Voice For Liberty

Tag: Featured

  • Wichita Mayor Carl Brewer is concerned about misinformation

    Wichita Mayor Carl Brewer is concerned about misinformation

    Wichita Mayor Carl Brewer is concerned about misinformation being spread regarding the proposed Wichita sales tax.

    In November Wichita voters will decide whether to create a sales tax of one cent per dollar. The largest intended purpose of the funds is to create a new water supply. Set aside for a moment the question whether Wichita needs a new water source. Set aside the question of whether ASR is the best way to provide a new water source. What’s left is how to pay for it.

    In its informational material, the city presents two choices for paying for a new water supply: Either (a) raise funds through the sales tax, or (b) borrow funds that Wichitans will pay back on their water bills, along with a pile of interest.

    Wichita proposed sales tax explanation on water

    As you can see in the nearby material prepared by the city, the costs are either $250 million (sales tax) or $471 million (borrow and pay interest). The preference of the city is evident: Sales tax. The “Yes Wichita ” group agrees.

    Are there other alternatives to these two choices? Could we raise the funds through water bills over the same five-year period as the proposed sales tax? Would this let commercial and industrial water users participate in the costs of a new water supply?

    Last week I posed this question at a Wichita water town hall meeting. Wichita Director of Public Works Alan King responded yes, this is possible, adding “I think you’re right. I think that there’s more than one alternative to funding.” A video excerpt of this meeting is available here.

    The response of the city’s public works director contradicts the possibilities the city presents to voters. Is this an example of the type of misinformation the mayor wants to clear up?

    Last week Mayor Carl Brewer told the Wichita Eagle “We decided to do a mailer because there was a lot of misinformation that was going out where people didn’t quite understand what was going on. By doing the mailer, we’re able to educate everyone.”

    The city spent $47,000 sending the mailer. But as we see, it has only contributed to the misinformation.

    The city’s threat to voters

    Here’s what is happening. City hall gives us two choices. It’s either (a) do what we want (sales tax), or (b) we’ll do something that’s really bad (borrow and pay interest). Wichita voters shouldn’t settle for this array of choices.

    Let me emphasize that. The city’s informational material says if voters don’t pass the sales tax, the city will do something unwise. But the city did that very same bad thing to pay for the current ASR project, that is, borrow money and pay interest. But now the city says pass the sales tax or we will do something bad to you. Pass the sales tax or the city will issue long-term debt and you will pay a lot of interest.

    Pass the sales tax, or we will do again what we did to pay for the current ASR project. And that would be bad for you and the city.

    Are there other alternatives for raising $250 million for a new water source (assuming it is actually needed)? Of course there are. The best way would be to raise water bills by $250 million over five years. In this way, water users pay for the new water supply, and we avoid the long-term debt that city council members and “Yes Wichita” seem determined to avoid.

    Water bills would have to rise by quite a bit in order to raise $250 million over five years. The city could decide to raise rates by different amounts for different classes of water users. The city could adjust its tiered residential rate structure to be more in line with the average of other large cities. (See Wichita water rates seen as not encouraging conservation.) But the total cost of the higher water bills would be exactly the same as the cost of the sales tax: $250 million.

    It’s important to have water users pay for a new water supply. The benefit is that water users will become acutely aware of the costs of a new water supply. That awareness is difficult to achieve. Many citizens are surprised to learn that the city has spent $247 million over the past decade on a water project, the ASR program. Almost all of that was paid for with long-term debt, the same debt that the city now says is bad.

    Paying for a new water supply through water bills would let commercial and industrial users participate in paying the cost of the project. These water users usually don’t pay a lot of sales tax. A restaurant, for example, does not pay sales tax on the food ingredients it purchases. An aircraft manufacturer does not pay sales tax on the raw materials and component parts it buys. But these companies do have a water bill. Yet, the city recommends that low income households pay more sales tax on their groceries. The city says this is the best way to pay for a new water supply to protect our lawns and golf courses during a drought.

  • ‘Yes Wichita’ co-chairs serve up contradicting plans for sales tax revenue

    ‘Yes Wichita’ co-chairs serve up contradicting plans for sales tax revenue

    At two forums on the proposed Wichita sales tax, leaders of the “Yes Wichita” group provided contradicting visions for plans for economic development spending, and for its oversight.

