Voice For Liberty

Tag: Wichita Eagle opinion watch

  • Kansas taxes and spending debated

    Should Kansas increase taxes or control spending in order to balance its budget? On the editorial page of the Wichita Eagle yesterday, three editorials discussed the Kansas budget, taxes, and spending.

    Rhonda Holman’s editorial featured Kansas Governor Mark Parkinson and his claims that the temporary one-cent sales tax used to fund the Intrust Bank Arena in downtown Wichita wasn’t noticed, and therefore didn’t harm the economy. The governor’s reasoning is incorrect, as taxes do indeed harm the economy.

    When it was proposed in Wichita in 2002 to have a sales tax increase of one-half cent per dollar to build an arena, Wichita car dealers claimed that it would place them at a competitive disadvantage. So people and business do notice the effect of sales taxes.

    While the geography is different — the proposed Wichita sales tax was to be only for one city, while the governor’s sales tax is for the entire state — the principle is the same: Higher taxes in Kansas will place our state at a competitive disadvantage.

    This editorial also mentions “painful cuts to education” that have been made. More about that in a moment.

    A second editorial was written by Bernie Koch, who is Executive Director of the Kansas Economic Progress Council. He takes the position that we can’t make additional cuts, concluding that “To simply rely on cuts will damage the institutions and systems needed to survive the Great Recession and pursue economic recovery.”

    Referring to a SurveyUSA poll from last month, Koch wrote: “86 percent [of Kansans] said they were somewhat or very concerned about cuts to education.”

    The problem with this poll is that the people of Kansas are very uninformed about school spending and cuts. First, there are plenty of cuts to be made, cuts that don’t affect the classroom. Recently the Wichita school district was able to find $2.5 million annual savings by adjusting transportation schedules at a small number of schools. Now that district is looking at savings that can be had in administration.

    So when the Eagle editorial board and the governor claim that “painful cuts” have been made to schools, were those painful cuts made before transportation schedules were adjusted? Kansans should ask where these priorities are set.

    Second, Kansans are simply uninformed — perhaps deliberately misinformed — about the level of school spending, as a poll conducted by the Kansas Policy Institute found. This poll, released last week, found that “fewer than one Kansan in 10 has a clear idea how much money schools actually receive — or spend — to educate elementary, middle and high school students across the state.”

    Further, when informed about the true level of spending and the increase over the past five years, 81 percent of Kansans oppose tax increases for school spending. Only 11 percent were willing to pay increased taxes.

    The third editorial was written by Kent Beisner, who is interim president and CEO of the Kansas Chamber of Commerce.

    Beisner accurately diagnoses the cause of the problem: “The governor and his allies in the Legislature actually have the audacity to claim that recent tax cuts are to blame for the state’s budget deficit. But when the Legislature cut taxes earlier this decade, revenues to the state skyrocketed. The problem occurred when the state showed zero fiscal restraint and committed to spending more than it was taking in, erasing more than a $950 million budget surplus in just two years. Kansas most definitely does not have a tax-cutting or revenue problem.”

    The way to get out of this problem is to control spending so that taxes don’t have to be raised. A low-tax environment is the best tool Kansas can use to attract and keep business, Beisner added: “If the Legislature adopts what will amount to the largest tax increase in the state’s history, states more competitive than Kansas will no doubt take advantage of our resulting anti-growth climate and lure our employers and workers out of the state.”

  • Wichita schools, despite claims, find cost savings

    Despite claims that school spending has been “cut to the bone,” USD 259, the Wichita public school district, found a way to save $2.5 million per year by adjusting school starting times, thereby saving on transportation costs.

    School spending advocates have claimed that it is not possible to cut spending without affecting students. It starts at the top with Kansas Governor Mark Parkinson’s repeated claims that spending has been “cut to the bone.” He says it’s not possible to make more cuts.

