed the Billionaire and his million dollars that said we can take the risk?”

To understand the errors in the second person’s comment, we need to understand the meaning of “for the water” and “the risk.” City documents have the answer.

A Wichita city white paper from May 2014 cites a community survey, concluding, “Wichitans have ranked a reliable water supply as their most important priority.” 2 The city interpreted citizens’ concerns are requiring protection from drought: “Protecting water sources during periods of drought is an important part of long-term water supply planning.” The paper presented “two options meet the goal of providing water for community growth and drought protection.” One option was using water from El Dorado Reservoir, and the second was expanding the ASR system. This paper does not mention the condition of existing water infrastructure.

On May 27, 2014 City Manager Robert Layton presented to the city council a “Strategic Plan Follow Up,” providing information about the possible uses of the proposed city sales tax. 3 For water issues, the only consideration was drought protection.

In July 2014, the city prepared a document titled “Strategic Plan Implementation Timetable.” 4 Regarding water, the activity needed was:

1. Develop a plan that addresses:
A. New water sources
B. Conservation strategies
C. Reuse opportunities for industry
D. Emphasize water as a priority with the State and Congressional delegation
E. Work with area communities to ensure water is also a priority for them

The long-term objective for water was: “Secure sufficient capacity from two identified options to provide water that supports the long-term growth of Wichita while protecting water users from future droughts. Implement cost-effective conservation strategies that complement water source capacity.”

Under measurements of success there were these items:

Year of final protection in a 1% drought without additional conservation efforts (target is 2030).
Variance in firm yield compared to demand in 2060 (target is 0%).
Volume of water treated (target is 20.8 billion gallons per year).
Annual water reductions from conservation programs (target is 0.35%).
Water conservation program cost to achieve water reduction goal (target is $300,000 annually).

None of this material mentions the condition of existing water infrastructure.

In September 2014 the city published a document titled “Water Supply Plan: The Proposed 1-cent Sales Tax.” 5 under “Plan Summary,” the document states: “Sales tax revenue would fund a new water supply, through Aquifer Storage and Recovery (ASR) improvements. This new supply would reduce the impact of any future drought and would support job growth.”

Later, the document says the plan does the following:

Pulls more water from the Little Arkansas River
Constructs new storage basins
Further utilizes existing treatment plant capacity
Stores treated water underground where it doesn’t evaporate
Builds an additional pipeline

The document clarifies that the “additional pipeline” is a “parallel pipeline” from the ASR plant to the central water plant.

Information from the City of Wichita. Click for larger.

An information sheet prepared for citizens said the same and warned of the costs of borrowing to pay for these facilities. 6

A lengthier presentation prepared for voters by the city held this:

THE NEED
Demand for water is expected to increase by more than seven billion gallons per year by 2060. A new water supply is needed to meet this demand. If the community should experience a significant drought, residents would face severe water restrictions.” 7

From these city documents, we can understand the error in the second commenter’s remarks. In the context of 2014, taxing and spending “for the water” meant expansion of supply, not maintenance of existing assets.

Further, in 2014 “the risk” that was to be addressed was the risk of water use restrictions in case of an extended drought. The risk of basic water plant infrastructure failing was not considered or addressed in the city’s plan for spending $250 million on a water project.


Notes

  1. Swaim, Chance. Wichita’s water plant: ‘Every hour that thing is running, it could fail.’ Wichita Eagle, July 21, 2019. Available at https://www.kansas.com/news/politics-government/article232826482.html.
  2. City of Wichita. Water Supply Planning. May 13, 2014. Archived on Google Drive here.
  3. Layton, Robert. Strategic Plan Follow Up. May 27, 2014. Archived on Google Drive here.
  4. City of Wichita. Strategic Plan Implementation Timetable. July 22, 2014. Archived on Google Drive here.
  5. City of Wichita. Water Supply Plan: The Proposed 1-cent Sales Tax. September 2014. Archived on Google Drive here.
  6. City of Wichita. Proposed 1 cent sales tax. Archived on Google drive here.
  7. City of Wichita. Plans & Background on Proposed 1 cent Sales Tax. Archived on Google Drive here.

In Wichita, here’s what tax decrement means

New research explains what you may have wondered: What is tax “decrement” financing?

Wichita has a financing mechanism known as the Gilbert-Mosley tax decrement fund. I knew about tax increment financing, but I never really understood how tax decrement financing worked. I had thought that in this context, “decrement” had a sophisticated meaning that I wasn’t able to understand because I wasn’t smart enough, or I hadn’t tried hard enough, or I didn’t have the correct documents to read.

Now, Chase M. Billingham and Sean Sandefur have published detailed research that explains how the Gilbert-Mosley financing works. Billingham is Assistant Professor of Sociology at Wichita State University. Their research, which forms a chapter of the book Tax Increment Financing and Economic Development, Second Edition: Uses, Structures, and Impact, is titled “The Conceptual Pliability of TIF and the Political Rhetoric of Environmental Remediation: Groundwater Pollution and Tax “Decrement” Financing in Wichita.” You may download a pdf of the chapter by clicking here. The published chapter had to be cut for length, but this pre-print version provides much greater detail than the published version.

