Voice For Liberty

Tag: American Legislative Exchange Council (ALEC)

  • Rich States, Poor States, 2106 edition

    Rich States, Poor States, 2106 edition

    In Rich States, Poor States, Kansas continues with middle-of-the-pack performance, and fell sharply in the forward-looking forecast.

    In the 2016 edition of Rich States, Poor States, Utah continues its streak at the top of Economic Outlook Ranking, meaning that the state is poised for growth and prosperity. Kansas continues with middle-of-the-pack performance rankings, and fell sharply in the forward-looking forecast.

    Rich States, Poor States is produced by American Legislative Exchange Council. The authors are economist Dr. Arthur B. Laffer, Stephen Moore, who is Distinguished Visiting Fellow, Project for Economic Growth at The Heritage Foundation, and Jonathan Williams, who is vice president for the Center for State Fiscal Reform at ALEC.

    Rich States, Poor States computes two measures for each state. The first is the Economic Performance Ranking, described as “a backward-looking measure based on a state’s performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration, and Non-Farm Payroll Employment — all of which are highly influenced by state policy.” The process looks at the past ten years.

    Looking forward, there is the Economic Outlook Ranking, “a forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less — especially on income transfer programs, and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.”

    For economic performance, Kansas is twenty-seventh. That’s up from twenty-eighth last year.

    In this year’s compilation for economic outlook, Kansas ranks twenty-seventh, down from eighteenth last year and fifteenth the year before. In 2008, the first year for this measure, Kansas was twenty-ninth.

    Kansas compared to other states

    Kansas and nearby states Economic Outlook Ranking. Click for larger version.
    Kansas and nearby states Economic Outlook Ranking. Click for larger version.
    A nearby chart shows the Economic Outlook Ranking for Kansas and some nearby states, shown as a trend over time since 2008. The peak of Kansas in 2013 is evident, as is the decline since then.

    Why Kansas fell

    Rich States Poor States Kansas trends 2016 aloneKansas fell in the Economic Outlook Ranking from 2013 to 2016. To investigate why, I gathered data for Kansas from 2008 to 2016. The nearby table shows the results for 2016 and the rank among the states, with the trend since 2008 shown. A rank of one is the best ranking, so for the trend lines, an upward slope means a decline in ranking, meaning the state is performing worse.

    There are several areas that may account for the difference.

    The most notable change is in the measure “Recently Legislated Tax Changes (per $1,000 of personal income)” Kansas fell four positions in rank. By this measure, Kansas added $2.67 in taxes per $1,000 of personal income, which ranked forty-seventh among the states. This is a large change in a negative direction, as Kansas had ranked seventh the year before.

    In “Property Tax Burden (per $1,000 of personal income)” Kansas improved one position in the rankings, despite the tax burden rising.

    In “Sales Tax Burden (per $1,000 of personal income)” Kansas fell one spot in rank. The burden is calculated proportional to personal income. The sales tax burden, as measured this way, fell slightly in Kansas, but the ranking fell in comparison to other states. (Although the Kansas sales tax rate rose in 2015, this report uses data from 2013, which is the most recent data available from the U.S. Census Bureau. It’s likely that the 2015 sales tax hike will increase this burden, but whether the ranking changes depends on actions in other states.)

    Kansas improved six rank positions for “Debt Service as a Share of Tax Revenue.”

    Kansas remains one of the states with the most public employees, with 672 full-time equivalent employees per 10,000 population. This ranks forty-eighth among the states.

    Kansas has no tax and spending limits, which is a disadvantage compared to other states. These limitations could be in the form of an expenditure limit, laws requiring voter approval of tax increases, or supermajority requirements in the legislature to pass tax increases.

    How valuable is the ranking?

    Correlation of ALEC-Laffer state policy ranks and state economic performance
    Correlation of ALEC-Laffer state policy ranks and state economic performance
    After the 2012 rankings were computed, ALEC looked retrospectively at rankings compared to actual performance. The nearby chart shows the correlation of ALEC-Laffer state policy ranks and state economic performance. In its discussion, ALEC concluded:

    There is a distinctly positive relationship between the Rich States, Poor States’ economic outlook rankings and current and subsequent state economic health.

