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"Increasingly, the media perpetrates this bad information. That behavior limits civil discourse and is a serious threat to personal freedom and our democratic republic." http://www.hutchnews.com/opinion/letters_to_editor/irresponsible-media-is-a-serious-threat-to-personal-freedom/article_72f9061c-ee54-5cc8-b004-cb3dce12a996.html


Media spin a threat
www.hutchnews.com
Kansans are bombarded with claims that range from innocently incomplete to quite deliberately false. Increasingly, the media perpetrates this bad information. That behavior limits civil discourse and is a serious threat to personal freedom and our democratic republic.
Thu, 24 Apr 2014 16:53:21 +0000
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Tax day discussion of Kansas' tax cuts. Looks like the economic outlook is improving. http://www.kansaspolicy.org/KPIBlog/116713.aspx


Rich States, Poor States: Kansas 15th Best Economic Outlook
www.kansaspolicy.org
The 2014 edition of Rich States, Poor States released today ranks Kansas at #15 for Economic Outlook and #32 for Economic Performance.  Economic Outlook is a forward-looking forecast based on each state’s standing in 15 important state polic
Tue, 15 Apr 2014 15:50:48 +0000
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"a need for charter schools to help them escape that cycle of failure and dropout." https://www.youtube.com/watch?v=x5rdU9tiLww&list=UUNthK1nbhLRYoiCXqjih3bw


Real Charters Schools Needed in Kansas
A failed charter school and someone looking to start a charter school in Kansas can only look to Kansas City, MO and wonder what impact high-performing publi...
Mon, 14 Apr 2014 18:55:40 +0000
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Posted by James Franko on Friday, December 28, 2012
This post is courtesy of William McBride and the Tax Foundation's Tax Policy Blog.

Since it appears more likely than ever that we’ll go over the fiscal cliff, we might as well start cataloging this historic achievement.

First, it will be the largest tax increase since World War II, at about 3.5 percent of GDP.

Second, the fiscal cliff is a historic income tax cliff. As the chart below shows, it will result in the highest tax rate on individual income (39.6 percent) since 2000, the highest tax rate on capital gains (23.8 percent) since 1997, and the highest tax rate on dividends (43.4 percent) since 1986.

Economic theory and evidence indicates these are among the worst kind of tax increases for the economy. As a result, most economists, including those at the Federal Reserve and the Congressional Budget Office, think this will lead to a recession in the first half of 2013. Arguably, this would be the first recession created by a tax increase since 1969, or, before that, the Great Depression. (The recession of 1990 coincided with a tax increase that was too small to have such an impact on the economy.)

Lastly, the fiscal cliff will be the first major tax increase since World War II to occur under a Republican controlled House of Representatives. The only lesson that can be drawn from that is don't do temporary tax cuts, e.g. the Bush tax cuts, unless you want them to be temporary.

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Update: Steve Entin reminds me that the 1990 income tax increase was probably a contributing factor in that year's recession, as was that year's payroll tax increase, and the economy was already weakened by the 1986 tax increase on capital and the 1988 payroll tax increase.
Posted by Dave Trabert on Wednesday, December 26, 2012

Several media reports have recently mentioned that some legislators and Governor Brownback are considering a sales tax increase next year as part of a long term plan to eventually eliminate the income tax.  Eliminating the income tax is a worthy long term goal, but the immediate issue is implementing the tax reform already passed by making all aspects of government operate more efficiently.  Reducing the cost of existing services, including public education, can be accomplished without impacting outcomes but it's hard work.  It requires fortitude and political will to resist the pushback from state agencies and special interest groups.  

Eliminating the income tax may require a slightly higher sales tax but the necessary rate cannot be established until government is first made to operate as efficiently as possible.

Kansas is by far the big spender in the region, with 2012 budgeted spending of $2,124 per resident compared to $1,579 for the states of Missouri, Colorado, Nebraska, Oklahoma and Texas. In fact, Kansas could reduce spending by $186 per resident to fully implement existing tax reform and STILL be the higher spender in the region.

Low taxes are the secret to strong economic growth and job creation, and efficient spending is the secret to having low taxes.   Every state has essentially the same basket of services but some find ways to provide those services at a better price. Spending less is NOT about eliminating services, it's about providing them at a better price.

Increasing the sales tax in 2013 might appease special interest groups that resist having government operate efficiently, but taxpayers deserve better.

Posted by Todd Davidson on Tuesday, December 11, 2012
If only we could derive our economic health by looking solely at the unemployment rate.  This simplistic view certainly has its perks – namely our economy would be easier to understand – unfortunately, without knowing the unemployment rate can decline for adverse reasons one can be misled into thinking some unhealthy economies are healthy.

