In this episode of WichitaLiberty.TV: An episode this week at the Wichita city council meeting highlights the need for campaign finance reform in Wichita. We’ll examine a few incidents and see if there’s a way we can reform Wichita city government so that it is capitalism friendly instead of crony friendly. View below, or click here to view at YouTube. Episode 69, broadcast December 21, 2014.
The City of Wichita gives little notice regarding a public hearing, which does not contribute to an open and transparent government that welcomes citizen involvement.
As part of its meeting on December 16, the Wichita City Council will consider issuing a letter of intent for industrial revenue bonds. Whether the bonds are a good or bad idea, the process the city has used in conducting the required public hearing is not contributing to an open and transparent government that welcomes citizen involvement.
The city’s publication of notice of a public hearing, published in a most obscure location.Kansas law requires that when cities or counties wish to issue industrial revenue bonds, there must be a public hearing (K.S.A. 12-1749d). Notice must be given.
The archives of The Wichita Eagle show that a legal publication was placed by the city on December 9 that gave notice of the December 16 item. But this notice, like most other legal notices, does not appear on the city’s website — a place where it would be much more useful. The city’s website is also where the city could make the notices available to citizens at very low cost to the city. The city’s website content is also available at no cost to citizens who already have internet access, unlike a subscription to The Wichita Eagle, although the Eagle advertisements are available to view without a subscription.
Here’s the problem that citizens face regarding the item on the December 16 agenda. For most people, the first awareness of this agenda item would have been on Friday December 12 at 2:33 pm. That’s when the agenda packet for this meeting was posted to the city’s website. If anyone had questions about the item, there is little time to resolve them between Friday afternoon and Tuesday morning. Of course, citizens could have inquired for details of the agenda item starting on December 9, when notice was published. But that would require inquiry to city officials, and it is not known if details were available at that time.
This is no way to hold a public hearing.
The city goes to great lengths to invite and solicit citizen involvement in city government. In the run-up to the recent sales tax election, the city continually reminded us of how many public meetings were held, how many surveys were filled out, and how we must come together as a community to solve our problems.
After the election Mayor Brewer started a press conference by, according to his published remarks, “thanking everyone who voted, participated in the community engagement process and took the time to learn about the sales tax proposal.” He also mentioned that the city would “expand and enhance our engagement process.”
But that’s not the case with this item. The notice that the city gave to citizens is deficient. Not legally deficient, but deficient if the city really wants citizens to be involved.
If the city is concerned about citizen involvement, the council should defer this item until next week or another future meeting.
These agencies spend considerable sums of tax money. This week the city will consider funding Go Wichita with a budget of $2,356,851 for 2015. That is not all the taxpayer money this agency will spend, as earlier this year the council voted to increase the city’s hotel tax by 2.75 cents per dollar, with the proceeds going to Go Wichita. City documents indicate that tax is estimated to generate $2.3 million per year.
That is a lot of tax money, and also a high proportion of the agency’s total funding. According to the 2012 IRS form 990 for Go Wichita, the organization had total revenue of $2,609,545. Of that, $2,270,288 was tax money from the city. That’s 87 percent taxpayer-funded. When the surge of higher hotel tax money starts flowing in, that percent will undoubtedly rise, perhaps to 93 percent or more.
Despite being nearly totally funded by taxes, Go Wichita refuses to supply spending records. Many believe that the Kansas Open Records Act requires that it comply with such requests. If the same money was being spent directly by the city, the records undoubtedly would be supplied.
The lack of transparency at Go Wichita is more problematic than this. Earlier this year Go Wichita refused to provide to me its contract with a California firm retained to help with the re-branding of Wichita. When the Wichita Eagle later asked for the contract, it too was refused. If the city had entered into such a contract, it would be a public record. Contracts like this are published each week in the agenda packet for city council meetings. But Go Wichita feels it does not have to comply with simple transparency principles.
The City of Wichita could easily place conditions on the money it gives to these groups, requiring them to show taxpayers how their tax dollars are being spent. But the City does not do this. This is not transparency.
In the past I’ve argued that Go Wichita is a public agency as defined in the Kansas Open Records Act. But the city disagreed. And astonishingly, the Sedgwick County District Attorney agreed with the city’s interpretation of the law.