    The formal correlation is not perfect (i.e., it is not equal to 100 percent) because there are other factors that affect a state’s economic prospects. All economists would concede this obvious point. However, the ALEC-Laffer rankings alone have a 25 to 40 percent correlation with state performance rankings. This is a very high percentage for a single variable considering the multiplicity of idiosyncratic factors that affect growth in each state — resource endowments, access to transportation, ports and other marketplaces, etc.

    Rich States, Poor States compilation for Kansas. Click for larger version.
    Rich States, Poor States compilation for Kansas. Click for larger version.
  • In Kansas, teachers unions should stand for retention

    In Kansas, teachers unions should stand for retention

    A bill requiring teachers unions to stand for retention elections each year would be good for teachers, students, and taxpayers.

    The bill is SB 469, titled “Recertification of professional employees’ organizations under the professional negotiations act.” It would require that the Kansas Department of Labor hold an election each year in each school district regarding whether the current representation should continue. These elections, in effect, would be referendums on the teachers union, by the teachers. (Update: The bill has been revised to call for elections every third year.)

    That’s a good thing. The teachers union monopoly ought to stand for retention once in a while.

    The bill has an estimated cost of $340,000 annually, including the hiring of 4 employees. But this is a situation ideally suited for outsourcing to one of the many companies that can perform this work. It would undoubtedly be less expensive and would not require the hiring of employees to do a job that is seasonal in nature.

    Further, the professional employees’ organization (union) that represents each district ought to bear the cost of the elections, if they want to continue representing a district.

    How effective has the teachers union been in advocating for teachers? In particular, teachers in the Wichita public school district ought to be wondering about the benefit of its union. The contract for this year did not include a pay increase, although the teachers do get some additional time off as the school year was shortened by two days. (Which makes us ask: Where is the concern by the board or teachers for the welfare of the students?)

    Wichita public school salaries and change. Click for larger.
    Wichita public school salaries and change. Click for larger.
    As far as performance over time, since 2008 teacher salaries in Wichita rose by 2.6 percent. Salaries for principals rose by 8.1 percent over the same period. Statewide, the increase in teacher pay was 7.7 percent, and for principals, 10.9 percent.

    On top of that, the Wichita teachers union takes credit for providing benefits that aren’t really benefits, such as when it promoted that only United Teachers of Wichita members would receive a copy of the employment agreement. In reality, it is a public document that anyone has the right to possess.

    There are many reasons why Kansas schoolteachers might be unhappy with their current union representation, including:

    Creating an adversarial environment for public schools in Kansas. Instead of cooperating on education matters, the union foments conflict with taxpayers.

    Forcing professional employees to work under rules more suited for blue-collar labor.

    Working to deny Kansas teachers a choice in representation. 1

    Promoting a false assessment of Kansas schools that is harmful to Kansas schoolchildren. 2

    Forming a task force to promote a false grassroots impression of support for the teachers union, complete with pre-determined talking points on a secret web page. 3

    Encouraging party-switching to vote in primary elections to protect union members’ “professional interests.” 4

    Constant drumbeat for more school spending without regard to competing interests and taxpayers.5 and taxes to support it.6

    Opposing the introduction of a modern retirement system, instead preferring to saddle Kansans with billions of dollars in debt.7

