Voice For Liberty

Tag: Jeff Longwell

Wichita City Council Member Jeff Longwell

  • Wichita city council to decide between rule of law, or rule by situation

    Tuesday’s Wichita City Council meeting will provide an opportunity for the mayor, council members, and city hall staff to let Wichitans know if our city is governed by the rule of law and proper respect for it, or if these values will be discarded for the convenience of one person and his business partners.

    Here’s the situation: a person wants to gain approval of a tax increment financing (TIF) district project plan. This requires a public hearing, which the city has scheduled for September 13th.

    But this schedule doesn’t suit the applicant. He has a personal business need — an expiring purchase option — and wants the city to issue a letter of intent stating that the city intends to do all the things that are the subject of the September public hearing.

    The letter of intent is not binding, city officials tell us. The council will still have to hold the September public hearing and vote on the incentives the developer wants. And the list of incentives is large, amounting to many millions of dollars. Whether to issue these incentives deserves discussion and a public hearing.

    But the letter of intent, in effect, circumvents the public hearing. It reduces the hearing to a meaningless exercise. No matter what information is presented at the September public hearing, no matter how strong public opinion might be against this project, is there any real likelihood that the council would not proceed with this plan and its incentives, having already passed a letter of intent to do so? I imagine that persuasive arguments will be made that since the city issued a letter of intent, and since the developers may have already taken action based on that letter, it follows that the city is obligated to pass the plan. Otherwise, who would ever vest any meaning in a future letter of intent from this city?

    And the developers are planning to take action based on this letter of intent. To them, the letter does have meaning. If it had no meaning, why would they ask for it?

    That bears repeating: If the letter of intent is non-binding, why issue it at all?

    The last time someone felt the city reneged on a letter of intent, it resulted in a court case that went all the way to the Kansas Supreme Court. I imagine the city is not anxious to repeat that experience.

    Part of the purpose of public hearings and their advance notice, usually 30 days or so, is to give interested parties time to prepare for the hearing. But citizens are given just a few days notice of the proposed letter of intent. The parties who will receive the subsidies, of course, have known about this for some time. Their bureaucratic and political enablers have, too.

    The issuance of the letter of intent on Tuesday, if the city council decides to do so, is an affront to the rule of law. It would be a powerful statement by the council that it intends to go ahead with the project and its subsides, public hearing — and citizens — be damned. It is a striking show of arrogance by the city and its political leadership, which is to say Mayor Carl Brewer.

    After Tuesday’s meeting we will know one thing. We will know if the Wichita City Council and city staff value the rule of law more than the needs of one small group of people. We won’t really know about individual city staff, but the council members and mayor will have to vote on this item. We’ll know exactly where each of them stands. Expect waffling.

    Tuesday provides citizens a chance to learn exactly how the mayor and each council members value the rule of law as compared to the needs of one person and his business partners. It is as simple as that.

    The project

    The project is the development of a new hotel in an existing building downtown. It sounds like a neat project and would be a great addition to Wichita. But — this project is a product of central government planning backed by massive government intervention in the form of millions of dollars of subsidy. Pretty much all the tools have been tapped in the proposed corporate welfare, even one form that will require the city to pass a special charter ordinance.

    The lead developer, David Burk, is well known in Wichita and has produced a number of successful projects. (We must qualify this as “seemingly successful,” as it seems as all of Burk’s projects require some sort of taxpayer involvement and subsidy. So we don’t really know if these projects would be successful if they had to stand on their own.)

    I’ve written extensively on the problems with government-directed planning and taxpayer-funded investment in downtown Wichita. See Downtown Wichita regulations on subsidy to be considered or Downtown Wichita revitalization for examples. This project suffers from all these problems.

    Furthermore, we see the problems of the public choice theory of politics at play here. Perhaps most prominent is the problem of concentrated benefits and dispersed costs. In this case Burk and his partners stand to garner tremendous benefit, while everyone else pays. This is why Burk and his wife are generous campaign donors to both conservative and liberal city politicians.

    Burk and past allegations

    The involvement of Burk in the project, along with the city’s response, is problematic. City documents indicate that the city has investigated the backgrounds of the applicants for this project. The result is “no significant findings to report.” Evidently the city didn’t look very hard. In February 2010 the Wichita Eagle reported on the activities of David Burk with regard to property he owns in Old Town. Citizens reading these articles might have been alarmed at the actions of Burk. Certainly some city hall politicians and bureaucrats were.

    The opening sentence of the Wichita Eagle article (Developer appealed taxes on city-owned property) raises the main allegation against Burk: “Downtown Wichita’s leading developer, David Burk, 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, according to court records and the city attorney.”

    A number of Wichita city hall officials were not pleased with Burk’s act.

    According to the Eagle reporting, Burk was not authorized to do what he did: “Officials in the city legal department said that while Burk was within his rights to appeal taxes on another city-supported building in the Cinema Plaza, he did not have authorization to file an appeal on the city-owned parking/retail space he leases. … As for Burk signing documents as the city’s representative, ‘I do have a problem with it,’ said City Attorney Gary Rebenstorf, adding that he intends to investigate further.”

