Voice For Liberty

Tag: Featured

  • A big-picture look at the EDA

    A big-picture look at the EDA

    While praising the U.S. Economic Development Administration for a small grant to a local institution, the Wichita Eagle editorial board overlooks the big picture.

    While praising a grant to Wichita State University from the U.S. Economic Development Administration, the Wichita Eagle editorial board doesn’t waste an opportunity remind us of its big-government, anti-taxpayer ideology. (Pompeo would eliminate source of WSU grants, July 11, 2015)

    The op-ed also criticizes U.S. Representative Mike Pompeo, who has sponsored legislation and offered amendments to end the EDA.

    While the Eagle op-ed is designed to make us feel happy for Wichita State University (and bad about Rep. Pompeo, especially given the photo the newspaper used to illustrate the story online), the short-sighted and naive reasoning behind it is harmful. The op-ed promotes the impression that federal money is free, a gift from a magical fairy godmother that falls out of the sky in abundance. Anyone who opposes this free stuff must be evil.

    But in exchange for the grant to WSU, we have to tolerate grants like these made by the EDA:

      Harry Reid Research Park

    • In 2008, the EDA provided $2,000,000 to begin construction of the UNLV Harry Reid Research & Technology Park in Las Vegas, NV. For many years the UNLV Harry Reid Research & Technology Park featured a paved road and a website claiming the first anticipated tenant would move in in 2010. But there are signs of life now in 2015, according to the article Signs of life emerge at UNLV’s long-dormant technology park.)
    • In 2010, $25,000,000 was spent by the EDA for a Global Climate Mitigation Incentive Fund and $2,000,000 for a “culinary amphitheater,” wine tasting room and gift shop in Washington State.
    • In 2011, the EDA gave a New Mexico town $1,500,000 to renovate a theater.
    • In 2013, the EDA also gave Massachusetts $1.4 million to promote new video games.
    • Back in the 1980s, the EDA used taxpayer dollars to build replicas of the Great Wall of China and the Egyptian Pyramids in the middle of Indiana. They were never completed — it is now a dumping ground for tires.

    So in exchange for WSU receiving a million dollars this year and $1.9 million last year, we have to put up with the above. We have to wonder if Harry Reid being the number one Senate Democrat had anything to do with a grant for a facility named in his honor. We have yet another government agency staffed with a fleet of bureaucrats, including a chief who will travel to Wichita to promote and defend his agency. We have another government agency that believes it can better decide how to invest capital than the owners of the capital. We have another example of shipping tax dollars to Washington, seeing a large fraction skimmed off the top, then cities and states begging for scraps from the leftovers.

    Often when the Eagle editorial board criticizes conservatives, it does so by using terms like “driven by ideology” or “blind adherence to right-wing ideology.”

    But anyone parachuting down from Mars and observing this system for making investment decisions would wonder: Why do they do this? What kind of ideology would result in this nonsense?

    You’ll have to ask the Wichita Eagle editorial board.

    Rep. Pompeo on the EDA

    In January 2012 Pompeo wrote an op-ed which explains the harm of the EDA. Here is an excerpt:

    Last week, Secretary Fernandez invited himself to Wichita at taxpayer expense and met with the Wichita Eagle’s editorial board. Afterwards, the paper accurately noted I am advocating eliminating the EDA even though that agency occasionally awards grant money to projects in South Central Kansas. They just don’t get it. Thanks to decades of this flawed “You take yours, I’ll take mine” Washington logic, our nation now faces a crippling $16 trillion national debt.

    I first learned about the EDA when Secretary Fernandez testified in front of my subcommittee that the benefits of EDA projects exceed the costs and cited the absurd example of a $1.4 million award for “infrastructure” that allegedly helped a Minnesota town secure a new $1.6 billion steel mill. As a former CEO, I knew there is no way that a taxpayer subsidy equal to less than one-tenth of one percent (0.1%) of the total capital needed made a difference in launching the project. That mill was getting built whether EDA’s grant came through or not. So, I decided to dig further.

