Tag: Economic development

  • Kansas and Wichita quick takes: Sunday December 12, 2010

    This week at Wichita City Council. This Tuesday, six speakers have signed up to appear on the public agenda. This is a portion of the meeting where citizens may speak on nearly any topic. Five are speaking on the city’s proposed trash plan, while one is speaking on a city-wide recycling project. … Approval of the city’s legislative agenda will be considered. Probably the greatest threat to economic freedom is this plank: “City of Wichita supports continued use of effective private-public partnerships and the appropriate intervention of state and local governments to spur economic development.” Also the city expresses support for highly subsidized, expensive, and little-used passenger rail service. … Also the council will consider amending the Wichita-Sedgwick County Comprehensive Plan to include Project Downtown: The Master Plan for Wichita. This is the plan that consulting firm Goody Clancy developed for the revitalization of downtown Wichita. The complete agenda report is at Wichita City Council, December 14, 2010.

    Sedgwick County Commission this week. On Wednesday the Sedgwick County Commission will vote on its legislative agenda. The agenda, or platform, is not law, but expresses the sentiment or desire of the commission. Last year Commissioner Karl Peterjohn shepherded through the requirement that voters approve all tax rate increases. This year the same language is proposed, but it may not pass. (The proposed language is this: “All local sales tax increases must be approved by voters under Kansas law. All property tax increases that raise the mill levy should also be required to receive voter approval.”) Some commissioners believe that voters elect them to use their judgment to make decisions on taxes, while other commissioners believe voters should have the final say on something as important as this. The agenda and backup material for Wednesday’s meeting is at Sedgwick County Commission, December 15, 2010.

    Wichita Eagle: Adopt downtown plan. Today’s Wichita Eagle editorial calls for passage of the downtown master plan recently developed by planning firm Goody Clancy. Rhonda Holman argues that a “busier, richer core” will benefit the town economically, adding that “downtown matters too much to be left to chance.” The idea that the core is essential to progress is taken as a given, but when downtown supporters are questioned, no evidence to support this nostrum is given. Also, this concept of “chance” that Holman doesn’t trust could also be described as a dynamic marketplace of ideas and capital, with many diverse players with dispersed knowledge acting to advance their own self-interest by creating things people will freely buy, all coordinated through the magic of the price system. What Wichita — with Holman’s support — plans to do is to replace this with the bureaucratic and political system.

    City planning by “Those Who Know Best.” “While the fixations of trendy planners might not register on the list of things that average Americans think about, these new utopian land-use ideals are filtering down into government agencies and city councils, and might eventually impact the way we all live.” Writing in the Orange County Register, Steven Greenhut quotes the definition of New Urbanism: “New Urbanism is the most important planning movement this century, and is about creating a better future for us all. It is an international movement to reform the design of the built environment, and is about raising our quality of life and standard of living by creating better places to live. New Urbanism is the revival of our lost art of place-making, and is essentially a reordering of the built environment into the form of complete cities, towns, villages and neighborhoods …” He warns: “Whenever some ideologue claims to offer the most important thing since sliced bread and then promises to reorder my life around it, we should all get nervous.” (The downtown Wichita planners do not use the term “New Urbanism,” but they share the same characteristics and goals.) And even more strongly: “The New Urbanists claim to want to give our lives meaning by creating superior urban forms of living, yet they miss the most meaningful things in life because they emphasize architecture over people. Like all totalitarians, they assume that what they prefer is so good and noble that they have the moral right to impose it on everybody else. The rest of us need to take notice now, so there is still time to oppose it.”

    Anderson appointment criticized. KU political science professor Burdett Loomis criticizes the appointment of Steven J. Anderson to be the new Kansas budget director, branding him an “ideologue” that has made “broadside attacks on public education.” Anderson believes in limited government, and his “attacks” on public — let’s be clear here — government schools are advocating school choice through vouchers. In states where vouchers are used, evidence is that public schools improve in response to the competition from private schools that parents can now actually afford. Plus, the state saves money, too. Loomis also criticizes Anderson for uncovering the large unspent fund balances in many Kansas agencies, balances that Loomis seems to doubt exist. Overall, Loomis presents an argument for the status quo in Kansas government, and the potential for change in the direction of restraining its growth has Loomis — in his own words — “concerned — worried, even.”