Following, an introduction to the research by Billingham:

If you ask people around Wichita why growth in the city’s downtown core has been so slow over the past several decades, you’re likely to hear that one of the main culprits was a terrible problem with groundwater pollution in the 1980s and 1990s. You’re also likely to hear about the miraculous and innovative home-grown response that Wichita came up with to solve this problem. This solution involved using tax-increment financing to fund the groundwater cleanup operation, keep Downtown Wichita from becoming a massive Superfund site, and save the city’s core from turning into a “ghost town.”

Despite the local mythology that has been built up around this operation, neither the history of Wichita’s groundwater problem nor the financial mechanisms that were implemented to address it are well understood by the public.

That’s the focus of a new piece of research published this month as a chapter in a new edited volume – Tax Increment Financing and Economic Development: Uses, Structures, and Impact (SUNY Press). In this chapter, my coauthor Sean Sandefur and I explain the history of Wichita’s downtown groundwater crisis, the politics behind the creation of the local taxing district established to fund the cleanup, and the financial mechanisms that are still in place today to direct money toward the cleanup fund.

Although this has consistently been referred to as a novel use of tax-increment financing, we reveal that the actual structure that was implemented is not an example of TIF at all, but rather a simple diversion of a constant flow of property tax dollars into a special fund, with no relation whatsoever to fluctuations in underlying property values and assessments.

The idea of “TIF” is so poorly understood, so vague, and so frequently subject to mystical ideas about projects “paying for themselves” that it can be used as a convenient label to mask how local governments actually engage in public finance. The results of this research are applicable for thinking about a wide range of downtown development projects currently underway in Wichita, as well as other cities.

Metropolitan employment and labor force

A visualization of employment, labor force, and unemployment rate for metropolitan areas, now with data through May 2019.

How does the Wichita metropolitan area compare with others regarding employment, labor force, and unemployment rate? A nearby example shows data from the Bureau of Labor Statistics, part of the United States Department of Labor. Considering growth of employment since the start of the decade, the answer is Wichita has not performed well.

This illustration came from an interactive visualization I created from BLS data. Click here to learn more and use the visualization.

Click for larger.

Wichita transit, by the numbers

Transit in Wichita isn’t working very well, and it is expensive.

A recent editorial in the Wichita Eagle proclaims, “If Wichita genuinely wants to be a vibrant, modern city, we have to improve our public transportation.” 1 This was inspired by the recent story of a Wichita State University employee chronicling his experience riding the bus to work for a week. The Eagle reported: “What Lucas found riding the bus for a week was that his regular 11-mile, 17-minute car commute was, on average, an hour and 35 minutes on Wichita Transit. Each way.” 2

There is little doubt that relying on the regular scheduled bus service in Wichita is frustrating for most riders. Some find it unusable. Given that, how much do we pay for transit?

The National Transit Database holds annual profiles for transit agencies. They are not easy to locate, and the numbers are presented in very fine print. I’ve excerpted some data for Wichita for 2017 and present tables nearby. (Clicking may produce larger versions.)

Of note: Fares account for 13.5 percent of operating revenue, not including the costs of buses, which are a capital expense. Someone else pays a lot of the expenses: For operating expenses, 51.4 percent comes from state and federal sources. For capital expenses, 82.4 percent is from federal sources.

For scheduled bus service, the cost per passenger mile is $1.44. and the cost of an unlinked passenger trip is $8.08. (An “unlinked passenger trip” is counted whenever someone boards a bus. For someone who rides a bus downtown and transfers to another bus — like the WSU employee — that counts as two unlinked trips. Two in the morning, then another two in the afternoon, for a total of four unlinked trips each day, or $32.32 for the day.)

Most of these costs for scheduled bus service are fixed in nature, meaning that they don’t increase with additional passengers. With more passengers, these costs on a per-mile or per-trip basis will fall, and if the additional passengers pay fares, the portion of expenses paid by fares will rise.

The costs for bus service in Wichita are not out of line with other similar cities, although costs rose rapidly in Wichita for 2016 and 2017, as can be seen in the nearby chart. (This chart comes from an interactive visualization of national transit data that I developed. Click here learn more about the data and to access the visualization.)

$8.08 per unlinked trip is a lot. $32.32 per day to travel to and from work is a lot. It seems like we ought to be able to provide better service. But I think Wichita provides about the same level of service as other similar cities.


Notes

  1. Suzanne Perez Tobias. Seriously, Wichita, it’s past time to fix our city bus system. Wichita Eagle, July 9, 2019. Available at https://www.kansas.com/opinion/opn-columns-blogs/suzanne-perez/article232442842.html.
  2. Lefler, Dion. A WSU Tech VP tried bus service, finds his 11-mile commute takes 1 1/2 hours each way. Wichita Eagle, July 8, 2019. Available at https://www.kansas.com/news/politics-government/article232316257.html.

