Voice For Liberty

Tag: Robert Layton

Wichita City Manager Robert Layton

  • It hasn’t worked, but Wichita will do it again

    man-digging-coinsTomorrow the Wichita City Council will, in all likelihood, issue more business welfare in an effort to create jobs in Wichita.

    The applicant company is asking for relief from paying property taxes under the city’s Economic Development Exemption (EDX). The city’s economic development policy has a formula that determines how much tax can be excused, based on job creation and capital investment. In this case, according to city documents, “WSM Industries qualifies for a 59%, five-plus-five year tax exemption.” Not 50 percent, and not 60 percent. Precisely 59 percent is what the city judges.

    Here’s how the tax savings breaks down among the various taxing jurisdictions:

    City of Wichita: $4,500
    Sedgwick County: $4,081
    USD 259: $7,920
    State of Kansas: $209
    Total: $16,710

    An analysis performed for the city indicates a favorable benefit-cost ratio for these incentives. This inspires a question: If we really believe in this benefit to the city (and similar benefits to the county, school district, and state), why doesn’t the city make more investments like this? Surely there are other worthy companies could expand if not for the burden of property taxes. And that’s what tomorrow’s contemplated action means, if we are to believe it is anything but cronyism and business welfare: Property taxes in Wichita are what prevented this company from expanding. Erase 59 percent of the company’s property tax burden, and it is able to make new capital investment and jobs.

    If it really is so easy to promote economic growth and job creation, we should be doing things like this at every city council meeting. Several times each meeting, don’t you think?

    I also wonder about companies that made expansions as did this applicant company, but did not ask the city for incentives. What is their secret?

    The reality is that these economic development incentives don’t work, if we are willing to consider the effect on everyone in the region instead of just this applicant company, and also if we are willing to consider the long-term effects instead of only the immediate.

    Peer-reviewed research on economic development incentives — this is the conclusion of all the studies — find business location decisions to be favorably influenced by targeted tax incentives. That’s not a surprise. But the research also finds that the benefits to the communities that offered them were less than their costs.

    Wichita and Peer Job Growth, Total Employment

    If peer-reviewed research is not convincing, let’s take a look at the record of Wichita.
    Here is a chart of job growth for Wichita, the nation, and our Visioneering peers. (Click it for a larger version, or click here for the interactive visualization, or here to watch a video.) The data shows that Wichita hasn’t been doing well.

    So if we believe that an active role for government in economic development is best, we have to also recognize that our efforts aren’t working. Several long-serving politicians and bureaucrats that have presided over this failure: Mayor Carl Brewer has been on the city council or served as mayor since 2001. Economic development director Allen Bell has been working for the city since 1992. City Attorney Gary Rebenstorf has served for many years. At Sedgwick County, manager William Buchanan has held that position for more than two decades. On the Sedgwick County Commission, Dave Unruh has been in office since 2003, and Tim Norton since 2001. It is these officials who have presided over the dismal record of Wichita.

    Wichita City Manager Robert Layton has had less time to influence the course of economic development in Wichita. But he’s becoming part of the legacy of Wichita’s efforts in economic development.

  • WichitaLiberty.TV August 25, 2013

    WichitaLiberty.TV logo

    In this episode of WichitaLiberty.TV, host Bob Weeks leads viewers through the first two chapters of Henry Hazlitt’s book “Economics in One Lesson,” using cartoons created by Amanda BillyRock. It’s about looking at not only the immediate effects but at the longer effects of any act or policy; and tracing the consequences of that policy not merely for one group but for all groups. Amanda uses the parable of the broken window to illustrate. Then, Bob wonders about an evaluation committee formed by the City of Wichita to vet downtown development partners: Did the committee overlook important information, and why didn’t the city council object as its members had previously? Episode 10, broadcast August 25, 2013. View below, or click here to view on YouTube.

  • Wichita’s evaluation of development team should be reconsidered

    Dump truck carrying coinsIn an effort to avoid mistakes made in the past and inspire confidence in the process, parties wishing to receive economic development subsidies for projects in downtown Wichita are evaluated on a variety of measures. The evaluation matrix released for a project to be considered next week by the Wichita City Council, however, ought to be recalculated.

