Voice For Liberty

Category: Kansas state government

  • Sales tax revenue and the Kansas highway fund

    Sales tax revenue and the Kansas highway fund

    The effect of a proposed bill to end transfer of Kansas sales tax revenue to the highway fund is distorted by promoters of taxation and spending.

    The bill is SB 463. The bill’s fiscal note tells how this bill, if passed, would affect the highway fund: “Beginning in FY 2018, the percentage of state sales tax and compensating use tax distributed to the [State Highway Fund] would be eliminated.” The fiscal note goes on to estimate that the highway fund would receive $553.4 million less sales tax revenue than it would otherwise in fiscal year 2018. (This bill proposed changes to other funds, but here I consider only highways.)

    In an email to supporters, Economic Lifelines wrote: “SB 463 would redirect 35% of T-WORKS funding beginning in July of 2017. Passage of this legislation would be a devastating blow to the future of the T-WORKS program.” (Economics Lifelines is a group that lobbies for more spending on highways. Its members are primarily local chambers of commerce, labor unions, construction equipment dealers, and construction material suppliers. In other words, those who benefit from more highway spending, without regard to whether it is needed and wise.)

    Former Kansas budget director Duane Goossen was more emphatic, writing: “Watch out! A very dangerous financial bill just surfaced in the Senate Ways and Means Committee, but it was promoted with language that hid the ultimate purpose and effect. Senate Bill 463 permanently transfers more than $500 million annually from the highway fund to the general fund.”1

    Goossen has it backwards, however. The proposed bill would transfer nothing from the highway fund to the general fund. It would, however, stop transfers from the general fund to the highway fund.

    There’s a difference, and it’s important. The highway fund has no claim on sales tax revenue other than what the legislature decides to send it. That amount has changed over the years. Kansas law specifies how much sales tax revenue is transferred to the highway fund. Here are some recent rates of transfer and dates they became effective:2

    July 1, 2010: 11.427%
    July 1, 2011: 11.26%
    July 1, 2012: 11.233%
    July 1, 2013: 17.073%
    July 1, 2015: 16.226%
    July 1, 2016 and thereafter: 16.154%

    (If SB 463 passes as it stands now, on July 1, 2017 the rate would become 0 percent.)

    Transfers from Sales Tax to KDOT. Click for larger.
    Transfers from Sales Tax to KDOT. Click for larger.
    Nearby is a chart showing how many sales tax dollars were transferred to the highway fund. In 2006 the transfer was $98.914 million, and by 2015 it had grown to $511.586 million, an increase of 417 percent. Inflation rose by 18 percent over the same period.3

    (It’s important to note that in some years money has been transferred from the highway fund back to the general fund. Worse, in some years KDOT has borrowed money for the highway fund, but it was transferred to the general fund.4)

    You’d think that Goossen, a former state budget director, would understand the difference between stopping a flow of funds versus reversing the flow. He claims the latter, and it isn’t surprising to see this mistake. A few sentences in the article let us know Goossen’s ideology, which is that Kansans should be taxed more so that government can continue to spend: “This maneuver does not fix the problem caused by unaffordable income tax cuts, it just makes highways and children pay for it.” First, tax cuts are never unaffordable. It is government that is unaffordable. Tax cuts let people keep more of what is rightly theirs. That is, unless you believe that government has a legitimate claim to your income and assets, as Goossen does. Second, he complains that “recurring revenue does not begin to cover expenses.” That is true. But the proper remedy is to reform and cut spending. Goossen prefers raising taxes.

    Economic Lifelines makes the same mistake. We can understand — but not condone — this organization’s motive. It exists for the sole purpose of drumming up support for spending that benefits its members. If its director, who wrote the email cited above, said that Kansas is spending enough or too much on highways, he undoubtedly would be fired.

    But what is Duane Goossen’s motivation for twisting the meaning of a bill? That’s a mystery.

    KDOT spending on major road programs. Click for larger version.
    KDOT spending on major road programs. Click for larger version.
    To top it off, spending on highways has increased — notwithstanding the transfers from the highway fund — when we look at actual spending on roads. KDOT’s Comprehensive Annual Financial Report shows spending in the categories “Preservation” and “Expansion and Enhancement” has grown rapidly over the past five years. Spending in the category “Maintenance” has been level, while spending on “Modernization” has declined. For these four categories — which represent the major share of KDOT spending on roads — spending in fiscal 2015 totaled $932,666 million, up from a low of $698,770 in fiscal 2010.

