Voice For Liberty

Tag: Sam Brownback

  • In Kansas Legislature, opportunities for saving were lost

    This year the Kansas Legislature lost three opportunities to improve the operations and reduce the cost of state government. Three bills, each with this goal, were passed by the House of Representatives, but each failed to make through the Senate, or had its contents stripped and replaced with different legislation.

    Each of these bills represents a lost opportunity for state government services to be streamlined, delivered more efficiently, or measured and managed.

    Kansas Streamlining Government Act

    HB 2120, according to its supplemental note, “would establish the Kansas Streamlining Government Act, which would have the purpose of improving the performance, efficiency, and operations of state government by reviewing certain state agencies, programs, boards, and commissions.” Fee-funded agencies — examples include Kansas dental board and Kansas real estate commission — would be exempt from this bill.

    In more detail, the text of the bill explains: “The purposes of the Kansas streamlining government act are to improve the performance, streamline the operations, improve the effectiveness and efficiency, and reduce the operating costs of the executive branch of state government by reviewing state programs, policies, processes, original positions, staffing levels, agencies, boards and commissions, identifying those that should be eliminated, combined, reorganized, downsized or otherwise altered, and recommending proposed executive reorganization orders, executive orders, legislation, rules and regulations, or other actions to accomplish such changes and achieve such results.”

    In testimony in support of this legislation, Dave Trabert, President of Kansas Policy Institute offered testimony that echoed findings of the public choice school of economics and politics: “Some people may view a particular expenditure as unnecessary to the fulfillment of a program’s or an agency’s primary mission while others may see it as essential. Absent an independent review, we are expecting government employees to put their own self-interests aside and make completely unbiased decisions on how best to spend taxpayer funds. It’s not that government employees are intentionally wasteful; it’s that they are human beings and setting self-interests aside is challenge we all face.”

    On February 25 the bill passed the House of Representatives by a vote of 79 to 40. It was referred to the Senate Committee on Federal and State Affairs, where it did not advance.

    Privatization and public-private partnerships

    Another bill that did not advance was HB 2194, which in its original form would have created the Kansas Advisory Council on Privatization and Public-Private Partnerships.

    According to the supplemental note for the bill, “The purpose of the Council would be to ensure that certain state agencies, including the Board of Regents and postsecondary educational institutions, would: 1) focus on the core mission and provide goods and services efficiently and effectively; 2) develop a process to analyze opportunities to improve efficiency, cost-effectiveness and provide quality services, operations, functions, and activities; and 3) evaluate for feasibility, cost-effectiveness, and efficiency opportunities that could be outsourced. Excluded from the state agencies covered by the bill would be any entity not receiving State General Fund or federal funds appropriation.”

    This bill passed by a vote of 68 to 51 in the House of Representatives. It did not advance in the Senate, falling victim to a “gut-and-go” maneuver where its contents were replaced with legislation on an entirely different topic.

    Opposing this bill was Kansas Organization of State Employees (KOSE), a union for executive branch state employees. It advised its “brothers and sisters” that the bill “… establishes a partisan commission of big-business interests to privatize state services putting a wolf in charge of the hen house. To be clear, this bill allows for future privatization of nearly all services provided by state workers. Make no mistake, this proposal is a privatization scheme that will begin the process of outsourcing our work to private contractors. Under a privatization scheme for any state agency or service, the employees involved will lose their rights under our MOA and will be forced to adhere to the whims of a private contractor who typically provides less pay and poor benefits. Most workers affected by privatization schemes are not guaranteed to keep their jobs once an agency or service is outsourced.”

    Note the use of “outsourcing our work.” This underscores the sense of entitlement of many government workers: It is not work done for the benefit of Kansans, it is our work.

    Then, there’s the warning that private industry pays less. Most of the time representatives of state workers like KOSE make the case that it is they who are underpaid, but here the argument is turned around when it supports the case they want to make. One thing is probably true: Benefits — at least pension plans — may be lower in the private sector. But we’re now painfully aware that state government has promised its workers more pension benefits than the state has been willing to pay for.

    Performance measures

    Another bill that didn’t pass the entire legislature was HB 2158, which would have created performance measures for state agencies and reported that information to the public. The supplemental note says that the bill “as amended, would institute a new process for modifying current performance measures and establishing new standardized performance measures to be used by all state agencies in support of the annual budget requests. State agencies would be required to consult with representatives of the Director of the Budget and the Legislative Research Department to modify each agency’s current performance measures, to standardize such performance measures, and to utilize best practices in all state agencies.” Results of the performance measures would be posted on a public website.

    This bill passed the House of Representatives by a nearly unanimous vote of 119 to 2, with Wichita’s Nile Dillmore and Geraldine Flaharty the two nay votes. In the Senate, this bill was stripped of its content using the “gut-and-go” procedure and did not proceed intact to a vote.

    Opposition to these bills from Democrats often included remarks on the irony of those who were recently elected on the promise of shrinking government now proposing to enlarge government through the creation of these commissions and councils. These bills, however, proposed to spend modest amounts increasing the manageability of government, not the actual range and scope of government itself. As it turns out, many in the legislature — this includes Senate Republicans who initiated or went along with the legislative maneuvers that killed these bills — are happy with the operations of state government remaining in the shadows.

    These proposals to scale back the services that government provides — or to have existing services be delivered by the private sector — mean that there will be fewer government employees, and fewer members of government worker unions. This is another fertile area of gathering support for killing these bills.

