Tag: Kansas legislature

Articles about the Kansas legislature, both the House of Representatives and the Senate.

  • LOB property tax increase already in effect

    From Kansas Policy Institute.

    LOB property tax increase already in effect

    By Dave Trabert

    About a year ago we asked the Kansas Department of Education to verify our calculation of the Local Option Budget (LOB) property tax increase that would result if Base State Aid Per Pupil (BSAPP) was increased from $3,838 per-pupil to $4,492 in accordance with a final Gannon ruling in favor of the plaintiffs/against Kansas taxpayers. KSDE verified our calculation but didn’t mention that the Legislature had already authorized districts to calculate LOB based on a hypothetical BSAPP of $4,433. Therefore, our reporting that increasing BSAPP to $4,492 would prompt an LOB increase of $154 million was inadvertently inaccurate, since most of that increase has already taken place. Upon learning of the potential mistake, we immediately contacted KSDE for clarification and issued this correction. We apologize for our role in this inadvertent reporting.

    It should also be noted that the authorization to calculate LOB at a hypothetical rate of $4,433 expires on June 30, 2014; if not re-authorized, LOB calculations will be based on the actual amount of BSAPP, which currently is $3,838.

    Setting LOB aside, let’s revisit the potential impact on citizens and the state budget if the Gannon ruling is upheld and implemented.

    (more…)

  • 2013 year in review: Top 10 stories from the Sunflower State

    2013 year in review: Top 10 stories from the Sunflower State

    By Travis Perry, Kansas Watchdog

    OSAWATOMIE, Kan. — It’s over, done, finalized, finito. With the final days and hours of 2013 ticking to a close, we figured it’s a good time for reflection on what the last 12 months have brought the Sunflower State.

    So, without further delay, Kansas Watchdog presents its Top 10 stories of 2013.

    Strip Club

    1. Wayward welfare dollars

    An in-depth investigation into howKansans spend hundreds of thousands of dollars in government welfare money came to a shocking conclusion: a striking number of transactions appear to be going toward anything but the basic necessities. From casinos and liquor stores to smoke shops and even strip clubs, Kansas Watchdog uncovered more than $43,000 in transactions at shady ATM locations around the state. To make matters worse, all this only took place over a three-month period.

    Read It:
    Kansans spent welfare cash on strippers, smokes and sour mash

    Video camera

    2. Camera-shy state lawmakers

    Fun fact: Did you know the Kansas Capitol is capable of broadcasting live video online of some of the Legislature’s most important committee meetings? Don’t beat yourself up over it. A striking number of lawmakers don’t know, either. It’s the end result of years of apathy that has led the state to be one of only 11 nationwide that do not stream some form of live video. If some kid in the middle of nowhere can attract global eyeballs with nothing more than a camera phone, what’s keeping the Kansas Legislature off the air?

    Read it:
    Camera shy: Kansas legislators sidestep transparency
    Eye in the sky: Kansas legislative leader won’t require streaming video

    3. Judicial selection gymnastics

    Here’s a shocking revelation: politics sway candidate commentaries, and Kansas is no exception. Gov. Sam Brownback’s pick for the Kansas Court of Appeals is a prime example of this, after the situation prompted his Democratic gubernatorial challenger to switch sides on his stance to oppose the new nominee. And how could we forget that, in their rush to criticize the conservative governor, Kansas Democrats conveniently forgot thatKathleen Sebelius did almost the exact same thing only a few years earlier.

    Read it:
    Democratic leader flip-flops on Kansas judicial nominee
    Partisan politics fuel Kansas Democrat’s change of heart
    Kansas Democrats use double standard on judicial nomination criticism

    4. Follow the money

    And as long as we’re on the topic of judicial nominees, how about we turn the spotlight on a few other critics of Brownback’s decision? Namely theLeague of Women Voters and Justice At Stake, both of which claim to be nonpartisan organizations while simultaneously accepting large sums of cash from George Soros’ liberal nonprofits, the Tides Foundation and Open Society Institute.

