Voice For Liberty

Category: Kansas state government

  • In Kansas, a lost legislative opportunity

    In Kansas, a lost legislative opportunity

    Kansas legislators are struggling to balance the state’s budget. In 2012 the legislature passed a tax cut, although it was unevenly applied. But in the intervening years, the legislature has not taken serious steps to cut state spending to match. Legislators failed to consider bills to streamline and outsource government functions, although the bills had passed in a previous session. The legislature has also failed to consider budgetary process reform as explained below in an article from May 2012.

    Leaders in the Kansas legislature and executive branch tell us the only way to balance the Kansas budget this year is by raising more revenue through taxation. That may be true, as reforming spending and budgeting takes time to accomplish. We had the time. But our legislature and executive branch squandered that opportunity. Now, they ask you for more tax revenue.

    This year Kansas made a leap forward in reducing income tax rates. The next step for Kansas is to reduce its spending, both to match the reduced revenue that is forecast, but also to improve the efficiency of Kansas government and leave more money in the hands of the private sector. Specifically, Kansas needs to improve its budgeting process and streamline state government.

    In Kansas, like in many states, the budgeting process starts with the previous year’s spending. That is then adjusted for factors like inflation, caseloads, and policy changes that necessitate more (or rarely, less) spending. The result is that debates are waged over the increment in spending. Rarely is the base looked at to see if the spending is efficient, effective, or needed.

    There are several approaches Kansas could take to improve on this process. One is zero-based budgeting. In this approach, an agency’s budget set to zero. Then, every spending proposal must have a rationale or justification for it to be added to the budget.

    Zero-based budgeting can be successful, but, according to the recent paper Zero-base Budgeting in the States from National Conference of State Legislatures, it requires a large commitment from the parties involved. It also can take a lot of time and resources. Kansas could start the process with just a few agencies, and each agency could go through the process periodically, say once every five or six years. Some states have abandoned the zero-based budgeting process.

    In its State Budget Reform Toolkit, American Legislative Exchange Council advocates a system called priority-based budgeting. This process starts with deciding on the core functions of state government. That, of course, can be a battle, as people have different ideas on what government should be doing.

    ALEC reports that “In 2003, Washington state actually implemented priority based budgeting to close a budget deficit of $2.4 billion without raising taxes.”

    The spending cuts Kansas needs to balance the budget are not large. Kansas Policy Institute has calculated that a one-time cut of 6.5 percent next year would be sufficient to bring the budget to balance.

    The problem that Kansas will face in reducing state spending and streamlining its government is that there are those who are opposed. Streamlining often means eliminating programs that aren’t needed, aren’t performing as expected, or are very costly. These programs, however, all have constituencies that benefit from them — the concept of concentrated benefits and dispersed costs that public choice economics has taught us. These constituencies will be sure to let everyone know how harmful it will be to them if a program is scaled back or ended.

    Streamlining also means that there may be fewer state employees. Some will say that the loss of state employees means a loss for the economy, as the state workers will no longer be receiving a paycheck and spending it. This reasoning, however, ignores the source of state workers’ pay: the taxpayers of Kansas. With fewer state employees, taxpayers will have more money to spend or invest. The problem is that it is easier to focus on the employees that may lose their jobs, as they are highly visible and they have vocal advocacy groups to watch out for them. This is an example of the seen and unseen, as explained by Henry Hazlitt.

  • More government spending is not a source of prosperity

    More government spending is not a source of prosperity

    Kansas needs to trim state government spending so that its economy may grow by harnessing the benefits of the private sector over government.

    In the debate over how to balance the Kansas budget, those who oppose low state taxes say the burden of taxation is simply transferred to other sources, usually in the form of sales and property taxes. Cutting spending is the other possibility, but it is argued that state spending is a good thing, a source of prosperity that Kansas should exploit.

    The idea that government spending is a generator of wealth and prosperity is true for only a certain minimal level of spending. We benefit from government provision of things like national defense, public safety, and a court system. But once government grows beyond these minimal core functions, it is markets — that is, free people trading in the private sector — that can produce a wider variety of better goods and services at lower cost.

    Those who call for more government spending seem to fail to realize spending has a cost, and someone has to pay. They see the salary paid to a government worker and say that money gets spent, thereby producing economic activity and jobs. But what is the source of the government worker’s salary? It is money taken from someone through taxation. By necessity, money spent on government reduces the private sector economic activity of those who paid the taxes. (At the federal level, government also spends by borrowing or creating inflation. Kansas can’t do this.)

    If this loss was economically equivalent to the gain, we might be less concerned. But there is a huge cost in taxation and government inefficiency that makes government spending a negative-sum proposition.