  • Kansas and Wichita quick takes: Tuesday December 7, 2010

    Political pretense vs. market performance. What is the difference between markets and politics or government? “There is a large gap between the performance of markets and the public’s approval of markets. Despite the clear superiority of free markets over other economic arrangements at protecting liberty, promoting social cooperation and creating general prosperity, they have always been subject to pervasive doubts and, often, outright hostility. Of course, many people are also skeptical about government. Yet when problems arise that can even remotely be blamed on markets, the strong tendency is to ‘correct’ the ‘market failures’ by substituting more government control for market incentives.” The article is The Political Economy of Morality: Political Pretense vs. Market Performance by Dwight R. Lee. Lee explains the difference between “magnanimous morality” (helping people) and “mundane morality” (obeying the generally accepted rules or norms of conduct). Markets operate under mundane morality, which is not as emotionally appealing as as magnanimous morality. But it’s important, as it is markets — not government — that have provided economic progress. There’s much more to appreciate in this article, which ends this way: “The rhetoric dominating the public statements of politicians and their special-interest supplicants is successful at convincing people that magnanimous morality requires substituting political action for market incentives, even though the former generates outcomes that are less efficient and moral than does the latter. The reality is that political behavior is as motivated by self-interest as market behavior is. … As long as there are people who cannot resist the appeal of morality on the cheap, the political process will continue to serve up cheap morality. And the result will continue to be neither moral nor cheap.”

    Begging for Billionaires. The documentary film Begging for Billionaires will be shown in Wichita next week. The film’s synopsis is this: “In 2005, a divided U.S. Supreme Court gave city governments the authority to take private homes and businesses by eminent domain and transfer ownership to private developers for the purpose of building things like shopping centers, corporate office towers and professional sports arenas. According to the court, the community economic development benefits of such private projects qualified them as being for ‘public use’ under the 5th Amendment’s ‘takings clause.’ The Court’s ruling immediately sparked public outrage and was broadly criticized as a gross misinterpretation of the constitution. Through a mix of guerrilla journalism, expert interviews, and the stories of victims; Begging For Billionaires reveals the fallout of the Kelo case, exposing how city governments brazenly seize property after property from the powerless and give it to the powerful for the pettiest of non-essential ‘economic development’ projects, many of which are subsidized with taxpayer money. Meanwhile, poor and disadvantaged families are forced from their homes. Everyday citizens watch helplessly as their family histories are bulldozed to smithereens. In some cases, homeowners scramble to save their life’s possessions as demolition crews pulverize the walls around them, and Centuries-old neighborhoods are wiped from existence despite rich histories and beautifully maintained homes. Begging for Billionaires begs the question: are we losing sight of the balance between individual property rights and those of the community?” The movie, sponsored by Americans for Prosperity, will be shown on Monday, December 13 from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

    O’Toole on urban planning. As Wichita considers approving a plan for the revitalization of downtown Wichita, we should consider the wisdom of Randal O’Toole: “Urban planners want to shape our cities. And they want our cities to shape you. That’s the conclusion of Cato Institute Senior Fellow Randal O’Toole. He argues that the rationales for most urban planning collapses upon examination.” O’Toole visited Wichita earlier this year. Click here to view a short video of him speaking on urban planning.

    Kansas House of Representatives leaders elected. “House Speaker Mike O’Neal, R-Hutchinson and Rep. Arlen Siegfreid, R-Olathe, will hold pivotal leadership positions in the Kansas House after voting Monday among GOP members who re-elected O’Neal to the chamber’s top job and selected Siegfreid as the new House majority leader.” More from Tim Carpenter in the Topeka Capital-Journal.

    School lessons learned. Joel Klein, Chancellor of New York City public schools, writing in the Wall Street Journal: “Over the past eight years, I’ve been privileged to serve as chancellor of the New York City Department of Education, the nation’s largest school district. Working with a mayor who courageously took responsibility for our schools, our department has made significant changes and progress. Along the way, I’ve learned some important lessons about what works in public education, what doesn’t, and what (and who) are the biggest obstacles to the transformative changes we still need. … Traditional proposals for improving education — more money, better curriculum, smaller classes, etc. — aren’t going to get the job done. … Bureaucrats, unions and politicians had their way, and they blamed poor results on students and their families. … The people with the loudest and best-funded voices are committed to maintaining a status quo that protects their needs even if it doesn’t work for children. … As I leave the best job I’ve ever had, I know that more progress is possible despite the inevitable resistance to change. To prevail, the public and, most importantly, parents must insist on a single standard: Every school has to be one to which we’d send our own kids. We are not remotely close to that today. We know how to fix public education. The question is whether we have the political will to do it.” This is more evidence of how far behind the rest of the states is Kansas.