    Read it:
    Soros bankrolls ‘nonpartisan’ critics of Kansas governor
    ‘Nonpartisan’ critic says Soros cash hasn’t caused political bias
    money-limit

    5. Fiscal follies

    Ever wonder just how much work goes into calculating the cost of a legislative proposal? Not that much, apparently. While state agencies claim they don’t pad their figures, government critics charge them with doing just that, and a close inspection of a few cost estimates only bolsters the case. Should it cost $17,000 for the state to put online a spreadsheet of data it already has? What about $20,000 for a program agency officials say could have been absorbed in-house? Yea, we thought so too.

    Read it:
    Fiscal follies: Kansas cost estimates draw criticism

     
    money jail

    6. Your money, behind bars

    How much should Kansas spend to lock up individuals whose only crime is drug related? While lawmakers are struggling to figure out what that figure should be, the reality is that Kansas drops about $42 million annually to keep these men and women in prison. To make matters worse, state law enforcement statistics suggest it’s overwhelmingly because of Kansas continues to wage war against marijuana.

    Read it:
    Kansas spends millions to keep non-violent drug offenders behind bars
    Twinkies-2

    7. Raking-in the dough

    Remember the media flurry surrounding the implosion of Hostess, one of America’s most iconic snack food manufacturers? Well here’s something you probably missed. According to the government, former employees were knocked out due to foreign trade pressure, and for that deserve extra benefits above and beyond standard unemployment insurance. But everything uncovered by Kansas Watchdog seems to point to the contrary. Curious? So were we.

    Read it:
    Former Hostess workers land sweet deal, taxpayers foot bill
    Did foreign trade really cause Hostess’ demise?
    Couch fire

    8. Couch crackdown

    If you’re looking for the nuttiest story of the year, look no further. The City ofLawrence, Kansas’ liberal bastion, only months ago brought us the headache-inducing mandate that city residents are not, in fact, capable of policing their own safety. Rather, officials passed a ban on front porch couches, despite the fact that local and nationwide statistics suggest it’s less of an issue than advocates would have folks believe.

    Read it:
    Kansas community cracks down on couches
    Islam Display

    9. Islamic fervor

    Wichita-area school came under fire earlier this year after students and parents were greeted on the first day of school with a large display outlining the five pillars of the Islamic faith. The matter prompted emotions of all scope and size, and landed the school squarely in the national spotlight.

    Read it:
    Kansas lawmaker ‘appalled’ by Islamic display in school
    KansasSeal

    10. Counting for attendance

    The legislative session is a busy time for any elected official, but some are less (or more) busy than others, it seems. After Kansas lawmakers headed for home in June, Kansas Watchdog took an in-depth peek at how they faired in the preceding months, and what we found was jaw-dropping. In all, seven members of the House of Representatives had missed more votes than all other members of the House combined.

    Read it:

    Handful of Kansas lawmakers outpace all others for missed votes

    Contact Travis Perry at travis@kansaswatchdog.org, or follow him on Twitter at@muckraker62. Like Watchdog.org? Click HERE to get breaking news alerts in YOUR state!

  • Job growth, Kansas and other states

    Kansas Capitol 2013-11-11 14.58.34Critics of Kansas Governor Sam Brownback and his economic growth plans say Kansas hasn’t been creating jobs. A look at the statistics tells us that Kansas has produced substandard performance in job growth for a long time.

    job-growth-states-compound-annual-rate-2013-12

    The nearby chart (click for a larger version) shows the compound annual rate of growth of jobs in the states, with Kansas highlighted in blue.

    From 1992 to 2012, Kansas created jobs at the rate of 1.022 percent per year, compounded. Arkansas managed 1.096 percent over the same period. That seems like a small difference, just 0.074 percentage points. But over time, compounding adds up, so to speak. If both states started with one million jobs and continued growing at these rates, in ten years Arkansas would have 8,136 more jobs than Kansas. In 20 years, the difference would be 18,080 jobs. That’s about as many people as work in each of Finney and Ford Counties, home to Dodge City and Garden City, respectively.

    Or, consider Texas, the state Kansas progressives love to hate. It’s has created jobs at the rate of 2.001 percent. If both states started with one million jobs and grew at these rates, in ten years Texas would have 112,083 more jobs than Kansas would have. In 20 years the difference would be 260,722 jobs. That’s almost as many people as work in the Wichita metropolitan area.