    Council member Jeff Longwell was quoted by the Eagle: “‘We should take issue with that,’ he said. ‘If anyone is going to represent the city they obviously have to have, one, the city’s endorsement and … two, someone at the city should have been more aware of what was going on. And if they were, shame on them for not bringing this to the public’s attention.’”

    Council member Lavonta Williams, now serving as vice mayor, was not pleased, either, according to her quotations: “‘Right now, it doesn’t look good,’ she said. ‘Are we happy about it? Absolutely not.’”

    In a separate article by the Eagle on this issue, we can learn of the reaction by two other city hall officials: “Vice Mayor Jim Skelton said that having city development partners who benefit from tax increment financing appeal for lower property taxes ‘seems like an oxymoron.’ City Manager Robert Layton said that anyone has the right to appeal their taxes, but he added that ‘no doubt that defeats the purpose of the TIF.’”

    The manager’s quote is most directly damaging. In a tax increment financing (TIF) district, the city borrows money to pay for things that directly enrich the developers, in this case Burk and possibly his partners. Then their increased property taxes — taxes they have to pay anyway — are used to repay the borrowed funds. In essence, a TIF district allows developers to benefit exclusively from their property taxes. For everyone else, their property taxes go to fund the city, county, school district, state, fire district, etc. But not so for property in a TIF district.

    This is what is most astonishing about Burk’s action: Having been placed in a rarefied position of receiving many millions in benefits, he still thinks his own taxes are too high.

    Some of Burk’s partners have a history of dealing with the city that is illustrative of their attitudes. In 2008 the Old Town Warren Theater was failing and its owners threatened to close it and leave the city with a huge loss on a TIF district formed for the theater’s benefit. Faced with this threat, the city made a no-interest and low-interest loan to the theater. The theater’s owners included David Wells, who is one of Burk’s partners in the project being considered by the council for the letter of intent.

    Entrepreneurs are not always successful. Business failure, if handled honestly and honorably, is not shameful.

    But when a business is already receiving taxpayer subsidy, and the response to failure is to demand even more from the taxpayer — that is shameful.

    Burk and Wells, by the way, played a role in the WaterWalk project, which has a well-deserved reputation as a failed development. In 2011 the city’s budget includes a loss of slightly over one million dollars for the TIF district that has benefited its owners to the tune of over $41 million.

    Burk has been personally enriched by city hall action before. An example from the same article: “A 2003 lease agreement gave Burk use of the retail strip at the front of the parking garage for $1 a year for the first five years.” Nearly-free property that you can then lease at market rates is a sweet deal.

    These gentlemen have had their bite at the taxpayer-funded apple. Now they want another bite, on their own schedule, without regard to rule of law and the public.

  • Job creation at young firms declines

    A new report by the Kauffman Foundation holds unsettling information for the future of job growth in the United States. Kauffman has been at the forefront of research regarding entrepreneurship and job formation.

    Previous Kauffman research has emphasized the importance of young firms in productivity growth. Research by Art Hall found that for the period 2000 to 2005, young firms created nearly all the net job growth in Kansas.

    So young firms — these are new firms, and while usually small, the category is not the same as small businesses in general — are important drivers of productivity and job growth. That’s why the recent conclusion from Kauffman in its report Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation is troubling: “The United States appears to be suffering from a long-term leak in job creation that pre-dates the recession and has the potential to persist for an unknown time. The heart of the problem is a pullback by newly created businesses, the economy’s most critical source of job creation, which are generating substantially fewer jobs than one would expect based on past experience. … This trend has only worsened since the onset of the most recent recession. The cohort of firms started in 2009, for example, is on track to contribute close to a million jobs less in its first five to ten years than historical averages.”

    The report mentions two assumptions that are commonly made regarding employment that the authors believe are incorrect:

    First, policymakers’ focus on big changes in employment because of events such as a new manufacturing plant or the recruitment of a business to a community ignore the more important fact that our jobs outlook will be driven more by the collective decisions of the millions of young and small businesses whose changing employment patterns are not as easy to see or influence. Second, it is just as easy to be deluded into thinking that the jobs problem will be solved by growth in the number of the self-employed.

    The importance of young firms is vital to formulating Kansas economic development policy. Kansas Governor Sam Brownback has incorporated some of the ideas of economic dynamism in his economic plan released in February. The idea of dynamism, as developed by Dr. Art Hall, is that economic development is best pursued by creating a level playing field where as much business experimentation as possible can take place. The marketplace will sort out the best firms. The idea that government economic development agencies can select which firms should receive special treatment is sure to fail. It is failing.

    While the governor’s plan promotes the idea of economic dynamism, some of his actual policies, such as retaining a multi-million dollar slush fund for economic development, are contrary to the free marketplace of business experimentation and letting markets pick winning firms.

    At the City of Wichita, economic development policy is tracking on an even worse direction. Among city hall bureaucrats and city council members, there is not a single person who appears to understand the importance of free markets and capitalism except for one: council member Michael O’Donnell, who represents district 4 (south and southwest Wichita).

