Voice For Liberty

Tag: Wichita city government

  • Wichita Center City South Redevelopment TIF District Testimony

    From John Todd.

    Update: Watch John’s testimony on YouTube here.

    Testimony delivered by John Todd before the Wichita City Council on December 2, 2008 in opposition to the proposed Tax Increment Financing (TIF) plan for the Center city South Redevelopment District located generally around the new Intrust Bank Arena.

    In 2004, proponents of the new Intrust Arena were assuring voters that their approval of the new arena would provide the “economic boost” and the “synergy” needed for effective downtown redevelopment without the need for increased property taxes. No mention was made at that time of the need for additional taxpayer subsidies for downtown development.

    In recent testimony before the City Council, I heard a staff member advise the Mayor and this City Council that county property appraisals in the area adjacent to the new Intrust Area had increased more than 10% in the prior year. Does this proposed TIF District sound like a blighted and declining area headed for economic stagnation? Or is it time for private developers to seize this development opportunity our Mayor envisions, and of course without the need for risking the taxpayer’s wallet that is a common element in private/public partnerships?

    Since the parcels of land around the new Intrust Arena appear to be owned by dozens of small private property and business owners, private developers will need to assemble the parcel(s) they need for development through voluntary exchange rather than through government’s involuntary and coercive taking of property by either the threat of eminent domain or the actual use of eminent domain. Street improvements, if needed for the project(s), should be paid for by the private developers or through the use of special assessment financing. Can anyone believe that city and/or county planners failed to plan for the street improvements needed for the new arena and a method of paying for them prior to beginning construction of the arena? (Note: In addition to the nearly $12 million TIF proposal for streets, a last minute change added an additional $10 million the TIF for a parking garage.) Also, I believe the original Arena project the voters approved in 2004 included $14 million dollars for a parking garage.

    One doesn’t have to look very far around our city to see and appreciate the success of our many risk-taking private developers who through their knowledge of the market and their problem solving abilities, plus most importantly the investment of their own money, continue to expand our tax base, create jobs, and enhance our quality of life. Perhaps these are the people you need to call on to bid on downtown development work without the need for a massive public subsidy?

  • Late Changes Don’t Inspire Confidence in Wichita Government

    At today’s Wichita City Council meeting, Councilmember Jim Skelton revealed that the plan for the downtown Wichita arena TIF district had changed. A provision for up to $10 million in parking was added.

    I had looked at the agenda report less than 24 hours before the start of the meeting. The plan for parking spending was not mentioned. I looked right now, and yes, it’s there.

    There’s a problem when things change so quickly. Citizens can’t prepare themselves on such short notice. That’s a problem for openness and transparency in government.

    This problem is in addition to the apparent uncertainty as to what’s needed for this TIF district to succeed.

    The TIF district passed, with all city council members voting in favor.

  • Downtown Wichita Arena TIF District Still a Bad Idea

    Say no to expansion of the Center City South Redevelopment tax increment financing (TIF) District.

    Remarks to be delivered at the December 2, 2008 meeting of the Wichita City Council. Watch the video here.

    Mr. Mayor, Members of the Council:

    It is the case the the City of Wichita is proposing to limit this TIF district spending to things like streets, intersections, landscaping, and lighting. But these are still things that developers working outside of TIF districts generally have to pay for themselves.

    This is the real function of TIF districts: TIF developers get to use their own property taxes to pay for things that non-TIF developers have to pay for out-of-pocket, or through special tax assessments on top of their regular property taxes. This is accomplished through a confusing arrangement that hides the reality and size of the subsidy given to TIF developers. I’ve come to realize that this confusion serves a useful purpose to this council, because if the people of Wichita knew what was really happening, they’d be outraged.

    The proposed TIF district, while smaller than previously proposed, is still large. Very large. Has anyone calculated what share of the retail and restaurant trade in Wichita would have to be captured by this district in order for it to be successful?

    Has anyone performed a market study to see if obtaining this market share would be feasible? And if feasible, what effect would this have on existing business and development in Wichita? Specifically, what effect would this have on other development in downtown, such as Old Town and Waterwalk? We’ve seen that when city-subsidized business is in financial trouble, this council is willing to fund a bailout.

    We’re at a point, Mr. Mayor, where entrepreneurs may not be willing to work in Wichita without a taxpayer subsidy, or at least not in competition with subsidized development. I am aware of a commercial development in Wichita that has been canceled because of Wichita’s tax environment. Some developers have told me that they are reconsidering whether to do any more business in Wichita simply because of our property tax environment. This situation has recently worsened, as we voted ourselves a large tax increase last month. At the state level, spending cuts or tax increases loom as the state’s budget situation deteriorates.