  • Kansas and Wichita quick takes: Wednesday December 1, 2010

    Tax incentives questioned. In a commentary in Site Selection Magazine, Daniel Levine lays out the case that tax incentives that states use to lure or keep jobs are harmful, and the practice should end. In Incentives and the Interstate Competition for Jobs he writes: “Despite overwhelming evidence that state and local tax incentives are having little to no positive effect on promoting real economic growth anywhere in the country, states continue to up the ante with richer and richer incentive programs. … there are real questions as to whether the interstate competition for jobs is a wise use of anyone’s tax dollars and, if not, then what can be done to at least slow down this zero sum game?” As a solution, Levine proposes that the Internal Revenue Service classify some types of incentives as taxable income to the recipient, which would reduce the value and the attractiveness of the offer. Levine also correctly classifies tax credits — like the historical preservation tax credits in Kansas — as spending programs in disguise: “Similarly, when a ‘tax credit’ can be sold or transferred if unutilized it ceases to have a meaningful connection to state tax liability. Instead, in such circumstances the award of tax credit is merely a delivery mechanism for state subsidy.” In the end, the problem — when recognized as such — always lies with the other guy: “Most state policy makers welcome an opportunity to offer large cash incentives to out-of-state companies considering a move to their state but fume with indignation when a neighboring state uses the same techniques against them.”

    Yoder: No business as usual. Kansas Watchdog reports on a speech by newly-elected U.S. Congressman Kevin Yoder from the Kansas third district. Said Yoder: “Business as usual has to stop in Washington.” They always say this. Let’s hope Yoder and the other new representatives from Kansas mean it, and can resist the inevitable pressures. Remember the assessment of Trent Lott, a former Senate majority leader and now a powerful lobbyist, as reported in the Washington Examiner: “‘We don’t need a lot of Jim DeMint disciples,’ Lott told the Washington Post, referring to the conservative South Carolina senator who has been a gadfly for party leadership and a champion for upstart conservative candidates. ‘As soon as they get here, we need to co-opt them.’”

    Kansas revenue outlook was mixed in November . From Kansas Reporter: “Kansas’ economy and the state government’s cash flow continued to struggle in November, preliminary tax revenue numbers indicated Tuesday. A Kansas Department of Revenue calculation of state tax receipts during November showed the state collected $384 million in taxes during the month, a whisker-thin $783,000, or 0.2 percent, less than forecasters calculated just three weeks ago, but nearly $30 million, or 8.5 percent more than in November, 2009.” The 8.5 percent growth from a year ago is partly from the increase in the state’s sales tax. “This suggests that actual retail sales activity, on which state officials are counting to hit future revenue targets, may be trailing year-earlier levels by about 2.4 percent.”

    Teacher organization offers alternative to KNEA . “The Kansas Association of American Educators says it offers the benefits of a union membership, but doesn’t involve itself in partisan issues.” More at Kansas Reporter.

    Kansas education officials may overstate student performance. Kansas schools claim rapidly rising test scores while other measures of student performance remain largely unchanged, even falling in some years. Kansas Watchdog reports: “There are nagging questions about the validity of claims based on state assessments and the tests are only one measure of the education system’s performance. Several national education watchdogs and the U.S. Department of Education have questioned the rigor of state tests, proficiency standards, graduation rates and graduates preparation for college and the workforce.” The story is Kansas Education Officials May Overstate Student Performance.

  • Kansas and Wichita quick takes: Monday November 29, 2010

    Louisville success factor may be gone. The secret sauce behind redevelopment of downtown Louisville, Kentucky may no longer be available to cities attempting to replicate Louisville’s success, such as it is. The Washington Post reports in the article Sen. Mitch McConnell’s earmark power credited for revitalizing Louisville: “The once grand downtown of this city on the Ohio River is shabby, as the nation’s old downtowns tend to be. Magnificent tall cast-iron-fronted buildings sit empty. So do historic brick tobacco warehouses, surrounded in razor wire, tagged with graffiti. But the downtown of Kentucky’s largest city also has a spectacular redeveloped waterfront featuring bike paths and open vistas, the spanking-new KFC Yum Center sports arena, and a medical complex of several hospitals that employ nearly 20,000 people, treat tens of thousands and conduct cutting-edge research. This resurgence is a result of civic vision, pride, tenacity — and the impressive earmark performance of Louisville’s Slugger: Mitch McConnell (R), Kentucky’s longest-serving senator and the powerful Senate minority leader.” … Louisville is cited as a success story by Wichita’s planners. But the earmark money that helped Louisville is probably not available to Wichita in the near term, and may not ever be available again, at least as it has been in the past. Plus, Kansas doesn’t have a senator with the clout of McConnell, and not one that calls Wichita home. McConnell lives in Louisville.