    The policy of Wichita is that of explicit crony capitalism, with city leaders believing they have the wisdom to develop policies that recognize which firms are worthy of taxpayer support. And if they want to grant subsidies to firms that don’t meet policies, they find exceptions or write new policies. Elected officials like Wichita Mayor Carl Brewer and city council member Jeff Longwell lust for more tools in the economic development toolbox.

    At the Sedgwick County Commission, two of the five members — Karl Peterjohn and Richard Ranzau understand the importance of free markets for economic development. But the city has a much larger role in targeted incentives for economic development, as it is the source of tax increment financing districts, industrial revenue bonds, economic development exemptions, community improvement districts, and other harmful forms on economic interventionism.

  • Kansas and Wichita quick takes: Monday June 20, 2011

    CIDs to start collecting tax. Soon two community improvement districts in Wichita will start collecting their additional sales tax, and so a Wichita city webpage is now available to warn consumers of the extra taxes they’ll pay at these merchants. There were some — like me — who wanted the city to have a policy of stronger consumer protection, such as a sign at the entry to a merchant, but city council members recognized, as did developers, that this full disclosure would be bad for business. The website disclosure allows the city to say it’s doing its job warning consumers, but the website is such a weak form of disclosure that it is nearly meaningless. Still, it satisfies council members like Jeff Longwell, who expressed concern that Wichitans would be “confused” by signs at merchants. You see, some CIDs may charge different amounts of extra tax, and Longwell thought informing shoppers of these different rates would confuse them. It seems that Longwell doesn’t have a very high opinion of the cognitive processing abilities of the people of Wichita, and it’s not the first time he’s expressed this sentiment. A few years ago when citizens complained that documents were not made available until just hours before a city council meeting, Longwell said he doubted citizens would read them anyway. See Wichita Council Member Jeff Longwell: We Can, and Do, Read. … For more on the CID disclosure issue, see In Wichita, two large community improvement districts proposed.

    Wichita City Council. This week the Wichita City Council considers these items: A facade improvement program loan is requested for a building at 1525 E. Douglas to house GLMV Architecture. This action will loan $500,000 for the purposes of sprucing up the outside of the building, with that amount, plus interest, to be paid back in the form of special assessments collected with the regular property tax. It’s similar to the special assessment financing used in new housing developments, but here applied to existing structures. Interestingly, the city documents proclaim a “gap,” meaning that “applicants show a financial need for public assistance in order to complete the project, based on the owner’s ability to finance the project and assuming a market-based return on investment.” In other words, private financing was not available, so the city steps in, and we have another example of the city investing in money-losing projects. Although it is likely the city will be paid back, the program also includes a $30,000 grant for this project. That, of course, is a gift from Wichita taxpayers made by the city council, and will not be paid back. … The council will be asked to decide whether to proceed with a new airport terminal costing $160 million and parking facilities costing $40 million. It’s said by city leaders that this will not cost Wichita taxpayers a thing. That is, unless you use the airport or paid any taxes to the federal government. Federal grants are a source of some funds for the airport, and are thought by city leaders to be free money, without cost. … On a consent agenda item, we learn that the bridge over the Big Ditch is going to cost more, as a supplemental agreement for $521,369 in additional funds for the planning of the bridge is requested. The reason, according to the city is “additional work is needed to comply with Federal requirements.” This is just the planning, not the actual construction of the bridge. So far the budget for planning and design is $5,219,145. … Also on the consent agenda is something that’s become not unusual: the need to repeal an ordinance and replace it with a corrected ordinance. … As always, the agenda packet is available at Wichita city council agendas.

    Rich States, Poor States event this week. Kansas Policy Institute and the Wichita Independent Business Association are hosting a breakfast event this Friday (June 24th) featuring Jonathan Williams, one of the authors of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index. There’s still time to RSVP. For more information, see Rich States, Poor States author to be in Wichita.

    Wichita’s riverside parks to be topic. This Friday (June 24th), Jim Mason, Naturalist at the Great Plains Nature Center will have a presentation and book signing at the Wichita Pachyderm Club. Mason is author of Wichita’s Riverside Parks, published in April 2011. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. Upcoming speakers: On July 1 there will be no meeting due to the Independence Day holiday. On July 8, Dave Trabert, President, Kansas Policy Institute, on “Stabilizing the Kansas Budget.”

    Pompeo noted for opposition to opposition to energy spending. Tax credits — mysterious to the general public, therefore increasingly used as a way to disguise government spending — come under attack from Chris Chocola in the Washington Examiner: “Last fall, voters sent a clear message to cut spending and get the country’s fiscal house in order. These same voters should take heed because some of the candidates they elected are suffering from temporary insanity when it comes to a classic Washington giveaway: the tax credit. Nearly 80 Republicans, many of whom ran on restoring fiscal sanity to Washington, have joined 100 liberal Democrats in sponsoring HR 1380, the New Alternative Transportation to Give Americans Solutions Act, known colloquially as the NAT GAS Act.” … The bill is a pet project of energy investor T. Boone Pickens in an effort to obtain billions in subsidy for his project to use natural gas as a transportation fuel. But, writes Chocola: “The goal should be creating a sustainable market, not a false one. It is not the role of Congress or the federal government to pick winners or losers in the broad field of energy alternatives. Backing any one industry over another distorts the market and destroys our system of free enterprise.” He criticizes those who campaigned on fiscal responsibility and support this bill. Chocola also calls out Wichita Republican U.S. Representative Mike Pompeo for his opposition to these energy tax and spending programs.