So let’s talk about good public policy. Let’s recognize that even it is the case that the Kansas Open Records Act does not require Go Wichita, WDDC, and GWEDC to disclose records, the law does not prohibit or prevent them from fulfilling requests for the types of records I’ve asked for. Even if the Sedgwick County District Attorney says that Go Wichita is not required to release documents, the law does not prevent the release of these records.
Once we understand this, we’re left with these questions:
Why does Go Wichita want to keep secret how it spends taxpayer money, as much as $4.6 million next year?
Why is this city council satisfied with this lack of disclosure of how taxpayer funds are spent? Many council members have spoken of how transparency is important. One said: “We must continue to be responsive to you. Building on our belief that government at all levels belongs to the people. We must continue our efforts that expand citizen engagement. … And we must provide transparency in all that we do.” That was Mayor Brewer speaking in his 2011 State of the City address.
It would be a simple matter for the council to declare that the city and its taxpayer-funded partner agencies believe in open government. All the city has to have is the will to do this. It takes nothing more. It costs the city and its agencies nothing, because the open records law lets government charge for filling records requests. I would ask, however, that in the spirit of open transparent government, in respect for citizens’ right to know how tax funds are spent, and as a way to atone for past misdeeds, that Go Wichita fulfill records requests at no charge.
Actions of the Wichita City Council have shown that campaign finance reform is needed. Citizen groups are investigating how to accomplish this needed reform, since the council has not shown interest in reforming itself.
Consider recent actions by the council and its members:
A minister dabbling in real estate development made a large contribution to his council representative just before he asked the city council for tax increment financing.
The council voted to give a construction company a no-bid contract for a parking garage. When later put out for competitive bid, the same company won the contract, but with a bid 21 percent less costly to taxpayers.
When a group of frequent campaign contributors wanted to win a contest for the right to build an apartment project, the city’s reference-checking process was a sham. City and other government officials were listed as references without their knowledge or consent, and none of the people listed as references were actually contacted.
A frequent campaign contributor, according to the Wichita Eagle, “represented himself as an agent of the city — without the city ‘s knowledge or consent — to cut his taxes on publicly owned property he leases in the Old Town Cinema Plaza.” City officials expressed varying degrees of displeasure. But it wasn’t long before David Burk was receiving taxpayer subsidy again from the city council.
The council voted to grant $703,017 in sales tax forgiveness to frequent campaign contributors and the mayor’s fishing buddy.
Wichita Mayor Carl Brewer with major campaign donor Dave Wells of Key Construction. Brewer has voted to send millions to Key, including overpriced no-bid contracts.What is the common thread running through these incidents? Council members have voted to enrich their significant campaign contributors. Each of these are examples of a “pay-to-play” environment created at Wichita City Hall. It’s harmful to our city in a number of ways.
First, overpriced no-bid contracts and other giveaways to campaign contributors isn’t economic development. It’s cronyism. It’s wasteful.
Second: Citizens become cynical when they feel there is a group of insiders who get whatever they want from city hall at the expense of taxpayers. At one time newspaper editorial pages crusaded against cronyism like this. But no longer in Wichita. The Wichita Eagle has reported on some of these issues — sometimes in depth, sometimes in passing, but some have escaped notice. The editorial page of the newspaper sometimes takes notice, but is rarely critical of the council or mayor.
Third, when it is apparent that a “pay-to-play” environment exists at Wichita City Hall, it creates a toxic and corrosive political and business environment. Companies are reluctant to expand into areas where they don’t have confidence in the integrity of local government. Will I find my company bidding against a company that made bigger campaign contributions than I did? If I don’t make the right campaign contributions, will I get my zoning approved? Will my building permits be slow-walked through the approval process? Will my projects face unwarranted and harsh inspections? Will my bids be subjected to microscopic scrutiny?
Importantly: Will the Wichita city council prop up a competitor to my company with economic development incentives that place my company at severe disadvantage?