    1. Goossen: High Danger Alert: SB 463. Kansas Center for Economic Growth. Available at: http://realprosperityks.com/goossen-high-danger-alert-sb-463/. ↩
    2. Kansas Statutes Annotated 79-3620. ↩
    3. Bureau of Labor Statistics CPI Inflation Calculator. Available at http://www.bls.gov/data/inflation_calculator.htm. ↩
    4. Voice for Liberty, Kansas transportation bonds economics worse than told. Available at http://wichitaliberty.org/kansas-government/kansas-transportation-bonds-economics-worse-than-told/. ↩
  • Kansas and Colorado, compared

    Kansas and Colorado, compared

    News that a Wichita-based company is moving to Colorado sparked a round of Kansas-bashing, most not based on facts.

    When a Kansas company announced moving its headquarters to Denver, comments left to a newspaper article made several statements that deserve closer examination.1

    One reader wrote “Yup another example that the tax relief for businesses is working in Kansas.” Another wrote “The biggest takeaway here is that then didn’t bother to mention the benefits of lower taxes meaning the tax policy Kansas touts really has no bearing on company decisions.” Another wrote “Just low taxes is not a magnet for business or people wanting to move here.” Let’s look at a few statistics regarding Kansas and Colorado business taxation.

    In the 2016 State Business Tax Climate Index from the Tax Foundation, Colorado ranked 18 overall, while Kansas ranked 22.2 According to this measure, Colorado has a better tax environment for business, even after Kansas tax reform.

    Data from the U.S. Census Bureau for 2014 shows that Colorado collects $2,195 in taxes from each of its citizens. Kansas collects $2,526.3 That’s after the Kansas tax cuts took effect. Kansas would have to cut taxes much more before it reaches the low level of taxation in Colorado.

    The takeaway: Even after Kansas tax reform, Colorado has lower taxes.

    Another commenter stated “People want to live and businesses want to be located … where education is important and supported.” The writer didn’t elaborate, but generally when people say “support” education, they mean “spend” a lot on public schools. Another commenter wrote “Public schools are treated as an afterthought by our Governor and Legislature.” So let’s look at spending.

    Colorado and Kansas schools, according to NEA. Click for larger.
    Colorado and Kansas schools, according to NEA. Click for larger.
    Regarding school spending, the National Education Association collects statistics from a variety of sources and uses some of its own transformations.4 A collection of statistics from that source is nearby. Note that Colorado teacher salaries are higher, while revenue per pupil is lower. Colorado spends more per student when considering current expenditures. Colorado has a higher student-teacher ratio than Kansas.

    Colorado and Kansas NAEP scores by ethnicity. Click for larger.
    Colorado and Kansas NAEP scores by ethnicity. Click for larger.
    The U.S. Census Bureau has different figures on spending. In a table titled “Per Pupil Amounts for Current Spending of Public Elementary-Secondary School Systems by State: Fiscal Year 2013” we see Colorado spending $8,647, and Kansas $9,828.5 This tabulation has Kansas spending 13.7 percent more than Colorado.

    Looking at scores on the National Assessment of Educational Progress (NAEP) — a test that is the same in all states — we see that when considering all students, Kansas and Colorado scores are very close, when measuring the percent of students scoring proficient or better. White students in Colorado, however, generally score higher than in Kansas.

    Colorado and Kansas NAEP scores by free/reduced lunch eligibility. Click for larger.
    Colorado and Kansas NAEP scores by free/reduced lunch eligibility. Click for larger.
    For NAEP scores by eligibility for free or reduced lunches, we see that Kansas and Colorado are similar, except that Colorado has made progress with eligible students in math, catching up with Kansas. (Eligible students are students from low-income households.)

    For what it’s worth, in Colorado 10.4 percent of students who attend public schools attend public charter schools. In Kansas the figure is 0.6 percent, due to Kansas law being specifically designed to limit charter school formation and survival.6

    A writer expressed this in his comment: “Colorado also presents a more stable political environment as well.” While this is something that probably can’t be quantified, a recent New York Times article disagrees, quoting a former governor:7

    “Colorado is subjected to extremes,” said Roy Romer, a former governor. “It’s not just blue and red. It’s also urban and rural. We have a history to this.”