    Even quicker. Open Letter to Paul Krugman: The New York Times columnist taken to task by Donald J. Boudreaux. … House GOP retreats from borrowing freeze, more Republicans drift from pledge to deny debt-limit increase without conditions. … Rasmussen poll: 70% say default is bad for economy, 56% say failure to cut spending is worse. … The Metaphysics of Contemporary Theft: “The remedy to address theft would be not more government help — public assistance, social welfare, counseling — but far less, given that human nature rises to the occasion when forced to work and sinks when leisured and exempt.” … Investor’s Business Daily: Times’ Bias Shows In Palin Email Affair. … Michael Barone: Government Looks to Past, Free Enterprise to Future: “Republicans want less government spending and more leeway for entrepreneurs to create new businesses and jobs. No one knows what innovative products and services will emerge. That’s the beauty of free enterprise, but it also makes it a hard sell politically.”

  • Wichita elections a blow for economic freedom

    Results from yesterday’s elections for Wichita mayor and city council members were in contrast to the message voters have sent in recent state and national races. There, voters expressed a preference for smaller government, less government spending, and less debt. For these Wichita city offices, however, voters — with one exception — voted for those who promised more government intervention and less economic freedom.

    The winning candidates, of course, didn’t mention the loss of economic freedom in their campaign pitches. But their promise to grow government means just that. Yes, they promise to carefully scrutinize city spending and incentives on a case-by-case basis, insisting they are wise enough and knowledgeable enough to determine which projects are worthy of taxpayer support, and which aren’t. They all say that, always.

    The winners in yesterday’s election — besides the officeholders — are those who will benefit from having a compliant and emboldened mayor and like-minded council members in office as they seek to earn their fortunes at city hall at taxpayer expense. We see these people and their names on the campaign donation reports of many of the successful candidates. Their interest is not good government, but personal enrichment. They generally contribute to all city council members regardless of political stance. It’s difficult to see how someone who has a consistent political ideology they believe in could contribute to all city council members. But they do.

    The incumbents who won re-election — Mayor Carl Brewer and council member and Vice Mayor Jeff Longwell — have already proven themselves to be totally captured by these special interests. Now the new council members have a decision to make: Do they stand up for limited government and economic freedom in Wichita, or do they join the mayor and other council members on the side of the crony capitalists?

    I’ll be surprised if any council member — excepting Michael O’Donnell — ever votes against any of the projects our city’s crony capitalists bring forward.

    This is not a happy day for the future of Wichita. While today’s Wichita Eagle editorial wrote of the mayor’s “enthusiasm for Wichita and optimism about its future,” we need to question the assumptions underlying his sentiments. Is it “optimistic” when a city feels it must dish out corporate welfare to any company that hints of leaving town for purportedly greener pastures? Is it “enthusiasm” when a government that doesn’t trust its citizens to build, work, and live where they want — instead pushing through a heavy-handed, taxpayer-funded downtown plan?

    The takeaway is that it’s easy for people to succumb to the mayor’s false promise of economic prosperity through government intervention. The message of economic freedom, of free people conducting their affairs with minimal interference, is more difficult to believe in for many people. Unfortunately, Wichita does not have a newspaper that believes in economic freedom and limited government, preferring instead the big-government approach to managing a city and its economy. Unlike in other recent elections, this time voters largely followed recommendations made by the Wichita Eagle editorial board.

    Going forward, we can expect a proposal for a tax increase of some sort soon. Some desire a citywide sales tax for the purposes of economic development. These ideas, along with any others expanding the reach and power of city government, will probably not face much resistance from the new city council.

  • Education gap on Wichita City Council

    Before Jim Skelton left the council in January, none of the four men serving on the Wichita City Council had completed a college degree. The three women serving on the council set a better example, with all three holding college degrees.

    Of the candidates running in next week’s election for four council seats and the office of mayor, less than half hold college degrees.

    Is it necessary to complete college in order to serve in an office like mayor or city council? Apparently none of the four men who held these offices without a degree thought so. The two running to retain their present positions — Mayor Carl Brewer and council member Jeff Longwell (district 5, west and northwest Wichita) — evidently don’t think so, or they would not be running again.

    But we tell young people that college holds the key to success. We encourage schoolchildren to consider college and to take a rigorous high school curriculum in order to prepare for it. We encourage families to save for college. Our region’s economic development agency promotes the number of people with college or advanced degrees. We promote our colleges and universities as a factor that distinguishes Wichita. We hope that our elected officials will set an example we want young people to follow.

    Once in office, we ask our city elected officials to attempt to grasp and understand complex sets of financial data, working with a budget of about half a billion dollars for the City of Wichita. We hope that they will be able to consider large and weighty issues such as the role of government in a free society. Members of the professional management staff — bureaucrats — that manage the city, county, and state are generally required to hold college degrees.