    Then, consider reporting in the Wichita Eagle this summer, which found this: “City and county tax records show that nearly $159 million in public money has been spent on Wichita’s tax increment financing districts, to get roughly $150 million worth of new development.” That’s not a good deal for city taxpayers.

    Also, evidence of the effectiveness of TIF districts for cities as a whole is not good. A study from the Institute of Government and Public Affairs at the University of Illinois finds that “cities, towns, and villages that had TIF districts actually grew more slowly than municipalities that did not use TIF.”

    Finally, Mr. Mayor, you’ve referred to some people as the “naysayers.” I don’t know if you were talking about me. It would be presumptuous of me to think so. But I don’t say “nay” to development, even to downtown development. What I say “no” to is taxpayer-subsidized development, planned and managed by government.

    Saying “no” to that, in turn, lets us say “yes” to the rich diversity of human individuality instead of a collectivist vision driven by government bureaucracy. It means saying “yes” to free people cooperating voluntarily through free markets. That is what is disappearing as more and more of our city’s development is subsidized and managed by government.

  • Wichita Chamber of Commerce values

    Here’s a message that Bryan Derreberry, president of the Wichita Metro Chamber of Commerce, sent to Chamber members. Note that this message doesn’t mention the role its political action committee played in the third Sedgwick County Commission district. In that race, the PAC spent some $19,000 of its $48,000 in an effort to elect Goddard mayor Marcey Gregory. Her opponent, longtime taxpayer advocate Karl Peterjohn, is just the type of candidate you’d expect chambers of commerce to support.

    But that’s changed. Stephen Moore in the article “Tax Chambers” published in The Wall Street Journal on February 10, 2007 wrote this: “In as many as half the states, state taxpayer organizations, free market think tanks and small business leaders now complain bitterly that, on a wide range of issues, chambers of commerce deploy their financial resources and lobbying clout to expand the taxing, spending and regulatory authorities of government. This behavior, they note, erodes the very pro-growth climate necessary for businesses — at least those not connected at the hip with government — to prosper.”

    Mr. Derreberry’s letter mentions “pro-business values.” At one time this meant something approaching free-market values. But now, Ronald Reagan’s prediction is being fulfilled here in Wichita: “What is euphemistically called government-corporate ‘partnership’ is just government coercion, political favoritism, collectivist industrial policy, and old-fashioned federal boondoggles nicely wrapped up in a bright-colored ribbon. It doesn’t work.”

    November 18, 2008
    Dear Chamber Members:

    This election cycle was a resounding success for the candidates supported by the Wichita Area Business Political Action Committee (WABPAC) as we raised more than $48,000 to support pro-business state and local candidates. The Chamber’s political action committee identified and supported 39 state legislative candidates and three Sedgwick County Commissioner candidates winning 36 of the 39 races in which WABPAC was involved (93% elected).

    The litmus test for the PAC’s engagement and support was whether a candidate had demonstrated an ability to listen and work with the business community to assure that your company, or organization, had the most competitive environment possible in which to excel. WABPAC’s Board of Trustees wants to thank every Chamber member who reviewed the PAC’s support recommendations and voted accordingly. The reason behind this appreciation is that the Chamber’s collective voice has its greatest impact when business members engage themselves in the election process and elect candidates who embrace pro-business values and understand the challenges you face daily.

    A strong, collective pro-business vote is also an outstanding way to support incumbent state legislators and local elected officials who have successfully advanced our region’s top priorities. Bottom line – we need to effectively support the business-attuned elected officials who support us. Our South Central Kansas state legislative delegation has been an adept and courageous partner in advancing our metro area’s top policy and program goals. Your combined voice, in supporting the PAC and re-electing a majority of this delegation, assures the return of legislators to Topeka willing to champion our most important business priorities.

    Respectfully,
    Bryan Derreberry

  • No Kansas subsidy to Northern Flyer

    When it comes to government money, there’s no shortage of people who have ideas on how to spend it. One group that has grand ideas of how government should spend your money is the Northern Flyer Alliance. This group promotes passenger train service in our area. Currently they’re promoting extension of rail service from Oklahoma City to Wichita.

    The problem with this group, as alluded to above, is that they seek to accomplish their goal by using government. As reported in the Wichita Eagle (Group seeks support for train service through Wichita), “The director of a group seeking expanded passenger rail service through Wichita today asked City Council members to pass a resolution urging the state to include in its upcoming transportation plan a new Amtrak line stretching from Oklahoma City to Wichita and on to Kansas City.”