    Of note, Colorado has initiative and referendum. Citizens may, by petition, propose new laws and veto laws the legislature passed.8 Kansas does not have initiative and referendum at the state level. This is one way that Kansas has a more stable political environment than Colorado: Citizens have less political power in Kansas. For example, the law that made marijuana legal in Colorado was passed through citizen initiative. I think it’s safe to say that it will be a long time — if ever — before Kansas has medical marijuana, much less full legalization.

    Further, Colorado has TABOR, or Taxpayer Bill of Rights. This is a measure designed to limit the growth of taxation and spending. Whether one likes the idea or not, it has had a tumultuous history in Colorado, according to a Colorado progressive public policy institute.9 And if you thought Kansas was the only state that — purportedly — underfunds education, welcome to Colorado. The same report holds: “As 2016 approached, the [Colorado] General Fund remained nearly $900 million short of what it needed to fully fund K-12 education and well below what it needed to restore postsecondary education and other programs to historic levels.” This is in line with the amount Kansas school spending advocates say Kansas needs to spend, adjusted for population.

    Colorado also has term limits on its state legislature and elected members of the state executive department (governor, lieutenant governor, secretary of state, attorney general, and treasurer.)10 Kansas has term limits on its governor, but on no other offices. This argues in favor of Colorado having a more dynamic and less stable government.

    —
    Notes

    1. Carrie Rengers. Viega to move corporate headquarters and 113 jobs to Denver. Wichita Eagle, March 18, 2016. Available at: http://www.kansas.com/news/business/biz-columns-blogs/carrie-rengers/article66851717.html. ↩
    2. 2016 State Business Tax Climate Index. (2016). Tax Foundation. Available at: http://taxfoundation.org/article/2016-state-business-tax-climate-index. ↩
    3. State Government Tax Collections – Business & Industry. US Census Bureau. Available at: http://www.census.gov/govs/statetax/. ↩
    4. Rankings of the States 2014 and Estimates of School Statistics 2015, National Education Association Research, March 2015. Available at http://www.nea.org/assets/docs/NEA_Rankings_And_Estimates-2015-03-11a.pdf. ↩
    5. U.S. Census Bureau. (2016). Public Elementary–Secondary Education Finance Data. Census.gov. Available at: https://www.census.gov/govs/school/. ↩
    6. National Center for Education Statistics. Public elementary and secondary charter schools and enrollment, by state: Selected years, 1999-2000 through 2012-13. Available at http://nces.ed.gov/programs/digest/d14/tables/dt14_216.90.asp. ↩
    7. Healy, J. (2014). Tracing the Line in Colorado, a State Split Left and Right. Nytimes.com. Available at: http://www.nytimes.com/2014/10/24/us/politics/in-colorado-ever-in-transition-a-fight-for-power.html. ↩
    8. Laws governing the initiative process in Colorado – Ballotpedia. (2016). Ballotpedia.org. Available at: https://ballotpedia.org/Laws_governing_the_initiative_process_in_Colorado. ↩
    9. Bell Policy Center. The road to 2016: More than three decades of constitutional amendments, legislative acts and economic ups and downs. Available at http://www.bellpolicy.org/research/road-2016. ↩
    10. Term Limits in Colorado, Colorado.gov. Available at https://www.colorado.gov/pacific/sites/default/files/Term%20Limits%20in%20Colorado.pdf. ↩
  • Math quiz on Kansas spending

    Math quiz on Kansas spending

    The average Kansan is misinformed regarding Kansas school spending, and Kansas news media are to blame, writes Paul Waggoner of Hutchinson.

    Math Quiz on Kansas Spending

    By Paul Waggoner

    Math questions, one would think, are very straight-forward and easy to answer. At least easy to guess the right answer in a simple multiple choice test. Such is not the case however with the average Kansan who follows state issues relying on the headlines in the Kansas press.

    The reality of how poor a job the Kansas press is doing with numbers is found in a December 2015 SurveyUSA study of 500 plus registered voters in Kansas. This scientific study of voters’ knowledge of educational spending in Kansas was virtually ignored by the Kansas media. Most likely because its implications don’t fit the media narrative on education in this Year 5 of the Age of Brownback. Even worse, the poll was commissioned by a conservative think tank, the Kansas Policy Institute.