    The irony is that elected officials often are highly reliant on the bureaucratic staff for information, data, and advice, and this professional bureaucracy is often highly educated. Does this imbalance create problems?

    Elected officials compared to regular people

    Amazingly, it turns out that elected officials, as a group, are less knowledgeable about civics than the general population. That’s the finding of Intercollegiate Studies Institute, which surveyed Americans and their knowledge of civics in 2008. After analyzing the data, ISI concluded: “Simply put, the more you know about American government, history, and economics the less likely you are to pursue and win elective office.”

    Related: Local elections, qualifications of Wichita’s elected officials.

  • Kansas and Wichita quick takes: Sunday March 13, 2011

    Wichita city council this week. There is no meeting of the Wichita City Council this week, as most members will be attending a meeting of the National League of Cities in Washington, DC. These conferences are designed to help council members be more effective. But for three of the council members that will be attending, their future service on the council is measured in days, not years. These three lame duck members — Sue Schlapp, Paul Gray, and Roger Smith — will be leaving the council in April when their terms end. Their participation in this conference, at taxpayer expense, is nothing more than a junket — for lame ducks.

    How attitudes can differ. At a recent forum of city council candidates, one candidate mentioned the five or six police officers conducting security screening of visitors seeking to enter Wichita city hall, recognizing that this doesn’t create a welcoming atmosphere for citizens. Vice Mayor Jeff Longwell said he thought the officers are “accommodating and welcoming.” It should be noted that Longwell carries a card that allows him to effortlessly enter city hall through turnstiles that bypass the screening that citizens endure. Further, it’s natural that the police officers are deferential to Longwell, just as most employees are to their bosses. … This attitude of Longwell is an example of just how removed elected officials can be from the citizens — and reality, too. Coupled with the closing of the city hall parking garage to citizens and the junket for lame ducks described above, the people of Wichita sense city hall elected officials and bureaucrats becoming increasingly removed from the concerns of the average person.

    Private property and the price system. In The Science of Success, Charles Koch succinctly explains the importance of private property and prices to market economies and prosperity, how government planning can’t benefit from these factors, and the tragedy of the commons: “Private property is essential for both a market economy and prosperity. There cannot be a market economy without private property, and a society without private property cannot have prosperity. To ensure ongoing innovation in satisfying people’s needs, there must be a robust and evolving system of private property rights. Without a market system based on private property, no one can know how to effectively allocate resources. This is because they lack the information that comes from market prices. Those prices depend on voluntary exchanges by owners of private property. Prices and the resulting profit and loss guide entrepreneurs toward satisfying the needs of consumers. Through this system, consumers are able to direct entrepreneurs in efficiently allocating resources through knowledge and incentives in a way no central authority can. … The biggest problems in society have occurred in those areas thought to be best controlled in common: the atmosphere, bodies of water, air, streets, the body politic and human virtue. They all reflect aspects of the ‘tragedy of the commons’ and function much better when methods are devised to give them characteristics of private property.”

    Toward a free market in education. From The Objective Standard: “More and more Americans are coming to recognize the superiority of private schools over government-run or ‘public’ schools. Accordingly, many Americans are looking for ways to transform our government-laden education system into a thriving free market. As the laws of economics dictate, and as the better economists have demonstrated, under a free market the quality of education would soar, the range of options would expand, competition would abound, and prices would plummet. The question is: How do we get there from here?” Read more at Toward a Free Market in Education: School Vouchers or Tax Credits?. … This week in Kansas a committee will hold a hearing on HB 2367, known as the Kansas Education Liberty Act. This bill would implement a system of tax credits to support school choice, much like explained in the article.

    Are lottery tickets like a state-owned casino? This week a committee in the Kansas House of Representatives will hear testimony regarding HB 2340, which would, according to its fiscal note, “exempt from the statewide smoking ban any bar that is authorized to sell lottery tickets under the Kansas Lottery Act.” The reasoning is that since the statewide smoking ban doesn’t apply to casinos because it would lessen revenue flowing to the state from gaming, the state ought to allow smoking where lottery tickets are sold, as they too generate revenue for the state.

    Money, Banking and the Federal Reserve. This month’s meeting of the Wichita chapter of Americans for Prosperity, Kansas features a DVD presentation from the Ludwig von Mises Institute titled “Money, Banking and the Federal Reserve.” About the presentation: “Thomas Jefferson and Andrew Jackson understood “The Monster.” But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates.” The event is Monday (March 14) at 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

    Wichita-area legislators to meet public. Saturday (March 19th) members of the South-Central Kansas Legislative Delegation will meet with the public. The meeting will be at Derby City Hall, 611 Mulberry Road (click for map), starting at 9:00 am. Generally these meetings last for two hours. Then on April 23 — right before the “wrap-up session” — there will be another meeting at the Wichita State University Hughes Metropolitan Complex, 5015 E. 29th Street (at Oliver).