    Loss of earmarks lamented. In the Wichita Eagle article Earmark ban could kill some Kansas projects, well, the title pretty much describes the problem according to some. In particular, the town of Augusta would have had a difficult time affording a levee if not for earmarks. It is mentioned that earmarks are about one percent of the total federal budget. One comment writer, defending the process, wrote “Earmarks return our money to us.” To which we must counter: Why send the money away to Washington in the first place, only to have to fight to get it back?

    “No” to citizen-powered democracy. The Newton Kansas argues that a “practical” state like Kansas shouldn’t let its citizens place propositions on the ballot through the petitions process. The editorial says that the California budget process has led to “serious economic turmoil in that state.” It doesn’t explain why, but the writer is probably referring to the fact that the California budget must be passed by a two-thirds majority of both houses of the legislature, rather than by a simple majority as in Kansas. The editorial also says that ballot measures induce spending by proponents and opponents, and some money may come from out of state. Special interests may get involved, too. And administrative costs of adding “pages” to the ballot must be paid for, too. … I must inform the Newton Kansas that the Kansas statehouse is already overrun by special interests, out-of-state interests already spend a lot on our elections and lobbying, and anyone who has observed our legislative process up close would not use the word “practical” to describe it. … The primary reason the ruling class don’t like the citizen initiative process is that one of the first things citizens may do is impose term limits on their elected officials.

    Wichita IMAX may not be exclusive. In another installment of his series of love letters to Wichita theater operator Bill Warren, Wichita Eagle reporter Bill Wilson reports on the construction of Warren’s new theater in west Wichita. On Warren’s plans for his theaters in Moore, Oklahoma (part of the Oklahoma City metropolitan area), Wilson’s article reports: “IMAX? ‘Possibly, and a few other surprises down there,’ Warren said.” … Earlier this year when Warren applied to the Wichita City Council for favored tax treatment for this theater, he implied that without the city’s largesse, he’d take his IMAX theater elsewhere. In his remarks at the council meeting where the tax favoritism was approved, Wichita Mayor Carl Brewer bought into the myth that there can be only one Warren IMAX theater when he said: “A lot of other cities want this IMAX … they’re on the internet watching this city council meeting to see what we’re going to do because they’re going to make a bid for this IMAX.” … City officials said the theater would be a tourist draw from as far away as Texas. … With another Warren IMAX possibly being built nearby, Wichitans and the mayor ought to agree that we were mislead, and Wilson ought to report this in the pages of the Wichita Eagle. This entire episode is more evidence that the Wichita City Council will believe almost anything told to them, as long as it involves the possibility of economic development and jobs.

    Sheriff to address Pachyderms, guide tour. This Friday (December 3) the Wichita Pachyderm Club features Sedgwick County Sheriff Robert Hinshaw as the presenter. His topic will be “An overview of the duties of the office of sheriff.” Then, from 2:00 pm to 3:00 pm Sheriff Hinshaw will guide Pachyderm Club members on a tour of the Sedgwick County jail. I’ve had the sheriff’s tour before, and it is very interesting. The public is welcome at Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Wichita City Council this week. As this Tuesday is the fifth Tuesday of a month, the Wichita City Council will not meet. Also, the Sedgwick County Commission will not meet this week.

    No free market for health care. A letter in today’s Wichita Eagle claims love for the free-market economy, but not for the provision of health care. The writer claims that free markets for medical services cannot work, because the transactions are one-sided, in that the patient does not have freedom of choice. The writer also cites government success in providing military and education that “improve our society’s overall well-being,” so government should provide health care, too. … I might suggest to the letter writer that we first attempt a free market in health care before we decide it doesn’t work. Most health care is paid for by someone else, and many people who have health insurance through their employers don’t have a choice in the matter. It is this regulation that causes many of the problems in the market, such as it is, and it is nothing resembling “free.” … Citing success of government education and military may not be persuasive to those who see performance of American schools on a long downward slide compared to other countries.

  • Wichita downtown plan focused on elite values, incorrect assumptions

    One of the themes of those planning the future of downtown Wichita is that the suburban areas of Wichita are bad. The people living there are not cultured and sophisticated, the planners say. Suburbanites live wasteful lifestyles. Planners say they use too much energy, emit too much carbon, and gobble up too much land, all for things they’ve been duped into believing they want.

    It’s an elitist diagnosis, and Wichita’s buying it. Well, we’ve already paid for it, but we can stop the harmful planning process before it’s too late.

    Consider the attitudes of Goody Clancy, the Boston planning firm the city hired to lead us through the process. At a presentation in January, some speakers from Goody Clancy revealed condescending attitudes towards those who hold values different from this group of planners. One presenter said “Outside of Manhattan and Chicago, the traditional family household generally looks for a single family detached house with yard, where they think their kids might play, and they never do.”