    City documents describe one of two competing projects as this: “River Vista is proposed by River Vista LLC, a development group comprised of George Laham, Dave Burk, Dave Wells and Bill Warren.”

    wichita-evaluation-matrix-2013-08

    It’s this ownership team that ought to cause the city concern. Two of the evaluation criteria are “Past project experience with the City of Wichita” and “References, especially from other municipal partners.” This development team was awarded the maximum number of points possible for each (points being a positive measure). Here are a few things that the evaluation committee may not have considered when awarding these points.

    Dave Wells: Wells is president of Key Construction. Last year the Wichita Eagle reported on “city-financed downtown parking garages that spiraled well over budget.” Noting the cost overruns, reporter Bill Wilson wrote: “The most recent, the 2008 WaterWalk Place garage built by Key Construction, an original partner in the WaterWalk project, came in $1.5 million over budget at almost $8.5 million. That’s the biggest parking garage miss, according to figures from the city’s office of urban development, although the 2004 Old Town Cinema garage built by Key Construction came in almost $1 million over budget at $5.225 million.” (Wichita city manager proposes eliminating no-bid construction projects.)

    Despite these two cost overruns on city projects, Wichita Mayor Carl Brewer wrote in a letter recommending Key Construction on a different matter: “Key is known for their consistent quality construction, budget control and on schedule delivery.” Maybe that’s what the evaluation committee relied on.

    Also, two years ago Key Construction proposed — and was awarded by the city council — a no-bid contract for a parking garage. But the city later put the contract to competitive bid. Key, which first bid $6 million, later bid $4.7 million. This no-bid contract awarded to Key was cronyism in the extreme. If the desire of the majority of the city council, including Mayor Carl Brewer, had been realized, Wichita taxpayers would have sent an extra — and unnecessary — $1.3 million to a politically-connected construction company. See Campaign contributions show need for reform in Wichita for an example of how Key Construction has mastered political cronyism.

    By the way, the mayor’s relationship with Wells means he should not participate in voting on this matter.

    Dave Burk, Dave Wells: These two were original partners in WaterWalk, which has received over $40 million in subsidy, with little to show for results.

    Dave Burk: He’s received many millions from many levels of government, but still thinks he doesn’t get enough. This is what we can conclude by his appeal of property taxes in a TIF district. Those taxes, even though they are rerouted back to him for his benefit, were still too high for his taste, and he appealed. The Wichita Eagle reported in the article (Developer appealed taxes on city-owned property): “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.”

    rebenstorf-quote-dave-burkA 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 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. Now he wants more city taxpayer subsidy.

    warren-bailout-poses-dilemma

    Bill Warren: In 2008 the Old Town Warren Theater was failing and its owners — Bill Warren being one — 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. Reported the Wichita Eagle: “Wichita taxpayers will give up as much as $1.2 million if the City Council approves a $6 million loan to bail out the troubled Old Town Warren Theatre this week. That’s because that $6 million, which would pay off the theater’s debt and make it the only fully digital movie theater in Kansas, would otherwise be invested and draw about 3 percent interest a year.”

    Besides Warren, you may — or may not — be surprised to learn that the theater’s partners included Dave Wells and Dave Burk, the same two men mentioned above. Also, Mayor Brewer’s relationship with Warren means he should not participate in voting on this matter.

    With the history of these parties working in public-private partnerships, the Wichita City Council needs to question the matrix delivered by the evaluation committee.

  • Wichita: No such document

    Wichita city hall logo

    When asked to provide documents that establish the city’s proclaimed policy, Wichita city hall is not able to do so, leaving us to wonder just how policy is made.

    At last week’s meeting of the Wichita City Council, both Urban Development Director Allen Bell and Wichita city manager Robert Layton explained that for downtown projects, the city’s policy that the debt service fund must show a cost-benefit ratio of 1.3 to one or better doesn’t apply. (Video of Bell explaining this policy is here, and of Layton doing the same, here. Meeting minutes are here.)

    More about this policy is available in In Wichita, economic development policies are questioned.