Wichita transit center application

Although plans have changed, an application by the City of Wichita holds interesting observations and claims.

Recently the City of Wichita submitted an application to the Federal Transit Administration seeking funds for a proposed transit center in Delano, just north of the new baseball stadium. Plans have changed, and the city’s intent is not clear. Nonetheless, the application is worth of reading and commentary. You can read the application by clicking on The Wichita transit center application. Following, some excerpts from the application and some remarks.

Application: “Employment centers are distributed in several areas around the City and are not concentrated in the downtown core.”

Precisely. This is one of the reasons why mass transit is difficult in Wichita. Transit worked better when downtown was a major employment center, but this is no longer true for most cities.

Application: “Located in the Delano District of the city, an area that is home to new economic development initiatives …”

While Douglas Street in Delano seems to be bustling, the “new economic development initiatives” are mostly in the future, at least as far as producing tangible results. The River Vista apartments are complete, and the new library is open. The new baseball park will not open until next year, and many are skeptical of its value as an economic driver. Other initiatives are still in the planning stage.

Notably, there is a lack of activity at the Delano Catalyst Site, a project slated for 200 apartments with parking garage, a 90 room hotel, and a public transportation hub. (Question: If this project has a public transportation hub, why build another just a few blocks away?) As of a week ago, there was no evidence of any positive construction activity, although it was reported there was some demolition last year. The city’s deadline for completion of this project is October 2020.

Application: “Not only would a new, multi-modal center be key to the growth of the west bank area and mitigate increased traffic, it would replace our old and antiquated transit center.”

Before reading this application, it was unclear to me (and others) whether the proposed transit center in Delano would replace or augment the existing transit center at Topeka and William. Now we know the city’s intent: replacement. Curiously, the application cover page checks off “Bus facility expansion” instead of “Bus facility replacement.”

Application: “Also integral to the boom in this area is a new multi-million dollar public-private economic partnership consisting of private a sports complex and other economic drivers slated to open in April of 2020.”

Regarding “private a sports complex,” I had thought that the City of Wichita would own the new baseball stadium. But this application calls it a private sports complex. While it is scheduled to open in April 2020, it seems unlikely that anything else will have opened by then.

Application: “… it is vital that services connect those areas to downtown employment (which exceeds 5,000 jobs) and to large employers (exceeding 11,000 people).”

Not long ago, city leaders told us there were 26,000 jobs in downtown Wichita. 1 The city and its affiliated agencies no longer use that number, because it was based on a gross misunderstanding and misuse of the data. A better estimate of jobs downtown is perhaps 14,000. 2

So why does this application use 5,000 as the number of jobs in downtown? (Exceeds?)

Application: “However, our aged and outdated transit center, located at William and Emporia Streets is an old design that doesn’t always meet our ever increasing needs.”

Click for larger.

As can be seen in the nearby chart, demand for bus transportation in Wichita is not rising — to say the least — in terms of either trips or passenger-miles.

Application: “Due to its inner city location, it requires constant policing and also sits less than 100 feet from Intrust Arena which hosts numerous events that necessitate closing the streets around the center; making bus operations next to impossible with foot traffic, cars and event activities so close.”

I believe that the proposed location in Delano also qualifies as “inner city.” If the transit center is a crime problem, moving it to Delano will probably also move the problem of crime. Indeed, the likely reason for the city deciding to move the proposed transit center is that developers of nearby property didn’t want a bus station next door.

As far as the present transit station being near an event center, Intrust Bank Arena hosts relatively few events, and very few that generate many thousands of spectators. And, isn’t the proposed location near a baseball stadium that the city hopes will generate much “foot traffic, cars and event activities?”

Application: “The land has also seen a significant increase in its value and will eventually be landlocked by future economic development by the private sector, further reducing accessibility.”

This is a surprise to hear. The only significant development near the present transit station is Commerce Street and the Spaghetti Works District. Property owners on Commerce Street think their property taxes are too high and have asked for relief. The Spaghetti Works district is not complete, so we really don’t know how to gauge its success. Whatever its future, it took millions in public subsidy to achieve.

Directly across William Street from the transit center is retail space owned by the City of Wichita whose only tenants have been government and quasi-governmental agencies that pay a fraction of market rent. (The last time I checked, in 2015 Wichita Festivals, Inc. was paying $2.00 per square foot in rent to the city for the entire space. At that time, according to the Weigand Commercial Real Estate Forecast, Class A space in the central business district averaged $16.04, Class B was $9.96, and Class C $7.46. Perhaps the city considers low rent as a contribution to Wichita Festivals. But it’s also an indication of the low value of this space. When built, it was thought that the retail space would lease for $8.70 per square foot, in 1993 dollars. 3 That’s $15.42 in 2019 dollars.)

