Greater Wichita Partnership (GWP) has requested $45,000 from Sedgwick County to engage the services of a consultant to direct an initiative to bring more focus to GWP’s regional economic development efforts. This one-time request, if provided, is intended to be leveraged with $45,000 from the City of Wichita and another $45,000 from GWP. Sedgwick County’s committment would represent one-third of the consultant’s work.
The proposed consulting engagement would be designed with two primary goals:
1. Develop a strategic plan for GWP that establishes an organizational structure to optimize and coordinate regional economic development efforts that grow opportunities, help create and maintain jobs, and promote the region as an attractive place to locate and/or grow a business.
2. Bring clarity and innovative ways for the Blueprint for Regional Economic Growth (BREG) to expand. We need to develop strategies to work together as a region to maintain and grow the Aerospace clusters for which we are known globally; while working to attract and grow businesses in other industries that will strengthen and diversify the regional economy.
There are a few ways to look at this request. One is that presently, GWP is working well and providing positive results, so there’s no need to spend money on the organization’s improvement. Local leaders seem pleased with GWP and its work. In January Wichita Mayor Jeff Longwell said “It’s hard to find a time when we’ve had more momentum.” 1 There are many other example of praise heaped on GWP and its leaders.
Or: We might argue that even though GWP is performing well, an overhaul could really boost its efforts.
Or: We might wonder how this organization is just getting started doing things like working on its focus and strategies. (While GWP is relatively new, it is a successor to a previous economic development group, with many of the same leaders and employees.)
What has GWP been doing? How effective is its stewardship of the Wichita-area economy? Here are some numbers on the Wichita-area economy.
Click for larger.Personal income. For the Wichita metropolitan statistical area, personal income in 2016 rose slightly from 2015 level, but is still below the 2014 level. In real (inflation-adjusted) dollars, personal income fell in 2016. 2
Wichita metro employment and unemployment. Click for larger.Employment. While officials promote the low Wichita-area unemployment rate, there is an alternative interpretation: The May 2017 unemployment rate declined to just about half the January 2011 rate. The number of employed persons rose by 1.1 percent, but the labor force fell by 3.7 percent. If we consider only unemployment rate, it looks like the Wichita area is prospering. But the unemployment rate hides bad news: The number of jobs increased only slightly, and the labor force fell by a lot. While it’s good that there are more people working, the decline in the labor force is a problem. 3
Population. In 1990 Wichita was the 80th largest SMA. In 2016 its ranking had fallen to 87.
Growth of GDP by Metro Area and Industries. Click for larger.Growth in output. The worst news, however, is that the Wichita-area economy shrank from 2015 to 2016. In real (inflation-adjusted) dollars, the Wichita metropolitan area gross domestic product fell by 1.4 percent. For all metropolitan areas, GDP grew by 1.7 percent. Since 2001, GDP for all metropolitan areas grew by 29.3 percent, while Wichita had 12.3 percent growth. 4
With these points in mind, we ought to wonder if GWP and its leadership ought to be replaced with something else.
This item will be handled on the commission’s consent agenda, meaning that there will be no discussion or individual vote unless a commissioner decides to “pull” the item.
In this episode of WichitaLiberty.TV: The Sentinel’s Danedri Herbert joins Bob Weeks to discuss the upcoming gubernatorial debate, the Kansas Legislature’s website and transparency, and accountability in government. View below, or click here to view at YouTube. Episode 184, broadcast February 17, 2018.
New Kansas Governor Jeff Colyer proudly cites the low Kansas unemployment rate, but there is more to the story.
In his recent speech to the legislature, Kansas Governor Jeff Colyer said, “There’s some good news to report here. According to the most recent data, the Kansas unemployment rate is 3.4%. That’s one of the lowest in the country, and the lowest our state has seen in more than seventeen years!”
Data from the Bureau of Labor Statistics, part of the United States Department of Labor shows changes to Kansas employment. The recent peak of the unemployment rate in Kansas was in 2009, when the rate reached 7.3 percent, averaging 6.9 percent for the entire year. In December 2017 it was 3.4 percent, just as the governor said. But since the unemployment rate is a ratio of two numbers, it can change for several reasons, and not all reasons are good news.
As shown in the nearby table, the unemployment rate since 2009 is down, and down a lot. Similarly, the number of unemployed persons is down, too, by nearly half. Good news.
But the number of employed persons has barely changed since 2009, rising by just one percent. At the same time, the labor force has fallen by 2.4 percent. The contracting labor force is the largest factor in the declining Kansas unemployment rate, and that is not good news.