    I discovered that the EDA is a federal agency we can do without. Similar to earmarks that gave us the infamous “Bridge to Nowhere” or the Department of Energy loan guarantee scandal that produced Solyndra, the EDA advances local projects that narrowly benefit a particular company or community. To be sure, the EDA occasionally supports a local project here in Kansas. But it takes our tax money every year for projects in 400-plus other congressional districts, many if not most of which are boondoggles. For example: EDA gave $2 million to help construct UNLV’s Harry Reid Research and Technology Park; $2 million for a “culinary amphitheater,” tasting room, and gift shop at a Washington state winery; and $500,000 to construct (never-completed) replicas of the Great Pyramids in rural Indiana.

    Several times in recent decades, the Government Accountability Office has questioned the value and efficacy of the EDA. Good-government groups like Citizens Against Government Waste have called for dismantling the agency. In addition, eliminating the EDA was listed among the recommendations of President Obama’s own bipartisan Simpson-Bowles Deficit Reduction Commission.

    So why hasn’t it been shut down already? Politics. The EDA spreads taxpayer-funded project money far and wide and attacks congressmen who fail to support EDA grants. Soon after that initial hearing, Secretary Fernandez flew in his regional director — again at taxpayer expense — to show me “all the great things we are doing in your home district” and handed me a list of recent and pending local grants. Hint, hint. You can’t say I wasn’t warned to back off. Indeed, Eagle editors missed the real story here: Secretary Fernandez flew to Wichita because he is a bureaucrat trying to save his high-paying gig. The bureaucracy strikes back when conservatives take on bloated, out-of-control, public spending, so I guess I’m making progress.

    Please don’t misunderstand. I am not faulting cities, universities, or companies for having sought “free” federal money from the EDA. The fault lies squarely with a Washington culture that insists every program is sacred and there is no spending left to cut.

    A federal agency run at the Assistant Secretary level has not been eliminated in decades. Now is the time. My bill to eliminate the EDA (HR 3090) would take one small step toward restoring fiscal sanity and constitutional government.

    Last year Pompeo offered an amendment to H.R. 4660, the Commerce, Justice, Science, and Related Agencies Appropriations Act for Fiscal Year 2015, to eliminate the Economic Development Administration (or the “Earmark Distribution Agency”). The amendment would send EDA’s total funding — $247 million in FY 2015 — to the Deficit Reduction Account, saving up to $2.5 billion over 10 years based on current levels.

    “We need to solve America’s debt crisis before it is too late, and that means reducing wasteful spending, no matter the agency or branch of government,” said Rep. Pompeo. “The EDA should be called the ‘Earmark Distribution Agency,’ as it continues to spend taxpayer dollars on local pet projects in a way similar to congressional earmarks — which have already been banned by the House.”

    Following, his remarks on the floor.

  • WichitaLiberty.TV: Bad news from Topeka on taxes and schools, and also in Wichita. Also, a series of videos that reveal the nature of government.

    WichitaLiberty.TV: Bad news from Topeka on taxes and schools, and also in Wichita. Also, a series of videos that reveal the nature of government.

    In this episode of WichitaLiberty.TV: The sales tax increase is harmful and not necessary. Kansas school standards are again found to be weak. The ASR water project is not meeting expectations. Then, the Independent Institute has produced a series of videos that illustrate the nature of government. View below, or click here to view at YouTube. Episode 88, broadcast July 19, 2015.

    The “Love Gov” series of videos from the Independent Institute can be found here: Love Gov: From first date to mandate.

  • Discussion of open government in Wichita and Kansas

    Discussion of open government in Wichita and Kansas

    Perspectives may differ, but the point is the same — more government transparency leads to more citizen engagement and better outcomes in communities, states, and nations.