Wichita’s mayor sells his barbeque sauce at movite theaters owned by a campaign contributor who receives city taxpayer subsidies.We need laws to prohibit Wichita city council members from voting on or advocating for decisions that enrich their significant campaign contributors. A model law for Wichita is a charter provision of the city of Santa Ana, in Orange County, California, which states: “A councilmember shall not participate in, nor use his or her official position to influence, a decision of the City Council if it is reasonably foreseeable that the decision will have a material financial effect, apart from its effect on the public generally or a significant portion thereof, on a recent major campaign contributor.”
We’d also need to add — as does New Jersey law — provisions that contributions from a business owner’s spouse and children will be deemed to be from the business itself. This is because for Kansas municipal and school district elections, only personal contributions may be made. Additionally the contributions of principals, partners, officers, and directors, and their spouses and children, are considered to be from the business itself for purposes of the law. These provisions are important, as many city council members in Wichita receive campaign contributions from business owners’ family members and employees as a way to skirt our relatively small contribution limits. For two examples of how companies use family members, employees, and friends to stack up campaign contributions, see Campaign contributions show need for reform in Wichita.
Such campaign finance reform would not prohibit anyone from donating as much as they want (up to the current limits) to any candidate. Nor would the law prevent candidates from accepting campaign contributions from anyone.
This reform, however, would remove the linkage between significant contributions and voting to give money to the contributor. This would be a big step forward for Wichita, its government, and its citizens.
Proponents see three paths towards campaign finance reform. One would be to press for a law in the upcoming session of the Kansas Legislature. Such a law would be statewide in scope, and could apply to city councils, county commissions, school boards, townships, and other elective bodies.
A second path would be to use the municipal initiative process. Under this process, a group writes a proposed ordinance. Then, it collects valid signatures on petitions. If a successful petition is verified, the city council must either (a) pass the ordinance as written, or (b) set an election to let the people vote whether the ordinance should become law.
There is also a third path, which is for the Wichita City Council to recognize the desirability of campaign finance reform and pass such an ordinance on its own initiative.
If we take the affected parties at their word, this third path should face little resistance. That’s because politicians who accept these campaign contributions say it doesn’t affect their voting, and those who give the contributions say they don’t do it to influence votes.
If politicians and contributors really mean what they say, there should be no opposition to such a law. Citizens should ask the Wichita City Council to pass a campaign finance reform ordinance that prohibits voting to enrich significant campaign contributors.
Some incidents
In 2008 the Wichita City Council approved a no- and low-interest loan to Bill Warren and his partners. Reported the Wichita Eagle: “Wichita taxpayers will give up as much as $1.2 million if the City Council approves a $6 million loan to bail out the troubled Old Town Warren Theatre this week. That’s because that $6 million, which would pay off the theater’s debt and make it the only fully digital movie theater in Kansas, would otherwise be invested and draw about 3 percent interest a year.”
When questioned about election donations:
“I would never do anything because of a campaign contribution,” said [former council member Sharon] Fearey, who received $500 from David Burk and $500 from David Wells.
“I don’t think $500 buys a vote,” said [former council member Sue] Schlapp.
“One has nothing to do with the other,” [Wichita Mayor Carl] Brewer said.
Also in 2008, the Reverend Dr. Kevass J. Harding wanted to spruce up the Ken-Mar shopping center at 13th and Oliver, now known as Providence Square. Near the end of June, Kevass Harding and his wife contributed a total of $1,000, the maximum allowed by law, to the campaign of Wichita City Council Member Lavonta Williams (district 1, northeast Wichita). This was right before Harding appeared before the city council in July and August as an applicant for tax increment district financing (TIF).
These campaign contributions, made in the maximum amount allowable, were out of character for the Hardings. They had made very few contributions to political candidates, and they appear not to have made many since then.
Campaign contributions to Wichita City Council member Lavonta Williams from an applicant for tax increment financing.
But just before the Ken-Mar TIF district was to be considered for approval, the Hardings made large contributions to Williams, who is the council member representing Ken-Mar’s district. Harding would not explain why he made the contributions. Williams offered a vague and general explanation that had no substantive meaning.
In August 2011 the council voted to award Key Construction a no-bid contract to build the parking garage that is part of the Ambassador Hotel project, now known as Block One. The no-bid cost of the garage was to be $6 million, according to a letter of intent. Later the city decided to place the contract for competitive bid. Key Construction won the bidding, but for a price $1.3 million less.