Catty-corner to the northwest lies new retail space that has largely remained empty since it was built some five years ago.

Application: “While changing attitudes about automobile ownership and driving are evident among the younger population, schedules and route coverage limit expanded ridership.”

This statement echoes a common belief: Young people, specifically Millennials, don’t like to own cars and drive as much as previous generations. This, however, may not be true. A recent research paper holds this in its abstract:

Anecdotes that Millennials fundamentally differ from prior generations are numerous in the popular press. One claim is that Millennials, happy to rely on public transit or ride-hailing, are less likely to own vehicles and travel less in personal vehicles than previous generations. However, in this discussion it is unclear whether these perceived differences are driven by changes in preferences or the impact of forces beyond the control of Millennials, such as the Great Recession.

After describing their research methodology, the authors state their findings:

We find little difference in preferences for vehicle ownership between Millennials and prior generations once we control for confounding variables. In contrast to the anecdotes, we find higher usage in terms of vehicle miles traveled (VMT) compared to Baby Boomers. Next we test whether Millennials are altering endogenous life choices that may, themselves, affect vehicles ownership and use. We find that Millennials are more likely to live in urban settings and less likely to marry by age 35, but tend to have larger families, controlling for age. On net, these other choices have a small effect on vehicle ownership, reducing the number of vehicles per household by less than one percent. 4 (emphasis added)

Commenting on this study, Leonid Bershidsky wrote:

It would, however, be a mistake to reconsider business plans as if consumer preferences were undergoing a radical change. Having a car of one’s own provides, and will continue to provide, a degree of freedom that cannot be matched by any other transportation offering. Data do not bear out the expectation that people will give up that freedom for any reason except being unable to afford it. 5

Looking at data for automobiles sales, Dale Buss wrote this in Forbes last year:

It turns out that Millennials were responsible for all new-vehicle sales growth in North America during the first quarter of 2018, according to data compiled by Experian, the credit-information company. More specifically, Millennial market share increased to 29.7 percent during the period from 27.9 percent in the first quarter of 2017, while market shares from other generations remained unchanged or fell in the same period, when overall U.S. car sales were leveling off after an eight-year boom. 6

I hope that decision-makers in Wichita government have better access to data than this application reflects.


Notes

  1. Weeks, Bob. Downtown Wichita jobs, sort of. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-jobs/.
  2. Weeks, Bob. Downtown Wichita business trends. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-business-trends/a>.
  3. Weeks, Bob. As landlord, Wichita has a few issues. Available at https://wichitaliberty.org/wichita-government/landlord-wichita-issues/.
  4. Christopher R. Knittel, Elizabeth Murphy. Generational Trends in Vehicle Ownership and Use: Are Millennials Any Different? NBER Working Paper No. 25674, March 2019. Available at https://www.nber.org/papers/w25674.pdf.
  5. Bershidsky, Leonid. Don’t Expect Car Ownership to Become Obsolete. Bloomberg, March 27, 2019. Available at https://www.bloomberg.com/opinion/articles/2019-03-27/millennials-aren-t-making-car-ownership-obsolete.
  6. Buss, Dale. Millennials — Once Viewed As Auto Market’s Lost Generation — Now Are Its Biggest Growth Driver. Forbes, July 27, 2018. Available at https://www.forbes.com/sites/dalebuss/2018/07/27/millennials-once-viewed-as-auto-markets-lost-generation-now-are-its-biggest-growth-driver/.

Wichita jobs and employment, May 2019

For the Wichita metropolitan area in May 2019, the labor force is up, the number of unemployed persons is up, the unemployment rate is unchanged, and the number of people working is up when compared to the same month one year ago. Seasonal data shows declines in labor force and jobs from April.

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

Click charts and tables for larger versions.

Total nonfarm employment rose from 300,000 last May to 303,200 this May. That’s an increase of 3,200 jobs, or 1.1 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation grew by 1.5 percent. The unemployment rate in May 2019 was 3.5 percent, same as one year ago.

Considering seasonally adjusted data from the household survey, the labor force fell by 402 persons (0.1 percent) in May 2019 from April 2019, the number of unemployed persons fell by 57 (0.5 percent), and the unemployment rate was unchanged at 3.7 percent. The number of employed persons not working on farms fell to 299,023 in May from 299,368 the prior month, a decline of 345 persons, or 0.1 percent.

The following chart of the monthly change in labor force and employment shows a general decline over the past year, then two consecutive months of losses for both measures.

The following chart of changes from the same month one year ago shows six consecutive months of decline in the rate of growth of both employment and labor force. The values are growing, but at a slower pace each month.

The Wichita transit center application

The City of Wichita has made an application to the federal government for funding for a new transit center.

Breaking: The Wichita Eagle has reporting on the city’s modification of plans today. Click on Wichita abandons parking garage plan, could buy developer’s property west of stadium instead.