    —
    Notes

    1. Weeks, B. (2013). Kansas teachers union: No competition for us. Voice For Liberty in Wichita. Available at: http://wichitaliberty.org/education/kansas-teachers-union-no-competition-for-us/. ↩
    2. Weeks, B. (2016). Kansas schools and other states. Voice For Liberty in Wichita. Available at: http://wichitaliberty.org/wichita-kansas-schools/kansas-schools-and-other-states/. ↩
    3. Weeks, B. (2014). Our Kansas grassroots teachers union. Voice For Liberty in Wichita. Available at: http://wichitaliberty.org/wichita-kansas-schools/kansas-grassroots-teachers-union/. ↩
    4. Weeks, B. (2012). KNEA email a window into teachers union. Voice For Liberty in Wichita. Available at: http://wichitaliberty.org/wichita-kansas-schools/knea-email-window-teachers-union/. ↩
    5. KNEA – School Funding . (2016). Knea.org. Available at: http://www.knea.org/home/366.htm. Accessed 8 Mar. 2016. ↩
    6. KNEA – Taxes and Revenue. (2016). Knea.org. Available at: http://www.knea.org/home/368.htm. Accessed 8 Mar. 2016. ↩
    7. Weeks, B. (2011). KPERS problems must be confronted. Voice For Liberty in Wichita. Available at: http://wichitaliberty.org/kansas-government/kpers-problems-must-be-confronted/. ↩
  • WichitaLiberty.TV: Jonathan Williams of American Legislative Exchange Council

    WichitaLiberty.TV: Jonathan Williams of American Legislative Exchange Council

    In this episode of WichitaLiberty.TV: Jonathan Williams of American Legislative Exchange Council (ALEC) explains the goals of ALEC, changes to Kansas tax policy and the results, and the effects of state taxes on charitable giving. View below, or click here to view in high definition at YouTube. Episode 100, broadcast November 8, 2015.

    Shownotes

  • State taxes and charitable giving

    State taxes and charitable giving

    States with higher rates of economic growth grow total charitable giving at a faster rate than states with low rates of economic growth, finds a new report by American Legislative Exchange Council.

    From ALEC: Charity is a crucial component of efforts to address societal challenges and help individuals thrive. From religious organizations to community charities, philanthropic donations drive the institutions of civil society and enable communities to develop around a greater sense of shared purpose. Despite this important role, charitable giving is rarely addressed in discussions around public policy — especially state tax policy.

    ALEC State factor charitable giving cover imageThe report uses data collected from the Internal Revenue Service (IRS) and focuses on both the levels of charitable giving and the growth of charitable giving throughout the states. We examined these trends over two different time periods. First, the IRS data begins in 1997 and is available through 2012. Second, we measured state charitable giving from 2008 to 2012 to understand how states fared during the recession.

    Here are some of the most significant findings from our report:

    • States with higher taxes generally experienced lower levels and lower rates of growth in charitable giving compared with their lower tax counterparts
    • A one percent increase in a state’s total tax burden is associated with a 1.16 percent decrease in the state’s rate of charitable giving
    • A one percent increase in a state’s personal income tax burden is associated with a 0.35 percent decrease in the state’s rate of charitable giving as a percent of total state income
    • In every category, over each time period, the nine states without income taxes grew their rates of charitable giving more than the nine states with the highest income taxes

    The report is available to download and read at The Effect of State Taxes on Charitable Giving. Following is material from the report’s executive summary:

    An often overlooked aspect of public policy is the role that charitable organizations have in addressing some of society’s most pressing concerns. Because of this important role and since charitable organizations are funded privately through donations, understanding how state policies interact with charitable organizations is crucial for a robust discussion about public policy. This State Factor examines state tax policies that encourage charitable giving, apart from the charitable giving deduction.

    While many factors certainly influence an individual’s choice about donating to charity, there are broad policy choices that can encourage higher rates of growth in charitable giving. By examining various tax burdens and tax rates with rigorous economic analysis, this paper’s research findings show that a 1 percent increase in the personal income tax burden is associated with 0.35 percent decrease in charitable giving per dollar of state income. Similarly, this State Factor found that an increase in personal income tax burden of roughly 1 percentage point of total state income results in a roughly 0.10 percentage point decrease in the level of measured charitable donations as a percent of income.

    When all state taxes are considered, a 1 percentage point increase in the total tax burden is associated with a 1.16 percent drop in charitable giving per dollar of state income. Similarly, this State Factor found that an increase in total tax burden of roughly 1 percentage point of total state income results in a roughly 0.09 percentage point decrease in the level measured charitable donations as a percent of income.