The no-bid contract for the garage was just one of many subsidies and grants given to Key Construction and Dave Burk as part of the Ambassador Hotel project. In Wichita city elections, individuals may contribute up to $500 to candidates, once during the primary election and again during the general election. As you can see in this table compiled from Wichita City Council campaign finance reports, spouses often contribute as well. So it’s not uncommon to see the David and DJ Burk family contribute $2,000 to a candidate for their primary and general election campaigns. That’s a significant sum for a city council district election campaign cycle. <a href=”http://wichitaliberty.org/files/wichita-city-council-campaign-contributions-associated-with-ambassador-hotel.pdf”” target=”_blank” title=”Wichita City Council campaign contributions associated with Ambassador Hotel”>Click here for a compilation of campaign contributions made by those associated with the Ambassador Hotel project.
Council Member Jeff Longwell (district 5, west and northwest Wichita), in his second term as council member, led the pack in accepting campaign contributions from parties associated with the Ambassador Hotel project. For his most recent election, he received $4,000 from parties associated with Key Construction, and $2,000 from David Burk and his wife. Total from parties associated with the Ambassador Hotel project: $6,000. When Longwell ran for Sedgwick County Commission this summer, these parties donated generously to that campaign, too.
Council Member Lavonta Williams (district 1, northeast Wichita) received $5,000 from parties associated with the Ambassador Hotel: $3,000 from parties associated with Key Construction, and $2,000 from David Burk and his wife.
Wichita Mayor Carl Brewer received $5,000 from parties associated with the Ambassador Hotel: $4,500 from parties associated with Key Construction, and $500 DJ Burk, David Burk’s wife.
Council Member and Vice Mayor Janet Miller (district 6, north central Wichita) received $3,500 during her 2009 election campaign from parties associated with the Ambassador Hotel: $1,500 from parties associated with Key Construction, and $2,000 from David Burk and his wife.
For his 2011 election campaign, Council Member Pete Meitzner (district 2, east Wichita) received $3,500 from parties associated with the Ambassador Hotel: $2,500 from parties associated with Key Construction, and $1,000 from David Burk and his wife.
For his 2011 election campaign, Council Member James Clendenin (district 3, southeast and south Wichita) received $1,500 from parties associated with the Ambassador Hotel: $1,000 from parties associated with Key Construction, and $500 from David Burk and his wife.
In 2011 nearly all council members approved a no-bid contract for this garage. It was later re-bid at a much lower price.What citizens need to know is that the Wichita City Council was willing to spend an extra $1.3 million of taxpayer money to reward a politically-connected construction firm that makes heavy campaign contributions to council members. Only one council member, Michael O’Donnell, voted against this no-bid contract. No city bureaucrats expressed concern about this waste of taxpayer money.
Of interest to current mayoral politics: In 2012 while Jeff Longwell was campaigning for the Sedgwick County Commission, campaign contributions from parties associated with Walbridge, a Michigan-based construction company appeared on Longwell’s campaign finance reports. Why would those in Michigan have an interest in helping a Wichita City Council member fund his campaign for a county office? Would the fact that Walbridge is a partner with Key Construction on the new Wichita Airport terminal provide a clue?
These contributions are of interest because on July 17, 2012, the Wichita City Council, sitting in a quasi-judicial capacity, made a decision in favor of Key and Walbridge that will cost some group of taxpayers or airport customers an extra $2.1 million. Five council members, including Longwell, voted in favor of this decision. Two members were opposed.
On July 16 — the day before the Wichita City Council heard the appeal that resulted in Key Construction apparently winning the airport contract — John Rakolta, Chairman and Chief Executive Officer of Walbridge and his wife contributed $1,000 to Longwell’s campaign for Sedgwick county commissioner.
Then on July 20, three days after the council’s decision in favor of Key/Walbridge, other Walbridge executives contributed $2,250 to Longwell’s campaign. Besides the Walbridge contributions, Key Construction and its executives contributed $6,500 to Longwell’s county commission campaign. Key and its executives have been heavy contributors to Longwell’s other campaigns, as well as to Wichita Mayor Carl Brewer and many other Wichita City Council members.
Wichita has laws that seem clear. But the city attorney said they don’t mean what they seem to say. Will our next mayor stand up for ethics?