    As to voter (mis) understanding this 15 question poll hit the jackpot. All the questions were multiple choice with only 4 options given.

    Question #6 asked how much state funding do you think Kansas school districts receive per pupil? The correct answer is well over $7,000 per student. 39% of Kansas voters thought it was under $4,000, another 22% thought between $4,000 and $5,000. Only 7% of voters guessed properly.

    The follow-up, Question #7, was how much total (federal/state/local) funding do you think Kansas school districts receive per pupil? The correct answer in 2015 was over $13,000 per pupil. Only 5% of registered Kansas voters got that one right. 40% thought the total was under $7,000, and 21% said $7,000 to $10,000 which were the two most inaccurate options!

    At this point I was even wondering how the accepted wisdom is so far removed from the truth. So I went to ksde.org, the website of the Kansas State Department of Education, to verify the precise figures. At that website every school district in the state is listed.

    What our local school districts spend is very close to the state averages. The Hutchinson USD 308 budget was over $60,000,000 in 2014 with 4,836 full-time students or $12,449 spent per pupil. 5 years earlier the USD 308 budget was $57 million, 5 years before that it was about $41 million.

    The comparable figures for USD 313 Buhler are $12,360 per pupil in 2014 with a $26,300,000 budget that 5 years earlier was $22,200,00 and 5 years before that was $18,000,000. For USD 313 that meant students were educated for just $9,000 per pupil as recently as 2005.

    Kansas school districts total spending is $2.0 billion higher now than just 10 years ago ($6 billion versus $4 billion). That is an incontrovertible fact. Which leads to two immediate questions: How can the Supreme court keep claiming the spending is constitutionally inadequate? And what exactly do taxpayers have to show for the extra $2,000,000,000 every year?

    The reality of those numbers are nowhere in the publics’ consciousness currently. For instance, SurveyUSA question #8 was “over the last 5 years how much do you think total per pupil funding has changed?” The correct answer is that it is actually up 9.92%. But fully 47% of Kansas voters confidently said it had dropped over 5%! Another 15% were sure it had dropped but thought the percentage was smaller. Only 7% of voters knew that school spending was up “over 5%’.

    The budget trajectory has changed and is on a much flatter curve than ever before. Taxpayers are mostly rejoicing, tax spenders (and their allies) are howling mad.

    My revised school spending narrative is frankly the story of the entire Kansas budget (as can be easily accessed at budget.ks.gov “Governors Budget Report FY 2017”).

    The state general fund budget first hit $1 billion in 1980 and grew consistently under Governors Carlin/Hayden/Finney at about a 6.5% annual rate.

    Under Graves and Sebelius that accelerated growth rate continued until the 2008-09 recession when the state budget dropped dramatically for 1 year under Governor Parkinson. This made a cumulative annual growth average of around 3% for those three administrations.

    Under Governor Brownback the general fund budget is still going up, but at a 5 year annual growth rate of 1.8%.

    On February 20th one Hutchinson News columnist’s headline blasted the “Deliberate financial starving of the state of Kansas.” I see this as more of a diet, and I say it is about time.

    The numbers on the state budget spending (and taxation) are readily available online. The execution of the plan for this new governmental trajectory leave something to be desired, but that is the topic for another day.

    Paul Waggoner is a Hutchinson resident and business owner. He can be reached with comments or questions at waggonerpm@gmail.com.

  • Kansas Supreme Court judicial selection

    Kansas Supreme Court judicial selection

    Kansas progressives and Democrats oppose a judicial selection system that is used by U.S. Presidents, both Democrats and Republicans.

    What is the substantive difference between these two systems?

    A) A state’s chief executive appoints a person to be a judge on the state’s highest court. Then the state’s senate confirms or rejects.

    B) A nation’s chief executive appoints a person to be a judge on the nation’s highest court. Then the nation’s senate confirms or rejects.

    Perhaps there is a difference that I’m not smart enough to see. I’m open to persuasion. Until then, I agree with KU Law Professor Stephen Ware and his 2007 analysis of the way Kansas selects Supreme Court judges as compared to the other states.1 That analysis concludes that “Kansas is the only state in the union that gives the members of its bar majority control over the selection of state supreme court justices.”