    State workers and their supporters also argue that fewer state workers mean fewer people paying state and other taxes. Forgotten by them is the fact that the taxes taken to pay these workers means less economic activity and fewer jobs in the private sector. And, in fact, Kansas has seen the number of government workers — at all levels — rise.

    As to not wanting performance measures: Supporters of the status quo say that people outside of government don’t understand how to make the decisions that government workers make. In one sense, this may be true. In the private sector, profitability is the benchmark of success. Government has no comparable measure when it decides to, say, spend some $300 million to renovate the Kansas Capitol. But once it decides to do so, the benchmark and measurement of profitability in executing the service can be utilized by private sector operators. Of course, private contractors will be subject to the discipline of the profit and loss system, something again missing from government.

    Curiously, Kansas Governor Sam Brownback didn’t use his prestige and influence to support these bills, at not publicly. Perhaps next year, an election year not only for the House but also for the entire membership of the Senate, will be different.

  • Kansas and Wichita quick takes: Friday October 14, 2011

    Kansas school reform. Kansas Governor Sam Brownback is preparing to release a plan for reform of Kansas school finance. The reform plans, however, appear to do nothing to actually improve Kansas schools. Missing is any plan to introduce school choice to Kansas, whether in the form of charter schools, vouchers, or tax credit scholarships. While the school spending establishment says that these programs rob the existing public schools of money, the reverse is true: school choice programs cost less. An example: “Pennsylvania’s tax-credit program had saved Keystone State residents $144 million since 2001.” … It’s unfortunate for Kansas schoolchildren that the governor will not introduce these programs, as many other states are introducing or expanding choice programs.

    Occupy Wall Street vs. Jobs. Steve Jobs, that is. After contrasting the behaviors of the Occupy Wall Street protests with the business accomplishments of Apple’s Jobs and how the products Apple developed have lead to better lives, Michael D. Tanner draws a line between government and the private sector: “The Occupy Wall Street crowd, and for that matter President Obama, see government as the center of our existence. It is government that makes for a better society, while the rich, businessmen, and entrepreneurs are ‘takers’ who don’t ‘pay their fair share.’ But would we really have been better off if we had taken more of Jobs’s wealth and given it to the government? Would President Obama really have used it better than Jobs did? Would the government have given us all that Jobs did? Government has spent trillions on schools that don’t educate, anti-poverty programs that don’t lift people out of poverty, stimulus programs that don’t stimulate, and health-care programs that don’t control the cost of health care. Compare Apple or Pixar’s record of success with the failures of government. For that matter, what government jobs program has created as many net new jobs as Jobs? In fact, the next time someone suggests that what we need is more taxes, more regulation, more class warfare, more government programs, we should instead suggest that what we really need are policies that encourages a poor boy from San Francisco to become rich and thereby make the rest of us a little richer as well.” … The complete article is Occupy Wall Street vs. Jobs.

    OWS and Tea Party united? Are the Occupy Wall Street protesters and the Tea Party political allies? Maybe, or maybe not, explains Fred Smith of Competitive Enterprise Institute, writing in USA Today: “The problems we face come not from capitalism, Wall Street variety or any other, but rather from crony-capitalism. Tea Partiers distinguish capitalism from crony-capitalism. Occupiers confuse them. In fact, some Occupiers seek their own form of cronyism — an expanded government that will help the ‘right’ beneficiaries, such as students and homeowners, instead of bankers and automakers. … The economist Joseph Schumpeter, in his essay “Can Capitalism Survive?”, warned long ago that too many business leaders would seek success through politics rather than competition, and that this would destroy true capitalism. Certainly, too many in Wall Street have succumbed to that temptation, and capitalism has suffered accordingly. But it suggests that Occupiers and the Tea Partiers share at least one common enemy. The Solyndra scandal illustrates that crony-capitalists are found far beyond Wall Street. Thus, instead of focusing on one small part of Manhattan Island, shouldn’t we liberate the whole American economy?” … It should be noted that the economic development policies of Wichita are firmly rooted in crony capitalism.

  • Kansas and Wichita quick takes: Wednesday October 5, 2011

    Green energy in Kansas. Kansas Representative Charlotte O’Hara of Overland Park issues a cautionary note on Kansas energy policy. Commenting on Kansas Governor Sam Brownback’s recent energy policy forum, she writes: “I applaud the governor’s energy summit, however with the recent events and controversy swirling around the issue of renewable/green energy initiatives at the federal level (Solyndra), we in Kansas need to step back and analyze whether our current tax incentive packages for green energy is based on sound economic principles or rather an attempt to embrace ‘green’ energy for politically correct reasons. Here’s the question that begs to be asked, are incentive programs offered in Kansas useful economic development tools or are we throwing money at failed public policy? Among those incentives: Up to $5 million in bond financing for wind the solar manufacturers; a 10 percent corporate income tax credit for new capital investment; a tax abatement on real property for up to 10 years (subject to community approval); no franchise or inventory tax; the ability to retain payroll and withholding taxes for five to 10 years depending on the number of jobs created in Kansas.” … She references a recent op-ed written by the governor (Wind energy offers clean path to economic growth) and cites the rebuttal by Paul Chesser of American Tradition Institute. That may be read at ATI Release: Kansas Gov., Former Sen. Brownback Incorrect on Promise, Economics of Renewable Energy. More coverage at Kansas Governor Sam Brownback on wind energy.