    Using the visualization.
    Using the visualization.
    If you’d like to use the interactive visualization of state employment data, you may click here to open it in a new window. Data is from Bureau of Labor Statistics, U.S. Department of Labor. Visualization created using Tableau Public.

  • Wichita can advocate for government transparency, or not

    Wichita City HallGovernment should be responsive to citizens when they make legitimate requests for records. Wichita should not hide behind non-profit entities and tortured interpretations of the law in order to keep records secret.

    When the Wichita City Council considers renewing its contract with Go Wichita Convention and Visitors Bureau, the council has another opportunity to decide whether it is truly in favor of open government and citizen access to records.

    Go Wichita, along with the Wichita Downtown Development Corporation and Greater Wichita Economic Development Coalition, contends that it is not a “public agency” as defined in Kansas law, and therefore does not have to fulfill records requests. Mayor Carl Brewer and most council members are comfortable with this tortured interpretation of the law. Inexplicably, the Sedgwick County District Attorney agreed with the city.

    I, along with many others, believe the city’s interpretation of the law is incorrect. So do many in the Kansas Legislature, and action may be taken there to eliminate the ability of Wichita to keep public records from the public. We can call it Gary’s Law, after Wichita City Attorney Gary Rebenstorf, who provides the legal advice the city relies upon.

    The legal stance of the City of Wichita certainly isn’t good public policy. Citizens should be able to learn how taxpayer money is spent. Agencies like Go Wichita, WDDC, and GWEDC need to open their check registers as has Sedgwick County, for example.

    In the meantime, there is nothing to prevent the city from asking Go Wichita to act as though it was a public agency as defined in the Kansas Open Records Act and to fulfill records requests. This would let Wichitans know that the city is truly interested in open and transparent government.

    It’s easy to bluster about open government. In one of his “State of the City” addresses, Mayor Brewer promoted the city’s efforts in accountability and transparency, telling the audience: “We must continue to be responsive to you. Building on our belief that government at all levels belongs to the people. We must continue our efforts that expand citizen engagement. … And we must provide transparency in all that we do.” Many other city documents mention transparency as a goal for the city.

    Earlier this year, the city won an award for government transparency regarding the city’s website. In a statement, the city manager said the city “will continue to empower and engage citizens by providing information necessary to keep them informed on the actions their government is taking on their behalf.”

    Until the city asks that these quasi-governmental organizations subject themselves to the Kansas Open Records Act, the message from the City of Wichita is clear: Accountability and transparency is provided on the city’s terms, not on citizens’ terms and the law.

    Why open records are important

    labette-community-college-donationHere’s an example as to why this issue is important: In 2009 Mike Howerter, a trustee for Labette Community College, noticed that a check number was missing from a register. Based on his inquiry, it was revealed that the missing check was used to reimburse the college president for a political contribution. While it was determined that the college president committed no crime by making this political contribution using college funds, this is an example of the type of information that citizens may want regarding the way public funds are spent.

    This is the type of information that I have requested. It is what is needed to perform effective oversight. It is what the City of Wichita has decided to avoid.

    This item in the past

    Two years ago I asked that the city council approve the contract with Go Wichita only after adding a provision that Go Wichita consider itself a public agency under the Kansas Open Records Act. Following are a few notes from the meeting (video may be viewed here or at the end of this article):

    Discussion of this matter at the meeting reveals that city staff believes that the annual reports filed by Go Wichita along with periodic checks by city staff are sufficient oversight.

    City Attorney Gary Rebenstorf cited the law regarding enforcement of the Kansas Open Records Act, stating that the Kansas Attorney General or the courts is the next step to seek enforcement of KORA. While Rebenstorf is correct on the law, the policy of the Kansas Attorney General is to refer all cases to the local district attorney. The Kansas AG will not intervene in this matter.