Wichita has a city code that seems to give guidance to council members (the mayor is a council member) on ethical behavior. The code says, in part, “[Council members] shall refrain from making decisions involving business associates, customers, clients, friends and competitors.”
But Mayor Carl Brewer and many council members have done just that. Many times, in fact. And the Wichita city attorney said that the city code doesn’t really need to be followed.
Be advised: If you ask the mayor to adhere to this law, he may threaten to sue you.
Following, from July 2013, what Wichita city code says and what the city attorney said about that law. We have a new city attorney this year, so maybe things will change. But I have a feeling that change must be started from the top, which is the mayor. The city attorney, indirectly, works for the mayor and council.
Wichita city code seemingly ignored
When a city has laws that it doesn’t enforce, what are citizens to do?
Here’s a section from the Wichita city code as passed in 2008 (full section below):
“[Council members] shall refrain from making decisions involving business associates, customers, clients, friends and competitors.”
When asked about a specific application of this city law, the Wichita city attorney supplied this interpretation:
Related to the Mayor’s participation in the item, yes, City Code advises Council members to “refrain from making decisions involving business associates, customers, clients, friends and competitors. … ” but the Code does not provide definitions or limits to these broad categories of constituents. Further, the City Code clearly requires Council members to “vote on all matters coming before the City Council except in those particular cases of conflict of interest. …” The city Code does not define what constitutes a conflict but the Council has historically applied the State law for that definition.
Applying that State law specific to local municipalities, the Mayor does not have any substantial interest in Douglas Place LLC, and therefore no conflict. Under the State ethics law, there was no requirement that the Mayor recuse himself from voting on the Ambassador Project.
So we have statutory language that reads “shall refrain,” but the city attorney interprets that to mean “advises.”
We also have statutory language that reads “business associates, customers, clients, friends and competitors.” But the city attorney feels that these terms are not defined, and therefore the mayor and city council members need not be concerned about compliance with this law.
I wonder whose interests the city attorney represents. The people of Wichita, who want to be governed in a fair and ethical manner? It doesn’t seem so.
If the city attorney’s interpretation of this law is controlling, I suggest we strike this section from the city code. Someone who reads this — perhaps a business owner considering Wichita for expansion — might conclude that our city has a code of ethics that is observed by the mayor and council members and enforced by its attorneys.
Giving that impression, though, would be false — and unethical.
Here’s the Wichita city code:
Sec. 2.04.050. — Code of ethics for council members.
Council members occupy positions of public trust. All business transactions of such elected officials dealing in any manner with public funds, either directly or indirectly, must be subject to the scrutiny of public opinion both as to the legality and to the propriety of such transactions. In addition to the matters of pecuniary interest, council members shall refrain from making use of special knowledge or information before it is made available to the general public; shall refrain from making decisions involving business associates, customers, clients, friends and competitors; shall refrain from repeated and continued violation of city council rules; shall refrain from appointing immediate family members, business associates, clients or employees to municipal boards and commissions; shall refrain from influencing the employment of municipal employees; shall refrain from requesting the fixing of traffic tickets and all other municipal code citations; shall refrain from seeking the employment of immediate family members in any municipal operation; shall refrain from using their influence as members of the governing body in attempts to secure contracts, zoning or other favorable municipal action for friends, customers, clients, immediate family members or business associates; and shall comply with all lawful actions, directives and orders of duly constituted municipal officials as such may be issued in the normal and lawful discharge of the duties of these municipal officials.
Council members shall conduct themselves so as to bring credit upon the city as a whole and so as to set an example of good ethical conduct for all citizens of the community. Council members shall bear in mind at all times their responsibility to the entire electorate, and shall refrain from actions benefiting special groups at the expense of the city as a whole and shall do everything in their power to ensure equal and impartial law enforcement throughout the city at large without respect to race, creed, color or the economic or the social position of individual citizens.
In this episode of WichitaLiberty.TV: While chair of the Wichita Metro Chamber of Commerce, a Wichita business leader strikes a deal that’s costly for taxpayers. A Kansas University faculty member is under attack from groups that don’t like his politics. Then, how can classical liberalism help us all get along with each other? View below, or click here to view at YouTube. Episode 68, broadcast December 14, 2014.