In this episode of WichitaLiberty.TV: Professor Edward Stringham joins Karl Peterjohn and Bob Weeks to discuss Bitcoin, sound money, and the role of markets in private governance. View below, or click here to view at YouTube. Episode 182, broadcast February 10, 2018.
Edward Peter Stringham is the Davis Professor of Economic Organizations and Innovation at Trinity College in Hartford, Connecticut. Stringham is editor of the Journal of Private Enterprise, president of the American Institute for Economic Research, past president of the Society for the Development of Austrian Economics, and past president of the Association of Private Enterprise Education. He a prolific author. His book, Private Governance: Creating Order in Economic and Social Life, is published by Oxford University Press.
In this episode of WichitaLiberty.TV: Wichita Area Technical College (WATC) has formed an affiliation with Wichita State University, to be called the Wichita State University Campus of Applied Sciences and Technology, or WSU Tech. Sheree Utash, president of WATC and future president of WSU Tech, joins Karl Peterjohn to discuss these institutions. (Bob should be back next week.) View below, or click here to view at YouTube. Episode 181, broadcast January 27, 2018.
Shownotes
Announcement: It’s official: WATC will become the WSU Campus of Applied Sciences and Technology
Is the state’s leading expert on school funding truly knowledgeable, or is he untrustworthy?
Recent events have found Kansas Department of Education’s Deputy Commissioner Dale Dennis in the news regarding a possible mistake or misapplication of school funds. The school spending establishment has rushed to his rescue, with Kansas National Education Association, Kansas Association of School Boards, United School Administrators of Kansas, Kansas School Superintendents Association, and American Federation of Teachers Kansas issuing a joint statement. Dale Dennis, says the statement, is “the best friend public education and the kids of Kansas have had.” He is described as “the most trustworthy, honest, and respected advocate for children and schools.”
Consider, however: The goals of these institutions are more spending on schools, less accountability for schools, and stamping out any movement towards school choice. And Dale Dennis accommodates this, especially more spending. This is the basis of the complaint, that he authorized more spending than the legislature intended in statute.
On Facebook, Kansas public school spending advocates mislead about the level of school spending. Click for larger.No matter how this dispute resolves, Dale Dennis is not trustworthy and honest. Below is a description of a speech he gave to the Hutchinson Rotary Club last year. He portrayed a number called “base state aid per pupil” as all that the state spends on schools. The reality is that the state spends much more. Presenting base state aid as though it was all the state spends is misleading. It’s a lie.
Base state aid is a fairly low figure and it has not kept up with inflation. But total state (and local) spending is much higher and has risen. This is why Dale Dennis is not trustworthy and honest. This is fake government.
But because Dennis is willing to paint Kansas school finances untruthfully and in a way that makes it look like spending is low and has declined, the public school spending establishment loves him. They cite his figures. And then: Who can argue with the Kansas Department of Education Deputy Commissioner?
What can argue with Dennis are the facts. Here’s how to refute Dale Dennis: View spending numbers from the Kansas State Board of Education.
Following, from April 2017, analysis of Dale Dennis and his speech to the Hutchinson rotary Club.
Fake government spawns fake news
Discussions of public policy need to start from a common base of facts and information. An episode shows that both our state government and news media are not helping.
A recent Hutchinson News article1 started with this:
Once you wake up to where Kansas was in 1992 at funding schools and what it needs to do to get caught up, said the Kansas Department of Education’s Deputy Commissioner Dale Dennis, it’s a shocker.
In 1992, base state aid per pupil was $3,600. That amount, taking into account the Consumer Price Index, would be the equivalent of $6,001.12 in 2013. Base state aid, however, has been frozen at $3,852 since 2014-15.
“The numbers are shocking, shocking,” Dennis told the Hutchinson Rotary Club at its Monday luncheon meeting at the Hutchinson Town Club.
Why is a speech by a government bureaucrat, as covered in a major newspaper, important? It illustrates two problems we face in understanding, discussing, and debating important matters of public policy.
First, can government be truthful and accurate? Dale Dennis — the state’s top official on school finance — certainly knows that the numbers he presented do not accurately characterize the totality of school spending in Kansas. But the problem is even worse than that. To use base state aid as the indicator of state spending on schools is deceptive. It’s deceptive in that, after adjusting for inflation, base state aid has declined. But total state aid to school districts has increased.
Base state aid is a false indicator of total spending on schools by the state. It’s fake — fake government. And for a newspaper to uncritically present this as news illustrates the second problem we face.