    Other school spending advocates repeat this theme of having cut as much as possible, repeating the “bone” theme. An issue of the Kansas National Education Association newsletter Under the Dome for March 30, 2009 claims that spending has “already been cut to the bone.”

    Kansas Board of Education Chair Janet Waugh said “Districts have already cut to the bone,” according to a Kansas Reporter article.

    Last year Representative Jim Ward, a Wichita Democrat, former Wichita school board member, and Assistant Minority Leader of the Kansas House of Representatives, stated in a KAKE Television news story “If you cut $10 million, you’re now cutting into the bone, the marrow, and you’re going to have a significant impact on the ability to deliver education.”

    The Wichita Eagle editorial board has said several times that cuts to Wichita school spending will hurt students. Referring to the possible need to cut $25 million from the Wichita school budget, Philip Brownlee in March wrote “Cutting that much money — or even a third as much — could cause great harm.”

    Despite these claims, by adjusting school starting times and transportation schedules, the Wichita school system was able to save a great deal of money without impacting the classroom. The $2.5 million savings just discovered by the Wichita school district is 30% of the “one-third of $25 million” that Brownlee says cutting would cause great harm. It represents 25% of the amount that Ward claimed would have a significant impact.

    We should now ask these questions:

    First, are there other cuts like this that can be made? It seems unlikely that this change is the only cost savings the Wichita school district — and other districts — can find.

    Second, the Wichita school district did not participate in a voluntary school audit program. What other costs savings might have been found if Wichita had participated?

    Third, why wasn’t this savings discovered and implemented in past years? Does it take a budget crisis to force public schools to seek ways in which to operate more efficiently?

    Finally, private sector businesses face the never-ending discipline of market competition and seek ways to operate more efficiently even in good times. Government institutions such as public schools, however, don’t face this discipline. Should Kansas find a way to introduce market discipline to our state’s schools?

  • Regulation has not lessened, instead it has harmed us

    Last week’s Wichita Eagle featured an op-ed by Brad Beachy, who is co-chairman of Wichita Democracy for America. Several of the claims made by Beachy deserve examination. In particular, Beachy blames free markets as the cause of our current economic problems: “The Great Recession we’re in now started in late 2007, after several years of deep tax cuts and major repeals of government regulation in the financial market.”

    Let’s look at regulation. Not everyone agrees with Beachy’s claim of major repeals of regulation in recent years. The liberal Time Magazine wrote this assessment of George W. Bush’s regulatory legacy about a year ago:

    The only major piece of regulatory legislation enacted during the Bush years was the Sarbanes-Oxley Act, which dramatically increased regulation of corporate financial disclosures. The really big regulatory changes being pointed to now as possible culprits for the crisis date back to Bush’s predecessors: Bill Clinton, Ronald Reagan, even Jimmy Carter and Gerald Ford. So the popular Democratic refrain that “Bush-era deregulation” is to blame for our troubles is a little hard to square with the evidence. What is true is that most Bush-era financial regulators were less than enthusiastic about the very act of regulating, and that Bush’s “ownership society” push glossed over a lot of potential dangers. Bush didn’t cause the financial regulatory breakdown, but he didn’t jump in to fix it either.

    The housing crisis played a large, perhaps dominant role in the current recession. So let’s look at what were the causes of that to see if deregulation played a role.

    Last October John A. Allison, chairman and former CEO of BB&T Corporation, the nation’s 10th largest financial-holding company, presented a lecture at the 30th annual Economic Outlook Conference at Century II, produced by the Center for Economic Development and Business Research (CEDBR) at Wichita State University. His lecture, titled “The Financial Crisis: Causes and Possible Cures” provided valuable insight into the causes of the problem we’re in.

    Allison said “Only government can make a mistake of this magnitude possible.” Government and its regulators, in this case the Federal Reserve System, the Federal Deposit Insurance Corporation, the housing policymakers Freddie Mac and Fannie Mae, and the Securities and Exchange Commission, were the proximate cause of the problem, and prevented natural market corrective forces to work.