    Pompeo to meet with public. If you don’t get your fill of politics for the day after the meeting with state legislators, come meet with United States Representative Mike Pompeo, who is just completing two months in office. Pompeo will be holding a town hall meeting at Maize City Hall, 10100 W. Grady (click for map) starting at 1:00 pm on Saturday March 19th.

    Losing the brains race. Veronique de Rugy writing in Reason: “In November the Organization for Economic Cooperation and Development (OECD) released its Program for International Student Assessment scores, measuring educational achievement in 65 countries. The results are depressingly familiar: While students in many developed nations have been learning more and more over time, American 15-year-olds are stuck in the middle of the pack in many fundamental areas, including reading and math. Yet the United States is near the top in education spending.” … A solution is to introduce competition through markets in education: “Because of the lack of competition in the K–12 education system. Schooling in the United States is still based largely on residency; students remain tied to the neighborhood school regardless of how bad its performance may be. … With no need to convince students and parents to stay, schools in most districts lack the incentive to serve student needs or differentiate their product. To make matters worse, this lack of competition continues at the school level, where teacher hiring and firing decisions are stubbornly divorced from student performance, tied instead to funding levels and tenure.” The author notes that wealthy families already have school choice, as they can afford private schools or can afford to move to areas with public schools they think are better than the schools in most urban districts.

    Teachers unions explained. A supporter of the teachers unions is questioned about her belief that the unions need more money and power. In Kansas, the teachers union in the form of Kansas National Education Association (KNEA) and its affiliates consistently opposes any attempt at reform.

  • Kansas and Wichita quick takes: Wednesday March 9, 2011

    Kansas legislature website. It’s getting better, and now has — by my recollection — all the functionality of the site it replaced. But there are still some issues. The search feature uses a Google site-specific search, which is good in many ways. But trying to find if there’s any legislation this year concerning sales tax? Not so easy. … The rosters of members are displayed in panels of 12 members of a time. For the House there are 11 such panels. I wonder on which panel I’ll find the member I’m looking for? … Too many documents are still being delivered in OpenOffice doc format, which many people will not be able to use.

    Kansas smoking ban. The Hutchinson News has reported and editorialized on the statewide smoking ban. In Hutch club owner wants to see measure repealed, Sheila Martin expresses her concern for the small business owners who are being harmed by the smoking ban. The booklet Martin created that the article refers to may be read here Kansas Smoking Ban Booklet. Then the newspaper editorialized against the smoking ban, writing “Eight months since it took effect, the local jury is in on Kansas’ statewide smoking law. It has hurt sales at some drinking establishments — no doubt, in turn, hurting state and local sales tax receipts — and it was doubtful that it stopped anyone from smoking or saved many from exposure to secondhand smoke.”

    Fighting government secrecy. Announcing a television show regarding government transparency, the Kansas Sunshine Coalition for Open Government writes: “Open government is essential to a democracy. But it’s often hard to find that vital government transparency — and to get public access to public records, even when the law is on your side. “What is your government hiding?” is the focus of a town hall panel set at 4:00 to 5:00 pm Saturday, March 12, at the First United Methodist Church, 330 N. Broadway, in downtown Wichita. The event will be taped and shown on KAKE-TV and affiliated stations around the state at 10 am Sunday, March 13, as part of the national celebration of Sunshine Week (March 13-19). … ‘The Mike and Mike Show’ will headline the meeting. Media attorney Mike Merriam of Topeka will join University of Kansas law professor Mike Kautsch in a interactive presentation on media law, as well as how citizens can use the Kansas Open Records Act and the Kansas Open Meetings Act. … The show also will feature a panel on the importance of open government led by the League of Women Voters of Wichita. The audience is invited to ask questions. Refreshments will be available at a reception afterward. …KPTS-TV, Channel 8 in Wichita, will rebroadcast the show at 7 pm, Thursday, March 24. Those interested are asked to arrive in time to be seated by 3:45 pm. The event is sponsored by the Kansas Sunshine Coalition, the LWV and the Elliott School of Communication at Wichita State University.

    Kansas judicial selection. The Wall Street Journal takes notice of the need for judicial selection reform in Kansas, writing “Kansas is the only state that gives the members of its bar a majority on the judicial nominating commission. That commission also handles the nominations for state Supreme Court justices, and changing that would require a state constitutional amendment. The Sunflower State is nonetheless off to a good start at making judicial appointments more than a preserve of the lawyers guild.” … Kansas University Law Professor Stephen J. Ware is the foremost authority on the method of judicial selection in Kansas and the need for reform. His paper on this topic is Selection to the Kansas Supreme Court, which is published by the Federalist Society for Law and Public Policy Studies. Further reporting by me is at Kansas judicial selection needs reform, says law professor.