Does the Wichita Metro Chamber of Commerce support free markets, capitalism, and economic freedom, or something else?
Very often, local chambers of commerce support crony capitalism instead of pro-growth policies that allow free enterprise and genuine capitalism to flourish.
We saw this in Wichita this year, where the Wichita Metro Chamber of Commerce campaigned for a sales tax increase. The Chamber recommended that Wichitans vote in favor of a sales tax of one cent per dollar, with some of the proceeds to be dedicated for a jobs fund. (Other uses were to be for a new water supply, expanded bus transit, and accelerated neighborhood street repair.) Chamber leaders told the Wichita city council that if the jobs fund was not included in the package presented to voters, the Chamber would not support the sales tax.
Not long ago the Wichita Chamber was opposed to higher sales taxes. In March 2010, as chair of the Wichita Chamber, Sam Williams submitted a letter to the Wichita Eagle in which he wrote “Tax increases and government spending will not create employment or revive the state’s economic engine. Increasing the costs of goods and services will only lead to fewer purchases, more business closures, higher unemployment and less taxes being paid.”
In April of same year, he wrote again to the Eagle, advising Wichitans this: “Simply put, raising taxes hurts business, costs jobs and ultimately leads to fewer taxpayers and fewer taxes being paid to fund state and local government.”
Having espoused these anti-tax sentiments just four years ago, it’s curious that the Wichita Chamber would support and campaign for a sales tax for Wichita this year. This spills over to mayoral politics. As far as I saw, Sam Williams, — the Chamber’s chair in 2010 — did not take a public position on the sales tax this year. Except for this: Williams is chair of the Wichita Downtown Development Corporation, and that organization endorsed the sales tax.
Regarding mayoral politics: Did you know that Sam Williams is running for mayor? And that it appears he has the support of the Wichita Chamber?
I have a request. If you see Sam Williams, would you ask him about his position on raising sales taxes?
Your chamber of commerce
Most people probably think that local chambers of commerce — since their membership is mostly business firms — support pro-growth policies that embrace limited government and free markets. But that’s usually not the case. Here, in an excerpt from his article “Tax Chambers” economist Stephen Moore explains:
The Chamber of Commerce, long a supporter of limited government and low taxes, was part of the coalition backing the Reagan revolution in the 1980s. On the national level, the organization still follows a pro-growth agenda — but thanks to an astonishing political transformation, many chambers of commerce on the state and local level have been abandoning these goals. They’re becoming, in effect, lobbyists for big government.
…
In as many as half the states, state taxpayer organizations, free market think tanks and small business leaders now complain bitterly that, on a wide range of issues, chambers of commerce deploy their financial resources and lobbying clout to expand the taxing, spending and regulatory authorities of government. This behavior, they note, erodes the very pro-growth climate necessary for businesses — at least those not connected at the hip with government — to prosper. Journalist Tim Carney agrees: All too often, he notes in his recent book, “Rip-Off,” “state and local chambers have become corrupted by the lure of big dollar corporate welfare schemes.”
…
In the states, chambers have come to believe their primary function is to secure tax financing for sports stadiums, convention centers, high-tech research institutes and transit boondoggles. Some local chambers have reportedly asked local utilities, school administrators and even politicians to join; others have opened membership to arts councils, museums, civic associations and other “tax eater” entities.
…
“I used to think that public employee unions like the NEA were the main enemy in the struggle for limited government, competition and private sector solutions,” says Mr. Caldera of the Independence Institute. “I was wrong. Our biggest adversary is the special interest business cartel that labels itself ‘the business community’ and its political machine run by chambers and other industry associations.”
From Stephen Moore in the article “Tax Chambers” published in The Wall Street Journal February 10, 2007. The full article can be found here.
My decision to fight for academic freedom
By Art Hall
For more than 25 years, I have dedicated myself to teaching economics and generating original economic research focused on public policy issues. Like all scholars nationwide, I have operated under the bedrock principle of academic freedom.
Academic freedom is the unfettered ability to research and teach, and a natural extension of rights protected under the First Amendment — without the fear of interference or persecution.