    Another fundamental problem with government taxation and spending is that it is not voluntary. In markets, people voluntarily trade with each other because they feel it will make them better off. That’s not the case with government. I do not pay my taxes because I feel doing so makes me better off, other than for that small part that goes to the basic core functions. Instead, I pay my taxes so that I can stay out of jail. This fundamentally coercive method of generating revenue for government gets things off to a bad start.

    Then, ask how that money is spent. Who decides, and how? Jeffrey A. Miron explains: “The political process, alas, does not lend itself to objective balancing of costs and benefits. Most programs benefit well-defined interest groups (the elderly, teachers unions, environmentalists, defense contractors) while imposing relatively small costs per person on everyone else. Thus the winners from excess spending fight harder than the losers, and spending far exceeds the level suggested by cost-benefit considerations.” 1

    An example in Kansas is the special interest group that benefits from highway construction. They formed a group called Economic Lifelines. It says it was formed to “provide the grassroots support for Comprehensive Transportation Programs in Kansas.” Its motto is “Stimulating economic vitality through leadership in infrastructure development.”

    A look at the membership role, however, lets us know whose economic roots are being stimulated. Membership is stocked with names like AFL-CIO, Foley Equipment Company, Heavy Constructors Association of Greater Kansas City, Kansas Aggregate & Concrete Associations, Kansas Asphalt Pavement Association, Kansas Contractors Association, Kansas Society of Professional Engineers, and PCA South Central Cement Promotion Association. Groups and companies like these have an economic interest in building more roads and highways, whether or not the state actually needs them.

    As Miron explained, groups like this will spend almost limitlessly in order to receive appropriations from the government. It’s easier than competing in markets for customers and business. It’s perhaps the largest problem with government spending: Decisions are made by a few centralized actors who are subject to intense lobbying by special interests. It is the well-known problem of concentrated benefits and diffuse costs. 2

    Some argue that without government spending, certain types of goods and services will not be provided. A commonly cited example is education, which accounts for about half of Kansas general fund spending. Would there be schools if not for government? Of course there would be. There are many non-government schools now, even though those who patronize them must first pay for the government schools before paying for their own schools. And there were many schools and educated, literate Americans before government decided it need to monopolize education.

    Still, it is argued that government spending on education is needed because everyone benefits from an educated citizenry. Tom G. Palmer explains: “Thus, widespread education generates public benefits beyond the benefits to the persons who are educated, allegedly justifying state provision and financing through general tax revenues. But despite the benefits to others, which may be great or small, the benefits to the persons educated are so great for them that they induce sufficient investment in education. Public benefits don’t always generate the defection of free-riders.”

    Those who still argue that government spending in education is for the good of everyone will also need to defend the sagging and declining performance of public schools. They need to persuade us that government schools are producing an educated citizenry. They need to defend the capture of Kansas spending on schools by special interest groups that benefit from this spending. They actually do a pretty good job of this, which illustrates the lengths to which special interest groups will go. In Kansas, they throw children under the bus.

    Back to the basics: Government spending as economic booster is the theory of the Keynesians, including the administration of Barack Obama. Miron, from the same article cited above, explains the problems with this:

    That brings us to the second argument for higher spending: the Keynesian claim that spending stimulates the economy. If this is accurate, it might seem the U.S. should continue its high-spending ways until the recession is over.

    But the Keynesian argument for spending is also problematic. To begin with, the Keynesian view implies that any spending — whether for vital infrastructure or bridges to nowhere — is equally good at stimulating the economy. This might be true in the short term (emphasis on might), but it cannot be true over the long haul, and many “temporary” programs last for decades. So stimulus spending should be for good projects, not “digging ditches,” yet the number of good projects is small given how much is already being spent.

    More broadly, the Keynesian model of the economy relies on strong assumptions, so we should not embrace it without empirical confirmation. In fact, economists find weak or contradictory evidence that higher government spending spurs the economy.

    Substantial research, however, does find that tax cuts stimulate the economy and that fiscal adjustments — attempts to reduce deficits by raising taxes or lowering expenditure — work better when they focus on tax cuts. This does not fit the Keynesian view, but it makes perfect sense given that high taxes and ill-justified spending make the economy less productive.

    The implication is that the U.S. may not face a tradeoff between shrinking the deficit and fighting the recession: it can do both by cutting wasteful spending (Medicare, Social Security, and the wars in Iraq and Afghanistan, for starters) and by cutting taxes.

    The reduced spending will make the economy more productive by scaling government back to appropriate levels. Lower tax rates will stimulate in the short run by improving consumer and firm liquidity, and they will enhance economic growth in the long run by improving the incentives to work, save, and invest.