The City of Wichita has submitted an application to the Federal Transit Administration for a project described as “Delano Multimodal Center and Park-N-Ride.” The application was supplied in several documents. I’ve combined them in what I hope is the correct order. Click here to view.

Map submitted with application. Click for larger.
The “Demonstration of Need” section starts with this: “The successful approval of the City of Wichita application will transform public transit in our city as we know it. Not only would a new, multi-modal center be key to the growth of the west bank area and mitigate increased traffic, it would replace our old and antiquated transit center.”

Of note, the application mentions a partnership “consisting of private a sports complex.” I had thought that the City of Wichita would own the new baseball stadium.

Following is more material from this section of the application:

This center is envisioned as containing transit amenities to handle connections from commuter service, connect-ability to the downtown circulator, transfer points to routes meeting education, employment and economic development key to the growth of the west bank area of the Arkansas River. Also integral to the boom in this area is a new multi-million dollar public-private economic partnership consisting of private a sports complex and other economic drivers slated to open in April of 2020. All of which presents countless public transit opportunities. Designed to rest in an urban setting, the development will have limited on-site parking and public transit will be key in providing accessibility for patrons.

With an evolving Wichita Transit and the growth of areas west and east of the city center, it is vital that services connect those areas to downtown employment (which exceeds 5,000 jobs) and to large employers (exceeding 11,000 people). The multi-modal transit center will provide vast opportunities that will meet and enhance Wichita’s education, employment and economic development needs An increase in demand for this types of service could see a huge advantage in the existence of a multi-modal center that contains transit-oriented development (TOD) space, up to 543 parking spaces as well as connect-ability to transit. This also becomes a quick charge area for our electric bus fleet (11 on order and a new application for more), improves access to our bike share program as well as any potential autonomous circulators which become possible with this type of facility.

Wichita Transit continues to explore and adopt new and innovative modes of transportation. However, our aged and outdated transit center, located at William and Emporia Streets is an old design that doesn’t always meet our ever increasing needs. Due to its inner city location, it requires constant policing and also sits less than 100 feet from Intrust Arena which hosts numerous events that necessitate closing the streets around the center; making bus operations next to impossible with foot traffic, cars and event activities so close. The land has also seen a significant increase in its value and will eventually be landlocked by future economic development by the private sector, further reducing accessibility. The multi-modal center will be a multi-functional transit center that works in today’s modern world.

Capital
Without this funding, it will be extremely difficult to fund a multi-modal center. The funding mix utilized for capital purchases up to now (FTA sections 5307 & 5339, and FHWA’s Surface Transportation Program (STP) and Congestion, Mitigation, and Air Quality (CMAQ), etc.) is not sufficient to close the funding gap to replace the transit center, as they are earmarked for normal operations (preventive maintenance, planning, operations, and other capital needs such as fare-boxes, bus IT needs, lift systems, support vehicles, security projects and bus replacements). Possible future CMAQ or STP funding will not be available to Wichita Transit until after 2020, but planned uses of eligible funds in 2021 and 2022 is for para-transit van replacement.

In 2017, Wichita Transit forged many partnership initiatives to increase economic and mobility opportunities for the Wichita community, partnerships that resulted in a 9% increase in fixed route ridership in 2018. Our partners include USD259, Wichita State University (WSU), WSU Tech, Regional Economic Area Partnership (REAP) and Workforce Alliance of South Central Kansas. In order for these minor accomplishments to become major successes it is essential that we create an impactful sustainable public transit system. This multi-modal facility would go a long way toward achieving that goal.

Above all, there is a latent demand for public transportation that is not met by the present system. While changing attitudes about automobile ownership and driving are evident among the younger population, schedules and route coverage limit expanded ridership. To date, the hub-and-spoke system has limited Wichita Transit from playing a role in adding jobs and residents downtown or creating links between employers and employees in the area workforce.

Wichita Transit has significant capital funding needs; needs that are also funded from the federal apportionment. Using the apportionment to fund operating costs is starving funding needed for capital replacements. The current transit service, system design, route configurations can be challenging for all but the most dedicated riders, who are most often transit-dependent. Providing a sustainable service level reflective of the results of citizen engagement efforts and generating improved outcomes. comparable to the local commitment to public transportation found in other communities.

Service improvement scenarios have been identified in addition to the current system – Introducing a modified grid system to improve connectivity, eliminate transfers, and shorten travel times, express bus services from Andover, Derby, Park City and West Wichita or Goddard would be introduced. Local service would also be extended to the City of Maize and Haysville.

Service enhancements would be expected to generate outcomes, including increased citizen satisfaction with the level of transit services, improved financial sustainability, and increased ridership, particularly ridership supporting downtown and economic development purposes.

Wichita population, according to Mayor Longwell

It is unfortunate that Wichita city and metro populations are falling. It is unimaginable that our city’s top leader is not aware of the latest population trends.

In May, Wichita Mayor Jeff Longwell told viewers of the KPTS Television program Call the Mayor that he was not aware of the latest United States Census Bureau estimates of population for Wichita. (A transcript of this portion of the program is below.)