    According to the new report, The Effect of State Taxes on Charitable Giving the following states donated the most to charity as a percent of total income between 1997 and 2012, in order from 1st to 10th: Utah, Wyoming, Georgia, Alabama, Oklahoma, South Carolina, Maryland, Idaho, North Carolina and Mississippi. The report examines patterns of philanthropic contributions in the states over time and uses rigorous economic analyses to draw significant conclusions about charitable giving in the United States.

    The report is written by Jonathan Williams, William Freeland, research analyst for the ALEC Center for State Fiscal Reform, and Ben Wilterdink, research manager for the ALEC Center for State Fiscal Reform. The report reveals that states with higher rates of economic growth grow total charitable giving at a faster rate than states with low rates of economic growth.

  • Kansas legislators: Don’t raise taxes

    Kansas legislators: Don’t raise taxes

    Letter from ALEC to Kansas lawmakers. Click to read.
    Letter from ALEC to Kansas lawmakers. Click to read.
    To balance the budget, there are many things Kansas lawmakers could do other than raising taxes.

    In congratulating Kansas lawmakers for passing a pro-growth tax cut, American Legislative Exchange Council (ALEC) reminds everyone that there is more than one way to balance a budget. Spending needs to be addressed:

    However, as budget realities need to be addressed, the spending side of the fiscal coin is a good place to start. ALEC has conducted non-partisan research on how states can make government more efficient. In the State Budget Reform Toolkit, case studies and policy options are examined that allow the state to maintain core services of government at a lower cost. One example is to eliminate positions in state agencies that have been vacant for more than six months, or to adopt a sunset review process for state agencies, boards and commissions. These examples and many more can be found on our website for your review.

    Some of the ideas in the State Budget Reform Toolkit have been considered and rejected by the Kansas Legislature. Others have not been considered, as far as I know. Most take more than one year to implement. These ideas remind us that when the Kansas Legislature and Governor Brownback cut taxes for everyone, they did not start planning for lower spending.

  • WichitaLiberty.TV: Wichita Eagle reporting, marijuana laws, and the Kansas economy

    WichitaLiberty.TV: Wichita Eagle reporting, marijuana laws, and the Kansas economy

    In this episode of WichitaLiberty.TV: The Wichita Eagle prints several stories that ought to cause readers to question the reliability of its newsroom. Wichita voters pass a marijuana law that conflicts state law. Performance of the Kansas economy. Finally, some unexplained results in the way people vote. View below, or click here to view at YouTube. Episode 81, broadcast April 19, 2015.

  • Rich States, Poor States, 2105 edition

    Rich States, Poor States, 2105 edition

    In Rich States, Poor States, Kansas continues with middle-of-the-pack performance, and fell in the forward-looking forecast for the second year in a row.

    In the 2015 edition of Rich States, Poor States, Utah continues its streak at the top of Economic Outlook Ranking, meaning that the state is poised for growth and prosperity. Kansas continues with middle-of-the-pack performance rankings, and fell in the forward-looking forecast.

    Rich States, Poor States is produced by American Legislative Exchange Council. The authors are economist Dr. Arthur B. Laffer, Stephen Moore, who is Distinguished Visiting Fellow, Project for Economic Growth at The Heritage Foundation, and Jonathan Williams, who is vice president for the Center for State Fiscal Reform at ALEC.

    Rich States, Poor States computes two measures for each state. The first is the Economic Performance Ranking, described as “a backward-looking measure based on a state’s performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration, and Non-Farm Payroll Employment — all of which are highly influenced by state policy.” The process looks at the past ten years.

    Economic Outlook Ranking. Click for larger version.
    Economic Outlook Ranking. Click for larger version.
    Looking forward, there is the Economic Outlook Ranking, “a forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less — especially on income transfer programs, and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.”

    For economic performance this year, Kansas is twenty-eighth. That’s up from thirty-second last year.