    Deficits will therefore shrink and the economy will boom. The rest of the world will gladly hold our debt. The U.S. will re-emerge as a beacon of small government and robust capitalism, so foreign investment (and talented people, if immigration policy allows) will come flooding in.

    In Kansas, we need to scale back government to appropriate levels, as Miron recommends. That means cutting spending. That will allow us to maintain low tax rates, starting with the income tax. Then we in Kansas can start to correct the long record of sub-par economic performance compared to other states and bring prosperity and jobs here.

    1. Cato Institute, 2010. ‘Slash Expenditure To Balance The Budget’. Accessed April 28 2015. http://www.cato.org/publications/commentary/slash-expenditure-balance-budget. ↩
    2. David Boaz: “Economists call this the problem of concentrated benefits and diffuse costs. The benefits of any government program — Medicare, teachers’ pensions, a new highway, a tariff — are concentrated on a relatively small number of people. But the costs are diffused over millions of consumers or taxpayers. So the beneficiaries, who stand to gain a great deal from a new program or lose a great deal from the elimination of a program, have a strong incentive to monitor the news, write their legislator, make political contributions, attend town halls, and otherwise work to protect the program. But each taxpayer, who pays little for each program, has much less incentive to get involved in the political process or even to vote.” ↩
  • The Kansas revenue problem in perspective

    The Kansas revenue problem in perspective

    If we take the budgetary advice of a former Kansas state budget official, we need to be ready to accept the economic stagnation that accompanied his boss’s tenure.

    Writing in his blog, former Kansas budget director Duane Goossen offers his advice for fixing the Kansas budget: “The state has a revenue problem that will not fix itself. Lawmakers have to face up to the fact that they must make revenue match expenditures. Unaffordable income tax cuts caused the problem. That’s the place to look for a correction.” (Lawmakers Make It Clear: Kansas Has A Revenue Problem)

    Goossen has one thing correct: revenue and expenditures must be equal, over any long period of time. The preference for Goossen, as we see, is to raise revenue to support more spending. We can’t afford tax cuts, he writes.

    But this is a backwards way of looking at the relationship between government and its subjects. When someone says we can’t afford tax cuts, that presumes a few things. First, it presumes that the previous level of taxation was better than the current level.

    Second, it presumes that tax cuts have a cost that can’t be afforded. The only way this is true is if we believe that the state has first claim on our incomes. The state takes what it believes it needs, and we get to keep the rest. Then if, somehow, the government is persuaded to give any of that claim back to us, this “gift” has to be paid for.

    But for those who believe in self-ownership, this is nonsense. It’s the people who “give” tax money to the government, not the government who “gives” it back in the form of tax cuts. If the government cuts taxes, the government gives us nothing. It simply takes less of what is ours in the first place.

    Growth of jobs in Kansas and nearby states. Click for larger version.
    Growth of jobs in Kansas and nearby states. Click for larger version.
    But the attitude of many government officials is the opposite. In 2006 Kansas cut taxes on business equipment and machinery. At the time, the Wichita Eagle reported: “Gov. Kathleen Sebelius, a Democrat, who first proposed the business machinery tax cut, agreed. ‘We’re not giving away money for the sake of giving it away,’ she said. ‘I’m hoping that the economic growth will actually help fund the school plan that we just passed.’” (emphasis added) (Lawmakers hope for growth)

    Growth of gross domestic product in Kansas and nearby states. Click for larger version.
    Growth of gross domestic product in Kansas and nearby states. Click for larger version.
    For the former governor of Kansas, letting business firms keep a little more of the money they earn means the state is “giving it away.” By the way, Duane Goossen — who now believes the only solution for the Kansas budget is to raise taxes — was the state’s budget director when Sebelius said the state is going to “give away money” in the form of tax cuts.

    If take Goossen’s advice and return to the tax rates of the Sebelius and Graves eras, let’s make sure we understand the economic growth Kansas experienced during those years. Nearby is a snapshot of Kansas job growth starting when Bill Graves became governor, along with growth in some nearby states. A chart of GDP growth starts in 1997, two years into the Graves administration. We don’t want to return to these levels of growth.

    If you’d like to use the interactive visualizations of this employment and GDP data, click here for employment, and click here for GDP.

  • Efficiency has not come to Kansas government

    Efficiency has not come to Kansas government

    Kansas state government needs to cut spending, but finds itself in a difficult situation of its own making.

    The budget bill under consideration in the Kansas Legislature calls for spending $3 million for the production of an efficiency analysis review. It’s a good idea, but is too late to help the legislature balance the budget this year.