    Randy Brown, who is chair of the Kansas Sunshine Coalition for Open Government and former opinion page editor of the Wichita Eagle was at the meeting and spoke on this matter. In his remarks, Brown said “It may not be the obligation of the City of Wichita to enforce the Kansas Open Records Act legally, but certainly morally you guys have that obligation. To keep something cloudy when it should be transparent I think is foolishness on the part of any public body, and a slap in the face of the citizens of Kansas. By every definition that we’ve discovered, organizations such as Go Wichita are subject to the Kansas Open Records Act.”

    Brown said that he’s amazed when public officials don’t realize that transparency helps build trust in government, thereby helping public officials themselves. He added “Open government is essential to a democracy. It’s the only way citizens know what’s going on. … But the Kansas Open Records Act is clear: Public records are to be made public, and that law is to be construed liberally, not by some facile legal arguments that keep these records secret.”

    He recommended to the council, as I did, that the contract be contingent on Go Wichita following the Kansas Open Records Act.

    Misunderstanding the scope of KORA

    In remarks from the bench Wichita City Council Member James Clendenin (district 3, southeast and south Wichita) asked the city manager a series of questions aimed at determining whether the city was satisfied with the level of service that Go Wichita has provided. He then extended that argument, wondering if any company the city contracts with that is providing satisfactory products or service would be subject to “government intrusion” through records requests. Would this discourage companies from wanting to be contractors?

    First, the Kansas Open Records Act does not say anything about whether a company is providing satisfactory service to government. That simply isn’t a factor, and is not a basis for my records request to Go Wichita. Additionally, the Kansas Open Records Act contains a large exception, which excepts: “Any entity solely by reason of payment from public funds for property, goods or services of such entity.” So companies that sell to government in the ordinary course of business are not subject to the open records law. Go Wichita is distinguished, since it is almost entirely funded by taxes and has, I believe, just a single client: the City of Wichita.

    Finally, we should note that the open records law does not represent government intrusion, as Clendenin claimed. Open records laws offer citizens the ability to get an inside look at the working of government. That’s oversight, not intrusion.

    Is the city overwhelmed with records requests?

    Wichita City Council Member Pete Meitzner (district 2, east Wichita) asked that there might be a workshop to develop a policy on records requests. He expressed concern that departments might be overwhelmed with requests from me that they have to respond to in a timely fashion, accusing me of “attempt to bury any of our departments in freedom of information acts [sic].”

    In making this argument, Mr. Meitzner might have taken the time to learn how many records requests I’ve made to the city. The answer, to the best of my recollection, is that I have made one request this year to the city citing the open records act. It was denied. I have made perhaps a half-dozen informal requests, most of which I believe were fulfilled consuming just a few moments of someone’s time.

    As to his concern over the costs of fulfilling records requests: The law allows for government and agencies to charge fees to fulfill requests. They often do this, and I have paid these fees. But more important than this, the attitude of council member Meitzner is typical of elected officials — disdain for providing records to citizens. Government should be responsive to citizens. As Randy Brown told the council, government should welcome opportunities to share information and be open and transparent. The city should not hide behind non-profit entities and torture the law in order to keep records secret.

    Wichita’s attitude towards citizens

    Randy Brown’s remarks are an excellent summation of the morality and politics of the city’s action and attitude regarding this matter.

    The council ought to be wary of taking legal advice from city attorney Gary Rebenstorf. He has been wrong several times before when issuing guidance to this council regarding the Kansas Open Meetings Act, which is similar to the Open Records Act. He’s taken the blame and apologized for these violations. He was quoted in the Wichita Eagle as saying “I will make every effort to further a culture of openness and ensure that like mistakes are avoided in the future.”

    But Rebenstorf’s attitude, as gauged accurately by Randy Brown, is to rely on facile legal arguments to avoid complying with the clear meaning and intent of the law.

    Why city council members would be opposed to what I have asked is unknown. Perhaps they know that among the public, issues relating to open records generally aren’t that important. Citizens ought to note the actions of Mayor Brewer. The mayor could easily put this matter to an end. He speaks of wanting to have open and transparent government, but when it comes time to make a tough call, his leadership is missing.

