Articles about the Kansas legislature, both the House of Representatives and the Senate.
In this episode of WichitaLiberty.TV: Radio talk show host Andy Hooser joins Bob Weeks to discuss millennials, issues in Kansas state government, and the Donald Trump Presidency. View below, or click here to view at YouTube. Episode 151, broadcast May 21, 2017.
A video explaining the Kansas budget is accurate in many aspects, but portrays a false and harmful myth regarding school spending.
A popular video explaining the Kansas budget deserves scrutiny for some of the data presented. The video is available at the Facebook page of Loud Light.
The presentation makes a few good points. For example, the video is correct in that the sales tax is a regressive tax, affecting low-income households in greater proportion. During the capaign for a Wichita city sales tax in 2014 I analyzed Census Bureau data and found that the lowest income class of families experience an increase nearly four times the magnitude as do the highest income families, as a percentage of after-tax income.1 2
The video also rightly notes that Kansas is now, and it has in the past under other legislatures and governors, inadequately funding KPERS, the state employee pension plan.
Interestingly, the video praises Kansas for its early adoption of “progressive economics.” I think the narrator meant “progressive taxation,” as the video shows Kansas adopting an income tax in 1933. How has that worked for Kansas? There are a variety of ways to look at the progress of Kansas compared to the nation, but here’s a startling fact: For the 73rd Congress (1933 to 1935) Kansas had seven members in the U.S. House of Representatives. (It had eight in the previous session.) Today Kansas has four members, and may be on the verge of losing one after the next census. This is an indication of the growth of Kansas in comparison to the nation.
The greatest problem in this video is its explanation of state spending on K through 12 schools. This is important, as the video correctly notes that this spending is half of the general fund budget. In introducing this section, the narrator notes “budget report gamesmanship that’s created a rhetorical paradox,” conceding it is “technically” true that education spending is at record levels.
The video then shows a chart titled “State Aid Per Pupil.” The chart starts with a value a little over $6,000 in 1993, declining to about $4,000 in 2013, then staying at that level. The citation is “Governor’s Budget Report” from the Kansas Division of Budget, and at the end of the video there is the explanation, “All financial data in this video is inflation adjusted to January 2017.”
A more accurate title for the chart is “Base State Aid Per Pupil.” That’s the actual name for the component of school spending that the video displays. This is important because base state aid is only the starting point for determining spending. Actual state aid to schools is much higher.
Base state aid, however, is not the only important number. To calculate the funding a school district receives, weightings are added. If students fall into certain categories, weightings for that category are added to determine a weighted enrollment. That is multiplied by base state aid to determine total state aid to the district. 6
While this may seem like a technical discussion that doesn’t make a difference, it’s very important. Some of the weightings are large and have increased by large amounts. The at-risk weighting, intended to cover the additional costs of teaching students from low-income families, started at five percent in 1993. In other words, for every student in this category, a school district received an extra five percent of base state aid. The value of this weighting has risen by a factor of nine, reaching 45.6 percent starting with the 2008-2009 school year.7
So in the nearby chart that I prepared using data adjusted for inflation in 2016, we see base state aid per pupil on a downward trend, just as the video shows. But I also plotted total state aid per pupil, which includes weightings. This number is on a mostly upward trend.
Ten years later base state aid was $3,852 — almost exactly the same — and the at-risk weighting was up to 45.6 percent. This generates funding of $5,609. For a district that qualified for the maximum high-density at-risk weighting, an additional $404 in funding was generated. (These numbers are not adjusted for inflation.)
So even though base state aid remained (almost) unchanged, funding targeted at certain students rose, and by a large amount.
Over time, values for the various weightings grew until by 2014 they added 85 percent to base state aid. A nearby chart shows the growth of total state aid as compared to base state aid. (Starting in fiscal 2015 the state changed the way local tax dollars are counted. That accounts for the large rise for the last year of data in the chart. For school years 2016 and 2017, block grants have replaced the funding formula, so base aid and weightings do not apply in the same way.)
All this determines state aid to schools only. There is also local aid and federal aid.
The questions Kansans should ask are these: Why doesn’t this video explain that “base state aid per pupil” is not the same as “state aid per pupil?” And why not explain that total state aid per pupil is much higher than base state aid, and has been rising over the long term?
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Should Kansans accept the results of a public opinion poll when little is known about it?
Recently American Cancer Society Cancer Action Network released results of a poll regarding Medicaid expansion in Kansas. What ACS CAN wants us to know is that 82 percent of Kansans favor expansion.
But before we accept these results, we need to know that ACS CAN will not release the full results of the survey, as other organizations have done.
In particular, last year Kansas Hospital Association conducted a poll on the topic of Medicaid expansion, and it released the complete poll and results.1
This year Kansas Center for Economic Growth conducted a poll. It released the full results.2 From this release, we learned that one of the questions was so vague as to be open to many different interpretations.3
Kansas Policy Institute conducts many polls and releases the full results.4
But ACS CAN, despite multiple requests to several contacts, will not release the full results of the poll, as other public policy advocacy groups have done.