    Economic development in Wichita. Events yesterday in Wichita City Hall and today at the Sedgwick County Commission indicate that most city leaders are firmly committed to rent seeking, corporate welfare, and large-scale government interventionism as the way to create propensity for our city and county. Here are a few articles with a different perspective: Wichita’s economic development strategy: rent seeking: “So what is rent seeking? Wikipedia defines it like this: ‘In economics, rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic environment, rather than by earning profits through economic transactions and the production of added wealth.’ … The private returns of rent seekers come from the redistribution of wealth, not from wealth creation. The tax that rent seeking imposes on the productive sector reduces the output growth rate by reducing the incentives of entrepreneurs to produce and innovate.” … Wichita again to bet on corporate welfare as economic development: “This week the Wichita City Council will consider three measures that, if adopted, will further establish corporate welfare and rent-seeking as Wichita’s economic development strategy. … When people are living on welfare, we usually see that as a sad state of affairs. We view it as a failure, both for the individual and for the country. We seek ways to help people get off welfare so that they become self-sufficient. We want to help them contribute to society rather than being a drain on its resources. But Wichita’s leaders don’t see corporate welfare as a bad thing. Instead, as these three measures — all of which will likely pass unanimously — illustrate, welfare is good when you’re a business in Wichita. Especially if you can raise speculation that your company might move out of Wichita.” … The ‘active investor’ role that the city of Wichita is about to take with regard to these three companies is precisely the wrong role to take. These actions increase the cost of government for the dynamic small companies we need to nurture. Instead these efforts concentrate and focus our economic development efforts in an unproductive way.”

    The first rough draft of the Solyndra story. As compiled by David Boaz, it’s a story that “just keeps getting more discouraging.” The headlines tell the story in his compilation at The First Rough Draft of the Solyndra Story.

    Tax increment financing. From Randal O’Toole: “Tax-increment financing (TIF) costs taxpayers around $10 billion per year and is growing as fast as 10 percent per year, according to a new report, Crony Capitalism and Social Engineering: The Case against Tax-Increment Financing published by the Cato Institute. Though originally created to help renew “blighted” neighborhoods, TIF today is used primarily as an economic development tool for areas that are often far from blighted. The report argues that TIF does not actually generate economic development. At best, it moves development that would have taken place somewhere else in a community to the TIF district. That means it generates no net tax revenues, so the TIF district effectively takes taxes from schools and other tax entities. At worst, TIF actually slows economic development, both by putting a larger burden on taxpayers and by discouraging other developers from making investments unless they are also supported by TIF.” … Tax increment financing — TIF districts — are expected to be a major source of revenue for the revitalization of downtown Wichita — and the accompanying social engineering directed from Wichita city hall. Wichita has also shown itself to be totally incapable of turning away from crony capitalism.

    Democrats Anonymous. “The first step is admitting you have a problem.”

  • Sedgwick County considers a planning grant

    This week the Sedgwick County Commission considered whether to participate in a HUD Sustainable Communities Regional Planning Grant.

    A letter from Sedgwick County Manager Bill Buchanan to commissioners said that the grant will “consist of multi-jurisdictional planning efforts that integrate housing, land use, economic and workforce development, transportation, and infrastructure investments in a manner that empowers jurisdictions to consider the interdependent challenges of economic prosperity, social equity, energy use and climate change, and public health and environmental impact.”

    The budget of the grant is $2,141,177 to fund the three-year plan development process, with $1,370,000 from federal funds and $771,177 of “leveraged resources” as a local match. These leveraged resources are in the form of in-kind contributions of staff time, plus $60,000 in cash.

    While Sedgwick County will be the grant’s “fiscal agent,” the work will be done by Regional Economic Area Partnership (REAP), an umbrella organization with the mission of, according to its website: “Guide state and national actions that affect economic development in the region and adopt joint actions among member governments that enhance the regional economy.”

    REAP’s members include city and county governments in a nine-county area in south-central Kansas. One of its duties is to administer the Kansas Affordable Airfares Program, the program that pays subsidies to airlines to provide service to the Wichita airport. In 2011, Sedgwick County paid $15,272 in “assessments” for its membership in REAP, while the City of Wichita paid $27,192. Governments pay smaller amounts as part of REAP’s water resources program.

    The counties that are considering participating in this planning grant are Reno, Harvey, Sedgwick, Sumner, and Butler.

    County documents specify the county’s in-kind contribution as $120,707. That consists of portions of the salary and benefits for four existing employees, plus $85,800 in “indirect administration costs.” There is no cash match at this time.

    John Schlegel, Director of Planning for the Wichita-Sedgwick County Metropolitan Area Planning Department, told commissioners that the end product of this grant would be the development of a regional plan for sustainable development. He said that we don’t know what the plan would contain, but that the purpose of the grant program is to get regions to work together on sustainability issues. The target area of the grant is a five-county area around Sedgwick County.

    He said that examples of issues would be economic development, workforce development, fiscal sustainability such as balanced budgets and spending priorities, and working together to create efficiencies in the region like joint purchasing and cost sharing.

    Commissioner Richard Ranzau asked to see a copy of the completed application, but the application is not complete.

    In his remarks, Ranzau described the application process, reading from the application document: “The applicant must show a clear connection between the need that they have identified within the region, the proposed approach to address those conditions, and the outcomes they anticipate the plan will produce.” He said that it appears that REAP will do these within the application, but the commission is being asked to approve and commit to these items without having seen them, which he described as irresponsible. He made a motion that action on the grant be delayed until these things are known.