    In that article, I mentioned that I attempted to find a document that states this policy. I asked the city to provide this document, or perhaps tell me when the city council acted to approve this policy, just as it has approved other similar policies.

    After two days of searching, city officials have said that there is no such document that establishes this policy.

    The people of Wichita ought to ask city hall just when this policy was made. City officials say Wichita has a transparent, open government. The Public-Private Partnership Evaluation Criteria for the redevelopment of downtown Wichita states “The business plan recommends public-private partnership criteria that are clear, predictable, and transparent.”

    But in the first project to be approved under this plan, the city finds itself apparently making policy on the fly to fit the needs of a group of politically-connected developers. This is not economic development. Instead, it’s cronyism.

  • In Wichita, economic development policies are questioned

    For an update on this story, see Wichita: No such document.

    At Tuesday’s meeting of the Wichita City Council, I was prepared to ask the council to not approve issuance of Industrial Revenue Bonds. My reason, explained here, was that the cost-benefit analysis did not meet the standard the city has established in its economic development incentives policy.

    At the meeting, though, Urban Development Director Allen Bell and Wichita city manager Robert Layton both explained that for downtown projects, the city’s policy that the debt service fund must show a cost-benefit ratio of 1.3 to one or better doesn’t apply. (Video of Bell explaining this policy is here, and of Layton doing the same, here.)

    I thought I should have known about that policy. I felt bad — embarrassed, even — for not being aware of it.

    There’s a certain logic to their arguments. The parking garage is available to the public — at least some parking stalls. But the garage was not built until the Ambassador Hotel project was finalized. And the number of parking spots actually available to the public is difficult to determine. One analysis shows that the number of spots available to the public is zero, although the city says otherwise.

    So the next day I sought to inform myself of this policy regarding the cost-benefit ratio for the city’s debt service fund for downtown projects.

    I found a document titled “City of Wichita Downtown Development Incentives Policy” as approved by the Wichita City Council on May 17, 2011. It doesn’t address cost-benefit ratios for any funds, at least by my reading.

    (By the way, that document, which was available on the city’s website at wichita.gov, wasn’t available after the city recently transitioned to a new website.)

    There is also the evaluation matrix for downtown projects. It includes as a criterion “Extent City’s ROI exceeds benefit/cost ratio of 1.3:1 on CEDBR Model.”

    I don’t see either of these documents supporting what was stated by two top city officials at Tuesday’s meeting, that the cost-benefit ratio of 1.3 to one requirement does not apply to the debt service fund for downtown projects.

    I’ve asked the city to provide such a policy document. So far, city officials have searched, but no such document has been provided. You’d think that if there is a document containing this policy, it would be readily accessible.

    Whether the “new” policy explained Tuesday by Messrs. Bell and Layton is sound public policy is something that should be discussed. It might be a desirable policy.

    But this entire episode smacks of molding public policy in order to fit the situation at hand.

    The city relies on cost-benefit analysis produced by Wichita State University Center for Economic Development and Business Research. The positive result produced for the general fund — the 2.62 that Bell referred to — was used to justify the public investments the city asked taxpayers to make in September 2011.

    We didn’t know about the unfavorable result for the city’s debt service at that time. City officials, however, knew, as it’s contained in the analysis provided to the city from CEDBR.

    City officials could have — if they had wanted to — explained this special debt service policy for downtown projects at that time. City officials or the mayor could have explained that part of the Ambassador Hotel project doesn’t meet the city’s economic development policies, but here’s why the project is a good idea nonetheless.

    City officials and the mayor could have used that opportunity to inform Wichitans of the special policy for downtown projects regarding the debt service fund, if such a policy actually existed at that time.

    But they didn’t do that. And if the policy actually existed at that time, it was a well-kept secret, and was until Tuesday.

    I’m sure some will say that we should just shrug this off as an innocent oversight. But this project is steeped in cronyism. It is the poster child for why Wichita and Kansas need pay-to-play laws so that city council members are prohibited from voting to send millions to their significant campaign contributors and the mayor’s fishing buddy.

    Soon the city will probably ask Wichitans to trust it with more tax revenue so the city can do more for its citizens. The city commissioned a survey to justify this. Also, the mayor wants a dedicated stream of funding so that the city can spend more on economic development.