    In this podcast, Kansas Policy Institute Vice President James Franko discusses government transparency with Seth Etter and Bob Weeks. Etter is the organizer of Open Wichita, an initiative to bring the benefits of open data and civic hacking to Wichita. Weeks blogs at Voice for Liberty in Wichita where he advocates for government transparency and accountability and uses open records requests to access, analyze and publish state and local government data. KPI maintains KansasOpenGov.org, an online data portal for state and local government data.

    Listen below, or click here for this and other Kansas Policy Institute podcasts.

  • ‘Love Gov’ humorous and revealing of government’s nature

    ‘Love Gov’ humorous and revealing of government’s nature

    A series of short videos from the Independent Institute entertains and teaches lessons at the same time.

    Lov Gov trailer exampleThe Independent Institute has produced a series of humorous and satirical videos to present lessons about the nature of government. The Institute describes the series here:

    Love Gov depicts an overbearing boyfriend — Scott “Gov” Govinsky — who foists his good intentions on a hapless, idealistic college student, Alexis. Each episode follows Alexis’s relationship with Gov as his intrusions wreak (comic) havoc on her life, professionally, financially, and socially. Alexis’s loyal friend Libby tries to help her see Gov for what he really is — a menace. But will Alexis come to her senses in time?

    There are five episode (plus a trailer). Each episode is around five minutes long and presents a lesson on a topic like jobs, healthcare, and privacy. The episodes are satirical and funny. They’d be really funny if the topic wasn’t so serious. I recommend you spend a half-hour or so to view the series.

    The link to view the video series is here.

  • Kansas school standards evaluated

    Kansas school standards evaluated

    A new edition of an ongoing study shows that Kansas school standards are weak, compared to other states. This is a continuation of a trend.

    Last week the National Center for Education Statistics (NCES) published a new version of its ongoing study Mapping State Proficiency Standards Onto NAEP Scales: Results From the 2013 NAEP Reading and Mathematics Assessments. As was also found in past years, the standards that the state of Kansas uses to evaluate students are low.

    This study is important because states set their own standards for evaluating students, as the report explains: “Because each state set its own standards, there was no assurance that students who met the standards of one state would be able to meet the standards of another state, and one could not compare the effectiveness of schools across states in terms of the percentages of students reported to meet the standards.”

    There is a national test that is the same in all states, the National Assessment of Educational Progress (NAEP). Again, from the report: “NAEP provided a common scale on which the stringency of the various state criteria for proficiency could be compared.” The purpose of the study is to map each state’s standards to a common standard. By doing this, we can determine whether a state uses a stringent or weak standard to evaluate students. This study does not evaluate the performance — good or bad — of a state’s students. Rather, the study evaluates the state and its standards.

    The two-page summary for Kansas is here.

    The summary is this:

    For reading in grades four and eight, the answer to the question “How do Kansas’ reading standards for proficient performance at grades 4 and 8 in 2013 map onto the NAEP scale?” is “below basic.”

    For math in grades four and eight the answer to the same question is “basic.”

    This means that the state of Kansas says students are “proficient” when by NAEP standards the students are “basic” or “below basic.”

    Especially in reading, Kansas standards are low. For grade four reading, 26 states (including Kansas) are in the “below basic” category. For grade eight reading, only nine other states besides Kansas fall into the “below basic” category.

    Following, charts excerpted from the study showing how Kansas measures against the other states. In some cases, there are few states with lower standards than Kansas. In no case is Kansas above the middle. Click charts for larger versions.

    NAEP scale equivalents of state grade 4 reading standards for proficient, 2013, Kansas emphasized 2015-07

    NAEP scale equivalents of state grade 8 reading standards for proficient, 2013, Kansas emphasized 2015-07

    NAEP scale equivalents of state grade 4 math standards for proficient, 2013, Kansas emphasized 2015-07

    NAEP scale equivalents of state grade 8 math standards for proficient, 2013, Kansas emphasized 2015-07

  • In Wichita, wasting electricity a chronic problem

    In Wichita, wasting electricity a chronic problem

    The chronic waste of electricity in downtown Wichita is a problem that probably won’t be solved soon, given the city’s attitude.