    Kansas Education Liberty Act. A strong school choice measure has been introduced in the Kansas House of Representatives. The bill is HB 2367 and may be read at the Kansas Legislature website. The measure’s supporters have a website at supportkela.com. From the bill’s supporters: “This bill authorizes specific non-profit organizations to grant scholarships to students to attend a qualified private or public school of their parents’ choice. These scholarships are funded through tax-credit eligible contributions from individual Kansans and corporations. State taxpayers will spend significantly less on each scholarship than they currently spend per pupil in public schools. This bill reduces education related spending from the state’s general fund and reduces the budget deficit. In addition, public schools will still have access to the majority of the federal and local taxpayer funding; so with each student who chooses another educational setting, public schools will have more funding per remaining student. Perhaps even more significant, our children will enjoy improved education outcomes in both public and private education in the state of Kansas with increased parental and community involvement.” … While the Kansas education establishment fiddles with “reforms” such as whether to grant tenure in three or five years, actual reform measures like this are what is needed.

    What … it’s not about the whales? “Environmental policy is not driven by tree-hugging activists, earnest liberal bloggers, or ecologically minded citizens. Instead, it flows from the lobbyists and executives of well-connected multinational corporations and built-for-subsidy startups that see profit in the loan guarantees, handouts, mandates, and tax credits Congress creates in the name of saving the planet.” Timothy P. Carney explains more in Meet the lobbyist who turns ‘green’ into greenbacks.

    Wichita council candidates. Now that the city primary election is over and each district has two candidates for the April 5 general election, this week’s meeting (March 11) of the Wichita Pachyderm Club features Wichita City Council candidates. Invited are from district 2: Pete Meitzner and Charlie Stevens. From district 4: Joshua Blick and Michael O’Donnell. From district 5: Jeff Longwell and Lynda Tyler. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Common Sense — Revisited author in Wichita. Clyde Cleveland will visit Wichita to speak at the Holiday Inn at 549 S. Rock Road on Wednesday, March 16th at 7:00 pm. The event’s promotional poster reads: “Join Clyde Cleveland, the author of Common Sense — Revisited and 2002 libertarian candidate for Iowa Governor for an eye-opening presentation on our Government and how we can restore it to the Republic in its original form. Learn about Indigenous and Surrogate Powers, and how Americans have surrendered their ‘Sentient Power’. The good news is, we can peacefully, and lawfully, re-inhabit our Sovereign status and reclaim a bottom-up, ‘By, of, and For the People,’ Republic form of Government. … This is what was intended by our founding fathers, and for which many others have given their lives to protect. Following the presentation Clyde will discuss how we can participate in rebuilding our State and National Republics.” Cleveland’s website is Common Sense Revisited. He will also speak in Overland Park on March 17th.

  • Cabela’s CID should not be approved in Wichita

    This week outdoor retailer Cabela’s will ask the Wichita City Council to create a Community Improvement District (CID) for its benefit. Creating the CID would allow Cabela’s — the only store in the proposed CID — to collect tax of an additional 1.2 cents per dollar sales from customers. Proceeds of one cent per dollar, less a handling fee, will be given to Cabela’s for its exclusive use, with 0.2 cents per dollar to be used for street and highway improvements near the proposed CID.

    CIDs should be opposed as they turn over tax policy to the private sector. We should look at taxation as a way for government to raise funds to pay for services that all people benefit from. An example is police and fire protection. Even people who are opposed to taxation rationalize paying taxes that way.

    But CIDs turn tax policy over to the private sector for personal benefit. The money is collected under the pretense of government authority, but it is collected for the exclusive benefit of the owners of property in the CID.

    This is perhaps the worst aspect of CIDs. Landlord and merchants already have a way to generate revenue from their customers under free exchange: through the prices posted or advertised for their products, plus consumers’ awareness of the sales tax rates that prevail in a state, county, and city.

    But the most consumers will never be aware that they paid an extra tax for the exclusive benefit of the CID. (A bill working its way through the Kansas legislature may require detailing of sales taxes on cash register receipts.)

    The Wichita city council had a chance to provide transparency to shoppers by requiring merchants in CIDs to post signs informing shoppers of the amount of extra tax to be changed in the store. But CID advocates got the city council to back down from that requirement. CID advocates know how powerful information is, and they along with their allies on the city council realized that signage with disclosure would harm CID merchants. Council Member Sue Schlapp succinctly summarized the subterfuge that must accompany the CID tax when she said: “This is very simple: If you vote to have the tool, and then you vote to put something in it that makes the tool useless, it’s not even any point in having the vote, in my opinion.” She voted against the signage requirement.

    We should ask Cabela’s why their business model is so flimsy that allowing them to collect one percent additional from their customers makes the difference between feasibility and not. Cabela’s is notorious throughout the country for seeking all sorts of corporate welfare, and the CID is not likely to be the only subsidy the company seeks to extract from the city, county, school district, and/or state. It’s all in their business plan, as revealed in the company’s 2004 IPO filing: “Historically, we have been able to negotiate economic development arrangements relating to the construction of a number of our new destination retail stores, including free land, monetary grants and the recapture of incremental sales, property or other taxes through economic development bonds, with many local and state governments.”

    Cabela’s and its supporters note that part of the 1.2 cents per dollar extra tax to be charged will be used to improve the intersection at Greenwich and K-96. The need of an upgrade there should be questioned. A Cabela’s spokesman told the Wichita Eagle that easy access to the store from the highway is needed because shoppers “come in with the big pickups, the Rvs.” We should note that there exists a full-service intersection with traffic signals less than one mile from the Cabela’s site. For half of the distance, Greenwich road is three lanes in each direction.