    Ware has made other powerful arguments in favor of discarding the system Kansas uses: “In supreme court selection, the bar has more power in Kansas than in any other state. This extraordinary bar power gives Kansas the most elitist and least democratic supreme court selection system in the country. While members of the Kansas bar make several arguments in defense of the extraordinary powers they exercise under this system, these arguments rest on a one-sided view of the role of a judge.”2

    Judges, Ware says, make law, and that is a political matter: “Non-lawyers who do not know that judges inevitably make law may believe that the role of a judge consists only of its professional/technical side and, therefore, believe that judges should be selected entirely on their professional competence and ethics and that assessments of these factors are best left to lawyers. In short, a lawyer who omits lawmaking from a published statement about the judicial role is furthering a misimpression that helps empower lawyers at the expense of non-lawyers, in violation of basic democratic equality, the principle of one-person, one-vote.”3

    Kansas exhibits a pattern of selecting governors from alternate political parties.
    Kansas exhibits a pattern of selecting governors from alternate political parties.
    For Kansas progressives and Democrats to oppose Kansas adopting the same system that has enabled Barack Obama to appoint two liberal justices to the U.S. Supreme Court, with perhaps more to come — don’t they realize that Kansas will (likely) have a Democratic governor someday? As Clay Barker noted, for the last 50 years, no Kansas governor has been followed by a successor of the same party (except for Mark Parkinson filling the remainder of a term after Kathleen Sebelius resigned). If that pattern holds — and there’s no guarantee that it will — the next Kansas governor will be a Democrat, just three years from now.

    Superficially, it doesn’t seem to make sense for Kansas Democrats to oppose the governor making judicial selections while supporting the President of the United States having the same power. It does make sense, however, when we realize that Kansas Democrats are comfortable with the state’s bar selecting the judicial nominees that the governor may consider. (Which gives truly useful and enjoyable bars a bad name.) Lawyers, especially lawyers that take an active role in politics, tend to be Democrats, and progressive Democrats at that. If the Kansas bar was dominated by constitutional conservatives, would Kansas Democrats feel the same?

    I’m not claiming that the motives of conservative Kansas Republicans are pure. Will they change their stance on the desirability of the governor appointing Supreme Court judges if there is a Democratic governor? I don’t know, but I have a suspicion.

    Defenders of the current Kansas system claim that the system is based on merit, not politics. To which we must note that this year the Kansas Supreme Court was reversed by the United States Supreme Court. It wasn’t even close, with justices voting eight to zero that the Kansas court was wrong in its application of the law. (The other Supreme Court justice said “I do not believe these cases should ever have been reviewed by the Supreme Court.)

    1. Ware, Stephen J., Selection to the Kansas Supreme Court. Fed-soc.org. Available at: http://www.fed-soc.org/publications/detail/selection-to-the-kansas-supreme-court. ↩
    2. Ware, Stephen J., The Bar’s Extraordinarily Powerful Role in Selecting the Kansas Supreme Court (September 25, 2009). Kansas Journal of Law & Pubic Policy, Vol. 18, No. 3, p. 392, 2009. Available at SSRN: http://ssrn.com/abstract=1478660. ↩
    3. Ware, Stephen J., Originalism, Balanced Legal Realism and Judicial Selection: A Case Study (August 3, 2012). Available at SSRN: http://ssrn.com/abstract=2129265. ↩
  • Power of Kansas cities to take property may be expanded

    Power of Kansas cities to take property may be expanded

    A bill working its way through the Kansas Legislature will give cities additional means to seize property.

    The bill is SB 338, titled “Rehabilitation of abandoned property by cities.” This bill has passed the Senate by a vote of 32 to eight. It has had a hearing in the House of Representatives.

    Wichitan John Todd is opposed to this bill and provided oral and written testimony this week to a House committee. In his testimony, Todd made these points, among others:

    • Senate Bill 338 appears to provide local governmental units with additional tools that they don’t need to “take” properties in a manner that circumvents the eminent domain statutes that private property rights advocates fought so hard to achieve in 2006.
    • The total lack of compensation to the property owner for the deprivation or taking of his or her property is missing in the bill.
    • Allowing a city or their third party take possession of vacant property they do not own and have not obtained legal title to is wrong.
    • Please take a look at a comparison between a free-market private sector solution as contrasted to a government mandated program to achieving affordable housing and the impact highly subsidized government housing solutions are having on adjacent home owners.