    At the Federal Reserve, management of our nations’ money supply is a problem. “The huge level of federal debt we have today would not be practical if the government did not own the monetary system,” Allison said.

    FDIC insurance of bank deposits leads people to invest in banks without regard to the risk the banks take. It also made the “pick-a-payment” mortgage possible, where each month a homeowner may owe more than the month before.

    Freddie Mac and Fannie Mae exist to promote housing ownership, and they promoted it far above the natural rate of home ownership. Their actions also made the subprime mortgage possible.

    The credit rating agencies sanctioned by the SEC — S&P, Moody’s, and Fitch — are given a monopoly over the issuance of ratings, and they failed in their duty.

    Before the innovations of Freddie Mac and Fannie Mae, savings and loan banks would originate mortgages locally and then hold them locally. Now, the model is “originate and sell,” Allison said. These government regulations made the mortgage broker origination model viable, and led to huge profits, until the bubble burst.

    So when Beachy asks “Why does the unseen hand of the marketplace, in its infinite wisdom, give million-dollar bonuses to the CEOs of mortgage institutions who drive their companies into bankruptcy” we have to answer it’s not the marketplace that did this. It was government policy and regulation, developed over the last few decades, that led to this situation. Our financial system operates in nothing resembling a free market environment.

    By the way, Beachy starts his op-ed questioning the motives of those he criticizes, in this case the Americans For Prosperity Foundation: “Billionaire David H. Koch presides on the foundation’s board of directors and has funded the organization with millions of dollars.” If motives are reason for criticism, we ought to note that Beachy — an employee at a government-owned and run institution — has a self-interest in keeping the government spending gravy train flowing.

  • Kansas fund balances disputed despite evidence of their existence, benefit

    A Wichita Eagle op-ed by Kansas State School Board Member David Dennis (Fund balances won’t save schools) and another by Rhonda Holman dispute evidence that Kansas can make it through the current financial situation by making use of large fund balances in state agency accounts.

    In his op-ed, Dennis writes that while he doesn’t disagree that Kansas schools have $700 million in funds excluding capital and bond payments, he writes “That fact by itself is very misleading. Each account must be analyzed separately.” He then proceeds to list some of these funds, their balances as of July 1, and what the fund is used for.

    This recitation, however, doesn’t qualify as “analysis.” An analysis would look at the change in fund balances over the course of a budget year, and the trend of the balances over years. Dennis doesn’t do any of this. Of course, that type of material doesn’t make it into most newspapers.

    Evidence gathered by the Kansas Policy Institute has found that statewide, these fund balances have grown by 53 percent over the last four years. For the Wichita school district, these balances have grown from $74 million to $94 million over the last four years. These funds grow when more money is added to them than is spent — strong evidence that schools have been receiving more money than they have needed.

    So we have a member of the school spending lobby disputing the availability of these funds and calling for more tax revenue to be spent on schools. Not much new here.

    What’s more disturbing is Wichita Eagle editorial writer Rhonda Holman’s recent editorial (Work together to solve budget crisis). It doesn’t come right out and say that the idea of using fund balances to make it through a tight spot is bogus. Instead, Holman shades her claims, using phrases like “If that were true” and “But a very different — and more realistic — scenario faces Parkinson and returning legislators.”

    This is after slamming the think tank that found these balances and promotes their use as “conservative.” (Believe me, that was meant as an insult.)

    It’s neither conservative nor liberal to look at facts.

    But the fact that these fund balances are available — and the fact that they’ve been growing in recent years — isn’t comfortable for big-taxing and big-spending liberals in Kansas. First, the growing balances mean that these funds have been stocked with more money than has been necessary.

    Second, for agencies to draw down these fund balances means that they’re going to have to be more careful in managing their finances and accounts. It’s easier to operate with large fund balances, no doubt, but many Kansans right now are operating on tight household budgets. We should expect government to do the same.