    Trimming Kansas government spending is a long-term project. The legislature has looked at several bills that would help control spending, but has not passed the bills. Had they been passed when introduced, the state would be in a much better position to make reforms. But a look at the history of these bills leads us to wonder if the leaders of our state government — both in the executive and legislative branches — are really serious about controlling spending.

    The three bills — explained in detail below — were in play during the 2011 and 2012 legislative sessions. They all passed the House of Representatives in 2011. But given that the Senate was in the hands of moderate Republicans, there was little chance that the bills would also pass the Senate. That’s what happened. Each bill died in the Senate.

    Starting with the 2013 session, however, the Senate has been in conservative hands. Have the bills been reintroduced? With the exception of the efficiency analysis review mentioned above and a look at K — 12 education, I don’t believe the bills, or anything else like them, have been introduced or considered.

    Both chambers of the Kansas Legislature and the governor’s mansion have been under the control of conservatives for three years, but no serious initiative to control spending has emerged, with the exception of the efficiency task force on K — 12 education. This ought to cause voters to ask if the desire and will to cut spending truly exists.

    It’s curious that liberals and progressives in Kansas are opposed to efforts to increase efficiency, such as the school task force. If the government services that liberals support are truly vital, they ought to insist that they are delivered as efficiently as possible so that the greatest number may benefit to the greatest extent. But that doesn’t happen.

    A simple path forward

    Recently I attended a meeting where a speaker reported his observations of state workers wasting time while at work. He contrasted that to the private sector, where he said this waste is less likely to happen. Shouldn’t we investigate state agencies, looking for instances of waste, and when found, eliminate the waste, he asked? It’s a good idea, but something that I think would be difficult to accomplish.

    There is an easier way to root out inefficiencies in the operations of state government — and local and federal too. That is to use the benefits of the private sector that the speaker praised. We can do this by outsourcing government functions to the private sector. Then, the work is done under the motivations that exist in the private sector.

    Kansas Policy Institute produced a report in 2013 that shows how Kansas can save using the principles of privatization and outsourcing. The report is Better Service, Better Price: How privatization can streamline government, improve services, and reduce costs for Kansas taxpayers.

    Reforms of this nature take some time to implement. Several years ago Kansas governmental leaders had time to start the state on a path to reform, but did not take the opportunity. Now these same leaders are considering raising taxes to balance the Kansas budget. This did not have to happen.

    The bills that did not pass

    In 2011 the Kansas Legislature lost three opportunities to do just this. Three bills, each with this goal, were passed by the House of Representatives, but each failed to pass through the Senate, or had its contents stripped and replaced with different legislation.

    Each of these bills represents a lost opportunity for state government services to be streamlined, delivered more efficiently, or measured and managed. These goals, while always important, are now essential for the success of Kansas government and the state’s economy. There is no reason why these bills, or similar measures, could not be revived. The improvements these bills would foster will not balance next year’s budget. But they will set the stage for controlling the growth of Kansas government spending. This will leave more money in the private sector, which will help Kansas grow.

    Kansas Streamlining Government Act

    HB 2120, according to its supplemental note, “would establish the Kansas Streamlining Government Act, which would have the purpose of improving the performance, efficiency, and operations of state government by reviewing certain state agencies, programs, boards, and commissions.” Fee-funded agencies — examples include Kansas dental board and Kansas real estate commission — would be exempt from this bill.

    In more detail, the text of the bill explains: “The purposes of the Kansas streamlining government act are to improve the performance, streamline the operations, improve the effectiveness and efficiency, and reduce the operating costs of the executive branch of state government by reviewing state programs, policies, processes, original positions, staffing levels, agencies, boards and commissions, identifying those that should be eliminated, combined, reorganized, downsized or otherwise altered, and recommending proposed executive reorganization orders, executive orders, legislation, rules and regulations, or other actions to accomplish such changes and achieve such results.”

    In testimony in support of this legislation, Dave Trabert, President of Kansas Policy Institute offered testimony that echoed findings of the public choice school of economics and politics: “Some people may view a particular expenditure as unnecessary to the fulfillment of a program’s or an agency’s primary mission while others may see it as essential. Absent an independent review, we are expecting government employees to put their own self-interests aside and make completely unbiased decisions on how best to spend taxpayer funds. It’s not that government employees are intentionally wasteful; it’s that they are human beings and setting self-interests aside is challenge we all face.”

    The bill passed the House of Representatives by a vote of 79 to 40. It was referred to the Senate Committee on Federal and State Affairs, where it did not advance.