Background on base state aid and school spending
Kansas school spending, showing base state aid and total state aid. See article for notes about 2015. Click for larger.Base state aid per pupil — the statistic Dennis presented — is an important number.2 It’s the starting point for the Kansas school finance formula used before the 2015-2016 (fiscal 2016) school year, and something like it may be used in a new formula.3
Base state aid, however, is not the only important number. To calculate the funding a school district receives, weightings are added. If students fall into certain categories, weightings for that category are added to determine a weighted enrollment. That is multiplied by base state aid to determine total state aid to the district. 4
While this may seem like a technical discussion that doesn’t make a difference, it’s very important, because some of the weightings are large. The at-risk weighting, intended to cover the additional costs of teaching students from low-income families, started at five percent in 1993. In other words, for every student in this category, a school district received an extra five percent of base state aid. The value of this weighting has risen by a factor of nine, reaching 45.6 percent starting with the 2008-2009 school year.
There’s also the high-density at-risk weighting. Starting with the 2006-2007 school year districts with a high concentration of at-risk students could receive an extra weighting of four percent or eight percent. Two years later the weightings were raised to six percent and ten percent. (This formula was revised again in 2012 in a way that may have slightly increased the weightings.)
Kansas school spending, showing ratio of total state aid to base state aid. See article for notes about 2015. Click for larger.Kansas school spending. See article for notes about 2015. Click for larger.The weightings have a large effect on school funding. For example: During the 2004-2005 school year, base state aid was $3,863 and the at-risk weighting was ten percent. An at-risk student, therefore, generated $4,249 in state funding. (Other weightings might also apply.)
Ten years later base state aid was $3,852 — almost exactly the same — and the at-risk weighting was up to 45.6 percent. This generates funding of $5,609. For a district that qualified for the maximum high-density at-risk weighting, an additional $404 in funding was generated. (These numbers are not adjusted for inflation.)
So even though base state aid remained (almost) unchanged, funding targeted at certain students rose, and by a large amount.
Over time, values for the various weightings grew until by 2014 they added 85 percent to base state aid. A nearby chart shows the growth of total state aid as compared to base state aid. (Starting in fiscal 2015 the state changed the way local tax dollars are counted. That accounts for the large rise for the last year of data in the chart. For school years 2016 and 2017, block grants have replaced the funding formula, so base aid and weightings do not apply in the same way.)
What have we learned?
We’re left wondering a few things:
Did Deputy Superintendent Dale Dennis tell the audience that base state aid is just part of the school funding landscape, and not reflective of the big picture? Did he tell the audience that total state aid to schools has increased, and increased substantially? If so, why wasn’t it mentioned in the article?
If Dale Dennis did not tell the audience these things, what conclusions should we draw about his truthfulness?
Why didn’t the Hutchinson News article explain to readers that base state aid is not an accurate or total indicator of total state spending on schools?
What is the duty of reporters and editors? We’re told that experienced journalists add background and context to the news — things that the average reader may not know. (This article is designated as “Editor’s Pick” by the Hutchinson News.)
By the way, the Wichita Eagle, on its opinion page, cited in a positive and uncritical manner the Hutchinson News article.5 This is notable as the writer of the Eagle piece, opinion editor Phillip Brownlee, was a certified public accountant in a previous career. This is someone we should be able to trust to delve into numbers and tell us what they mean. But that isn’t the case.
Whatever your opinion on the level and trend of school spending, we need to start the discussion from a common base of facts and information. From this episode, we see that both our state government and news media are not helping.
For the fiscal 2016 and 2017 school years, the formula was replaced by block grants. ↩
AMENDMENTS TO THE 1992 SCHOOL DISTRICT FINANCE AND QUALITY PERFORMANCE ACT AND THE 1992 SCHOOL DISTRICT CAPITAL IMPROVEMENTS STATE AID PROGRAM (FINANCE FORMULA COMPONENTS), Kansas Legislative Research Department, May 20, 2014 http://ksde.org/Portals/0/School%20Finance/amends_to_sdfandqpa_2015.pdf↩
For the third quarter, GDP for the nation grew at the annual rate of 3.4 percent. For Kansas, growth was 2.1 percent. Kansas ranked 41st among the states.
The nearby table shows GDP change by industry group and compares Kansas to the country, Plains states (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota), and nearby states.
Personal income growth in Kansas trails most of the nation. While personal income for the nation grew at the rate of 0.6 percent in the third quarter, Kansas grew at 0.3 percent. Only three states experienced slower growth.
In this episode of WichitaLiberty.TV: Radio Host Andy Hooser of the Voice of Reason appears with Karl Peterjohn to discuss the simulcast of his radio show on KGPT 26, the legislative session, and whether President Trump’s tax breaks can save Kansas from the recent tax hike. Bob Weeks is still out. View below, or click here to view at YouTube. Episode 180, broadcast January 20, 2018.