    On Tuesday the League of Women Voters — Wichita Metro sponsored a forum on the proposed one cent per dollar sales tax that appears on the November ballot. I appeared on behalf of the Coalition for a Better Wichita, a group that opposed the proposed sales tax. At the forum, a member of the audience wondered about whether proceeds of the sales tax would be given to Wichita State University. Speaking on behalf of “Yes Wichita,” one of its co-chairs Harvey Sorensen replied “there’s been no ask from Wichita State, there’s been no commitment to Wichita State.” When the questioner pushed back, Sorensen named several infrastructure needs of the WSU innovation campus that might be funded by sales tax revenue. Later, he said “there really have been no commitments” and challenged the questioner to “read me the data.” (For audio of this forum, click here.)

    The next day television station KCTU sponsored a debate in which I also participated. Michael Monteferrante represented “Yes Wichita.” He is a co-chair of that campaign. In response to a question, he said of the $80 million of sales tax dollars earmarked for economic development and jobs, “32 million dollars of it will be going to Wichita State University to work on fantastic training for our workforce. Another 32 million will go to just training some of the workforce in terms of our elimination of aerospace jobs. And just 16 million of the 80 million dollars will be going to retention and jobs and areas that will require the oversight that Mr. Weeks is talking about.” (For audio of this event, click here.)

    These two co-chairs of the “Yes Wichita” campaign offered contradictory answer to questions about the plans for the economic development aspect of the proposed sales tax. Coupled with Wichita’s hiring two weeks ago of a firm to form an economic development plan for Wichita, citizens are rightly concerned to doubt that the city has a plan for the sales tax.

    As far as the promised oversight, citizens might also be alarmed to learn of Monteferrante’s statement that only $16 million of the spending requires oversight.

  • Another Wichita sales tax forum

    Another Wichita sales tax forum

    On Wednesday October 29 KCTU Television held a televised debate on the issue of the proposed one cent per dollar Wichita sales tax. Michael Monteferrante represented “Yes Wichita.” He is a co-chair of that campaign. I represented Coalition for a Better Wichita, substituting for Jennifer Baysinger, who was not able to attend. R.J. Dickens was the moderator.

    This is the audio portion of the broadcast. It is about one hour in length. It represents the complete program.

  • Wichita sales tax forum

    Wichita sales tax forum

    Voice for Liberty Radio 150x150On Tuesday October 28 the League of Women Voters — Wichita Metro held a lunchtime forum on the issue of the proposed one cent per dollar Wichita sales tax. Harvey Sorensen and Moji Fanimokun represented “Yes Wichita.” Both are co-chairs of that campaign. I represented Coalition for a Better Wichita, substituting for Jennifer Baysinger, who was not able to attend. Paul Babich was the moderator.

    The audio presentation is about 53 minutes long. It represents the complete forum.

  • Wichita wants to expand water project, but abandons its website

    Wichita wants to expand water project, but abandons its website

    As the City of Wichita recommends voters spend $250 million on the expansion of a water project, the project’s accompanying website was abandoned, and has now disappeared.

    ASR website as it appeared in January 2012. Click for larger version.
    ASR website as it appeared in January 2012. Click for larger version.
    The Aquifer Storage and Recovery (ASR) project is a Wichita water utility system. So far its cost has been $247 million. As part of the proposed Wichita one cent per dollar sales tax, another $250 million is earmarked to be spent on its expansion.

    To help Wichitans learn about the ASR system, the city built a website at wichitawaterproject.org. Nearby is how the front page of that website appeared in January 2012. As you can see, it’s an attractive design. It holds much information about how ASR works and why the city says we need it.

    ASR website as it appears today. Click for larger version.
    ASR website as it appears today. Click for larger version.
    Here’s how the same website looks today. Around the middle of October the website went “dark.” Prior to this shutdown, it appears that the last time the website was significantly updated was December 2011.

    What has happened since January 2012 and now? First, a major city investment was completed. That’s Phase II of the ASR project. The ASR website says Phase II is expected to cost $220 million. But the ASR website was not updated to track the progress of Phase II during its completion and commissioning stages.

    The second thing that’s happened since the ASR website was abandoned is that the city has decided that expansion of the ASR system is the best way to provide for future Wichita water supply. In November voters will decide whether a one cent per dollar sales tax will be implemented, with 63 percent of the funds used to pay for ASR expansion.

    So the ASR system is important. If the city proceeds with its plan, about one-half billion dollars will have been spent on the project, plus an unknown amount of financing charges from the city’s decision to pay for the current system with long-term debt. ($500 million is about $1,300 for each Wichita resident.)

    Here’s an indication of the city’s priorities. The city’s communication staff has time to produce videos about something called “Ghoulish Gala.” (It’s a fundraising event for Botanica.) The city has the time and capability to produce and post news releases on items like a Beatles tribute concert coming to Century II.