It would be unfair to conclude that ACS CAN has something to hide, or that the poll was constructed in a way to be misleading. Conversely, it is not wise to give much weight to this poll when we know so little about it.
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By Karl Peterjohn
The budget deadlock has begun at the Kansas statehouse. The legislature cannot leave Topeka until they have approved the next biennial state budget that will begin July 1. Usually, this includes the governor’s signature on that legislation. That might not happen this year. That’s the issue.
Governor Brownback is not willing to fund a multi-year, multi-billion spending bill demanded by the liberal legislative majorities in both houses. Earlier this year he vetoed a record-breaking income tax hike scheme. So far, the governor has been successful in having his vetoes sustained.
The pressure is going to be applied for the governor’s fiscally responsible Republican allies opposed to income tax hikes.
The powerful government employee spending lobbies, headed by arguably, the most powerful lobby in this state, the KNEA teachers’ union, that spending priorities for the reliably liberal Democrats in the legislature along with a large number of other self-described, “progressives,” or “moderates,” big spending Republicans now hold sizable majorities in both houses of the Kansas legislature. However, the bi-partisan spending factions are short of the two-thirds majorities required to override Governor Brownback’s repeated vetoes. The spending lobbies have come close, and did override the governor’s pass a record-breaking income tax hike proposal in the Kansas house, but that override effort ultimately failed by three votes in the senate.
The other powerful spending lobbies among the road contractors, hospitals, and the most powerful appointed body: ethically flawed and disciplined Chief Justice of the Kansas Supreme Court, Lawton Nuss, and his fellow band of black-robed lawyers on the Kansas Supreme Court continue to try and force massive state spending hikes. Several members of this court, including Nuss, represented school districts and school finance litigation issues before joining the court.
Massive tax hikes will be required to fund this spending spree. Spending estimates indicate the increases proposed would be $2.25 billion over five years according to State Representative John Whitmer. Expanding Obamacare under the guise of Medicaid expansion could be even more expensive after the first few years.
What is different with earlier Kansas budget battles besides another zero on the cost? In this digital age we are in, everything seems to have moved digitally into a win/lose, up/down, on/off configuration.
The lawyers on Kansas’ top court with their school funding edicts, will all be providing pressure and using the leftstream Kansas news media to try and push a handful of Republican legislators to shift their votes, so everyone can go home with a huge income tax hike. Sadly, this destructive tax hike is unlikely to be successful in funding all of the proposed state spending proposals.
This is the big spenders’ dream scenario for the next state budget.
The scenario for fiscally responsible legislators and Governor Brownback is less clear. In the analog days of the 20th century, when people looked for win-win, instead of zero-sum games where every winner means there must be a loser, compromise was the answer.
To his credit, Governor Brownback has expressed a willingness to compromise. Brownback has supported and signed smaller excise tax hike bills in recent years. He continues to be blasted by liberal media critics in the editorial pages across the state. These tax hikes tried to reach a legislative compromise that allowed a continued growth in state spending. This spending growth was being driven by the perpetual school finance lawsuits.
There is another solution if the legislative deadlock continues, and there is a recent and nearby example for Kansas elected officials to consider: let the people decide. The Kansas Constitution has a provision that, “…all political power in this state is inherent in the people.” This is in the Kansas Constitution’s Bill of Rights.
How would empowering Kansans work?
In 2016, in our neighboring state to the south, Oklahoma, the state spending lobbies convinced the legislature to place a one cent sales tax hike on the statewide ballot. In November 2016 Oklahoma voters decided the fate of this sales tax hike. It was rejected by the voters.
A compromise between Governor Brownback and his fiscally conservative GOP legislative allies on one side could be reached with the larger number of Democrat and Republican tax hike advocates in the legislature using this “let the people decide,“ approach. Kansas taxpayers need to have a say in the massive new spending schemes appearing at the statehouse.
The tax hike advocates can place their proposal for raising state taxes/spending on either the August or preferably the November 2017 election ballot where a statewide referendum could be held. Both sides could make their case to voters. All political power is inherent in the people, and letting the voters decide would certainly be preferable to having appointed lawyers in black robes setting state fiscal policy with big-spending legislators as their willing accomplices.
Karl Peterjohn is a former journalist and served two terms as a Sedgwick County commissioner between 2009-17. He advocated on behalf of Kansas taxpayers as the executive director of the Kansas Taxpayers Network between 1992-2009.
In this episode of WichitaLiberty.TV: Kansas Policy Institute Dave Trabert joins Bob Weeks and Karl Peterjohn to discuss the Kansas economy, budget, and schools. View below, or click here to view at YouTube. Episode 149, broadcast April 30, 2017.
In Rich States, Poor States, Kansas improves its middle-of-the-pack performance, but continues with a mediocre forward-looking forecast.
In the 2017 edition of Rich States, Poor States, Utah continues its streak at the top of Economic Outlook Ranking, meaning that the state is poised for growth and prosperity. Kansas continues with middle-of-the-pack performance rankings, and after falling sharply in the forward-looking forecast, continues at the same level.