    Joe Yager, chief executive officer of REAP, said that last year’s grant application is available on the REAP website, and that is the closest thing to a draft application that is available today. This year’s application is a second year of the program. Last year the commission voted not to participate in the grant by a 3 to 2 vote.

    Commissioner Karl Peterjohn wondered if the new planning consortium is a duplication of existing regional authorities. He listed seven different groups, besides REAP, that are involved in planning for the region.

    In further remarks, Peterjohn was concerned that smaller counties will have the same voting representation as Sedgwick County, which is many times larger than the small counties.

    In response to a question from Peterjohn, Yager said that the current application is for category 1 funds only, which are for planning purposes. If REAP is successful in the application, it could apply for category 2 funds, which are for implementation of a plan.

    Answering another question, Yager said that “livability principles,” which applicants must be committed to advance, are providing more transportation choices, promoting equitable and affordable housing, enhancing economic competitiveness, supporting existing communities, coordinating policies and leveraging investments, and valuing communities and neighborhoods. Peterjohn said these principles were not supplied in the information made available to commissioners.

    Peterjohn said these principles sound innocuous on their face, but when details are examined, he said he could not support a “Washington-driven agenda” that could not pass the present Congress. He described this effort as part of an “administrative end-around,” baiting us with a federal grant, that will allow Washington, HUD, and EPA to “drive what we do in our community.”

    The motion on deferring the item failed on a 2 to 3 vote, with Peterjohn and Ranzau voting for it.

    The commission heard from three citizens. In his remarks, John Todd referenced a slide titled “Common Concerns” from a presentation given by REAP. Todd listed these concerns, which include: “A method of Social Engineering to restrict residence in the suburbs and rural areas and force Americans into city centers; a blueprint for the transformation of our society into total Federal control; will enforce Federal Sustainable Development zoning and control of local communities; will create a massive new ‘development’ bureaucracy; will drive up the cost of energy to heat and cool your home; will drive up the cost of gasoline as a way to get you out of your car; and will force you to spend thousands of dollars on your home in order to comply.”

    Susan Estes of Americans for Prosperity challenged the attitude of some commissioners, particularly Jim Skelton, which is that approving the planning grant does not commit us to implementing the plan. She told the commissioners “If you know you don’t like the federal government coming in and planning for you, say so now. Let’s get it over with and be upfront and honest to those involved,” referring to the other cities and counties that may participate in the grant and planning process.

    She characterized the language that appears in the grant materials as meaning “more control and less liberty.”

    In his remarks, Ranzau asked Schlegel what problem we will solve by participating in the grant. Schlegel answered that the purpose of the grant is to “build the greater regional capacity for regions to better compete in what is really becoming a global marketplace.” This is the end product, he said.

    Ranzau said that we don’t need more planning, that we have more than enough planning at the present time. This grant, he said, would create another consortium that is unaccountable to the people, as no one is elected to them. The organizations receive tax dollars, and while some elected officials serve on these bodies, it is not the same as being directly accountable to the people. The fact that the grant requires a new consortium to be formed is evidence that the agenda is to circumvent the will of the people, he said.

    Ranzau also said that Schlegel told him that “acceptance of this grant will take REAP to another level, because right now they are struggling, and this will help plot the course for REAP.” He said that REAP, which is housed at the Hugo Wall School of Public Affairs at Wichita State University, needs to expand its role and authority in order to give it “something to do.” He said the grant will promote the “progressive agenda” of the Obama administration in this way.

    Later Commission Chair Dave Unruh disputed the contention regarding the workload of REAP.

    Ranzau also questioned whether we want the federal government to be a “source of solutions” for our local communities. He also questioned one of the stated goals of the program, which is to reduce cost to taxpayers. It’s a new program, he said, and would not reduce the cost to taxpayers.

    He further questioned the ability of the grant program to help teach local communities to be fiscally responsible. With federal spending out of control, he said the federal government is not in a position to help in this regard.

    He further said that talking in generalities sounds benign, and that he wanted to know what he is committing the county to this year. Repeating the concerns of Peterjohn, Ranzau said that accepting this grant would be accepting the policies of the Obama Administration as our own. He said that in the 2010 elections the people repudiated the agenda of the president, and this grant program is an example of the type of programs people have said they don’t want. It is concern with the agenda behind this grant program that is his greatest concern, he later explained.

    Continuing, Ranzau questioned the ability of the federal government to create conditions for sustainable growth: “You’ve got to be kidding me. Look at the vision they now have for growth in this county. It’s a disaster. And now they want to take the same policies that have created and made our current economic situation worse — they want to bring them to our local communities by these sorts of grants.”

    Both Ranzau and Peterjohn questioned the ability of this grant to produce affordable housing, citing the government’s role in the ongoing housing crisis.

    Ranzau, who has voted against many grants, added that this is the “the worst and most troublesome grant” he’s seen in his time in office, adding that the grant is clearly an agenda created by President Obama. He said there are politicians who ran for office on platforms of limited government and fiscal responsibility, and this grant is an opportunity for them to “act on those values.”

    In further discussion, it was brought out that each region makes its own definition of what sustainability means to it, but Yager provided this definition of sustainability: “Meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

    In his remarks, Unruh said that Sedgwick County has been involved in sustainability thinking and planning for at least two years. He said this is a strategy that helps the county plan for the future. He asked manager Buchanan if the county had a definition of sustainability. Buchanan replied the County has taken a similar approach to the International City/County Management Association, which he said involves four factors: Economic stability — sufficient jobs and economic development; ensuring that local governments are fiscally healthy so that they can provide quality services; social equity, which he said ensures that the delivery of services in communities is equitable; and the environment, which he said was not about global warming, but rather making sure we’re not wasting natural resources.