    In this year’s compilation for economic outlook, Kansas ranks eighteenth, down from fifteenth last year and eleventh the year before. In 2008, the first year for this measure, Kansas was twenty-ninth.

    Kansas compared to other states

    A nearby chart shows the Economic Outlook Ranking for Kansas and some nearby states, shown as a trend over time since 2008. The peak of Kansas in 2013 is evident, as is the decline since then.

    Why Kansas fell

    Rich States Poor States Kansas trends 2015 aloneKansas fell in the Economic Outlook Ranking from 2013 to 2015. To investigate why, I gathered data for Kansas from 2008 to 2015. The nearby table shows the results for 2015 and the rank among the states, with the trend since 2008 shown. A rank of one is the best ranking, so for the trend lines, an upward slope means a decline in ranking.

    There are several areas that may account for the difference. One value, “Top Marginal Corporate Income Tax Rate,” did not change from 2013 to 2015, remaining at 7.00%. But the ranking for Kansas fell from 24 to 27, meaning that other states improved in this measure relative to Kansas.

    For “Personal Income Tax Progressivity (change in tax liability per $1,000 of Income)” Kansas fell two positions in rank.

    In “Property Tax Burden (per $1,000 of personal income)” Kansas fell three spots since 2013.

    In “Sales Tax Burden (per $1,000 of personal income)” Kansas fell three spots in rank. The burden is calculated proportional to personal income.

    In “Recently Legislated Tax Changes (per $1,000 of personal income)” Kansas fell one position in rank.

    Kansas improved six rank positions for “Debt Service as a Share of Tax Revenue.”

    Kansas remains one of the states with the most public employees, with 695.4 full-time equivalent employees per 10,000 population. This ranks forty-eighth among the states.

    “Average Workers’ Compensation Costs (per $100 of payroll)” rose by one cent, and Kansas fell two spots in ranking.

    Kansas has no tax and expenditure limitations, which is a disadvantage compared to other states.

    How valuable is the ranking?

    Correlation of ALEC-Laffer state policy ranks and state economic performance
    Correlation of ALEC-Laffer state policy ranks and state economic performance
    After the 2012 rankings were computed, ALEC looked retrospectively at rankings compared to actual performance. The nearby chart shows the correlation of ALEC-Laffer state policy ranks and state economic performance. In its discussion, ALEC concluded:

    There is a distinctly positive relationship between the Rich States, Poor States’ economic outlook rankings and current and subsequent state economic health.

    The formal correlation is not perfect (i.e., it is not equal to 100 percent) because there are other factors that affect a state’s economic prospects. All economists would concede this obvious point. However, the ALEC-Laffer rankings alone have a 25 to 40 percent correlation with state performance rankings. This is a very high percentage for a single variable considering the multiplicity of idiosyncratic factors that affect growth in each state — resource endowments, access to transportation, ports and other marketplaces, etc.

    Rich States, Poor States compilation for Kansas. Click for larger version.
    Rich States, Poor States compilation for Kansas. Click for larger version.

  • Twitter, helpful in this case

    A useful contribution of Twitter to society is to reveal how little some people actually know about their causes.

    It started with this. American Legislative Exchange Council, or ALEC, was holding a meeting in Kansas City, and there was a lot of ALEC-bashing going on. But I like what ALEC does, as I tweeted:

    Which provided an opportunity to explain the fundamental axiom of libertarianism, and how libertarians apply it to everyone, including government:

    As ALEC is accused of being a tool for corporate interests, I asked a question:

    ALEC’s critics revealed themselves to be uninformed:

    The following reveals severe confusion in its reference to Ayn Rand. Regarding capitalism, she wrote: “When I say ‘capitalism’” I mean a full, pure, uncontrolled, unregulated laissez-faire capitalism — with a separation of state and economics, in the same way and for the same reasons as the separation of state and church.” When business corporations ask for subsidies, tax breaks, and the like, they violate this principal. There is a conflict between the interests of many businesses and capitalism.

    Telling someone what they know is a lazy and weak form of argument, isn’t it?

    I think that was the end of the conversation.