    But what about something really important, like the spending of half a billion dollars on a water project? That website has been abandoned.

    City Government Relations Director Dale Goter explained to me that a staff person had been updating the ASR website, but that person is no longer available.

    The handling of the ASR website represents a management failure. The ASR website was attractive. It had a lot of functionality. Sites like that are somewhat complex and may require people with experience and training for their creation and updating.

    But citizens need basic information about their government. Websites that are simple and functional are easy to build, maintain, and update. There are systems like wordpress.com where websites can be hosted at no charge. It takes about five minutes to take a press release or budget document and post it on a WordPress site.

    But that’s not what the city decided to do. It went with a fancy design instead of a simple and functional design that could be maintained and updated by city communications or public works staff. Now, that website has disappeared, right at the time the ASR system is in the center of the news.

    I wonder: Was the ASR website really needed, if the city did not care that it was abandoned?

  • Examining claims in favor of the proposed Wichita sales tax

    Examining claims in favor of the proposed Wichita sales tax

    In an advertisement in the Wichita Eagle and in a mailer sent to Wichita voters, the “Yes Wichita” group makes a series of statements regarding plans for a new water supply. It’s important that Wichita voters be aware of the complete facts and context of these claims so that they make an informed decision on how to vote.

    The city has proposed a one cent per dollar sales tax. The largest portion — 63 percent or $250 million — is earmarked for a new water supply. Voters will see this question on the ballots for the November 4, 2014 election.

    Advertisement from "Yes Wichita."
    Advertisement from “Yes Wichita.” Click for larger version.
    Here’s what the “Yes Wichita” group has stated under the heading “The Plan For Affordable Long-term Water Supply” along with what voters also need to know.

    Save taxpayers $221 million over 20 years in costs. This statement is true only if the Wichita city council decides to pay for ASR expansion by using long-term debt. That decision has not been made. Besides that, there are other ways to raise this money. And if using debt for water projects is bad, why did the city borrow over $200 million for the current ASR project, and hundreds of millions for other water projects? See By threatening an unwise alternative, Wichita campaigns for the sales tax.

    Wichita Water Supply Plan Capital Costs
    Wichita Water Supply Plan Capital Costs
    Replace 60 year old aging pipelines so water is transported safely. The sales tax plan for water calls for the augmentation of one pipe, as shown in the city’s plan. Not replacing pipes plural, as this advertisement indicates. Plus, the pipe that is the subject of the city’s water plan is 60 years old, but there is no indication that it needs replacement.

    Tourists, visitors and renters help pay for our water. This is true. It is also true that if funds were raised through higher water bills, these people would also pay. Also, city documents regarding the sales tax state: “The State of Kansas estimates that 13% of sales taxes paid in the Wichita area are paid by non-residents based on a report at www.ksrevenue.org/pullfactor.html.” But at the “Yes Wichita” website, there is a different claim: “If we fund a new water source through a sales tax instead of water bills or property taxes, visitors and tourists will pay the sales tax, reducing the burden of this cost to Wichitans by about one-third.” Which is it? 13 percent, or 33 percent? Will “Yes Wichita” show us their figures or provide a reference for the basis of this claim?

    Prevent future high water rate increases. This is true. If we experience a prolonged drought, water rates would have to rise to cover the fixed costs of the water utility. That is, if we have such a drought. That may not happen, or it may not happen for many years.

    Fund ASR improvements which would provide new wells and a water storage site. This is true. What’s left is to decide whether making these additional investments in the ASR project is wise. We’ve learned that the expectations of ASR have been cut in half. We’ve learned that the ASR project is still in its commissioning phase, and it has not been turned loose for actual production for any significant period. I do not believe we have enough knowledge and experience to judge the success or failure of ASR. See Should Wichita expand a water system that is still in commissioning stage?

  • Wichita sends educational mailer to non-Wichitans, using Wichita taxes

    Wichita sends educational mailer to non-Wichitans, using Wichita taxes

    Why is the City of Wichita spending taxpayer money mailing to voters who don’t live in the city and can’t vote on the issue?

    A resident of Bel Aire thought it was curious that she received an informational mailing regarding an issue she can’t vote on. The issue is the proposed one cent per dollar Wichita city sales tax that is on the November ballot.

    Envelope of sales tax mailer sent by Wichita Mayor Carl Brewer to Bel Aire resident. Click for larger version.
    Envelope of sales tax mailer sent by Wichita Mayor Carl Brewer to Bel Aire resident. Click for larger version.
    What is curious about her receiving this mail about the Wichita sales tax? She can’t vote on this issue because she lives in Bel Aire, not in Wichita. Only those voters who live in Wichita will have the question on their ballots. Bel Aire is a nice town, but it is not Wichita.