    Instead of being a problem, houses like these can present economic opportunity, says John Todd.
    Instead of being a problem, houses like these can present economic opportunity, says John Todd.
    In closing his testimony, Todd remarked: “In summary, cities in Kansas clearly have all the powers they need to deal with property issues through current law. By enhancing the power of cities and their appointed non-profit community redevelopment organizations to ‘take’ privately owned properties without compensation in an involuntary manner violates the individual private property rights that are essential for the rule of law and liberty to prevail.”

    Click here to view Todd’s written testimony and visual exhibits.

    Empty lots in northeast Wichita. Click for larger version.
    Empty lots in northeast Wichita. Click for larger version.
    Separately, Todd supplied a map of a portion of northeast Wichita. He remarked:

    I am told that there are over 100 vacant lots in this neighborhood represented by green color. It also shows “Poor” and “Very Poor to Unsound” properties in tan and yellow. SB 338 was touted to provide a tool to deal with blight. The point of this map is to demonstrate how the City of Wichita has been using existing law to deal with blighted properties, and how this law has facilitated the destruction of huge numbers of houses. Many had economic value, but there was no compensation to the property owners. My conclusion was that given the existing law, coupled with tax foreclosure sales, there was no need to give cities additional tools.

    What we have under existing law is actually a regulatory taking of private property with no compensation to property owners. Passage of SB 338 would expand those tools to allow cities or their chosen non-profit entities to seize vacant properties they do not have legal title to. The result for a property owner is a “regulatory taking,” ordered by the Kansas Courts with no compensation, allowing the city or the non-profit time to seek title through a mandated court order and judicial deed. Both are methods of forced government transfer and are wrong.

  • In Kansas, doctors may “learn” just by doing their jobs

    In Kansas, doctors may “learn” just by doing their jobs

    A proposed bill in Kansas should make us question the rationale of continuing medical education requirements for physicians.

    The bill is HB 2615, titled “Charitable healthcare providers; continuing education credits for gratuitous care of eligible patients.”

    The bill’s supplemental note explains the bill “… would allow charitable healthcare providers and dentists to fulfill one hour of continuing education credit for performance of two hours of gratuitous service to medically indigent persons.”

    In an op-ed published in the Wichita Eagle Representative Dan Hawkins explained “we believe that this system has the potential of generating more than $18 million in free care for the neediest Kansans.” (Rep. Dan Hawkins: Plan increases access to health care, reduces cost, March 7, 2016)

    Contrary to Hawkins, the care won’t be free. It may not cost the state anything, but it will have a cost to the doctors who supply the “free” care.

    Perhaps more importantly, this bill should make us question the purpose of continuing medical education requirements for physicians and dentists. In Kansas, physicians must participate in 50 hours of continuing medical education annually. This education requirement is satisfied by participating in “activity designed to maintain, develop, or increase the knowledge, skills, and professional performance of persons licensed to practice a branch of the healing arts.”

    But HB 2615 will let physicians satisfy 20 hours of this requirement by providing 40 hours of health care to needy people. Having doctors perform routine medical care — doing their daily job, in other words — doesn’t seem likely to advance the “knowledge, skills, and professional performance” of doctors, which is the stated goal of the regulation.

    We have, therefore, a regulation that seems reasonable — ensuring that doctors are up-to-date in professional knowledge — instead being used by the state to “encourage” doctors to provide free labor.

    Episodes like this should be a lesson in the powers and abuses of the regulatory state.

    The Kansas regulations

    According to the Kansas Board of Healing Arts, physicians must participate in continuing medical education each year, earning “50 hours with a minimum of 20 hours of Category I and a maximum of 30 hours of Category II.”

    In more detail, the regulations state the continuing education is “activity designed to maintain, develop, or increase the knowledge, skills, and professional performance of persons licensed to practice a branch of the healing arts.” 1 Category I continuing education is “presented by a person qualified by practical or academic experience” and may consist of lectures, panel discussions, workshops, seminars, symposiums, and other formal learning opportunities. 2 The requirements are 20 hours of this education annually.