    In other words, the city wants its citizens to trust their government. But in order to gain that trust, the city needs to avoid episodes like this.

  • Wichita economic development and the election

    Ballot boxAs Wichitans decide their preference for city council members, voters should take a look at the numbers and decide whether they’re satisfied with our city’s performance in economic development.

    As shown in the article Wichita economic statistics, Wichita is not doing well in key economic statistics. Debt has risen rapidly in recent years. Growth of private sector jobs lags far behind the nation and the state of Kansas, and government jobs have grown faster than private sector jobs. While inflation-adjusted spending per person is holding relatively steady, the city is cutting services and generally sending a message of budgetary distress.

    Perhaps most astonishing: With all the public money poured into downtown redevelopment, with all the claims of new projects being competed, and with all the talk of building up the tax base, assessed valuation in downtown Wichita is declining.

    In his recent State of the City Address, Wichita Mayor Carl Brewer called for increased effort and funding for economic development, specifically job creation. He, and most of Wichita’s political and bureaucratic leaders, believe that more targeted economic development incentives are needed to boost Wichita’s economy.

    Whether these incentives are good economic development policy is open for debate. I don’t believe we need them. Kansas and Wichita should chart another course to increase economic freedom in Kansas. That, in turn, will make our area appealing to companies. But our local bureaucrats, most business leaders, and nearly all elected officials believe that targeted incentives are the way to attract and retain business.

    Even if we believe that an active role for government in economic development is best, we have to conclude that our efforts aren’t working. In most years, the number of jobs that officials take credit for creating or saving is just a small part of the labor force, often less than one percent.

    Rarely mentioned are the costs of creating these jobs. These costs have a negative economic impact on those who pay them. This means that economic activity and jobs are lost somewhere else in order to pay for the incentives.

    Also, some of these jobs would have been created without the city’s efforts. All the city should take credit for is the marginal activity that it purportedly created. Government usually claims credit for everything, however.

    Several long-serving politicians and bureaucrats that have presided over this failure: Mayor Carl Brewer has been on the city council or served as mayor since 2001. Economic development director Allen Bell has been working for the city since 1992. City Attorney Gary Rebenstorf has served for many years.

    Wichita City Manager Robert Layton has had less time to influence the course of economic development in Wichita. But he’s starting to become part of the legacy of Wichita’s efforts in economic development.

    The incumbents running for reelection to city council have been in office varying lengths of time. All, however, subscribe to the interventionist model of economic development championed by the mayor. That’s the model that hasn’t been working for Wichita.

    If voters in Wichita are truly concerned about economic development for everyone, next week’s election provides an opportunity to make a positive change by bring new voices to the city council.

  • Downtown Wichita economic development numbers questioned

    When the Wichita City Council recently received the 2012 Project Downtown Annual Report, a city council member took the opportunity to question and clarify some of the facts and figures presented in the report.

    Wichita Project Downtown Annual Report 2012

    In his questions, Wichita City Council Member Paul Gray (district 4, south and southwest Wichita) asked whether the amount of public investment presented did, in fact, include all public investment.

    In his answer, Scott Knebel, who is Downtown Revitalization Manager, said no, not all forms of public investment were included in the figures presented in the report. He told the council that an analysis is being prepared, perhaps to be available in May.

    Gray urged Knebel to be more forthcoming when reporting on the level of public investment in order to gain a better level of community buy-in: “If you truly want a greater level of community buy-in, being as forthcoming as we can with the financial analysis of these projects and truly demonstrating what we as a community are putting in through all the different public financing mechanisms available. You may not persuade the people who don’t like public participation in projects — you’re not going to change their viewpoints by that and I don’t expect you to — but the difference is you may get more trust and buy-in from the community that thinks you’re not being forthcoming and honest with them.”

    Regarding Wichita news media, Gray said the media may say “‘See, it’s a 90 percent private funded ratio versus 10 percent’ which is not really the case. We’re skewing actual numbers to demonstrate our successes downtown, but I think our successes downtown speak for themselves.”