    Privatization and public-private partnerships

    Another bill that did not advance was HB 2194, which in its original form would have created the Kansas Advisory Council on Privatization and Public-Private Partnerships.

    According to the supplemental note for the bill, “The purpose of the Council would be to ensure that certain state agencies, including the Board of Regents and postsecondary educational institutions, would: 1) focus on the core mission and provide goods and services efficiently and effectively; 2) develop a process to analyze opportunities to improve efficiency, cost-effectiveness and provide quality services, operations, functions, and activities; and 3) evaluate for feasibility, cost-effectiveness, and efficiency opportunities that could be outsourced. Excluded from the state agencies covered by the bill would be any entity not receiving State General Fund or federal funds appropriation.”

    This bill passed by a vote of 68 to 51 in the House of Representatives. It did not advance in the Senate, falling victim to a “gut-and-go” maneuver where its contents were replaced with legislation on an entirely different topic.

    Opposing this bill was Kansas Organization of State Employees (KOSE), a union for executive branch state employees. It advised its “brothers and sisters” that the bill “… establishes a partisan commission of big-business interests to privatize state services putting a wolf in charge of the hen house. To be clear, this bill allows for future privatization of nearly all services provided by state workers. Make no mistake, this proposal is a privatization scheme that will begin the process of outsourcing our work to private contractors. Under a privatization scheme for any state agency or service, the employees involved will lose their rights under our MOA and will be forced to adhere to the whims of a private contractor who typically provides less pay and poor benefits. Most workers affected by privatization schemes are not guaranteed to keep their jobs once an agency or service is outsourced.”

    Note the use of “outsourcing our work.” This underscores the sense of entitlement of many government workers: It is not work done for the benefit of Kansans; to them it is our work.

    Then, there’s the warning that private industry pays less. Most of the time representatives of state workers like KOSE make the case that it is they who are underpaid, but here the argument is turned around when it supports the case they want to make. One thing is probably true: Benefits — at least pension plans — may be lower in the private sector. But we’re now painfully aware that state government has promised its workers more pension benefits than the state has been willing to fund.

    Performance measures

    Another bill that didn’t pass the entire legislature was HB 2158, which would have created performance measures for state agencies and reported that information to the public. The supplemental note says that the bill “as amended, would institute a new process for modifying current performance measures and establishing new standardized performance measures to be used by all state agencies in support of the annual budget requests. State agencies would be required to consult with representatives of the Director of the Budget and the Legislative Research Department to modify each agency’s current performance measures, to standardize such performance measures, and to utilize best practices in all state agencies.” Results of the performance measures would be posted on a public website.

    This bill passed the House of Representatives by a nearly unanimous vote of 119 to 2. In the Senate, this bill was stripped of its content using the “gut-and-go” procedure and did not proceed intact to a vote.

    Opposition to these bills from Democrats often included remarks on the irony of those who were recently elected on the promise of shrinking government now proposing to enlarge government through the creation of these commissions and councils. These bills, however, proposed to spend modest amounts increasing the manageability of government, not the actual range and scope of government itself. As it turns out, many in the legislature — this includes Senate Republicans who initiated or went along with the legislative maneuvers that killed these bills — are happy with the operations of state government remaining in the shadows.

    These proposals to scale back the services that government provides — or to have existing services be delivered by the private sector — mean that there will be fewer government employees, and fewer members of government worker unions. This is another fertile area of gathering support for killing these bills.

    State workers and their supporters also argue that fewer state workers mean fewer people paying state and other taxes. Forgotten by them is the fact that the taxes taken to pay these workers means less economic activity and fewer jobs in the private sector.

    As to not wanting performance measures: Supporters of the status quo say that people outside of government don’t understand how to make the decisions that government workers make. In one sense, this may be true. In the private sector, profitability is the benchmark of success. Government has no comparable measure when it decides to, say, spend some $300 million to renovate the Kansas Capitol. But once it decides to do so, the benchmark and measurement of profitability in executing the service can be utilized by private sector operators. Of course, private contractors will be subject to the discipline of the profit and loss system, something missing from government.

  • Political perspective masquerades as ‘documentary’

    Political perspective masquerades as ‘documentary’

    From Kansas Policy Institute.

    Political perspective masquerades as ‘documentary’

    By Dave Trabert

    “Where the Buffaloed Roam — An Ode to the Kansas Budget,” a film by Louisburg High School student Carson Tappan, is being featured at the Kansas City Film Festival.  It is billed as a “documentary” but in reality, it merely presents a political viewpoint that doesn’t let facts get in the way of the story it wants to tell.