    Then, if we find that Kansas can make it through this tight spot without tax increases, that deprives Kansas government spenders of future tax revenue. After all, if new taxes are implemented now, they’ll probably be around after the economy recovers, providing even more tax revenue for Kansas government to spend.

    Tough economic times ought to provide an incentive to look for ways that government can become more efficient. But hardly anyone in Kansas government is looking for savings. In the case of Kansas schools, planned performance audits were canceled last year because school administers were too busy working on budget cuts. School districts could voluntarily participate in the audit — Derby did — but the Wichita school district didn’t participate.

  • Lutz, Hanson, Fahnestock owe Wichita an apology

    In the campaign for the sales tax to build the downtown Wichita arena (Intrust Bank Arena), the idea of hosting NCAA men’s basketball games was promoted as something that would happen if voters approved the arena.

    This week we learned that for this event, our arena has been rejected for the next three years.

    Three arena boosters in particular — Bob Hanson of the Greater Wichita Area Sports Commission, businessman George Fahnestock, and Wichita Eagle sports columnist Bob Lutz — owe Wichita and Sedgwick County voters an apology.

    As it turns out, Lutz was quite the visionary in a June 18, 2004 Wichita Eagle column, in which he wrote: “Imagine our city bidding for an NCAA Tournament subregional or the Big 12 Tournament.”

    We don’t have to imagine anymore.

  • To sway opinion, basic facts must be correct

    A Vince Corbett of Wichita makes the case for riding an electric bicycle to work instead of driving a car. (“Biking saves,” August 30, 2009 Wichita Eagle) Unfortunately, the letter contains a mistaken fact and an unreasonable assumption.

    To make his case, he outlines a commuting trip that someone might make: ” … from 29th Street North and Woodlawn to Douglas and Main to work and to return — a distance of about 32 miles …”

    Google maps reports the one-way distance between these two intersections as 7.7 miles. Bing maps found a shorter route at 7.2 miles. Mr. Corbett’s one-way distance of 16 miles is over twice as large as these two numbers. Taking the freeway route is longer at 10.3 miles (according to Bing) but still not anywhere near Corbett’s one-way distance of 16 miles.

    Corbett then makes a claim that driving these 32 miles requires three gallons of gasoline, implying a car that gets 10.7 miles per gallon. (I don’t know if we should interpret this as city or highway driving.)

    But according to the EPA, a mid-size car like a Chevrolet Malibu gets 22 mpg in the city. A large car like a Buick Lucerne gets 17 mpg. Even a large SUV like a Chevrolet Suburban gets 14 mpg, still quite a bit above Corbett’s illustration.

    (A Toyota Prius gets 48 mpg in the city, 4.5 times the figure used by Corbett.)

    Letters to the editor of a newspaper are a place for people to express their opinions and attempt to sway public opinion. These letters, however, need to be based on facts that are correct and assumptions that are reasonable. Newspapers do their readers a disservice when letters are not fact-checked in even a very basic way. This letter is such a case.

  • Wichita Eagle reporting, headlining discussed by commissioners

    In today’s meeting of the Sedgwick County Commission, Wichita Eagle reporting and editorializing was the subject of an off-agenda item.

    Commissioner Gwen Welshimer used this opportunity to read into the record part of a press release she issued yesterday. The entire press release, as well as video, is at the end of this article.

    Commissioner and Chairman Kelly Parks mentioned that he has been disturbed with some headlines in the Wichita Eagle recently, and that the media has “not checked out some of the headlines they’ve put out.”

    Commissioner Karl Peterjohn shared his concerns with misleading Wichita Eagle headlines, referring to a headline that appeared after the county approved its budget, as covered in my post Wichita Child Advocacy Center still in business, despite headline.

    I spoke to Wichita Eagle reporter Bill Wilson, and he had no comment other than his reporting speaks for itself.