Mayor Longwell said he wasn’t aware of the estimate, telling the audience, “census estimates are different than the census.” Absolutely correct. The census, which is an attempt to count the population, happens only once every ten years, while census estimates for population are produced annually. With only decennial data, we wouldn’t know much about recent developments.

Estimates are important. We use them in numerous circumstances when producing a count would be expensive. Mayor Longwell said he hasn’t seen estimates for population, but he knows the unemployment rate for Wichita. That is also an estimate produced by a different branch of the federal government. The city uses many estimates. The “City Overview” section of the budget document starts with: “Wichita, the largest city in Kansas with a population 389,965 …” The footnote gives the source of the data as “2015 Census population estimates.”

On Call the Mayor, Longwell said, “our population in Wichita has grown from 2000 by nearly 40,000 people.” Interestingly, if the mayor doesn’t want to use estimates, he should have said the City of Wichita population grew by about 30,000, as that is the difference between the 2010 and 2000 census counts. Based on the estimate of city population for 2018, growth has been almost 37,000.

Wichita and top 100 city population, annual change, through 2018. Click for larger.
It’s too bad that the mayor doesn’t know the latest population estimates, because they don’t hold good news. The City of Wichita proper lost 1,052 in population from 2017 to 2018, a decline of 0.27 percent. 1 For the same period, the Wichita Metropolitan Statistical Area population fell by 740 persons, or 0.11 percent. Net domestic migration for the Wichita metro area showed a loss of 3,023 persons, or 0.47 percent of the population. This change, on a proportional basis, was 301st among the 383 largest metro areas. 2

Wichita’s unemployment rate is low, and has been declining

One of the reasons the Wichita unemployment rate is low is because of a declining labor force. As can be seen in the nearby chart, the unemployment rate (green line) has fallen — and by a lot — since the end of the last recession in 2009. (Click here for an interactive version of the chart.) But the unemployment rate depends on two things, one being the labor force as the denominator of a fraction, or ratio. If the denominator (labor force) falls at a greater rate than the numerator, the unemployment rate will fall. That is what has happened in Wichita.

Wichita labor force and employment. Click for larger.

For example, on January 1, 2010, the labor force in Wichita was 320,287 and the number of unemployed persons was 28,523, resulting in an unemployment rate of 8.9 percent. The number of employed persons was 291,764.

Then, on April 1, 2019, the labor force in Wichita was 311,114 (falling by 9,173 or 2.9 percent) and the number of unemployed persons was 11,576 (falling by 16,947 or 59.4 percent), resulting in an unemployment rate of 3.7 percent. The number of employed persons was 299,538 (rising by 7,774 or 2.7 percent).

If, for example, the current labor force was the same size as on January 1, 2010, and we have the same number of employed people as we do today, there would be 20,749 unemployed people, and the unemployment rate would be 6.5 percent instead of 3.7 percent. (We don’t know what would have happened had the labor force not fallen, but this is an example of how the arithmetic works.)

This is unfortunate

It is unfortunate that the city and metro populations are falling. It is unimaginable that our city’s top leader is not aware of the latest population trends. These numbers are easy to find. Until recently, they would be reported in local news media.

But the city has an economic development staff that ought to be aware of these numbers. There is the Greater Wichita Partnership, responsible for shepherding economic development. There is a city manager, assistant city manager, six city council members, and a fleet of bureaucrats. Didn’t any of these people know the population has declined? If not, why not?

And if any knew the population was declining and didn’t tell the mayor, well, that’s another problem.

Transcript from Call the Mayor, May 30, 2019

Host: We have a Facebook question from Bob. Could you please comment on the recent US Census Bureau population estimates for the city of Wichita and Wichita metro stat area for the year ending July 1, 2018. It’s very specific but the latest on the census for Wichita.

Longwell: So the census estimates are different than the census and so I’m not I haven’t seen the census estimate data specifically. I know the region … Wichita is becoming a destination for health care and so you’re starting to see many people in rural Kansas migrate to big cities and we’re no different. I know that our population in Wichita has grown from 2000 by nearly 40,000 people and so we will continue to see that growth and right now we need more people. We need people to fill these jobs that are in Wichita. Our unemployment’s at historic low right now.

To view the program on YouTube starting at the point of this question, click here.


Notes

  1. Weeks, Bob. Wichita population, 2018. Available at https://wichitaliberty.org/economics/wichita-city-population-2018/.
  2. Weeks, Bob. Wichita population falls; outmigration continues. Available at https://wichitaliberty.org/wichita-government/wichita-population-falls-outmigration-continues/.

Wichita airport hotel ownership unclear

The Wichita City Council plans to use the consent agenda to vote on an item containing confusing language.