    Mr. Tappan is to be commended for tackling the project and it is heartening to see a high school student take an interest in state budget issues. He deserves an “A” for initiative and creativity but he fails in his goal to “make the problem clean and simple.” I agreed to be interviewed for the film and provided Mr. Tappan with a great deal of data, some of which contradicts claims made by other participants but he chose not to use it.

    I recently asked Mr. Tappan why he excluded pertinent facts I provided and he wrote back saying, “I did not exclude any facts that you provided, the interview was too long to keep it in its entirety.” But as explained later in this piece, he did indeed exclude facts that contradict one of his own contentions.

    Mr. Tappan and other participants in the film are certainly entitled to their opinion, and healthy discussions of alternate views are productive. Different opinions can be evenly presented in a documentary format but “Where the Buffaloed Roam” goes out of its way to ridicule those who don’t agree with its premise that reducing taxes is a bad idea.

    The film takes the position that states like Texas and Florida can manage without an income tax because they have oil and tourism revenue, but that is not the reason. Texas, for example, could have all of the oil revenue in the nation and still have a high tax burden if it spent more. Every state provides the same basket of basic services (education, social service, etc.) but some states do so at a much lower cost and pass the savings on in the form of lower taxes.

    In 2012, the states that tax income spent 49 percent more per-resident providing services than the states without an income tax, and they don’t do it by pushing spending to local government; the ten states with the highest combined state and local tax burden spent 43 percent more per resident than the ten states with the lowest burdens. Kansas, by the way, spent 37 percent more per resident than the states without an income tax.

    While Kansas spent $3,409 per resident, Texas only spent $2,293 and Florida spent just $1,862 per resident. Small states also spent less; New Hampshire (which doesn’t have an income tax or a state sales tax) spent just $2,455 per resident. States that spend less, tax less.

    The “oil and tourism” objection is common so I gave this information to Mr. Tappan and discussed it in the interview. He didn’t just ignore those facts .. he actually made the “oil and tourism” argument.

    The “clean and simple” explanation of the Kansas budget is that spending wasn’t adjusted when taxes were reduced. Regardless of whether legislators agreed with tax reform, they and Governor Brownback should have reduced the cost of government. Instead, they succumbed to pressure from the bureaucracy and special interests and continue to increase spending. General Fund spending will set a new record this year and is proposed to rise even higher over the next two years.

    Let’s put that in perspective. Kansas’ 2012 spending of $6.098 billion was 37 percent higher than the per-resident spending of states without an income tax. This year Kansas is expected to spend $191.5 million more than in 2012 and the budgets under consideration in the Legislature will add another $210.1 million in the next two years.

    Kansas doesn’t need to be as efficient as states with low taxes to balance the budget…the state just needs to operate a few percentage points better. Ask legislators or Governor Brownback if government operates efficiently and they will say, “of course not.”  Then ask what they are going to do about it. This year, as in the past, the majority would rather raise taxes unnecessarily than stand up to the bureaucracy and special interests that profit from excess government spending. That is the clean and simple explanation of what is wrong with the Kansas budget.

    Former state budget director Duane Goossen tells a different story (but still won’t debate us in public where he can be called out). He said revenue dropped three straight years during the recent recession and it appeared that revenue would decline for a fourth year, which prompted a sales tax increase that he attributes for the revenue turnaround. But that’s not exactly true. Mr. Goossen talked about tax revenue declines before carefully shifting to a discussion of revenue declines. Most people, and probably Mr. Tappan, wouldn’t catch that nuance but Mr. Goossen knows exactly what he was doing.

    As shown in the above table, tax revenue only declined two years during the recession, in 2009 and 2010. Total revenue did decline a third year and was projected down a fourth year but that was because of conscious decisions made by legislators to transfer tax money out of the General Fund. The November 2009 Consensus Revenue Estimate predicted that tax revenues would increase for 2011, from $5.192 billion to $5.324 billion, and that estimate did not consider any sales tax increase. Mr. Gossen is simply pushing a notion that tax increases are necessary. Or, maybe tax increases are Mr. Gossen’s preference but he would rather distract his interlocutor with obfuscation than simply state his true goal.

    This tax revenue chart that appears in the film clearly attributes tax revenue growth between 2010 and 2012 to the 1 cent sales tax that began July 1, 2010 (it’s unknown whether Mr. Goossen or Mr. Tappan prepared it because there is no sourcing). But this chart is yet another misrepresentation of the facts.

    Data readily available from the Kansas Legislative Research Department shows that income taxes and other tax sources also increased in 2011 and 2012. Income tax revenue increased by $560 million over the two years while retail sales taxes grew by $490 million and all other General Fund taxes increased by $125 million. 