    The proposed intersection can be viewed as an unnecessary public improvement — a sweetener to the deal — that doesn’t cost Cabela’s anything. Interestingly, the city’s adopted capital improvement plan for 2009 to 2018 contains “private contributions of $8.4 million for an interchange at K-96 and Greenwich Road.”

    We also have to recognize the harmful effect of a subsidy granted to one company on its competitors. In this case, the city’s response is likely to be “let the competitors apply for a CID.” This pressure — where merchants of all types see other merchants benefiting from the state collecting taxes for their own benefit — is leading to “CID sprawl,” a term coined by Susan Estes. This accurately represents the natural result of the irresistible urge of the CID: charging your customers more and blaming it on the government.

    In particular, a major competitor to Cabela’s is Gander Mountain in the downtown WaterWalk development. This store benefits from taxpayer subsidy, and if it were to close, Wichita taxpayers would be liable for bond payments. Further, the store is considered an anchor for the struggling development. A closed store surely would not be good for WaterWalk’s future.

    Finally, Lynda Tyler, who is running for city council against current council member and Vice Mayor Jeff Longwell, wrote this letter which appeared in the Wichita Eagle. The questions she raises deserve answers.

    Is Cabela’s revenue estimate accurate?

    On the surface, the community improvement district for Cabela’s seems pretty simple: Those who shop at the store will help pay for the store and the K-96 on-ramps through an extra sales tax. But look at the numbers.

    The Eagle reported that the CID is expected to generate $17.2 million over 22 years (Feb. 16 Business Today). That means it would generate an average of $781,818 per year. At 1.2 cents per dollar of sales, the Wichita store would have to have yearly sales of $65.1 million per year.

    Cabela’s does not release its per store sales numbers, but according to an Aug. 23, 2007, Barron’s article, Cabela’s averaged about $348 in sales per square foot. On an 80,000-square-foot store, that would be $27.8 million of sales per year. That is less than half of the amount estimated for the Wichita store.

    If we issue general obligation bonds and build the ramps based on an inflated number, it would be the taxpayer who stands to lose. If the city also issues revenue bonds based on the inflated numbers, there could be a disaster, too, if the store does $26 million instead of $65 million in sales.

  • Wichita city manager Robert Layton on the air

    Yesterday Wichita city manager Robert Layton appeared as a guest on the Gene Countryman Show on KNSS Radio in Wichita and spoke on a number of topics brought up by the host and callers.

    Several times host Gene Countryman referred to Wichita theater owner Bill Warren and his assessment of Layton as “best city manager the city’s ever had,” calling Warren’s assessment “high praise.” Warren has good reason to heap praise on Layton. He and his partners have benefited handsomely from actions the Wichita City Council has taken at Layton’s recommendation. Most recently Warren escaped paying property taxes on a new movie theater, and negotiated a deal in where the property tax on an existing property will increase at an agreed-upon rate that is likely lower than what would happen otherwise. Before Layton’s arrival in Wichita, the council heaped subsidy on Warren too, once bailing out the failing Warren Old Town Theater with an interest-free loan.

    Layton also said criticism causes him to “bristle a little bit,” but dismissed his critics as a small minority, although he said he doesn’t discount it.

    On the possible arrival of Southwest Airlines to Wichita, Layton said he feels “pretty good” about Wichita’s chances in receiving service from the popular discount airline. He said that we need to keep the Affordable Airfares Program to keep Southwest interested in Wichita. But later he said “The Southwest business model doesn’t require subsidies over a long period of time.”

    But as I wrote in 2006, we’ve been told before that the airfare subsidies were meant to be temporary: “From the beginning, we in the Wichita area have been told each year that the AirTran subsidy was intended as a temporary measure, that soon AirTran would be able to stand on its own, and there will be no need to continue the subsidy.” History has shown, however, that the subsidy has grown to the point where the entire state funds the subsidy for Wichita. It appears to be a permanent part of the state’s economic program, with Governor Brownback expressing support for continued funding for the program.

    On downtown, Layton said that the city doesn’t want to place businesses in downtown who will be on tax breaks or tax exempt for ten years. If the city is to achieve this goal, it will take a 180 degree change in the mindset in city hall where the mayor and vice-mayor Jeff Longwell complain that we don’t have enough “tools in the toolbox” to incentive businesses. In his State of the City address last week, one of the achievements Mayor Carl Brewer was proud of was the decision by Cargill to locate a facility in downtown Wichita. According to city documents, “The City has also offered a 100% five-plus-five year tax abatement on the new facility.” This is precisely the type of tax break Layton spoke against. Cargill, by the way, received many other forms of subsidy — let’s be clear — corporate welfare — for its decision.

    On the plan for how to handle Wichita’s trash, Layton said his intent was to start a community dialog on the subject, and that has happened. Layton praised Iowa’s bottle bill, which adds five cents to the price of items sold in bottles. He said it makes it easier for people to recycle.