For the Tuesday June 25, 2019 meeting of the Wichita City Council meeting, item No. II-17 concerns the city leasing land to a company wanting to build and operate a new hotel near the airport. 1 The agenda packet holds this language:

“Upon execution of the lease, WEH will provide a $2 million good faith security deposit in escrow with the Airport to ensure timely construction of the hotel. Upon completion of the roof construction, the deposit will be available to WEH for additional construction costs. WEH will invest a minimum of $12 million of private funds to build and equip the property, which the structure will be owned by the WAA in accordance with existing policy. During the life of the lease, WEH is required to make periodic capital improvements and re-investment obligations in order to maintain its franchise agreement with a national flag hotel.” (emphasis added)

(WEH is Wichita Eisenhower Hotel, LLC, a private company formed to construct and operate the hotel. WAA is the Wichita Airport Authority, which is the same as the Wichita City Council.)

Reading this, can you tell me who will own the hotel building? I wondered, so I posed this question by email to the city’s public information officer: “The sentence fragment ‘which the structure will be owned by the WAA in accordance with existing policy’ sounds like the hotel building will be owned by the Wichita Airport Authority. Is this correct?”

I received a generic response that illuminated nothing. 2 My follow-up question was not acknowledged by the end of the day.

The council will, at least according to its schedule, consider this item tomorrow morning. Will city council members, acting as the Wichita Airport Authority, have a clear idea of the meaning of this agenda item and the supporting contract?

I think I know what it means. WEH will own the hotel and lease the land from the city. There’s language like this: “The development group requesting a lease agreement has formed a Kansas corporation to own and operate a hotel on the Airport.” (emphasis added)

Further, the lease is priced by the square foot of land (49.6 cents per square foot per year), although after four years that is replaced by a minimum agreed amount or a percent of the revenue of the hotel.

All this points to WEH owning the hotel building, not the city through the Airport Authority, although the Wichita Business Journal has a different opinion. 3 But it’s a shame that we must guess what the city means.

Will city council members also have to guess? Perhaps. This item is on the airport’s consent agenda. Unless a council member speaks up and asks for clarification, there will be no discussion on this item.


Notes

  1. Wichita city council final agenda packet for June 25, 2019. Available at https://wichita.gov/Council/Agendas/06-25-2019%20Final%20Council%20Packet.pdf.
  2. “All buildings and land are owned by the Airport Authority, with just a few exceptions. The FAA owns the control tower and the Post Office and the County owns the buildings at Jabara’s WSU Tech campus. But even in those cases, the land is owned by the Authority. Tenants pay land and building rent but do not pay property taxes.”
  3. The Wichita Airport Authority, which will also own the structure …” McCoy, Daniel. *New hotel planned for Wichita Eisenhower National Airport. Available at https://www.bizjournals.com/wichita/news/2019/06/21/new-hotel-planned-for-wichita-eisenhower-national.html.

Wichita and other airports

How does the Wichita airport compare to others?

The nearby chart shows data starting in 2010 for Wichita and selected airports, as well as all U.S. airports. For all measures except load factor, Wichita is at or near the bottom. Often the trend for Wichita underperforms the other airports, too.

It is not too surprising that the Wichita airport lags others, as the Wichita economy has been underperforming, even losing jobs in 2017. Now we know that the metropolitan area and city proper have lost population.

Local business leaders have formed a campaign to promote using the airport. The statistics in this chart and the visualization end shortly before that campaign started.

This chart was created from a visualization holding data from TranStats, a service of the Bureau of Transportation Statistics (BTS), which is the independent statistical agency within the United States Department of Transportation (DOT). While monthly data is available, this visualization holds annual totals through 2018.

The visualization holds data for all U.S. airports with scheduled flights. To view and use the interactive visualization, click here.

Wichita and selected airports. Click for larger.

Airport traffic statistics, 2018

Airport traffic data presented in an interactive visualization, updated through 2018.

This visualization holds data from TranStats, a service of the Bureau of Transportation Statistics (BTS), which is the independent statistical agency within the United States Department of Transportation (DOT). While monthly data is available, this visualization holds annual totals.

The nearby example shows data starting in 2010 for the nation (blue lines) and Wichita. The visualization holds data for all U.S. airports with scheduled flights.

Example from the visualization, showing Wichita compared to all airports, through 2018. Click for larger

A few observations regarding Wichita airport traffic as compared to the nation:

  • Since 2014, passenger traffic (departing passengers) at the Wichita airport is higher, but traffic for the nation as a whole is much higher.
  • The number of scheduled departures has been declining in Wichita, while increasing for the nation after a decline.
  • The number of available seats on departing flights from Wichita has been mostly level, while rising sharply for the nation.
  • Load factor for Wichita has been rising, while level and declining slightly for the nation.

To view and use the interactive visualization, click here.

New metropolitan rankings regarding knowledge-based industries and entrepreneurship

New research provides insight into the Wichita metropolitan area economy and dynamism.