    Unruh said that we are not opposed to these principles, that these are reasonable activities for elected officials. He added that regionalism is the “whole measuring stick.” We must consider communities close to us when planning, he added. It is reasonable to get these people together on a voluntary and non-binding basis. While he said he didn’t like excess spending at the federal level, it is his money that the federal government is spending, and we should take advantage of this program, adding that we need to plan. If the plans are not acceptable, he said we could simply not adopt them. He disagreed with the contention of Ranzau and Peterjohn that this process causes the county to yield to any master plan developed by the federal government. He again mentioned that we are using our money to develop this plan, and asked our federal officeholders to stop spending money in this way.

    He added that he believes in limited government and fiscal responsibility, and that accessing these resources does not make him “hypocritical, insincere, or untruthful.”

    In rebuttal to Buchanan, Ranzau said that the grant funding document says that one of the goals is to reduce greenhouse gas emissions, which are believed by many to be a cause of global warming or climate change. The document does mention helping regions “consider the interdependent challenges of … energy use and climate change.” This language was transmitted to commissioners in a letter from Buchanan. Ranzau again said it is important not to downplay the agenda that is associated with the grant funds. In earlier remarks, Ranzau had described how applications would be scored or ranked, and that winning applications would need to conform to the goals of HUD.

    The commission voted to approve the grant, with Unruh, Norton, and Skelton voting in favor, and Ranzau and Peterjohn voting against.

    Commentary

    Discussions such as these, where the role of government and the nature of the proper relationship between the federal government and states, counties, and cities, are a regular feature at Sedgwick County Commission meetings, due to the concerns of Peterjohn and Ranzau. These discussion do not often take place at the Wichita City Council, unless initiated by citizens whose testify on matters.

    The remarks of chairman Unruh illustrated one of the important conundrums of our day. Many are opposed to the level of federal (and other government) spending. Polls indicate that more and more people are concerned about this issue. Yet, it is difficult to stop the spending.

    In particular, the grant process is thorny. The principled stand of Ranzau, and sometimes Peterjohn, is that we should simply refuse to participate in the spending — both federal and local — that grants imply, and in the process also accepting the strings attached to them. Others, Unruh and Skelton in particular, have what they believe is a pragmatic view, arguing that it is our money that paid for these grant programs, and so by participating in grants we are getting back some of the tax funds we send to Washington. This reasoning allows Unruh to profess belief in limited government and fiscal responsibility while at the same time participating in this spending.

    But there is no doubt that accepting federal money such as these grant funds means buying in to at least parts of the progressive Obama agenda, something that I think conservatives like Unruh and Skelton would not do on a stand-alone basis. This is an example of the power and temptation of what appears to be “free” federal money, and Ranzau and Peterjohn are correctly concerned and appropriately wary.

    It is even more troublesome to realize that this power over us is exercised using our own money, as Skelton and Unruh rightly recognize, but nonetheless go along.

    There may be a legislative solution someday. First, we can elect federal officials who will stop these programs. But the temptation to bring money back to the home district, either through grant programs or old-fashioned pork barrel spending, is overwhelming. Just this week U.S. Senator Jerry Moran, who voted against raising the debt ceiling in August, pledged to find more federal funds to pay for Wichita’s aquifer storage and recovery program.

    An example of legislation that may work is a bill recently introduced by U. S. Representative Mike Pompeo of Wichita and others. The bill is H. R. 2961: To amend the Patient Protection and Affordable Care Act to have Early Innovator grant funds returned by States apply towards deficit reduction. The purpose of the bill is to direct the early innovator grant funds that Kansas Governor Sam Brownback returned towards deficit reduction, rather than being spent somewhere else.

    The fiscal conservatives who vote to accept federal grant funds should be aware of research that indicates that these grants cause future tax increases. In my reporting on such a study I wrote: This is important because, in their words, “Federal grants often result in states creating new programs and hiring new employees, and when the federal funding for that specific purpose is discontinued, these new state programs must either be discontinued or financed through increases in state own source taxes.” … The authors caution: “Far from always being an unintended consequence, some federal grants are made with the intention that states will pick up funding the program in the future.”

    The conclusion to this research paper (Do Intergovernmental Grants Create Ratchets in State and Local Taxes?) states:

    Our results clearly demonstrate that grant funding to state and local governments results in higher own source revenue and taxes in the future to support the programs initiated with the federal grant monies. … Most importantly, our results suggest that the recent large increase in federal grants to state and local governments that has occurred as part of the American Recovery and Reinvestment Act (ARRA) will have significant future tax implications at the state and local level as these governments raise revenue to continue these newly funded programs into the future. Federal grants to state and local governments have risen from $461 billion in 2008 to $654 billion in 2010. Based on our estimates, future state taxes will rise by between 33 and 42 cents for every dollar in federal grants states received today, while local revenues will rise by between 23 and 46 cents for every dollar in federal (or state) grants received today. Using our estimates, this increase of $200 billion in federal grants will eventually result in roughly $80 billion in future state and local tax and own source revenue increases. This suggests the true cost of fiscal stimulus is underestimated when the costs of future state and local tax increases are overlooked.