    David Dixon, the Goody Clancy principal for this project, revealed his elitist world view when he told how that in the future, Wichitans will be able to “enjoy the kind of social and cultural richness” that is only found at the core. “Have dinner someplace, pass a cool shop, go to a great national music act at the arena, and then go to a bar, and if we’re lucky, stumble home.”

    These attitudes reflect those of most of the planning profession — that people can’t be relied on to choose what’s best for them. Instead they believe that only they — like the planners at Goody Clancy — are equipped to make choices for people. It’s an elitism that Wichita ought to reject.

    Besides this, many of the assumptions that planners rely on are wrong, like the purported demographic shifts planners rely on. Consider the recent article Urban Legends: Why Suburbs, Not Dense Cities, are the Future by journalist and geographer Joel Kotkin. While Kotkin’s article focuses a lot on mega-cities like Mumbai and Mexico City, there’s a lot to be learned by smaller cities like Wichita.

    One of the issues Kotkin addresses is the effort of cities to appeal to the “creative class.” This is a hot issue in Wichita, where it is thought that we can’t attract young urbanites and their energy and upward economic mobility. Therefore, we must invest in arts, culture, and “hipness.” Kotkin responds:

    The hipper the city, the mantra goes, the richer and more successful it will be — and a number of declining American industrial hubs have tried to rebrand themselves as “creative class” hot spots accordingly. But this argument, or at least many applications of it, gets things backward. Arts and culture generally do not fuel economic growth by themselves; rather, economic growth tends to create the preconditions for their development. … Sadly, cities desperate to reverse their slides have been quick to buy into the simplistic idea that by merely branding themselves “creative” they can renew their dying economies; think of Cleveland’s Rock and Roll Hall of Fame, Michigan’s bid to market Detroit as a “cool city.” … Culture, media, and other “creative” industries, important as they are for a city’s continued prosperity, simply do not spark an economy on their own. It turns out to be the comparatively boring, old-fashioned industries, such as trade in goods, manufacturing, energy, and agriculture, that drive the world’s fastest-rising cities.”

    The things the Wichita plan is designed to foster: increased density, increased real estate values, decreased use of the automobile, and prescription by cultural elites of what may be built in which locations — these things drive away many people, Kotkin says: “Nor is the much-vaunted ‘urban core’ the only game in town. Innovators of all kinds seek to avoid the high property prices, overcrowding, and often harsh anti-business climates of the city center.”

    The sprawl and the alleged unsustainable lifestyle of the suburbs that elites like the Goody Clancy planners clearly disdain — here’s what Kotkin says: “Consider the environment. We tend to associate suburbia with carbon dioxide-producing sprawl and urban areas with sustainability and green living. But though it’s true that urban residents use less gas to get to work than their suburban or rural counterparts, when it comes to overall energy use the picture gets more complicated.” He cites examples in the article.

    But the planning process might not be all bad, Kotkin concedes, noting that “To their credit, talented new urbanists have had moderate success in turning smaller cities like Chattanooga and Hamburg into marginally more pleasant places to live.” Chattanooga is one place that Wichita planners and their acolytes have visited recently.

  • Downtown Wichita demographics not favorable

    “Uber-geographer” Joel Kotkin wrote in the Wall Street Journal recently: “Pundits, planners and urban visionaries — citing everything from changing demographics, soaring energy prices, the rise of the so-called ‘creative class,’ and the need to battle global warming — have been predicting for years that America’s love affair with the suburbs will soon be over.”

    As Wichita considers adoption of the plan for the revitalization of its downtown, urban planners — both local and out-of-town — tell us that there’s a big demand for downtown living. People are tired of suburban living, they say. Presentations by the city’s planning firm Goody Clancy have contained bullet points like “who favor living and working in vibrant downtowns” and “and they are part of broad demographic trends that are much more ‘downtown friendly’ …e.g., almost two-thirds of Wichita’s households include just one or two people.”

    This purported shift from suburban to urban lifestyles is one of the primary underlying memes for the downtown Wichita planners. Is this shift in preference real?

    Not according to Kotkin: “But the great migration back to the city hasn’t occurred.”

    Kotkin cites some figures showing the decline in the market for downtown condos in a few cities, and concludes “Behind the condo bust is a simple error: people’s stated preferences.” He shows some figures that support his contention that “Demographic trends, including an oft-predicted tsunami of Baby Boom ’empty nesters’ to urban cores, have been misread.”

    These demographic trends are behind the analysis that Goody Clancy uses to promote its vision for downtown Wichita. Kotkin’s research ought to give us concern that downtown visionaries are leading Wichita down a path that really isn’t there.