    It’s becoming evident that Kansans need a better way to enforce compliance with the Kansas Open Records Act. It seems quite strange that local district attorneys are placed in a quasi-judicial role of deciding whether citizen complains are justified. If citizens disagree — and nearly everyone I’ve talked to thinks that the opinion issued by the Sedgwick County District Attorney is this matter is nonsensical and contrary to the letter and spirit of the law — they find themselves in the position of suing their government. That is costly, and citizens soon realize their own taxpayer dollars are used against them.

    Wichita logic open records

  • Shortchanging Kansas schoolchildren, indeed

    School blackboardThis month the New York Times published an editorial that advocates for more spending on Kansas public schools. While getting some facts wrong, the piece also overlooks the ways that Kansas schoolchildren are truly being shortchanged.

    Here’s evidence supplied by the Times (Shortchanging Kansas Schoolchildren, October 13, 2013): “State spending on education has fallen an estimated 16.5 percent since 2008, including $500 million in cuts under the Brownback administration, resulting in teacher layoffs and larger class sizes.” (Governor Brownback has responded to the editorial; see Kansas Governor responds to the Times.)

    The Times editorial board doesn’t say how it calculated the 16.5 percent decline in spending, but it’s likely that it used only base state aid per pupil, which is the starting point for the Kansas school finance formula. Much more spending is added to that. A nearby table holds spending figures for recent years, and a similar chart with inflation-adjusted figures may be found in Kansas school spending rises.

    kansas-school-spending-2013-10-table-02

    Perhaps the Times didn’t notice that at the time base state aid was falling, total state spending on schools rose. Base state aid per pupil, adjusted for inflation, is lower than it was during the previous decade. Total Kansas state spending on schools, however, has recovered to the same level as 2006, in inflation-adjusted dollars.

    Total state aid per pupil this past school year was $6,984. Base state aid per pupil was $3,838. Total state spending, therefore, was 1.82 times base state aid. It’s important to consider the totality of spending and not just base state aid. It’s important because total spending is so much greater than base state aid. Also, total spending accounts for some of the difficulties and expenses that schools cite when asking for higher spending.

    For example, advocates for higher school spending often point to non-English speaking students and at-risk students as being expensive to educate. In recognition of this, the Kansas school finance formula makes allowances for this. According to the Kansas Legislator Briefing Book for 2013, the weighting for “full-time equivalent enrollment in bilingual education programs” is 0.395. This means that for each such student a school district has, an additional 39.5 percent over base state aid is given to the district.

    For at-risk pupils, the weighting is 0.456. At risk students, according to the briefing book, “are determined on the basis of at-risk factors determined by the school district board of education and not by virtue of eligibility for free meals.”

    Taken together, bilingual students considered to be at-risk generate an additional 85.1 percent of base state aid to be sent to the district, per student.

    Teachers and class sizes

    The Times wrote that under Brownback, Kansas experienced “teacher layoffs and larger class sizes.” Figures from the Kansas State Department of Education tell a different story. Considering the entire state, two trends emerge. For the past two years, the number of teachers employed in Kansas public schools has risen. Correspondingly, the pupil-teacher ratio has fallen.

    Kansas school employment

    The trend for certified employees is a year behind that of teachers, but for the last year, the number of certified employees has risen, and the ratio to pupils has fallen. Pupil-teacher ratio is not the same as class size, but it’s the data we have.

    Here’s the question we need to answer: If school districts have been able to hire more teachers and other certified employees, and if the student to teacher ratio is improving at the same time, but there are still high class sizes, what are school districts doing with these teachers and employees?

    Kansas school employment ratios

    By the way, the Times editorial writers might be interested in learning that the declines in school employment occurred during the administrations of Kathleen Sebelius and Mark Parkinson, Democrats both.

    I’ve created interactive visualizations that let you examine the employment levels and ratios in Kansas school districts. Click here for the visualization of employment levels. Click here for the visualization of ratios (pupil-teacher and pupil-certified employee).

    If the Times really wanted to help Kansas schoolchildren from being shortchanged, it might have noticed that at a time when Kansas was spending more on schools due to an order from the Kansas Supreme Court, the state weakened its already low standards for schools. This is the conclusion of the National Center for Education Statistics, based on the most recent version of Mapping State Proficiency Standards Onto the NAEP Scales. More about that can be found in Why are Kansas school standards so low?