    The situation in which we find ourselves was accurately described by economist Walter E. Williams in his recent visit to Wichita. As I reported: “The essence of our relationship with government is coercion,” Williams told the audience. This, he said, represents our major problem as a nation today: We’ve come to accept the idea of government taking from one to give to another. But the blame, Williams said, does not belong with politicians — “at least not very much.” Instead, he said that the blame lies with us, the people who elect them to office in order to get things for us. A candidate who said he would do only the things that the Constitution authorizes would not have much of a chance at being elected.

    The further problem is that if Kansans don’t elect officials who will bring federal dollars to Kansas, it doesn’t mean that Kansans will pay lower federal taxes. The money, taken from Kansans, will go to other states, leading to this conundrum: “That is, once legalized theft begins, it pays for everybody to participate.”

    We face a moral dilemma, then. Williams listed several great empires that declined for doing precisely what we’re doing: “Bread and circuses,” or big government spending.

  • Pompeo announces reelection bid

    In what he described as an informal setting before a small group of supporters on Tuesday, U. S. Representative Mike Pompeo announced his bid for reelection to represent the fourth district of Kansas. Kansas Governor Sam Brownback appeared beside Pompeo and offered his endorsement.

    In his endorsement, Brownback praised Pompeo’s work on sensible federal regulations and controlling federal spending. Brownback said the upcoming election is very important, with the budget and the economy being the most important issues.

    In his remarks, Pompeo said that top-down direction of the economy from Washington hasn’t worked, citing high unemployment numbers specifically. He said that the good ideas he’s seen have come from governors. The requirements of states to have balanced budgets — a constraint not in effect at the federal level — is a factor, he said.

    Pompeo said he’s been doing the things that he promised to do when he campaigned for office — working for small government and controlling regulation, mentioning the Environmental Protection Agency specifically.

    Pompeo has been critical of President Barack Obama for his criticism of corporate jet owners not paying their fair share of taxes. Asked if Obama is getting the message, Pompeo said no, the president’s not getting the message. “I don’t think this president understands that just his rhetoric alone is doing tremendous damage to the aviation industry and its suppliers.”

    On the tone in Washington, Pompeo said the dialogue in Washington has changed. In the past, he said the thought was: “Can we take this agency, and instead of growing it by eight percent, grow it by three. That talk is gone. It is now about does this agency have any usefulness? Is there a functionality that remains? Should we keep it, keep it at a smaller level, can we make it more efficient, or is it something that we ought to get rid of? We have truly changed the discourse. We are now talking, for the first time in a very long time, about the proper role of our federal government, and what Americans can afford.”

    He said this change in attitude was not just his own, but that the large incoming class of new conservative representatives elected last year has shifted the conversation in this way.

    Pompeo said it it is important for voters to elect people who are willing to be specific in their plans for shrinking government. Too often candidates run on a platform of smaller government, but won’t specify the methods they will use to cut government, he said, adding that changes in the role of the federal government will affect us all.

    On Governor Brownback returning the grant for the formation of a Kansas health insurance exchange, Pompeo said that he voted to overturn Obamacare in its entirety, so he’s not in favor of spending money to implement it. He also said he’d like to see the returned money used for deficit reduction, and that he has introduced legislation that would require this.

    Pompeo’s announcement was not unexpected — photos of organizational meetings for 2012 campaign volunteers have been spotted on Facebook and he’s been successful in fundraising — so the real news will be the announcement (or rumors) of opponents. The filing deadline is in June, with the primary election in August followed by the general election in November.

  • Kansas needs pro-growth policies

    A theme of Kansas Governor Sam Brownback when he spoke in Wichita this week was jobs and opportunities, and how Kansas needs pro-growth policies to break out of a slump.

    The governor spoke at the annual dinner of the Kansas Policy Institute. He said: “We cannot continue on this path and hope that we are going to move forward and win in the future. It won’t work. We have got to change course, and we’ve got to be aggressive about it, or we’re doomed to a slow decline, which we’ve had for some period of time.”

    Brownback said we need to move to a pro-growth tax policy, although he wasn’t ready to release details at the time.

    Looking at a few charts of job growth in Kansas, we can easily see the problem Brownback referred to. A chart of the number of private sector jobs in Kansas as compared to a few surrounding states over the past ten years shows Kansas at or near the bottom.

    Kansas private sector job growth compared to other statesKansas private sector job growth compared to other states. Data is indexed, with January 2001 equal to 1. Source: Bureau of Labor Statistics

    Looking at year-to-year job changes over since January 2010, we again see Kansas at or near the bottom.

    Kansas private sector job change, year-to-year, compared to other statesKansas private sector job change, year-to-year, compared to other states.

  • Kansas Governor Sam Brownback on wind energy

    Recently Kansas Governor Sam Brownback wrote an editorial praising the benefits of wind power. (Gov. Sam Brownback: Wind offers clean path to growth, September 11, 2011 Wichita Eagle) Brownback has also been supportive of another form of renewable energy, ethanol.

    But not everyone agrees with the governor’s rosy assessment of wind power. Paul Chesser of American Tradition Institute offers a rebuttal of Brownback’s article, which first appeared in a Bloomberg publication.

    Chesser writes: “Apparently Gov. Brownback has overlooked the horrid results of efforts in recent years to spur the economy and employment with government renewable energy ‘stimulation’ from taxpayer dollars. … The lessons of failure with government mandates in pursuit of a renewable energy economy are not hard to find.”

    Chesser goes on to describe ATI’s study which illustrates the negative economic consequences of renewsable energy standards, which Brownback has supported. The study is The Effects of Federal Renewable Portfolio Standard Legislation on the U.S. Economy.