    Knebel and Wichita Downtown Development Corporation President Jeff Fluhr promised to be more forthcoming with investment figures in the future.

    Gray also asked about the city’s practice of building retail space and practically giving it away to developers, who can then lease the space and earn outsized returns at taxpayer expense. I reported this at the time this lease was under consideration by the city council:

    According to a letter of intent approved by the city council — and sure to become law after a public hearing at a meeting of the Wichita City Council on September 13th — the city is planning to build about 8,500 square feet of retail space in a downtown parking garage. The garage is being built, partly, to serve a hotel Burk and partners are developing.

    Here are the details of the deal Burk and his partners are getting from the taxpayers of Wichita: The city plans to lease this space to Burk and $1.00 per year. Not $1.00 per square foot, but $1.00 for the entire space — all 8,500 square feet.

    That’s the plan for the first five years. For the next 10, the city would charge $21,000 rent per year, which is a rate of about $2.50 per square foot.

    For years 15 through 20, the rent increases to $63,000, or $7.41 per square foot. At the end of this period, Burk will have the option of purchasing the space for $1,120,000, which is a cost of about $132 per square foot.

    That cost of $132 per square foot is within the range of what sources in the real estate industry tell me top-quality retail space costs to build in Wichita, which is from $130 to $140 per square foot. Rents asked for that space would be from $15 to $18 per square foot per year.

    Using the low figure, Burk could expect to collect about $127,500 in annual rent on space he rents for $1.00, leaving a gross profit of $127,499 for him. As the $15 rent is a net figure, Burk’s tenants will pay taxes, insurance, and maintenance.

    Wichita city manager Robert Layton answered Gray by saying that real estate leasing is not an area of the city’s expertise.

    Without Gray’s questions, these important matters of public policy would likely not have been brought to public attention. For mentioning these topics, Gray was — in an attempt at humor by Wichita City Council Member Pete Meitzner (district 2, east Wichita) — branded as “Debby Downer.”

    Citizens might expect that as millions in public funds are invested, someone in city hall is keeping track, and that there is a plan for reporting these numbers. Citizens should ask why Mayor Brewer, City Manager Layton, and current council members are not concerned that there appears to be no such plan for accountability.

    The notion of reporting that there was only $10.7 million in “public projects” in 2012 is absurd. Just one project, the Ambassador Hotel, received $15,407,075 in taxpayer funds to get started, and then was slated to receive $321,499 per year for the first five years, with smaller amounts for 22 years. Wichita voters rejected a small part of the ongoing subsidy, but the rest remained.

    As to city manager Layton’s answer that the city is not experience in real estate leasing, my response is well, why then did you get involved? It’s not the first time the city has made such a sweetheart lease deal with some of the same parties. It’s become almost routine, as I reported at the time this lease was being considered:

    While most citizens might be shocked at the many layers of subsidy offered to Burk, he’s accustomed to such treatment. In 2003, the city offered a similar deal to Burk and his partners for retail space that is part of the Old Town Cinema project. That deal was made with Cinema Old Town, LLC, whose resident agent is David Burk. According to the Wichita Eagle, other partners in this corporation include Wichita theater owner Bill Warren, real estate agent Steven Barrett, Key Construction and seven others.

    David Wells, one of the owners of Key Construction, is a partner with Burk on the new hotel project, and Key is slated to build the garage under a process that doesn’t require competitive bidding, even though city money is used to pay for it. Note: Later the garage was put out for competitive bid.

    The Old Town project let Burk and his partners lease 17,500 square feet of retail space from the City of Wichita for $1.00 per year for the first five years. Like the proposed project, that’s not $1.00 per square foot, but $1.00 per year for all 17,500 square feet.

    I wonder: Is the fact that these parties — Burk, Key Construction, Bill Warren — are reliable campaign contributors to Wichita Mayor Carl Brewer and many other Wichita City Council members, does that mean anything?

    Wichita Eagle reporting on this meeting is at City Council member Paul Gray questions numbers by Wichita Downtown Development.

  • Wichita economic development solution, postponed

    Recent reporting in the Wichita Business Journal on Wichita’s economic development efforts has many officials saying Wichita doesn’t have enough incentives to compete with other cities. That is, we are not spending enough on incentives.