The Unemployment Rate = (Number of Unemployed Persons)/(Labor force) – that is, if a state has 5 unemployed individuals and 100 people in the labor force the unemployment rate is 5%.

Mathematically the unemployment rate can decline three ways:

  1. The Number of Unemployed Persons declines while the Labor Force is unchanged or increases (Good)
  2. The Number of Unemployed Persons remains unchanged or decreases while the Labor Force increases (Good)
  3. Unemployed declines at least as fast as the Labor Force declines (Probably Bad)

#1 and #2 are good because new jobs were created.  #3 is bad because the unemployed person just gave up (or moved to another state).  Complicating the matter further, depending on which time frame is chosen; one can see all three instances.  In order to determine if jobs were created we need look at the change in the number of employed.  

According to the Bureau of Labor Statistics from September 2012 to October 2012 the number of employed persons increased from 1,396,552 to 1,400,956 in Kansas.  This means the unemployment rate dropped because jobs were created not because workers dropped out of the labor force.

Looking back further from October 2011 to October 2012 we see employment is actually down 7,725 jobs – meaning the unemployment rate is lower than 2011 because unemployed individuals dropped out of the labor force.  

That means we’re in situation #3 above – not good for the people who either given up looking for work or given up life in Kansas to seek a job elsewhere. It also is not good for the state as we have fewer people working, investing, living, and paying taxes in The Sunflower State.

Posted by Todd Davidson on Friday, December 07, 2012
“In the end, the money that towns across America gave General Motors did not matter.” That’s the conclusion of a New York Times investigation of local subsidies.  They chronicle the proliferation of over $80 billion in local subsidies to businesses of all shapes and sizes across the United States.  (You can search the database for yourself here.)

According to the NY Times investigation, “as [GM’s] financial problems grew, incentives became a big part of its math.”  Put another way - as GM’s ability to build cars people wanted to drive declined; they ramped up the ability to take money from taxpayers.

The Fraser Institute’s Economic Freedom of North America 2012 study argues these incentives diminish economic freedom because“[w]hen the government taxes one person in order to give money to another; it separates individuals from the full benefits of their labor and reduces the real returns of such activity.”  

It’s rather intuitive that when we reward lobbying instead of production we get less production, which is why the Fraser Institute’s study “shows a powerful, consistent, and robust relationship between economic freedom and growth.”

Unfortunately, state and local governments in Kansas have been doling out $1 billion to politically-favored businesses in recent years.  The deterioration of economic freedom over the years has resulted in Kansas dropping below five Canadian provinces in the Fraser Institute’s annual economic freedom rankings.

There is hope!  Now that our state has lowered taxes for all Kansans by $800 million it seems there is hope that leaders in Topeka are less interested in picking winners and losers. So everyone in the state will have a little bit more money in their pocket and a better chance to chase their dreams. In fact, if you eliminate the $1 billion in subsidies Kansas governments give every year, then tax relief is paid for and cronyism is turned back. That is commonly referred to as a “win-win proposition.”

Posted by Todd Davidson on Friday, November 09, 2012

Kansas is number 21 according to Site Selection’s 2012 Top State Business Climate Rankings.  Getting into the top tier will require further efforts to provide quality services and a low tax burden.  

The magazine ranks each state’s business climate based on 6 criteria:

The publication's ranking is based 50 percent on a survey of corporate site selectors … and 50 percent on five criteria, three that require states to demonstrate a strong record of attracting capital investment: the state's placement in Site Selection's most recent Governor's Cup ranking of qualified projects the previous calendar year; its Competitiveness Ranking, published the previous May; and its projects logged into the magazine's New Plant Database year to date… The other two criteria are the Tax Foundation and KPMG's Location Matters analysis of state tax burdens on mature firms and on new firms. 

Kansas performance was weighed down by a poor showing in the Tax Foundation and KPMG’s study Location Matters a Comparative Analysis of State Tax Costs on Business; where Kansas’ Mature Firm Tax Index Rank and New Firm Tax Index Rank were 47th and 48th respectively.

According to Site Selection, the “most important location criteria” is the “state and local tax scheme.” Because the rankings did not take into account tax cuts passed in May, Kansas will likely see a boost next year.  

However Kansas' work is not done; the top tier states are able to deliver quality services at a low cost.  Nine out of the top ten spent less per resident than Kansas in 2011.  In order to deliver on the “most important criteria” Kansas needs to deliver quality services more efficiently.

Posted by Todd Davidson on Monday, November 05, 2012
With 31 states spending less per resident than Kansas, it’s easy to believe Kansas can deliver a pro-growth tax policy by spending more efficiently.  It turns out, most Kansans agree. Kansans seem to understand that lower taxes means more opportunities for them to succeed and the only way to have lower taxes is to have lower spending.