    Following is Chesser’s response to Governor Brownback.

    Kansas Gov., Former Sen. Brownback Incorrect on Promise, Economics of Renewable Energy

    By Paul Chesser

    American Tradition Institute today called attention to the many fallacies in a column written by Kansas Gov. Sam Brownback and published yesterday in the Bloomberg Government newsletter (subscription required), in which the former U.S. Senator touted the “long-term benefits” and “job creation” ability of renewable energy, predominantly with wind power.

    Apparently Gov. Brownback has overlooked the horrid results of efforts in recent years to spur the economy and employment with government renewable energy “stimulation” from taxpayer dollars. He wrote for Bloomberg, “Experience has taught us that investments in the renewable energy economy is creating jobs across all employment sectors, including construction, engineering, operations, technology and professional services, in both rural and urban communities.”

    “Unlike most of his fellow Republicans, it sounds like the governor continues to support President Obama’s failed initiatives to create ‘Green jobs’ in a hopeless attempt to save the U.S. economy,” said Paul Chesser, executive director of American Tradition Institute.

    Continue reading at ATI Release: Kansas Gov., Former Sen. Brownback Incorrect on Promise, Economics of Renewable Energy.

  • Kansas and Wichita quick takes: Monday August 29, 2011

    Wichita City Council. The Wichita City Council will not meet this week, as Tuesday is the fifth Tuesday of the month. The council will not meet on September 6th, as that is a Tuesday after a Monday holiday.

    Government and business. Today’s Wichita Eagle carries a letter to the editor that makes a comparison that would be humorous, if so many people didn’t believe it: that government can be, and should be, run like a business. Here’s part of the letter: “But government isn’t like a family. It’s a business — a business that provides the services we need and want. Things like courts, the financial system, the military, national parks, interstate highways and all the other things that the government does to make our life what it is today. And each of these services has costs. To stay in business, all businesses must make a profit, or have the potential to turn a profit in the near future.” … Government is nothing like a business, however, and failing to recognize this is dangerous. First, customers patronize businesses voluntarily because they like what they get for their money. We don’t have this voluntary relationship with government — we must pay whether we want to or not, and regardless of whether we use the services government provides. Government often becomes the sole source provider of many things, meaning that we must use government, even if we would like to get the service somewhere else. Thus, government is not often subject to competition, which characterizes markets that business operates in. Then, government has no ability to calculate profit, as it conscripts its capital. Finally, just because government currently provides a service, it doesn’t follow that government should provide it, or that government is the only way to provide it, or that government is the best way to provide it.

    Developer welfare shop opened. From Wichita Business Journal: “The Wichita Downtown Development Corp. on Friday opened its new Innovation Center. Designed as a one-stop shop for developers interested in building downtown projects, the new center is expected to be a place where ideas are both created and shared.” Should Wichitans be worried about centralized government planning?

    ‘Kansans United’ formed. The Kansas City Star notes the formation of a new group named Kansans United in Voice and Spirit. According to the group’s website: “Kansans United in Voice & Spirit are concerned citizens throughout the state of Kansas who are uniting to support, advocate for, and protect valuable State services, programs, and policies and to promote government by and for all Kansans.” … Judging by posts on its Facebook page, the group is a reaction to the policies of Kansas Governor Sam Brownback, and is in favor of the glorification of government.

    Kansas education summit. On Thursday September 15th, Kansas Policy Institute is holding a summit on education in Kansas. In its announcement, KPI writes: “Kansas can expand educational opportunities for students in need — even in our current economic climate. Join a “Who’s Who” of the nation’s education reformers in a discussion on how Kansas can give every student an effective education. … Invited participants include Gov. Sam Brownback, the Kansas Department of Education, Kansas National Education Association, Kansas Association of School Boards, state legislators, and other public education stakeholders.” … KPI notes that we increased total aid to Kansas public schools by $1.2 billion between 2005 and 2011, that 25 percent of Kansas students are unable to read at grade level. The event will be held at the Holiday Inn & Suites, Overland Park West. The cost is $35, which includes breakfast and lunch for the all-day event. … RSVPs are requested. For more information, click on Kansas Policy Institute Education Summit.

    No Wichita Pachyderm this week. The Wichita Pachyderm Club will not meet this week. Upcoming speakers: On September 9, Mark Masterson, Director, Sedgwick County Department of Corrections, on the topic “Juvenile Justice System in Sedgwick County.” Following, from 2:00 pm to 3:00 pm, Pachyderm Club members and guests are invited to tour the Sedgwick County Juvenile Detention Center located at 700 South Hydraulic, Wichita, Kansas. … On September 16, Merrill Eisenhower Atwater, great grandson of President Dwight D. Eisenhower, will present a program with the topic to be determined. … On September 23, Dave Trabert, President of Kansas Policy Institute, speaking on the topic “Why Not Kansas: Getting every student an effective education.” … On September 30, U.S. Representative Mike Pompeo of Wichita on “An update from Washington.” … On October 7, John Locke — reincarnated through the miracle of modern technology — speaking on “Life, Liberty, and Property.” … On October 14, Sedgwick County Commission Members Richard Ranzau and James Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On October 21, N. Trip Shawver, Attorney/Mediator, on “The magic of mediation, its uses and benefits.”