    Another thing the Times could have done to increase the public’s awareness of the performance of Kansas schools is to investigate why Kansas schools perform relatively well on national tests. I and others have done this; see Kansas school test scores, a hidden story and Kansas and Texas schools and low-income students.

  • Kansas schools do not have rigorous standards, despite newspaper editorials

    kansas-city-star-2013-10-15A Kansas City Star editorial makes a case for higher school spending in Kansas, but is based on a premise that doesn’t exist in fact.

    In its conclusion, the editorial states: “Kansans have always known that rigorous standards and strong, well-funded public school systems are the best routes to an educated work force.” (A decisive time for Kansas schools, October 15, 2013.)

    The problem is that Kansas doesn’t have rigorous standards for its schools.

    If the Star editorial writers had asked the National Center for Education Statistics about Kansas school standards, that agency might have referred the editorialists to the most recent version of Mapping State Proficiency Standards Onto the NAEP Scales. (NCES is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations, and is located within the U.S. Department of Education and the Institute of Education Sciences.)

    The mapping project establishes a relationship between the tests each state gives to assess its students and the National Assessment of Education Progress, a test that is the same in all states. The conclusion of NCES is that Kansas school standards are relatively low, compared to other states. This video explains. (View below, or click here to view in HD at YouTube.)

    For Kansas, here are some key findings. First, NCES asks this question: “How do Kansas’s NAEP scale equivalent scores of reading standards for proficient performance at grades 4 and 8 in 2009 compare with those estimated for 2005 and 2007?”

    For Kansas, the two answers are this (emphasis added):

    “Although no substantive changes in the reading assessments from 2007 to 2009 were indicated by the state, the NAEP scale equivalent of both its grade 4 and grade 8 standards decreased.

    Also: “Kansas made substantive changes to its reading grade 8 assessment between 2005 and 2009, and the NAEP scale equivalent of its grade 8 standards decreased.

    In other words, NCES judged that Kansas weakened its standards for reading performance.

    A similar question was considered for math: “How do Kansas’s NAEP scale equivalent scores of mathematics standards for proficient performance at grades 4 and 8 in 2009 compare with those estimated for 2005 and 2007?”

    For Kansas, the two answers are this (emphasis added):

    “Although no substantive changes in the mathematics assessments from 2007 to 2009 were indicated by the state, the NAEP scale equivalent of its grade 8 standards decreased (the NAEP scale equivalent of its grade 4 standards did not change).”

    Also: “Kansas made substantive changes to its mathematics grade 4 assessment between 2005 and 2009, but the NAEP scale equivalent of its grade 4 standards did not change.”

    For mathematics, NCES judges that some standards were weakened, and some did not change.

    In its summary of Kansas reading standards, NCES concluded: “In both grades, Kansas state assessment results showed more positive changes in achievement than NAEP results.” For mathematics, the summary reads: “In grade 4, Kansas state assessment results showed a change in achievement that is not different from that based on NAEP results. In grade 8, state assessment results showed a more positive change.”

    In other words: In three of four instances, Kansas is claiming positive student achievement that isn’t apparent on national tests.

    Kansas is not alone in weakening its standards during this period. It’s also not alone in showing better performance on state tests than on national tests. States were under pressure to show increased scores, and some — Kansas included — weakened their state assessment standards in response.

    What’s important to know is that Kansas school leaders are not being honest with Kansans as a whole, and with parents specifically. In the face of these findings from NCES, Kansas Commissioner of Education Diane M. DeBacker wrote this in the pages of The Wichita Eagle: “Kansans are proud of the quality of their public schools, and a steady and continuing increase in student performance over the past decade has given us ample reason for that pride.” (Diane DeBacker : Pride in Kansas public schools is well-placed, March 20, 2012.)

    A look at the scores, however, show that national test results don’t match the state-controlled tests that DeBacker touts. She controls these states tests, by the way. See Kansas needs truth about schools.

    The same year a number of school district superintendents made a plea for increased funding in Kansas schools, referring to “multiple funding cuts.” (Reverse funding cuts, May 3, 2012 Wichita Eagle.) In this article, the school leaders claimed “Historically, our state has had high-performing schools, which make Kansas a great place to live, raise a family and run a business.”