    Kotkin issues a note of caution for urban planners: “The condo bust should provide a cautionary tale for developers, planners and the urban political class, particularly those political ‘progressives’ who favor using regulatory and fiscal tools to promote urban densification. It is simply delusional to try forcing a market beyond proven demand.”

    What does this mean for Wichita? Wichita’s planners and leaders are promoting a light-handed approach to downtown development, saying, for example, that public financing will be only for public purposes. But Wichita has a history of heavy-handed interventionism using economic development tools of all types. They wish for more. And as the mayor said at a council meeting earlier this year, he’s recently learned of new types of incentive programs that other cities are using. Other council members and some city staff believe that Wichita doesn’t have enough “tools in the toolbox” for shoveling incentives on companies for economic development purposes.

    So I think Wichita’s leaders definitely will use the “regulatory and fiscal tools” that Kotkin warns of. It’s only without government intervention that we’ll know whether Wichitans really prefer suburban, downtown, or other forms of living. Urban planners and city hall bureaucrats can’t tell us that.

    The Myth of the Back-to-the-City Migration

    The condo bust should lay to rest the notion that the American love affair with suburbia is over.

    Pundits, planners and urban visionaries—citing everything from changing demographics, soaring energy prices, the rise of the so-called “creative class,” and the need to battle global warming—have been predicting for years that America’s love affair with the suburbs will soon be over. Their voices have grown louder since the onset of the housing crisis. Suburban neighborhoods, as the Atlantic magazine put it in March 2008, would morph into “the new slums” as people trek back to dense urban spaces.

    But the great migration back to the city hasn’t occurred. Over the past decade the percentage of Americans living in suburbs and single-family homes has increased. Meanwhile, demographer Wendell Cox’s analysis of census figures show that a much-celebrated rise in the percentage of multifamily housing peaked at 40% of all new housing permits in 2008, and it has since fallen to below 20% of the total, slightly lower than in 2000.

    Continue reading at the Wall Street Journal (subscription required) or at Kotkin’s website.

  • Kansas and Wichita quick takes: Friday November 26, 2010

    Bill Gates on school reform. Microsoft Chairman and founder Bill Gates, in an effort to help the states save money on schools, recently gave a speech, as reported by the New York Times: “He suggests they end teacher pay increases based on seniority and on master’s degrees, which he says are unrelated to teachers’ ability to raise student achievement. He also urges an end to efforts to reduce class sizes. Instead, he suggests rewarding the most effective teachers with higher pay for taking on larger classes or teaching in needy schools.” This is a refreshing take on the issue of class size. For more background on these issues from Voice for Liberty, click on Focus on class size in Wichita leads to misspent resources, Wichita public school district’s path: not fruitful, In public schools, incentives matter, and Wichita school district policy is misguided. For what it’s worth, incoming Kansas governor Sam Brownback doesn’t seem to have these issues on his agenda for education reform.

    Now the schools look for savings. The Lawrence Journal-World reports on an initiative to save on utility costs in the Lawrence public school system. “Teachers are unloading their refrigerators, flipping off computer monitors and unplugging their coffee pots — all to help the Lawrence school district save a few bucks over the Thanksgiving break. It’s all part of an ongoing program to trim utility costs, thus far saving the district at least $3.6 million.” I wonder: why hasn’t the school district been doing this already? This is more evidence that spending can be cut in ways that won’t harm children, despite the shrill claims of school spending advocates when they, like Wichita Representative Jim Ward or outgoing governor Mark Parkinson, claim that spending has already been “cut to the bone.” Lawrence, USD 497, contributed to the 2005 Kansas schools lawsuit, but is not a member of this year’s group suing taxpayers for more money. Give a small measure of credit to this district, that they’re trying to cut costs first instead of suing taxpayers.

    Business climate under Brownback. A poll by the Wichita Business Journal indicates that Kansans think the state’s business climate will improve under incoming governor Sam Brownback — barely. 53 percent of respondents clicked on “Yes, it will get better.” The rest thought the business climate will remain the same or get worse. This is not a scientific poll, but represents the sentiment of those readers who chose to participate.

    The parent trigger. A law in California allows parents whose children are in failing public schools to petition the school to become a charter school, close down, other undergo other reform. Called the “parent trigger,” the law was promoted from the political left, unlike most reform proposals which come from the political right. The Center for School Reform at the Heartland Institute explains in the policy brief The Parent Trigger: A Model for Transforming Education. As the full report states: “America’s $400 billion public education system exists primarily to serve grown-ups — bureaucrats, unions, and other special interests — not kids.” The primary opposition to this measure comes from — naturally — the teachers union: “Because many parents will likely choose to have their schools convert to charters and most charter schools are not unionized, powerful unions like the California Teachers Association view parental empowerment as a threat.” Anyone who has read much about school reform knows that the teachers unions and schools spending advocacy groups are the greatest threat to any meaningful reform. In Kansas, the two groups that consistently oppose meaningful reform are Kansas National Education Association (KNEA, the teachers union) and the Kansas Association of School Boards (KASB).