    Myths of capitalism. In a short video, Dr. Jeffrey Miron explains three common myths of capitalism. The first, and one we struggle with in Wichita as our city and state seek to be business-friendly, is the common perception that business and capitalism are one and the same. Miron says: “Nothing could be farther from the truth. The point of capitalism is to make sure that businesses have to compete vigorously against each other, and that benefits consumers. It’s not good for the businesses per se, because they have to work really hard. So many businesses understand this, and they hate capitalism. They are constantly trying to get government to erect various rules, restrictions, and regulations that help them, but they’re not in the interests of consumers.” … Miron also addresses the issue of income distribution, noting that capitalism rewards those who are productive and who come up with good ideas. Some people have very little skill, he notes, and so it is reasonable to support some antipoverty spending. But hampering capitalism to achieve this goal makes everyone worse off. … Also, capitalism is not responsible for the recent financial crisis. We didn’t have unbridled capitalism before the crisis, he says, and it is much more likely that government interference with capitalism causes crises like in 2008. TARP and other bailouts shielded risk-takers from paying the true price for the risk they undertook, and encourages people to take other risks, knowing they will not have to pay. … This video is from LearnLiberty.org, a project of Institute for Humane Studies, and many other informative videos are available.

  • Kansas and Wichita quick takes: Tuesday August 16, 2011

    Future of Kansas insurance exchange. “TOPEKA — A federal appeals court ruling in Georgia that overturned a portion of the nation’s latest health insurance law Friday did little to end confusion over how to follow that law in Kansas. A three-judge panel of the 11th U.S. Circuit Court of Appeals ruled that the Patient Protection and Affordable Care Act, which requires all Americans to carry health insurance or face penalties, is unconstitutional. The Court ruled that Congress exceeded its constitutional powers by requiring people to buy health insurance when they choose not to do so.” At issue is whether the state should continue to spend money and work on infrastructure to support Obamacare, when it appears increasingly likely that the law will be ruled unconstitutional. Gene Meyer reports in Kansas Reporter.

    Concern over Wichita spending. At today’s city council meeting the council considered whether to pay travel expenses for Wichita Mayor Carl Brewer to attend a sister cities exchange meeting in Mexico. The mayor announced that he would be paying his own airfare, that the hotel and meals would be paid for by the host city, so the only expense would be for his luggage and perhaps some incidental meals. Council Member Pete Meitzner (district 2, east Wichita) said that if the city sends representatives on worthwhile missions, the city should pay all travel expenses. Vice Mayor Lavonta Williams (district 1, northeast and east Wichita) disagreed, noting that just last week she traveled to Texas on city business, and she paid for her own airfare. The mayor remarked that “primarily what we’re doing is we’re paying to perform the job we’re assigned to do,” and that previous commitments had been made that obligate the current council to follow through. … The next item was to pay for travel for other persons to attend the conference. The agenda packet for today’s meeting contained no information on these two items, certainly not the amounts of money involved or the persons to travel. … The council’s concern over spending on items like the mayor’s airfare is welcome, but this spending is small relative to the many areas in which the city could trim spending.

    Kansas governor praises wind power. Today Kansas Governor Sam Brownback promoted investment in wind energy. In a press release he said “I want Kansas to be known as the ‘Renewable State.’ To get there, we have to balance the three E’s: Energy, Economy and the Environment. My first priority as Governor is to grow the Kansas economy, and getting wind power to market is a key component accomplishing that.” Contrary to the governor’s rosy picture, Lisa Linowes details the long string of failures of the wind power industry, including the fact that wind power is becoming more expensive, despite its massive federal subsidy. It is unknown why Brownback — who generally supports free markets — supports wind power and the government intervention necessary to prop up the industry. The same can be said for his support of ethanol, which is rapidly losing support for its three forms of government intervention that support it: a subsidy for its producers, a mandate to use it, and a tariff to protect domestic producers from foreign competition.

    Corporate taxes. Mitt Romney made it an issue. David Henderson comments: “No, I’m making the simple point that a tax on corporations is a tax on people. I remember that in addressing the issue in the 1980s, the late Herb Stein said that it’s as if people think that if the government imposed a tax on cows, the tax would be paid by the cows.” In a video, Milton Friedman explained that “There’s no business to be taxed. There are people. Only people can pay taxes. … When you talk about a tax on business, it has to be paid by somebody. Either it’s paid by the stockholder, or it’s paid by the customer, or it’s paid by the worker. There’s no other way it can come from.” He also addressed the fiction that the Social Security tax is paid equally by employers and workers.

    How the racism charge is used. The Capital Research Center has published a piece that illustrates how the political left tosses around a charge that no one wants to be accused of: racism. In an email the Center says: “Author Kevin Mooney examines a little-known group called Color of Change, which alleges that conservatives in the media are racists. Targeting figures like TV talk show host Glenn Beck and Fox News CEO Rupert Murdoch, Color of Change enjoys the praise of prominent left-of-center groups like Media Matters and MoveOn.org. Mooney says the Left admires Color of Change because it has learned how to use the incendiary charge of racism to stifle conservatives’ free speech.” … The report itself says: “The intense anti-Fox animus is not new, but this time conservatives have good cause to be concerned about one aspect of the new campaign against Fox. That campaign aims to exploit the most incendiary of tactics — the issue of race — to dislodge conservatives from prominent media posts. … Despite much evidence that contemporary America has moved beyond the tragic legacy of slavery and segregation, the Left remains eager to accuse its opponents of racism.” … It will come as no surprise that George Soros is a financier of this organization. The compete report is The Left Wing Targets Conservative Media.