    So this group is asking Wichita (and many other towns and cities) to apply pressure to the State of Kansas to subsidize this rail line. This group is another example of political entrepreneurship in action. Instead of practicing market entrepreneurship — that’s where you develop and deliver services and products that people actually want enough to pay for — this group seeks to accomplish its goals by influencing politicians and bureaucrats. They were successful in Oklahoma.

    If we want passenger train service that is truly successful, this group should work to raise private capital rather than seeking government subsidy. This is the only way we’ll know whether this train service is something that truly adds value, or whether it is just another “amenity” the government provides by taxing one person to subsidize someone else.

  • Bailouts National and Local

    A post at the Wichita Eagle Editorial blog titled Either way, taxpayers will pay for failing GM illustrates how when government and business become highly intertwined, a self-sustaining behemoth is created that can’t be slain.

    We say an example of this locally this year in Wichita, when a taxpayer subsidy to a development turned out to be underperforming. The solution? Pump more taxpayer money into a failing project. See Wichita and the Old Town Warren Theater Loan.

  • Problems with Wichita’s Economic Forecasts

    On October 7, 2008, the Center for Economic Development and Business Research at Wichita State University released a glowing economic forecast for the near future in Wichita. Events immediately following the release of this report, however, illustrate just how hard it is to forecast economic conditions. When policymakers rely on these reports, bad decisions are the fully predictable result.

    The report Wichita’s Economic Outlook: 2008 Review and 2009 Forecast, says “Next year will bring continued job growth in the Wichita market, despite the national economic downturn,” according to reporting in the Wichita Business Journal. But recent articles in the Wichita Eagle with titles such as Cessna warily eyes economy and Hawker Beechcraft plans to lay off 500 paint a different picture.

    It’s hard to forecast the economy, and events the past few months have unfolded at an alarmingly fast pace. But the Center for Economic Development and Business Research has produced other research that is problematic. I’ve written about these reports in posts such as Wichita School District Economic Impact and Stretching Figures Strains Credibility.

    Incredibly, as I report in WSU Study on Downtown Wichita Arena Not Complete, the former director of this center was not aware of important new government accounting standards when she and her staff prepared the forecasts that were used to justify the downtown Wichita arena in 2004.

    The problem is that Wichita and Sedgwick County policymakers use these studies to plan and justify their actions in intervening with our economy. As a result, we often proceed with plans based on unreliable information.

  • What? Wichita’s Air Service Subsidy Isn’t Working?

    Recently a travel and tourism expert visited Wichita and said (and I hesitate to repeat his exact words on this family-oriented blog) “Your air service sucks.”

    (See Tourism expert has frank tips for Kansas.)

    I’m more than a little distressed to hear that. Right now we spend $6.5 million per year in subsidy to low-cost airlines in order to reduce airfares and improve service to and from Wichita. Is this subsidy not working?

  • Wichita Mayor Carl Brewer’s Reformulated TIF Plan Still a Bad Idea

    Today the Wichita City Council holds a special meeting to consider a reformulated plan to provide tax increment financing (TIF) for the area surrounding the downtown Wichita arena. It’s still a bad idea.

    It appears there are two major changes in the new plan. First, the TIF district is smaller. Second, spending on the district would be 70 percent of the new property taxes — the “increment” — instead of 100 percent.

    Why is this plan a bad idea? Why, you may be asking, aren’t I in favor of development and progress in downtown?

    To me, there’s a difference between entrepreneurs working in markets and government centralized planning. That’s one of the reasons why I oppose this TIF district. It represents government making plans for us, rather than people deciding themselves what they want. It’s the difference between political entrepreneurs — who work to please elected officials — and market entrepreneurs — who work to please customers.

    If it turns out that when people express their preferences freely that they don’t really want much downtown development, that’s okay with me. I, for one, do not feel that I have the superior knowledge needed to tell people where they should go for fun and entertainment. I’d rather let people decide themselves.

    I’m not willing to use the blunt tool of government to direct people and their money to where I think it should go. I wouldn’t do that even if I was convinced I was right.

    But there are people in Wichita who don’t share my view of free people trading freely in free markets. Mayor Carl Brewer and several city council members — Sharon Fearey and Lavonta Williams being most prominent among them — and quasi-governmental organizations such as the Wichita Downtown Development Corporation feel differently. They feel that they know better than Wichitans do where development should be happening, and they’re willing to use the tools of government to force their vision upon you.

    This is what’s happening at this time. This is why Wichitans need to oppose this TIF district.

    Other article about TIF districts in Wichita: Do Wichita TIF Districts Create Value?, Downtown Wichita Arena TIF District, Wichita City Council’s Misunderstanding of Tax Increment Financing, Tax Increment Financing in Wichita Benefits Few, Tiff over Wichita TIFs, and Wichita City Manager’s Warning is Too Late.