    These claims made by Kansas school leaders are refuted by the statistics that aren’t under the control of these same leaders. Before courts rule on school spending, and before we change Kansas school standards, we need to realize the recent stewardship of Kansas schools under current leadership.

    Ask these questions before devoting more resources to Kansas public schools:

    Why are Kansas school standards so low compared to other states?

    Why did Kansas reduce its standards at the same time school spending was increasing?

    Following are two examples of charts from the NCES study where Kansas school standards rank compared to other states. Click on them for larger versions.

    Kansas Grade 4 Reading Standards

    Kansas Grade 4 Math Standards 01

  • Exchange Place still not good for Wichita, others

    Wichita city hall logoTomorrow the Wichita City Council will consider a redevelopment plan for the Exchange Place project in downtown Wichita. Despite having shed the problems with the former owners, the project has become an even worse deal for the taxpayers of Wichita, Kansas, and the nation. Those looking for jobs and for investment capital to meet consumer demands are worse off, too.

    Here’s what the city council agenda packet gives as the sources of financing for this project.

    HUD Loan Amount         $29,087,700
    Private Equity            5,652,254
    Tax Credit Equity        19,370,395
    TIF Proceeds             12,500,000
    Total Sources of Funds  $66,610,349

    Consider each of these sources of funding. TIF, or tax increment financing, diverts future increased tax revenues away from their normal uses and diverts them back to the project. In this case, the city will borrow $12,500,000 by selling bonds. It will give this money to the developer. Then, TIF proceeds will be used to repay these bonds.

    It sounds innocent, even beneficient and desirable. But if this project was not built within a TIF district, it would add $12,500,000 in tax revenues to the city, county, and school district. This is called “building up the tax base,” something politicians and bureaucrats say is an important goal. Downtown Wichita, however, has not done well in this regard, despite the claim of hundreds of millions in investment.

    City leaders will tell us that tax increment financing is needed for economic development. Regarding the effect of tax increment financing districts on economic development, economists Richard F. Dye and David F. Merriman have studied tax increment financing extensively. Their paper The Effects of Tax Increment Financing on Economic Development bluntly states the overall impact of TIF: “We find clear and consistent evidence that municipalities that adopt TIF grow more slowly after adoption than those that do not.”

    Later in the same paper the authors conclude: “These findings suggest that TIF trades off higher growth in the TIF district for lower growth elsewhere. This hypothesis is bolstered by other empirical findings.”

    What about the effect of tax increment financing on job creation, that being another goal mentioned by politicians and bureaucrats? One person who has looked at the effect of TIF on jobs is Paul F. Byrne of Washburn University. He authored a recent report titled Does Tax Increment Financing Deliver on Its Promise of Jobs? The Impact of Tax Increment Financing on Municipal Employment Growth. In its abstract we find this conclusion regarding the impact of TIF on jobs: “Results find no general impact of TIF use on employment. However, findings suggest that TIF districts supporting industrial development may have a positive effect on municipal employment, whereas TIF districts supporting retail development have a negative effect on municipal employment.” This project is a retail project, and can be expected to have a negative effect on employment.

    Another bad aspect of this project for citizens is what city documents describe as “tax credit equity.” The amount is $19,370,395. This is understatement at its finest. Tax credits are a direct transfer from taxpayers to the project developers, with very few strings attached.

    A tax credit is an appropriation of money made through the tax system and economically equivalent to a direct grant of money. Recently some have started to use the word “tax appropriations” or “tax expenditures” to describe tax credits in recognition of this. These expenditures don’t go through the normal legislative process as do most appropriations. If the Kansas Legislature and United States Congress are not comfortable with writing this developer a check for over $19,000,000, they should not make a roundabout contribution through the tax system that has the same economic impact on the state’s and nation’s finances.

    Citizens will be told that the tax credits are needed because rehabbing historic buildings is expensive. We should let politicians and bureaucrats know that living or working in a historic building is a premium amenity that one chooses, just like one might choose granite counter tops in their kitchen. We shouldn’t expect others to pay for these voluntary choices.