    So why did the City of Wichita spend tax dollars informing residents of Bel Aire about an issue on which they may not vote?

    Many Wichitans question whether the city should have spent tax dollars on this mailer. Especially when it’s pretty clear that the material is designed to encourage citizens to vote in favor of the tax.

    (If you doubt whether the city’s educational material is advocating for passage of the sales tax, consider this: The “Yes Wichita” group campaigns for passage of the tax. This group refers voters to the city’s website to learn about the issue. “Yes Wichita” would not do that if the city’s material contained anything that might discourage a “Yes” vote.)

    I’ve been involved in political campaigns. I’ve always been quite careful to send mail only to those voters who live in the relevant jurisdiction. That is, I don’t waste donors’ money mailing to people who are not able to vote for my candidate.

    The return address on this envelope indicates the mail came from the Office of the Mayor. So may I ask, Mayor Carl Brewer, why are you wasting taxpayer money sending mail to people who can’t vote on this issue?

  • Wichita sales tax hike harms low income families most severely

    Wichita sales tax hike harms low income families most severely

    Analysis of household expenditure data shows that a proposed sales tax in Wichita affects low income families in greatest proportion, confirming the regressive nature of sales taxes.

    One of the criticisms of a sales tax is that it is regressive. That is, it affects low-income families in greatest proportion. This is an important consideration to explore, because in November Wichita voters will decide whether to create a new city sales tax of one cent per dollar. If enacted, the sales tax in Wichita would rise from 7.15 percent to 8.15 percent.

    It’s an important issue because to hear some people talk, it seems as though they are saying the proposed tax is “one penny.” Anyone can afford that, they say. But the tax is an extra penny on each dollar spent, meaning that the cost of, say, fifty dollars of food at the grocery store increases by fifty cents, not one penny.

    Further, we hear the sales tax spoken of as being a one percent increase. That’s true, if we mean a one percent increase in the cost of most things we buy. And one percent, after all, is just one percent. Not a big deal, people say. But considering the sales tax we pay, a relevant calculation is this: (8.15 – 7.15) / 7.15 = 14 percent. Which is to say, the amount of sales tax we pay will rise by 14 percent.

    To explore the effect of the proposed sales tax on families of different incomes, I gathered data from the U.S. Census Bureau, specifically table 1101, which is “Quintiles of income before taxes: Annual expenditure means, shares, standard errors, and coefficient of variation, Consumer Expenditure Survey, 2012, (Selected Values).” This table divides families into five quintiles. It gives annual expenditures for each quintile in various categories. For each category, I judged whether it is subject to sales tax. For example, for housing, I indicated it is not subject to sales tax. This is not totally accurate, as some of the spending in this category may be for taxable items like maintenance and repair supplies. Food is subject to sales tax in Kansas, although low-income families may apply for a rebate of the tax. Despite these shortcomings, I feel this data gives us an approximation of the effect of the sales tax. (Click on the table to view a larger version, or see below for how to obtain the data.)

    As you might imagine, as income rises, so does total taxable expenditures. Of interest, the percent of expenditures that are taxable is relatively constant across income levels.

    Click for larger.
    An important finding is the bottom line of the table, which shows the increase in cost due to the proposed sales tax as percent of income after taxes. This calculates the relative impact of the proposed sales tax increase as a percent of income. It is here that we expect to see the regressive nature of a sales tax appear. For all consumers, the increase in cost is 0.35 percent. For the lowest class of income, the increase in cost is 0.97 percent of income. It falls to 0.26 percent for the highest income class.

    This means that the lowest income class of families experience an increase nearly four times the magnitude as do the highest income families, as a percentage of after-tax income. This is the regressive nature of sales taxes illustrated in numbers, and is something that Wichita policy makers and voters should consider.

    I’ve made the data available as a Google Docs spreadsheet. Click here for access.

  • WichitaLiberty.TV: The proposed one cent per dollar Wichita sales tax

    WichitaLiberty.TV: The proposed one cent per dollar Wichita sales tax

    In this episode of WichitaLiberty.TV: We’ll talk about the proposed Wichita sales tax, including who pays it, and who gets special exemptions from paying it. Then, can we believe the promises the city makes about accountability and transparency? Finally, has the chosen solution for a future water supply proven itself as viable, and why are we asking low-income households to pay more sales tax on groceries for drought protection? View below, or click here to view at YouTube. Episode 63, broadcast October 26, 2014.