    Kansas certainly has a spending problem but tax revenue is actually running well ahead of inflation…even after income taxes were reduced. General Fund tax revenue increased 28 percent between 2004 and 2014 while inflation was only 24 percent. The November 2014 Consensus Revenue Estimate shows that tax revenue will continue to stay well ahead of inflation (assuming inflation continues at its current pace. Tax revenue in 2017 would be 39 percent higher than 2004 but inflation would be 29 percent higher (again, assuming inflation maintains its current pace.)

    The film also contains a number of false claims about school funding. Heather Ousley, who is a member of an organization that actively campaigns for the defeat of legislative candidates who do not subscribe to the “just spend more” philosophy of school funding, repeatedly claimed that schools are being defunded. She also repeats the mantra that schools are being defunded so that public education can be privatized; she may believe that but having spent a lot of time working with legislators, I know that to be a false assumption. Defenders of the status quo are fond of repeating the mantra, but it is nothing more than a scare tactic.

    Schools are not being defunded and Mr. Tappan was provided with data from the Kansas Department of Revenue that contradicts claims made in the film. Again, he chose not to use that information. In reality, school funding will set a fourth consecutive record this year at $6.145 billion. On a per-pupil basis, it’s $13,343 and will be the third consecutive record. The facts are explained in greater detail in another blog post, which also shows that state funding is increasing this year under the new block grants.

    There are other examples of factual inaccuracy in the film, but hopefully those set forth here sufficiently demonstrate that “Where the Buffaloed Roam” is not the documentary it purports to be but an artfully designed political statement.

    Those who agree with the film’s position are certainly entitled to their view. They should just be honest and say that they prefer higher taxes and the high spending that goes with it.

    Note: KPI staff members Patrick Parkes and David Dorsey deserve credit for much of the research in this blog post.

  • Kansas conservatives call for repeal of death penalty

    Kansas conservatives call for repeal of death penalty

    From Kansas Coalition Against the Death Penalty.

    Kansas Conservatives Call for Repeal of Death Penalty

    TOPEKA, Kan. — Today at the Capitol, Representative Bill Sutton, R–Gardner, joined a group of conservative leaders calling for support of HB 2129. This bill would replace the death penalty in Kansas with life in prison without the possibility of parole.

    Their case is straightforward: the death penalty is at odds with core conservative values — a commitment to fiscal responsibility, limited government, and valuing life.

    Ron Keine, Anthony Brown, Laura Peredo, Rep. Bill Sutton, Jill Craven, Ray Krone
    Ron Keine, Anthony Brown, Laura Peredo, Rep. Bill Sutton, Jill Craven, Ray Krone
    “There are millions of dollars spent on trials and appeals and we have nothing to show for it,” said Sutton. “There is absolutely zero utility for the tax dollars spent.” Earlier this year, Rep. Sutton detailed the high cost of Kansas’ death penalty in an op-ed appearing in Watchdog.org.

    “More Kansas conservatives like myself are recognizing that the death penalty is unnecessary and in many ways harmful to the state,” said former Republican State Representative Anthony Brown. “Because of this growing conservative support, red states like Kansas are considering ending the death penalty.”

    In addition to Kansas, Nebraska is also considering legislation to repeal the death penalty. A bill repealing the death penalty and replacing it with life without parole passed the Nebraska Judiciary Committee unanimously earlier this month.

    Two individuals wrongfully sentenced to death and later found innocent, Ray Krone and Ron Keine of Witness to Innocence, also spoke at today’s event. Keine, who has been active in Republican politics since his release, does not trust government with the power to execute. “The government almost killed me and dozens of other innocent individuals across the country who were wrongfully sentenced to death. Kansas has an opportunity this year to ensure that the state never runs that risk.”

    Krone said, “If it can happen to me, it can happen to anybody.” Krone was the 100th person in America to have faced the death penalty and to be later proven innocent. Since 1973, 150 people have been wrongfully sentenced to death and later exonerated.

    Young conservatives also call for repealing the death penalty. Laura Peredo, president of Ravens Respect Life at Benedictine College, explained her rationale for opposing the death penalty: “No crime can change the fundamental truth that every human life possesses dignity from the moment of conception until natural death. I am one of a growing number of young people who support repealing the death penalty — a reform that demonstrates our unwavering commitment to safeguarding life at all stages, without exceptions.”

    Jill Craven, Secretary of the Fourth District of the Kansas Republican Party, said it’s time that Republicans take a stand on the death penalty consistent with party values. “I challenge conservatives to take a fresh look at all the details surrounding this issue — moral implications and fiscal impact — and again stand boldly for what is right,” said Craven.