Dr. Art HallSince 2004, I have had the esteemed privilege of directing the Center for Applied Economics at the KU School of Business. (I also teach economics classes.) The Center’s purpose is to offer economic analysis and economic education relevant for policy makers, community leaders, and other interested citizens. This purpose often involves providing legislative testimony and conducting public policy research on subjects that may be controversial but are nonetheless important.
A student group at KU that disagreed with testimony I delivered on a specific piece of legislation used the Kansas Open Records Act (KORA) to request copies of my private e-mail correspondence for the past 10 years. This is a misuse of open-records law, a type of misuse that seems to be spreading nationwide. The policy intent of open-records laws is to aid the transparency of government operations and deliberations, not to suppress debate and free academic inquiry.
The students’ misuse of KORA explains why I recently took legal action against KU; not out of hostility or secrecy, but to take a stand for the principle of academic freedom. While my attorney and I believe that the private records the students asked for are exempt from release under certain provisions of the KORA, KU planned to comply with the students’ request. My legal action will allow a judge to adjudicate the different interpretations of KU’s legal obligations under the KORA.
If my private, personal communications are released, I will not be the only one whose academic freedom is jeopardized. The issue is much larger, and could ultimately jeopardize the academic freedom of any scholar at a public institution of higher education.
My views about academic freedom in this matter are consistent with those advocated by the nation’s premier organization for higher education faculty: the American Association of University Professors (AAUP) has stated that a crucial component of academic freedom is the ability of faculty to engage with a variety of experts as they pursue their research. With the odd exception of the Kansas chapter (which reportedly provided funding to the student group seeking my private documents), the AAUP has consistently stood by professors and researchers in shielding their private correspondence from over-reaching records requests, acknowledging the threat that this kind of activity poses to academic freedom.
Both the Kansas Board of Regents and the University of Kansas Faculty Council strongly support the principle of academic freedom. In a unanimously passed resolution, the Faculty Council wrote, “academic freedom … is essential to the mission of the University: to educate students and to engage in scholarly inquiry.”
Furthermore, there is an emerging body of legal precedent that allows researchers the latitude they require to correspond broadly with experts with diverse viewpoints without fearing their thoughts will be misconstrued, published and used against them in order to silence them.
The Supreme Court has written that “scholarship cannot flourish in an atmosphere of suspicion and distrust.” In the Sweezy decision, the majority wrote, “merely to summon a witness and compel him, against his will, to disclose the nature of his past expressions and associations is a measure of governmental interference in [academic] matters.”
In this landmark academic freedom case, the Court ultimately ruled that “these are rights which are safeguarded by the Bill of Rights and the Fourteenth Amendment.”
For anyone questioning why I would take legal action against KU, let me be clear. I am taking legal action for my students, for the University, for Kansas, and to preserve the integrity of all forms of academic and scholarly research for my peers.
When I decided to take legal action, I knew it would create controversy and suspicion. But my commitment to academic freedom compelled me to do it.
Art Hall directs the Center for Applied Economics at the KU School of Business, where he is also a lecturer in economics.
High Touch Technologies in downtown Wichita, with sign calling for higher sales tax.At the same time the city council voted to rent to High Touch up to 180 parking stalls at monthly rent of $35. These are located in the garage at 215 S. Market. The condition of the garage had deteriorated so much that it had been closed. In March 2014 the city council decided to rehabilitate the garage. According to city documents, the cost to rehabilitate the garage is $9,685,000, which creates 550 parking stalls. This is a cost per stall of $17,609.
A question is this: Who was the biggest beneficiary of this transaction: High Touch and its owners, or city taxpayers?
To evaluate real estate investments, a common metric is capitalization rate. The formula is
capitalization rate = annual net operating income / cost (or value)
In its coverage of the rehab of the garage, the Wichita Eagle didn’t let taxpayers know how much High Touch benefited from their contributions.For a parking stall in this garage as rented to High Touch, the capitalization rate is
($35 per stall per month * 12 months per year) / $17,609 cost = 2.4 percent
How do we place this number in context? Is this a good or bad deal for taxpayers? To answer this question, we need to find an appropriate capitalization rate. In major cities the capitalization rate for parking garages is lower than for other types of real estate, perhaps five percent. Local sources say the rate in Wichita for parking garages could be seven or eight percent, but there are no recent parking lot transactions to help gauge what the market wants for a capitalization rate. Taxpayers may remember when the city evaluated the Union Station project in October, part of which is a parking garage, the city used a capitalization rate of nine percent. That’s the capitalization rate the city felt the investor deserved to earn, and the city used that rate to justify taxpayer subsidy.