    Some lights like these have been left on so long that the bulbs have burnt out. But the city hasn't replaced them.
    Some lights like these have been left on so long that the bulbs have burnt out. But the city hasn’t replaced them.
    Street lights in downtown Wichita burning during the middle of the day. It’s a continuing problem.

    What can citizens do to solve this problem? The attitude of the city is “don’t bother us with this problem.” The city advises citizens to call Westar when they see street lights wasting electricity. That’s the city’s attitude, even though this is a chronic problem.

    Wichita city government Facebook page public service advice regarding "vampire" power waste.
    Wichita city government Facebook page public service advice regarding “vampire” power waste.
    The city is concerned that working with Westar to turn off street lights during the day may not be cost-effective, according to Ken Evans, the city’s director of strategic communications. That’s the attitude he expressed in a recent City of Wichita Facebook dialog with citizens. But the city has run a campaign asking people to turn off appliances like microwave ovens and alarm clocks when not in use. This saves a vanishingly small amount of electricity, and at a large cost in convenience.

    At least five tall street lights can be seen wasting electricity.
    At least five tall street lights can be seen wasting electricity at 2:30 in the afternoon.
    But the city feels it is not cost-effective for them to ensure that dozens of street lights are switched off during the day, even though this is a chronic problem. Even though the city is concerned about the use of electricity contributing to ozone pollution.

    Part of the problem may lie in that the city pays Westar a fixed amount per street light, without regard to the amount of electricity used or wasted. Westar, while a privately-owned company that should be responsive to the profit motive, is instead a highly-regulated utility that functions almost as an arm of government.

    None of this mitigates the fact that waste is waste, especially waste that could be fixed easily — if the city wanted to.

  • Wichita water statistics update

    Wichita water statistics update

    The Wichita ASR water project had a relatively good month in June, but has not been producing water at the projected rate or design capacity.

    An important part of Wichita’s water supply infrastructure is the Aquifer Storage and Recovery program, or ASR. This is a program whereby water is taken from the Little Arkansas River, treated, and injected in the Equus Beds aquifer. That water is then available in the future as is other Equus Beds water.

    With a cost so far of $247 million, the city believes that ASR is a proven technology that will provide water and drought protection for many years. Last year the city recommended that voters approve $250 million for its expansion, to be paid for by a sales tax. Voters rejected the tax.

    Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative.
    Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative.
    According to city documents, the original capacity of the ASR phase II project to process water and pump it into the ground (the “recharge” process) was given as “Expected volume: 30 MGD for 120 days.” That translates to 3,600,000,000 (3.6 billion or 3,600 million) gallons per year. ASR phase II was completed in 2011.

    At a city council workshop in April 2014, Director of Public Works and Utilities Alan King briefed the council on the history of ASR, mentioning the original belief that ASR would recharge 11,000 acre feet of water per year. But he gave a new estimate for production, telling the council that “What we’re finding is, we’re thinking we’re going to actually get 5,800 acre feet. Somewhere close to half of the original estimates.” The new estimate translates to 1,889,935,800 (1.9 billion) gallons per year.

    Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013.
    Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR Phase II, cumulative since July 2013.
    Based on experience, the city has produced a revised estimate of ASR production capability. What has been the actual experience of ASR? The U.S. Geological Survey has ASR figures available here. I’ve gathered the data and performed an analysis. (Click charts for larger versions.)

    I’ve produced a chart of the cumulative production of the Wichita ASR project compared with the original projections and the lower revised projections. The lines for projections rise smoothly, although it is expected that actual production is not smooth. The second phase of ASR was completed sometime in 2011, but no water was produced and recharged that year. So I started this chart with January 2012.