    Category II continuing education comprises activities that are less formal, such as “clinical consultations with other healing arts practitioners that contribute to a practitioner’s education, participation in activities to review the quality of patient care, instructing healing arts and other health care practitioners, patient-centered discussions with other health care practitioners, participating in journal clubs, using searchable electronic databases in connection with patient care activities. and
    using self-instructional materials.” 3 The requirements are 30 hours of this education annually.

    Of note, HB 2615 doesn’t seem to specify into which category will fall the hours of continuing medical education earned by providing service to needy patients.

    —
    Notes

    1. K.A.R. 100-15. (2016). Ksbha.org. Available at: http://www.ksbha.org/regulations/article15.shtml#kar100154. ↩
    2. ibid. ↩
    3. ibid. ↩
  • Kansas should adopt food sales tax amendment

    Kansas should adopt food sales tax amendment

    A proposed constitutional amendment would reduce, then eliminate, the sales tax on food in Kansas.

    A severe and harsh problem in Kansas is our high sales tax on food. Only 14 states apply sales tax to food purchased at grocery stores for home consumption. Of those states that tax food, Kansas has either the highest rate, or the second-highest rate, depending on a few factors. Now, a resolution introduced in the Kansas Senate would reduce the food sales tax rate in two steps, and then eliminate the tax.

    The measure is SCR 1612, titled “Constitutional amendment providing for phase out and complete exemption from sales and use taxation of food and food ingredients.”

    The essence of the resolution is that on July 1, 2017, the sales tax on food would fall to four percent. On July 1, 2018 it would fall to two percent. On July 1, 2019 the rate would become zero.

    This is a proposed amendment to the Kansas Constitution. To advance it requires passage in both the House and Senate with a two-thirds margin. If that happens, the amendment would appear on a statewide election ballot. If a majority of Kansas voters approve, the constitution then has a new amendment. The governor has no role in the processing of amending the constitution except for expressing approval or opposition and lobbying legislators and voters.

    The resolution is sponsored by 12 senators. It requires 27 senators to pass with the required two-thirds margin.

    Estimates that reducing the food sales tax rate from the present 6.5 percent to four percent might reduce revenue from $120 million to $150 million.

    Kansas sales tax effects by income quintile, three scenarios. Click for larger version.
    Kansas sales tax effects by income quintile, three scenarios. Click for larger version.
    This is something the state needs to do. The sales tax on food is harmful to low-income families. See Kansas sales tax has disproportionate harmful effects and Wichita sales tax hike would hit low income families hardest. Supporters of a national sales tax, the FairTax, recognize this and compensate for the regressive nature of sales tax by incorporating a “prebate,” a monthly payment to offset the high sales tax on food and other necessities.

    It’s true that in Kansas there is the possibility of receiving a food sales tax credit of $125. But this is something that must be applied for when filing an income tax return. Also, the credit is nonrefundable, meaning that applicants must have income tax liability of at least $125 to receive the full credit. Low-income households generally don’t have an income tax liability, meaning the tax credit is not available to them.

    When proposing tax cuts, the question usually asked is “how do we pay for the tax cut.” That’s the wrong question. Tax cuts do not have a cost. It’s government that has a cost. Tax cuts simply let people keep more of what is rightfully theirs in the first place. So the proper question is “how will the state trim spending so people keep more of their money, especially low-income families.”

    But if the legislature wanted to compensate for the lost revenue of cutting sales taxes on food, here’s something to consider.

    The Kansas Department of Transportation receives part of the sales tax revenue. Prior to 2013, 11.2 percent of sales tax revenue was transferred to KDOT. Since then, the figure is 17.1 percent. If we simply changed the allocation back to the pre-2013 level, that would mean an additional 180 million dollars for the state general fund, according to estimates from Kansas Policy Institute. That’s enough to pay for the first round of food sales tax cuts in the proposed amendment.

  • Kansas highway spending

    Kansas highway spending

    An op-ed by an advocate for more highway spending in Kansas needs context and correction.

    An op-ed in the Wichita Eagle by Bob Totten, executive vice president of the Kansas Contractors Association, makes the case for more spending on Kansas roads and highways. (Bob Totten: State’s road and bridge work is underfunded, February 25, 2016)

    Besides lamenting the purportedly poor condition of Kansas roads and bridges, Totten mentions — frequently — the diversion of money from the highway fund to the general fund. While opinions may differ on the wisdom of KDOT borrowing money by selling long-term bonds and transferring those funds to the state’s general fund, that activity is separate from spending money on roads. (The borrowing and transferring is not wise, for both Republican and Democratic administrations. See Kansas transportation bonds economics worse than told.)