    It should be noted that reporters generally don’t write the headlines for their stories.

    Regarding this matter, it may be that the parties are quarreling over relatively minor details of events and the meaning of words.

    For example, Welshimer’s press release states “Reporter Bill Wilson’s latest article stated that the City of Wichita knew nothing about the County’s plans.” The article referred to (“County scouting locations for site to ease jail crowding” August 20, 2009 Wichita Eagle) states, in part: “The county’s search is unwelcome news to city officials …” (emphasis added)

    Editorialist Rhonda Holman‘s August 21 piece repeats this idea: “It reportedly was news to city officials and downtown leaders that county commissioners were discussing the possibility of locating such a facility and hadn’t ruled out the core.” (emphasis added)

    Does this all boil down to what the meaning of “news” is? Does “unwelcome news” mean that someone has never heard of an item before, or does it mean “Yes, I am aware of this item, and I don’t like it?”

    Following is the full text of the press release issued by Gwen Welshimer on August 25, 2009.

    Either the Wichita Eagle knew they were putting out false information on their jail annex stories or they didn’t know for sure and printed their stories recklessly. Their August 20, 21, and 23 articles and editorial, claiming the County Commission had been reviewing properties in Downtown Wichita for a jail annex, were not true. The Eagle’s actions caused considerable concern for Downtown business owners. No commissioner has looked at any Downtown buildings with any real estate agent for the purpose of housing detainees. A retraction and an apology are due to the county from the Eagle.

    The Eagle reporter who wrote the stories quoted me erroneously and had not interviewed me. Eagle editorialist, Rhonda Holman committed an egregious act with her August 21 editorial in which she scolded the commission for having the intent to put jail detainees Downtown. Reporter Deb Gruver showed a lack of professionalism by her participation in this deed.

    Reporter Bill Wilson’s latest article stated that the City of Wichita knew nothing about the County’s plans. That was also not true. On July 29, the Wichita Mayor, Vice Mayor, and Sedgwick County Commission Chairman and I met at City Hall. The topic of conversation was that the County’s prison farm on McLean and Harry would need to be replaced in the future. This facility is currently being used to house work release detainees who go to their jobs and return there for the duration of their sentence. The Mayor said he would see if the City had a building that could be used for this purpose.

    The truth is that Chairman Parks and I took one short afternoon to see two buildings with a real estate agent. We were shown warehouse properties, one off south Southeast Boulevard and one off north I-135. These properties had no potential of filling our needs. The next day the Eagle reported that we were scouting for a site in Downtown Wichita and attempting to do harm to Downtown redevelopment plans. Nothing could have been further from the truth.

    I believe the Eagle is angry because of the county’s decision not to continue funding the needs of Downtown and give more consideration to the future of Sedgwick County. County commissioners did put their political careers on the line to raise the money and build a $210 million economic tool for Downtown. I have not witnessed appreciation for this effort. What I have witnessed is a constant demand for more. It appears that we will continue to be harassed by the Eagle, until we bring out the checkbook.

    Gwen Welshimer
    Chairman Pro-Tem
    Sedgwick County Commission

  • Wichita downtown arena parking problem

    This week the Wichita Eagle printed a letter submitted by Sedgwick County Commissioner Karl Peterjohn. The printed letter is quite a bit shorter than what Peterjohn submitted. The unabridged letter follows.

    The Wichita Eagle editorial written by Rhonda Holman on June 29, 2009 now claims that the new Intrust Bank Arena in downtown Wichita lacks adequate parking. This is a major change by the Eagle editorial board’s position. I have repeatedly asked county staff about the available parking in and around this soon-to-open facility since I became a commissioner in January. I have been repeatedly told by county staff that adequate parking will be available when the Intrust Arena opens next year. The most recent public assurance I have received was only a few days ago.

    In 2004, while I led the opposition to the proposed downtown arena in my role as the executive director of the Kansas Taxpayers Network, I repeatedly raised the parking availability issue. In 2004 the arena advocates claimed that arena parking would not become a problem and that the critics were wrong.