    Whether these incentives are good economic development policy is open for debate. I don’t believe we need them, and that we in Kansas and Wichita can chart another course to increase economic freedom in Kansas. That will make our area appealing to companies. But our local bureaucrats, most business leaders, and nearly all elected officials believe that targeted incentives are the way to attract and retain business.

    (Charts at the end of this article illustrate the record in Wichita on jobs.)

    Our leaders have identified what they believe is a solution to a problem, but have not implemented that solution effectively, in their own words.

    I should say have not implemented the solution on a widespread basis, because Wichita has devoted more tax money to economic development. According to the 2010 City Manager’s Policy Message, page CM-2, “One mill of property tax revenue will be shifted from the Debt Service Fund to the General Fund. In 2011 and 2012, one mill of property tax will be shifted to the General Fund to provide supplemental financing. The shift will last two years, and in 2013, one mill will be shifted back to the Debt Service Fund. The additional millage will provide a combined $5 million for economic development opportunities.”

    So the city has decided to spend more tax dollars on economic development, but this allocation is being phased out — at the same time nearly everyone is calling for more to be spent in this area.

    Isn’t this a failure of political and bureaucratic leadership? We have a long-standing problem, officials have identified what they believe is a solution, but it is not being implemented. These leaders have the ability to spend more on economic development, as illustrated by Wichita’s shifting of tax revenue.

    Even if we believe that an active role for government in economic development is best (and I don’t believe that), we have to conclude that our efforts aren’t working. Several long-serving politicians and bureaucrats that have presided over this failure: Mayor Carl Brewer has been on the city council or served as mayor since 2001. Economic development director Allen Bell has been working for the city since 1992. City Attorney Gary Rebenstorf has served for many years. At Sedgwick County, manager William Buchanan has held that position for 21 years. On the Sedgwick County Commission, Dave Unruh has been in office since 2003, and Tim Norton since 2001. Unruh has said he wants to be Wichita’s next mayor.

    Wichita City Manager Robert Layton has had less time to influence the course of economic development in Wichita. But as he approaches his fourth anniversary in Wichita, he starts to become part of the legacy of Wichita’s efforts in economic development.

    Wichita’s job creation record

    Two charts illustrate the record of job growth in Wichita. The first shows Wichita job growth compared to Kansas and the nation. Data is from U.S. Bureau of Economic Analysis, and indexed with values for 2001 set to 1.00.

    As you can see, job growth in Wichita trails both Kansas and the nation.

    The next chart shows Wichita job growth by sector.

    Private sector job growth is prominently lower than government. This is a problem, because more economic activity is directed away from the productive private sector to inefficient government.

  • Mixed message on Southwest subsidies

    Now that Southwest Airlines has announced that it will offer service in Wichita, the question is this: Will Southwest tap the subsidy?

    Last year city manager Bob 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.”

    A mixed message.

    From the Wichita Eagle: “[Southwest vice president for airport affairs Bob] Montgomery said Southwest may initially utilize Affordable Airfares revenue to mitigate ‘risk’ but hopes to grow its business so the public subsidies aren’t needed.”

    Mixed.

    “[Kansas Governor Sam] Brownback also committed during the news conference to recommending the extension of Affordable Airfares during the 2013 legislative session, calling its potential role helping defray Southwest’s risk entering the Wichita market appropriate. ‘The program is doing what we want,’ the governor said. ‘It’s a good program, and I’m going to propose continuing it.’”

    Mixed message again. Especially so for a governor who is being praised for his free market beliefs. Or, as in Forbes: “Sam Brownback is a dazzlingly Reaganesque success as governor of Kansas.”

    The Southwest executive again: “But Montgomery said the fate of Affordable Airfares will have no bearing on Southwest’s future in Wichita. ‘We are here with no conditions, no demands,’ he said. ‘We ask that y’all fly Southwest, because this is a tough business.’”

    Mixed.

    Southwest has started service in cities comparable to Wichita without government subsidy or with only small levels of assistance. Let’s hope our city and state leaders can do the same.