    The call for repeal is stated in an open letter signed by Craven, Sutton, Brown and other prominent conservatives from across Kansas. Speakers are hopeful that the growing conservative support in Kansas for repeal of the death penalty will lead to a hearing and a vote on HB 2129, which currently is in the House Appropriations Committee.

    More information about the death penalty can be found online at ksabolition.org and conservativesconcerned.org.

  • Kansas slips in Tax Foundation business tax climate index

    Kansas slips in Tax Foundation business tax climate index

    Based on five components of taxation important to business, Kansas ranks twenty-second among the states, two positions lower than last year.

    The Tax Foundation collects and presents data regarding taxation in the states. From this data, analysts compute the State Business Tax Climate Index. In the Facts & Figures 2015 compilation released today, Kansas ranks 22 among the states. A rank of 1 means the most favorable business tax climate.

    In 2014 Kansas ranked at position 20.

    The index is composed of five components: Corporate tax rates, individual income tax rates, sales tax rate, unemployment insurance tax rate, and property tax rate.

    In many of the areas where data is gathered Kansas ranks near the middle of the states, but there are exceptions.

    One area where Kansas ranks low among the states is in “Federal aid as a percentage of general revenue.” For Kansas the value is 24.9 percent, which is 44th among the states. For Missouri the value is 38.2 percent, which ranks fifth.

    Another area where Kansas is outside of the middle is in “State general sales tax collections per capita.” The value for Kansas is $1,003, which ranks 12th. This high ranking is probably due to the sales tax on groceries in Kansas. Many states do not tax groceries. In a similar measure “State and local general sales tax collections per capita” Kansas ranks 11th.

    In “State and local cell phone tax rates” Kansas ranks 11th highest, with a tax rate of 12.87 percent.

    In “State and local excise tax collections per capita” Kansas ranks 42nd at $384.

    In “Property taxes paid as a percentage of owner-occupied housing value” Kansas ranks 15th, with a rate of 1.39 percent. In this ranking, first position means the highest tax rate, so only 14 states have a rate higher than Kansas.

    In “State debt per capita” Kansas ranks lower than most, at position 37 with debt at $2,362 per person. But in “State and local debt per capita” Kansas is higher than most states, at position 16 with debt of $9,274 per person.

  • In Kansas, resolving school district spending variances could yield savings

    From Kansas Policy Institute.

    Resolving school district spending variances could yield hundreds of millions in savings

    By Dave Trabert

    School districts spent an average $12,960 per student during the 2014 school year but the range of spending across districts varied quite significantly. Total spending went from a low of $9,245 per-pupil (USD 218 Elkhart, with 1,137 students) to a high of $23,861 (USD 490 El Dorado, 1,872 students); El Dorado also hosted a Special Ed Co-Op and must record the cost of serving students in other districts per KSDE. USD 359 Argonia had the highest spending per-pupil among districts that did not host Special Ed Co-Ops, spending $22,847 with 162 students enrolled.

    Instruction spending variances can be somewhat driven by the school funding formula and student body compositions (extra money is given to districts for special education, low income students and bi-lingual students) but districts have a great deal of latitude in resource allocation. Some districts, for example, divert money from Instruction as a result of other spending decisions. Variances in spending on Administration and other cost centers, however, are primarily driven by district operating decisions.

    Many Kansas school districts have low enrollment, and while it would be expected that very small districts would spend more per-pupil because of economies of scale, some small districts are able to operate at lower prices per student than many larger districts. There are also wide variances even among districts of similar size.

    A complete analysis of all operating cost centers (including Operations/Maintenance, Transportation, Food Service and Community Service can be found here.

    To put these variances in perspective, KPI staff calculated the potential savings of getting each district spending above median within their enrollment category down to the median for each cost center. The total comes to a staggering $516 million. There may be some circumstances that preclude some of that savings being realized but there could also be additional savings realized among those districts spending below median.

    To be clear, the purpose of this analysis is not to say that a specific dollar amount of savings could be had if districts operate more efficiently. However, variances of this magnitude certainly indicate that efficiency efforts driven by the Legislature could easily yield nine-figure savings.

  • WichitaLiberty.TV: Sin taxes, and what the Kansas Legislature doesn’t want you to know

    In this excerpt from WichitaLiberty.TV: Sin taxes, and what the Kansas Legislature doesn’t want you to know. Originally broadcast February 8, 2015. View below, or click here to view at YouTube. For more on these issues, see:

    Sin-tax or vice-tax?
    This is how much the Kansas Legislature wants Kansans to know
    Availability of testimony in the Kansas Legislature