    2013 was a drought year, so to present ASR in the best possible light, I’ve prepared a chart starting in July 2013. That was when it started raining heavily, and data from USGS shows that the flow in the Little Arkansas River was much greater. Still, the ASR project is not keeping up with projections, even after goals were lowered.

    Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II.
    Gallons of Water Recharged Through Recharge Basins and Wells during Wichita ASR phase II.
    On the chart of monthly production, the horizontal line represents the revised annual production projection expressed as a constant amount each month. This even rate of production is not likely, as rainfall and river flow varies. In the three years that ASR phase II has been in production, that monthly target been exceeded in two months.

    In June 2015, the ASR project recharged 205 million gallons of water. Its design capacity is 30 million gallons per day, so the work done in June represents seven days of design capacity. The ASR project is able to draw from the Little Arkansas River when the flow is above 30 cfs. As can be seen in the chart of the flow of the river, the flow was above this level for the entire month.

    Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs at this measurement station.
    Flow of the Little Arkansas River at Valley Center. The ASR project is able to draw from the river when the flow is above 30 cfs at this measurement station.
    At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.
    At one time the city was proud enough of the ASR project that it maintained an informative website at wichitawaterproject.org. That site no longer exists.
  • Wichita property taxes still high, but comparatively better

    Wichita property taxes still high, but comparatively better

    An ongoing study reveals that generally, property taxes on commercial and industrial property in Wichita are high. In particular, taxes on commercial property in Wichita are among the highest in the nation, although Wichita has improved comparatively.

    50 State Property Tax Comparison Study, Selected Wichita Data. Click for larger version, or see text for pdf version.
    50 State Property Tax Comparison Study, Selected Wichita Data. Click for larger version, or see text for pdf version.
    The study is produced by Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence. It’s titled “50 State Property Tax Comparison Study, April 2015” and may be read here. It uses a variety of residential, apartment, commercial, and industrial property scenarios to analyze the nature of property taxation across the country. I’ve gathered data from selected tables for Wichita. (A pdf version is available here.)

    In Kansas, residential property is assessed at 11.5 percent of its appraised value. (Appraised value is the market value as determined by the assessor. Assessed value is multiplied by the mill levy rates of taxing jurisdictions in order to compute tax.) Commercial property is assessed at 25 percent of appraised value, and public utility property at 33 percent.

    This means that commercial property faces 2.18 times the property tax rate as residential property. (The study reports a value of 2.173 for Wichita. The difference is likely due from deriving the value from observations rather than statute.) The U.S. average is 1.710.

    Whether higher assessment ratios on commercial property as compared to residential property is desirable public policy is a subject for debate. But because Wichita’s ratio is high, it leads to high property taxes on commercial property.

    For residential property taxes, Wichita ranks below the national average. For a property valued at $150,000, the effective property tax rate in Wichita is 1.253 percent, while the national average is 1.490 percent. The results for a $300,000 property were similar.

    Commercial property taxes in Wichita compared to nation.
    Commercial property taxes in Wichita compared to nation.
    Looking at commercial property, the study uses several scenarios with different total values and different values for fixtures. For example, for a $100,000 valued property with $20,000 fixtures (table 25), the study found that the national average for property tax is $2,519 or 2.099 percent of the property value. For Wichita the corresponding values are $3,289 or 2.741 percent, ranking fourteenth from the top. Wichita property taxes for this scenario are 30.6 percent higher than the national average.

    In other scenarios, as the proportion of property value that is machinery and equipment increases, Wichita taxes are lower, compared to other states and cities. This is because Kansas no longer taxes this type of property.

  • Wichita Transit snapshot

    Wichita Transit snapshot

    Here is a financial snapshot of the Wichita Transit System. Data is from the National Transit Database for 2013. These are operating costs only, and do not include the costs of acquiring buses and other capital equipment.

    Of note is the low fraction of expenses paid for through fares. Considering operating expenses only, the number is 20.3 percent. The remainder is provided by taxpayers. Operating expenses per passenger mile were $0.69.

    Wichita transit system snapshot 2013