    Public or private parks? John Stossel asks whether parks should be public or privately owned. A video clip shows several interviewees insisting that parks must be public. Unknowing to these people, they were all interviewed in a privately-owned park. In this video clip, Stossel explains the tragedy of the commons and the benefits of private property. His written article concludes: “What private property does — as the Pilgrims discovered — is connect effort to reward, creating an incentive for people to produce far more. Then, if there’s a free market, people will trade their surpluses to others for the things they lack. Mutual exchange for mutual benefit makes the community richer.”

    Kansas Rep. Jim Morrison. Kansas Representative Jim Morrison of Colby has died. Services are pending.

    Kansas City Mayor not happy with job poaching. The flow of jobs from Kansas City Missouri across the border to Kansas needs to stop, says Kansas City Mayor Mark Funkhouser. The Promoting Employment Across Kansas (PEAK) program is to blame, he says. This program allows companies to use nearly all the payroll withholding taxes its employees pay for its own benefit instead of supporting the Kansas budget. In urging Missouri to step up its ability to offer incentives, Funhouser used the term “nuclear deterrence.” He seems to indicate that the ability of one state to counter another state’s incentives might stop companies from moving just to get incentives. See Kansas City Star article Loss of jobs to Kansas irks Kansas City’s mayor. It’s a little ironic to hear Missouri complain about generous Kansas incentives, as Kansas politicians like Wichita Mayor Carl Brewer often complain about the incentives other states offer that Kansas can’t match, and how they wish they had other “tools in the toolbox.” Also, Star columnist Mary Sanchez is wrong when she writes “Present-day market realities call for upfront capital incentives for companies to relocate.”

  • Kansas and Wichita quick takes: Monday November 22, 2010

    Wichita city council this week. This week is workshop only, meaning that legislative action is limited to consent items. These items are voted on in bulk, unless a council member wants to “pull” an item for separate discussion and voting. Generally consent items are thought to be non-controversial, at least by the person who creates the agenda. This week one consent item may cause a bar to lose its license, as Hurst Laviana reports in the Wichita Eagle. Start time is 9:30 am instead of the usual 9:00 am.

    Workshop to discuss Wichita trash. Tuesday’s Wichita city council meeting will have a workshop discussing a plan for a Wichita trash haulers’ cooperative and for a recycling plan. Brent Wistrom and Deb Gruver report in the Wichita Eagle. Conservatives on the council who favor big government — Jeff Longwell, Jim Skelton, and Sue Schlapp — seem to favor the proposal. I guess it is inevitable. But I worry that if we start relying on government to manage a simple thing like trash for us, the danger is that government will want to expand its realm of responsibility to providing things like water, jobs and economic development, employee training for business, housing for low-income people, golf courses, art museums and culture, transit, ice skating rinks, airports, dances for seniors, planning services, education, retirement plans, and health care.

    Candidate for Wichita mayor noticed. Bob Nelson describes himself this way: “I am a 36 year old lawyer, technical consultant, and aviation industry professional. I am a long time Republican and conservative.” His website –maybe still in developmental state, but nonetheless visible to the world — is Bob Nelson for Mayor.

    Former Wichita school chief in news. Former USD 259, the Wichita public school district superintendent Winston Brooks, now head of Albuquerque public schools, is in the news. An administrator alleges a hostile work environment and has been placed on leave with pay. It’s not the first time highly-paid administrators have been placed on paid leave for long periods since Brooks took over. The meaning of this to Wichita? Many of the current members of the Wichita school board loved Brooks and were sorry to see him leave Wichita.

    Charter school studies examined. Carl Bialik, in a “The Numbers Guy” article in the Wall Street Journal, writes about the “confusing report cards” that charter schools have received in various studies. Some studies report glowing results for charters, and other report poor results as compared to regular public schools. Bailik does report one finding: “There is some consensus among these studies. Researchers generally have found that charter schools in low-income, urban areas boost test scores, while suburban charter schools in wealthier areas don’t.” Mentioned by one source quoted in the article is one of the best attributes of charter schools: they can’t force students to attend, so poor ones close down, unlike poor public schools.