    Then, there’s a “HUD Loan Amount,” which is actually a loan guarantee of $29,087,700. U.S. taxpayers are liable for this amount of money should the project not meet its projections.

    The subsides to this project have real costs. This development will require services from the city, county, and school district, yet it won’t be contributing its full share of property taxes. So someone else has to pay.

    The tax credits represent money that has to be made up by taxpayers across Kansas and the nation. Again, someone else has to pay. Since Kansas applies sales tax to food, even poor people buying groceries will be contributing to the cost of the grants given to this project through state tax credits.

    We’ll be told that there’s a “funding gap” that taxpayers must step forward to fill. Why does that gap exist? It’s simple: Markets have decided that this project is not worth what it costs. If it was worth what it’s going to cost, and if the developer is reputable (as we’ve been promised), markets would be willing to fund the project. This happens every day all across the country, even during recessions.

    What the city is proposing to do is to take risks with the taxpayers’ money that no one is willing to take with their own. Further, the spending and credit that is diverted from markets to this project wastes capital. There is less capital available for projects that people value, because it is diverted to projects that politicians and bureaucrats value.

    The difficulty is that it’s easy to see the new project. The groundbreaking and ribbon cutting ceremonies that commemorate government intervention will be covered by television and newspapers. Politicians and bureaucrats are drawn to these events and will spend taxpayer funds to make sure you’re aware of them.

    It’s more difficult to see that the harm that government intervention causes. That harm is dispersed and more difficult to spot. But the harm is real. If it is not, then we need to ask why our governments don’t do more of this type of development.

    Driving by a development in a TIF district and noticing a building or people working at jobs does not tell the entire story. Recognizing the existence of a building, or the payment of taxes, or jobs created, is “stage one” thinking, and no more than that.

    It’s hard to think beyond stage one. It requires considering not only the seen, but also the unseen, as Frederic Bastiat taught us in his famous parable of the broken window. It also requires thinking of the long term effects of a policy, not just the immediate. But over and over again we see how politicians at all levels of government stop thinking at stage one. This is one of the many reasons why we need to return as much decision-making as possible to the private sector, and drastically limit the powers of politicians and governments.

  • Brief filed in Kansas school finance case

    Kansas Judicial Center in snowWalt Chappell has filed a brief providing argument and evidence relevant to the current Kansas school finance case. Many expect that the Kansas Supreme Court will rule by the end of the year so that the legislature may act without the uncertainty of a court ruling still in the future.

    In a message accompanying his brief, Chappell explained his reasons for filing the brief. You may view the brief below after Chappell’s message, or click here to view in full screen mode at Scribd.

    On Friday, September 6th, I filed the attached Amicus Brief with the Kansas Supreme Court in the Gannon school finance case. While serving as a member of the State Board of Education, I had the unique opportunity to gather longitudinal data which verifies that the $2 billion increase in K-12 funding over the past 10 years has not produced a measurable increase in student achievement.

    The brief is short, but the data in the Appendices are powerful. After reading the analysis and legislative recommendations to increase productivity, it will be clear that there is absolutely no justification for increasing appropriations or raising taxes to give K-12 school districts significantly more money to spend.

    There are bills already drafted which will save more per year than the $809 million demanded by the Gannon plaintiffs. By working together, Kansas leaders can make significant improvements in what and how we teach our children without massive increases in funding.

    Hopefully the longitudinal data and analyses in this brief will be helpful as you write news stories about the Gannon case and school finance. This is a major issue and will increase taxes on all sectors of the state economy if the Court rules that more money is required without first implementing legislation to improve productivity and the effectiveness of how money is currently spent to educate Kansas children.

  • Anderson, former Kansas budget director, speaks

    Last Friday former Kansas budget director Steve Anderson spoke to members and guests of the Wichita Pachyderm Club. Two videos are available, a highlights version and full version. View below, or to view on YouTube, click here for highlights or here for full version.

    Also, it was announced on Friday that Anderson would be joining Kansas Policy Institute in the role of senior adjunct fiscal policy fellow. For more on this from KPI, see Former state budget director Steve Anderson joins Kansas Policy Institute.

    Highlights video

    Full speech