The Walton Family Foundation has released a study titled “The Most Dynamic Metropolitans,” saying it is new research ranking the economic performance of metropolitan areas in the Heartland and across the country. 1

Of the study, the authors write “Our Most Dynamic Metropolitan Index, and the analysis contained in this report provides objective insight into the communities providing economic opportunity for their residents, separating high performers from the low. Most Dynamic Metropolitans provides fact-based metrics on near-term and medium-term performance and prospects for long-term growth. The index allows economic development officials the ability to monitor their metro’s vivacity relative to others on a national basis or within their region and state.”

In the overall rankings, Wichita was number 319 of 379 metropolitan areas examined. Of note, this research recognizes the importance of young firms:

While most of our metrics are commonly used indicators of economic development, the young firm employment ratio is a relatively new measure. We use factor analysis to test our hypothesis that the ratio is an indicator of longer-term economic growth. Factor analysis is a statistical tool that can derive categories, called factors, from several variables by finding the ways clusters of variables move together. A factor analysis on all of our metrics tells us that we generally have the two factors we claimed to have above: one closely relating to variables such as 2016-2017 growth in average annual pay and 2017-2018 job growth. The second most closely relating to per-capita personal income, 2013-2017 growth in real GDP, 2013-2017 average annual pay growth and the young firm employment ratio. Thus, our hypothesis regarding the young firm employment ratio seems valid.

There have been some rankings showing Wichita doing well in jobs at young firms. 2 That’s good, as young firms — which are different from small business — are vitally important to economic growth. 3

This study, however, shows Wichita lagging in young firm employment ratio. In these rankings, Wichita came in at position 247 of 379 metro areas. That is better than the overall ranking for Wichita, which is at number 319.

The young firm employment ratio is calculated using data from 2016. Perhaps newer data will show something different.


Notes

  1. Walton Family Foundation. New Metropolitan Rankings Show Knowledge-Based Industries and Entrepreneurship Drive Success. June 10, 2019. Press release with links to documents available at https://www.waltonfamilyfoundation.org/about-us/newsroom/new-metropolitan-rankings-show-knowledge-based-industries-and-entrepreneurship-drive-success.
  2. Weeks, Bob. Metro Monitor evaluates the Wichita economy. Available at https://wichitaliberty.org/economics/metro-monitor-evaluates-wichita-economy-2018/.
  3. Jason Wiens and Chris Jackson. The Importance of Young Firms for Economic Growth. Available at https://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-digest/the-importance-of-young-firms-for-economic-growth.

Wichita airport traffic

Traffic is rising at the Wichita airport. How does it compare to others?

Click for larger.
Passenger traffic at Wichita Dwight D. Eisenhower National Airport has been rising. We know that from news reports and social media. While rising activity is good, it’s important to place Wichita in context with other airports.

(The Wichita airport has reported data through April 2019, while comprehensive national data from the Bureau of Transportation Statistics is available through February, so these comparisons are through February.)

Media reporting on the Wichita airport often uses “passengers” as the measure. The industry, however, uses “enplanements” as the most important measure of airport traffic. When Bureau of Transportation Statistics uses the term passengers, the precise meaning of the data is enplanements. 1

Looking at passengers (that is, enplanements) for the Wichita airport, we see that monthly Wichita passenger counts are rising, generally. 2 But not for all months. Over the past year, there were three months when traffic fell, compared to the same month of the previous year.

Compared to the nation, there were seven months in the past year when the increase in passengers in Wichita was greater than the change for all airports, as shown in the bars for each month in the nearby chart. Because of several slow months in Wichita coupled with some the of good months in Wichita being only slightly better than the nation, the overall picture is not as good for Wichita. This can be seen by the lines in the same chart, where the change in passengers over the last year is always higher for the nation.

Besides the number of passengers, we should also consider the number of flights departing an airport. This is particularly important to business travelers, as for them, the availability of a flight today or tomorrow may be more important than a bargain-price fare. In this chart, there are some months where the number of flights fell from the year before. The 12-month trend for Wichita is falling while rising for the nation.

Is the reported rising passenger count at the Wichita airport good news? Of course it is. But a useful assessment requires placing the Wichita data in context. In that context, the Wichita airport is underperforming.

Click charts for larger versions.

In the following chart of passengers, Wichita counts are generally rising, but not as fast as the nation. This data is indexed with January 2011 representing 100. The thicker lines are the average of the prior 12 months in order the smooth the seasonality of the monthly data.

In the following chart of the number of flights, Wichita is on a downward trend generally, although in the last two years the value has increased slightly.


Notes

  1. The government requires carriers to report enplanements, so it is a consistent measure across all airports. Further, airports generate revenue primarily from enplaned passengers rather than arriving passengers. The number of enplanements is almost exactly half the number of passengers. Over the last 15 years, enplanements in Wichita have accounted for 49.88 percent of passengers, with deplanements being 50.12 percent.
  2. Passenger traffic data is highly seasonal. It is not uncommon for passenger counts in the summer months to be 25 or 30 percent higher than winter counts. Therefore, comparisons are to the same month in the previous year.