    Rasmussen polls from last week. “Talk about low expectations” was the start of the email message from Rasmussen Reports. Examples: “Just 26% of voters now think the country is heading in the right direction. This finding continues to fall since Election Day and is the lowest reading since mid-March, largely because Democrats are down but sentiments among Republicans and unaffiliated voters haven’t moved.” (Right Direction or Wrong Track) … “A plurality (47%) of voters believes America’s best days have come and gone, a number that has remained fairly constant since the beginning of the year.” … “Thirty percent (30%) of homeowners say the value of their home is less than what they still own on their mortgage.” … “Belief that a home is a good buy for a family remains at an 18-month low.” It’s all at What They Told Us: Reviewing Last Week’s Key Polls .

  • The problem with public-private partnerships

    As the City of Wichita gets ready to undertake the revitalization of downtown Wichita, we need to make sure we understand the many problems inherent in the “public-private partnership.” The following commentary by Fred L. Smith, Jr. President of the Competitive Enterprise Institute originally appeared on OpenMarket.org, and it does an excellent job explaining these problems. Some of these I and others have brought to the attention of the Wichita City Council.

    The Problem With Public-Private Partnerships

    by Fred Smith

    In our half-political, half-private world, there are a growing number of public-private partnerships. Almost nothing in the current world can be done without implicit or explicit permission by local, state, federal or (increasingly) global regulators. But the term, public-private is normally used to denote the joint funding and, sometimes, joint management of some “public” facility — streets, water systems, and so forth.

    The rationale for “public” investments is that they are “public” goods, whose benefits are not adequately captured by the provider. There are many problems with this concept — in practice, it means that someone wants something and nobody seems to be providing it. Note, from a Coasian/Schumpeterian free market perspective, these are exactly the “lures” that lead mankind to pursue the unexplored entrepreneurial paths to the future. Rushing in with government assistance distorts and preempts those creative forces.

    Sometimes, public-private partnerships can be a transitional step toward privatization. The concept of “corporatization” that is, reorganizing an activity now performed by some political agency so that its inherent economic realities become more understandable and transparent, may be a useful step in privatizing the activity.

    In most cases, however, public-private partnerships are simply a means of using tax breaks, regulatory easing, taxpayer support and so forth to subsidize some private activity: stadia, light and heavy rail — mass transit generally, sometimes (for God’s sake) hotels and malls, downtown development districts. Where I live in Washington, D.C., businesses are allowed to add a “special tax” to pay for services the city supposedly pays for with normal tax revenues. Such public-private partnerships suffer from the full array of government failures:

    • Log-rolling and pork-barrel politics: I’ll vote for your PPP if you vote for my PPP.
    • Weakened market tests: resources are devoted to a project not because it benefits the citizenry but rather because it benefits a powerful interest group and/or because a creative referendum entices a majority of voters to support their special interests.
    • Weaker Management: Absent market tests, managers are less motivated to find that mix of services and creative array of financing tools to ensure that it proves “profitable” (that is, a rational allocation of capital). Roads, even charter schools, etc all have suffered here immensely.
    • Lack of innovation: No institution in the private world can allow itself to stagnate – the creative forces of destruction will soon make it obsolete. PPP managers face much weaker innovative forces — if things go wrong, they can always appeal to their “public” nature for taxpayer bailouts.
    • Corruption: Crony capitalism abounds in the PPP world.
    • Faddism: Markets sometimes go on kicks — the tech boom, for example — but these soon collapse. Governments go on kicks for many decades — “renewable energy” and “mass transit” being perhaps the best examples but “magnet” investments in downtown malls, stadia and convention centers are perhaps even more persistent ones. Before Walmart became a PPP, it did more for consumers than all the PPP malls in the world.
    • Crowding Out: Capitalism plays a critical role in allocating capital — planting the seeds for our future. That is a very difficult task, one made much more difficult by the existence of PPPs. Government already seizes a disproportionate amount of our wealth and the PPP concept allows it to further distort the allocation by market forces. I’ve argued that the genius of the Progressives in the late 19th century was to preempt or push large sectors of the emerging future (the environment, schools, electromagnetic spectrum, infrastructure, welfare, the medical world) into the political world. The PPP concept simply exacerbates this tendency.

    Our challenge is to find ways to expand the private sector and only very rarely does the PPP concept do that. It allows people to be sloppy — “That would never pay for itself but it obviously has value, thus, we need some government help. Let’s not make it an honest government function, let’s make it a Public-Private partnership and get the best of all possible outcomes!!”

    This Mixed Economy model is less honest than true socialism (government acting directly) for many reasons. If as is often the case, things go wrong, it will be capitalism — not government — that will be blamed. PPP activities are less subject to consumer sovereignty (look at airports or schools). The true costs of the activity don’t appear on government budgets — making it appear that PPP arrangements are “bargains.”