    KDOT spending on major road programs. Click for larger version.
    KDOT spending on major road programs. Click for larger version.
    When we look at actual spending on roads, we see something different from what is portrayed in this op-ed. KDOT’s Comprehensive Annual Financial Report shows spending in the categories “Preservation” and “Expansion and Enhancement” has grown rapidly over the past five years. Spending in the category “Maintenance” has been level, while spending on “Modernization” has declined. For these four categories — which represent the major share of KDOT spending on roads — spending in fiscal 2015 totaled $932.666 million, up from a low of $698.770 million in fiscal 2010.

    In light of this rising spending on roads, we have to wonder what is the point of Mr. Totten’s op-ed. That is self-evident. The purpose of the Kansas Contractors Association is to have the state spend as much as possible on projects that benefit its clients, which include contractors, construction companies, and material suppliers. It matters not whether the spending is needed, wise, or the proverbial “bridge to nowhere” — the goal of Mr. Totten is more spending by Kansas taxpayers to benefit his association’s members.

    KDOT spending. Click for larger version.
    KDOT spending. Click for larger version.
  • Steve Rose and Jim Denning on the Kansas economy

    Steve Rose and Jim Denning on the Kansas economy

    Kansas City Star editorialist Steve Rose visits with Kansas State Senator Jim Denning.

    It’s helpful for Kansans to have commentary and factual injection accompany a Steve Rose editorial in the Kansas City Star. In this case let’s look at a column based on his interview with Kansas State Senator Jim Denning.

    Steve Rose: “The numbers can be sliced and diced to make a positive or negative picture, but it is undeniable that Kansas government itself is virtually bankrupt, and Brownback’s tax policies are responsible.”

    A government can balance a budget by taxing more or spending less. We see the clear preference of Rose here: There is not enough taxation. We now have an efficiency study that shows some ways to save money. The question is why didn’t the legislature commission this study in 2012, the year in which it cut taxes?

    “[State Sen. Jim Denning of Overland Park] Denning said: ‘The governor rolled the dice on the most aggressive tax cut policy in history, and things just did not turn out the way he expected.’”

    It’s a shame to see Republicans — or anyone, for that matter — referring to tax cuts as “rolling the dice.” Cutting taxes simply means that people are allowed to keep more of what is rightfully theirs in the first place — which is a good thing. There is legitimate concern that the 2012 tax cuts were distributed in an unfair or unwise way. The way to fix that is to cut taxes for those who didn’t receive the purportedly unfair cuts.

    Unemployment with and without stimulus through 2014-01As far as the results of the tax cuts, the governor should not have bragged as he did. The ability of government to manage the economy is limited, especially at the state level. Consider the Obama stimulus. The nation’s unemployment rate was always above the rate the administration predicted if there were no stimulus. See Brownback and Obama stimulus plans.

    Kansas Spending, Per Capita, Adjusted for CPI 2016-01Further, what is the role of taxation in Kansas? Is it taxation or government spending that is purportedly good for the Kansas economy? Is it to support spending? If so, the tax cuts have not have an effect on spending. While some programs have been trimmed, overall state spending continues on a largely upward trend (for all funds spending) or remains mostly flat (for general fund spending). See Spending and taxing in Kansas.

    Denning: “If we would have closed the [LLC] loophole, we would have brought in an additional $200 million, and the governor would have been a hero.”

    Kansas General Fund spending, showing large deficits of revenue compared to spending in 2014 and 2015.
    Kansas General Fund spending, showing large deficits of revenue compared to spending in 2014 and 2015.
    The LLC loophole Denning refers to is the zero income tax on pass-through business income. Eliminating it and recapturing the $200 million would not have balanced the Kansas budget. In fiscal years 2014 and 2015 the state spent $340 million and $308 million more than it took in as revenue. Spending restraint is necessary.

    Denning: “The Legislature has controlled spending to the lowest levels on record. … Our constituents wanted us to reduce spending, and we did.”

    It’s hard to justify Denning’s claim with facts. See again Spending and taxing in Kansas.