But on the 215 S. Market garage the city, on behalf of taxpayers, accepted a cap rate of just 2.4 percent.
What if the city wanted to earn a capitalization rate of nine percent for taxpayers? The annual rent for each parking stall would have to be $1,585, or $132 per month. At seven percent capitalization rate, the monthly rent would be $103.
But the city is renting the spaces for just $35, not $132 or $103.
View from parking garage, 215 S. Market, August 2009It’s actually a better deal for High Touch — and a correspondingly worse deal for city taxpayers — than these numbers show. If High Touch was to build a parking garage itself, it would encounter expenses such as insurance, lighting, cleaning and sweeping, repairs and maintenance, and security. Not to mention taxes, which the city does not pay. But the city will pay these other expenses, except for insurance, as the city self-insures. That has an implicit cost that taxpayers bear.
All of these costs are contained in the $35 monthly rent the city will collect from High Touch. It’s a great deal for High Touch, and a bad deal for city taxpayers. It also establishes a template whereby private sector developers are unlikely to develop parking in downtown Wichita when there is a competitor that can undercut their rates, using taxpayer dollars to do so.
Taxpayers might remember that the biggest subsidy for High Touch — the property and sales tax breaks — started when the company CEO dropped hints that the company might add jobs elsewhere than Wichita. Chambers told the Wichita Business Journal that he considered moving the office to another city. All this happened while he was working his way up the leadership ladder to become chair of the Wichita Chamber.
These agencies spend considerable sums of tax money. This week the city will consider funding Go Wichita with a budget of $2,356,851 for 2015. That is not all the taxpayer money this agency will spend, as earlier this year the council voted to increase the city’s hotel tax by 2.75 cents per dollar, with the proceeds going to Go Wichita. City documents indicate that tax is estimated to generate $2.3 million per year.
I’ve appeared before the council several times to ask that Go Wichita and similar organizations comply with the Kansas Open Records Act. See Go Wichita gets budget approved amid controversy over public accountability, City of Wichita Spends $2 million, Rebuffs Citizen’s Transparency Request, and articles at Open Records in Kansas.
In 2008 the Wichita City Council approved a no- and low-interest loan to Bill Warren and his partners. Reported the Wichita Eagle: “Wichita taxpayers will give up as much as $1.2 million if the City Council approves a $6 million loan to bail out the troubled Old Town Warren Theatre this week. That’s because that $6 million, which would pay off the theater’s debt and make it the only fully digital movie theater in Kansas, would otherwise be invested and draw about 3 percent interest a year.”
These contributions are of interest because on July 17, 2012, the Wichita City Council, sitting in a quasi-judicial capacity, made a decision in favor of Key and Walbridge that will cost some group of taxpayers or airport customers an extra $2.1 million. Five council members, including Longwell, voted in favor of this decision. Two members were opposed.
Then on July 20, three days after the council’s decision in favor of Key/Walbridge, other Walbridge executives contributed $2,250 to Longwell’s campaign. Besides the Walbridge contributions, Key Construction and its executives contributed $6,500 to Longwell’s county commission campaign. Key and its executives have been heavy contributors to Longwell’s other campaigns, as well as to Wichita Mayor Carl Brewer and many other Wichita City Council members.
Here’s a section from the Wichita city code as passed in 2008 (full section below):
Very often, local chambers of commerce support crony capitalism instead of pro-growth policies that allow free enterprise and genuine capitalism to flourish.
These agencies spend considerable sums of tax money. This week the city will consider funding Go Wichita with a budget of $2,356,851 for 2015. That is not all the taxpayer money this agency will spend, as earlier this year the council voted to increase the city’s hotel tax by 2.75 cents per dollar, with the proceeds going to Go Wichita. City documents indicate that tax is estimated to generate $2.3 million per year.
In 2008 the Wichita City Council approved a no- and low-interest loan to Bill Warren and his partners. 
Very often, local chambers of commerce support 