Rich States, Poor States is produced by American Legislative Exchange Council. The authors are economist Dr. Arthur B. Laffer, Stephen Moore, who is Distinguished Visiting Fellow, Project for Economic Growth at The Heritage Foundation, and Jonathan Williams, who is vice president for the Center for State Fiscal Reform at ALEC.
In addition to the printed and pdf versions of Rich States, Poor States there is now an interactive web site at www.richstatespoorstates.org.
Rich States, Poor States computes two measures for each state. The first is the Economic Performance Ranking, described as “a backward-looking measure based on a state’s performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration, and Non-Farm Payroll Employment — all of which are highly influenced by state policy.” The process looks at the past ten years.
Looking forward, there is the Economic Outlook Ranking, “a forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less — especially on income transfer programs, and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.”
In this year’s compilation for economic outlook, Kansas ranks twenty-sixth, up one position from the previous year, but down from eighteenth and fifteenth the years before. In 2008, the first year for this measure, Kansas was twenty-ninth.
A nearby chart shows the Economic Outlook Ranking for Kansas and some nearby states, shown as a trend over time since 2008. The peak of Kansas in 2013 is evident, as is the decline since then.
Kansas fell in the Economic Outlook Ranking from 2013 to 2016 and moved by just one position in 2017. To investigate why, I gathered data for Kansas from 2008 to 2017. The nearby table shows the results for 2017 and the rank among the states, with the trend since 2008 shown. A rank of one is the best ranking. For the trend lines, an upward slope means a decline in ranking, meaning the state is performing worse.
There are several areas that account for the difference.
The most notable change is in the measure “Recently Legislated Tax Changes (per $1,000 of personal income)” Kansas fell four positions in rank. By this measure, Kansas added $2.66 in taxes per $1,000 of personal income, which ranked forty-sixth among the states. This is a large change in a negative direction, as Kansas had ranked seventh two years before.
For the state liability system, Kansas ranks nineteenth, when it was fifth two years ago.
Kansas remains one of the states with the most public employees, with 669.8 full-time equivalent employees per 10,000 population. This ranks forty-eighth among the states.
Kansas has no tax and spending limits, which is a disadvantage compared to other states. These limitations could be in the form of an expenditure limit, laws requiring voter approval of tax increases, or supermajority requirements in the legislature to pass tax increases.
There is a distinctly positive relationship between the Rich States, Poor States’ economic outlook rankings and current and subsequent state economic health.
The formal correlation is not perfect (i.e., it is not equal to 100 percent) because there are other factors that affect a state’s economic prospects. All economists would concede this obvious point. However, the ALEC-Laffer rankings alone have a 25 to 40 percent correlation with state performance rankings. This is a very high percentage for a single variable considering the multiplicity of idiosyncratic factors that affect growth in each state — resource endowments, access to transportation, ports and other marketplaces, etc.
Effective July 1, 2015, the tax on cigarettes in Kansas rose by $0.50 per pack, going from $0.79 to $1.29 per pack. For the three years prior to that date cigarette tax collections averaged about $7.5 million per month. Since then collections has averaged about $11.1 million per month. But, as the chart shows, the trend is down. For February 2017 collections were $8.7 million, almost exactly the same as the month before the tax hike took effect.
Details of the subsidy programs used to keep Cargill in Wichita are starting to take shape.
This week the Wichita City Council will consider one of the (potentially many) subsidy programs offered to keep Cargill in Wichita.
Cargill Protein Group is currently located at 151 N. Main. The plan is for Cargill to purchase and demolish the Wichita Eagle building at 825 E. Douglas, then build a new office building in its place. The subsidy program to be considered this week is the Industrial Revenue Bond program1. The city won’t be lending Cargill money. Instead, IRB’s are a (convoluted) method whereby local governments are able to forgive the payment of property taxes. For the case of Cargill, city documents state the tax forgiveness could be worth $1,359,531 per year.2 This would be shared by these taxing jurisdictions, again according to city documents.
Of note, the city is in a hurry to handle this matter. Pending legislation would reduce the amount of property tax able to be exempted.3
In addition to the property tax exemption, the IRBs also carry a sales tax exemption for purchases related to construction. City documents give an estimated value of $2,026,291 for the sales tax Cargill will not have to pay.
The action to be considered this week is likely just a portion of total subsidy package. For example, at one time it was speculated that the City of Wichita would build a parking garage and let Cargill use it as their own. With a proposed capacity of 750 parking spots, this would cost many millions.4
Now, the city plans to let Cargill construct the garage, and the city will, according to city documents, “purchase a parking easement from Cargill to obtain public access to the parking structure Cargill will complete as part of this project.” It sounds like the city will rent spaces in the garage. It will be interesting to see the rate the city will agree to pay.
From the state of Kansas Cargill is likely to receive PEAK benefits. Under this program, the Kansas state withholding tax deducted from Cargill employees’ paychecks will be routed back to Cargill.5 (Well, only 95 percent goes back to Cargill. The state keeps five percent.)
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In this episode of WichitaLiberty.TV: Kansas Senator Ty Masterson joins Bob Weeks and Karl Peterjohn to discuss legislative issues and politics. View below, or click here to view at YouTube. Episode 147, broadcast April 16, 2017.