    Voters were repeatedly assured that there was plenty of parking that would be available downtown for the arena. The Wichita Eagle editorial page was among the leading advocates for this project and ignored opponents arguments concerning this $206 million (back then it was described as a $185 million) project. At that time there was only a general area for this new facility’s location so this argument lacked specificity. The exact location was unknown when voters cast their ballots.

    The Friday before the 2004 election I held a news conference pointing out the dimensions of the parking problem downtown in particular and the related location and capacity issues in great detail. At this news conference I provided a map of the Kansas Coliseum’s Britt Brown Arena and adjacent parking area available for comparison purposes with the existing 3,500 parking spaces for this 12,000 seat facility along I-135. I still have a few extra copies of this Britt Brown Arena aerial view. Arena proponents attended this 2004 news conference and claimed that the arena opponents concerns were invalid because of existing downtown parking. The Eagle editorial page repeatedly backed these arena proponents’ claims.

    The 2004 election is now political history. I want the Intrust Arena to be a success because this project has now become very important to the entire community. The reservations I expressed in 2004 have not disappeared just because of time. The decision to eliminate some of the one-way streets with two-way streets will not be an improvement in traffic flow in my opinion. There will be challenges for people to become comfortable with access into and out of this new facility while participating in high attendance events when the arena opens in a few months. To get beyond this challenge for any new facility, the county staff and parking consultant need to be correct about the adequacy of parking for the Intrust Arena and I believe are working to accomplish this objective.

  • Paygo rule meaningless, harmful

    In a letter printed in yesterday’s Wichita Eagle, Doug Ittner of Wichita promotes the benefit of a rule known as “paygo.” The purpose of this rule is to force budget discipline on Congress. As the Washington Post’s David Broder wrote in that newspaper in June: “[Paygo’s] key provision requires that any new tax cut or entitlement increase be paid for by an offsetting reduction in other programs or a tax increase. If, for example, you want to guarantee child care for every working mother or provide her with a payroll tax cut, you would have to find savings or revenue elsewhere of equal size.”

    It sounds like Congress has suddenly been overtaken by reason, doesn’t it?

    If only it were so.

    The reality is that the paygo rule is so feckless as to be meaningless. In fact, the rule causes great harm. By sounding tough, the existence of the rule leaves apparently naive citizens like Mr. Ittner to conclude that things are under control in Washington. But things are far from under control, and this illusion of control is quite harmful.

    A good article to read to understand how paygo works is the Wall Street Journal article The ‘Paygo’ Coverup from June. Here are some of the points it makes.

    • When Democrats took over Congress in 2006, Speaker Nancy Pelosi imposed paygo rules. What happened? “By 2008, Speaker Pelosi had let those rules lapse no fewer than 12 times, to make way for $400 billion in deficit spending.”
    • President Obama campaigned on paygo, and the deficit has exploded by an unprecedented amount since he took office.
    • “Paygo only applies to new or expanded entitlement programs, not to existing programs such as Medicare.” Existing entitlements consume the lion’s share of federal spending, so paygo doesn’t apply to much of the problem.
    • Paygo doesn’t apply to discretionary spending.
    • Congress classifies spending to circumvent paygo. “… the 2010 budget resolution included a $2 billion increase for low-income heating assistance as an entitlement change that should be subject to paygo. But Congressional Democrats simply classified it as discretionary spending, thereby avoiding the need for $2 billion in cuts elsewhere.
    • “The other goal of this new paygo campaign is to make it easier to raise taxes in 2011, and impossible to cut taxes for years after that.”

    Even the liberal David Broder, in his Washington Post piece, recognizes that the current law is “full of loopholes,” as the title of his article indicates.

    We’d be better off without this meaningless rule, so full of loopholes, that lets politicians promote the illusion of controlling the federal budget.