KPI’s Dave Trabert on the results of KPI’s statewide poll conducted by SurveyUSA:

We often hear laughter when we ask people around the state if government operates efficiently. This poll not only backs that up, but also shows that 83 percent of Kansans believe the state government could operate five to 10 percent more efficiently. Even 82 percent of participants who are government employees agree. 

These numbers are significant because in May of 2012 Kansas passed significant tax relief in HB 2117.  KPI’s dynamic analysis of those tax cuts, estimates a one-time 8.5% reduction in spending will be needed to implement the tax relief.  

If the state government can deliver a 5%-10% improvement in efficiency, as most Kansans deem possible, tax relief will make Kansas much more attractive to businesses without cuts in core services.  A win-win for all Kansans.

Posted by Todd Davidson on Monday, October 29, 2012
10.4% of Kansas' labor is under-utilized according to the Bureau of Labor Statistics U-6 measure. This number includes 156,300 unemployed, marginally attached, or involuntary part-time workers.

(Data was provided to KPI from the BLS via email on 10/29/2012)

The Wall Street Journal’s Ben Casselman explains the U-6:

The official unemployment rate uses a fairly narrow definition of “unemployed,” looking only at people who are actively looking for work. But the Labor Department also publishes a range of other rates using different definitions. The broadest and best known alternate rate, known by its Labor Department designation, U-6, includes people who want to work but aren’t actively looking and also people who are working part-time because they can’t find full-time jobs. As of September, the national U-6 rate stands at 14.7%.

More recently, the Labor Department has begun publishing similar data for states. The numbers are released quarterly on a four-quarter rolling average, so they aren’t as up to date as the state unemployment figures that are released each month. Still, they give a window into state labor markets. 

Posted by Todd Davidson on Friday, October 19, 2012

The Kansas Department of Labor just announced the September unemployment rate was 5.9%.  Nearly a full percentage point below the September 2011 rate of 6.7%.

A closer look at the Bureau of Labor Statistics household survey shows that the drop did not come from higher employment.  7,819 fewer Kansans were employed in September 2012 than in September 2011.  The unemployment rate is lower because over 12,000 unemployed Kansans dropped out of the labor force over the last year.

  


 

Posted by Todd Davidson on Thursday, October 11, 2012

New analysis from Kansas Policy Institute puts Kansas’ general fund spending in perspective. Using data from the National Association of State Budget Officers (NASBO) and the Census Bureau, KPI has calculated general fund spending per-resident for all 50 states.

The spending data demonstrates the key to a pro-growth tax policy is low spending.
  • Kansas would have spent $1.2 billion less if spending were at the same level as the average state without an income tax.
  • Kansas spent a quarter more than the top ten states in the Tax Foundation's State Business Tax Climate Index.
  • Kansas spent 24% more than the ten highest ranked states in ALEC's Rich State Poor States.

Posted by Todd Davidson on Tuesday, October 09, 2012

The Tax Foundation released the 2013 State Business Tax Climate Index, ranking Kansas 26th in the country. With significant tax relief coming into effect January 1, 2013 Kansas may finally break from the middle of the pack and be better positioned to attract and retain businesses.

The 2013 State Business Tax Climate Index looks at state tax law as it stood on July 1, 2012. Kansas's recently passed tax reductions do not take effect until 2013 and thus were not included in the analysis. However, they will likely improve the state's score and rank in future years. ~ Joseph Henchman, Coauthor of the 2013 State Business Tax Climate Index 

The Tax Foundation report did mention Kansas’ recent tax reforms (pg 54):

In May 2012, Kansas enacted significant tax changes that will take effect in 2013. The existing three-bracket income tax with a top rate of 6.45 percent will become a two-bracket income tax with a top rate of 4.9 percent. The standard deduction is doubled to $9,000; some itemized deductions are eliminated; and non-wage income from sole proprietors, partnerships, and S corporations is exempted from tax. These changes, on net, will improve Kansas’s score on individual income tax.

State Business Tax Climate Index

Posted by Todd Davidson on Friday, October 05, 2012
A compilation of each school district’s 2012 spending is now available on KansasOpenGov.org. The downloadable summary breaks out 2011 and 2012 spending on accounts titled Instruction, Capital, Debt and Other Current for every district in the state of Kansas.

In 2012 statewide spending on schools increased $195,247,583.  That amounts to a 3.5% increase and breaks out as follows:

  • Instruction spending statewide increased $85,591,054 or 2.8%
  • *Other Current Spending increased $58,508,762 or 3.1%
  • Capital expenditures increased $39,916,386 or 23.7%
  • Spending on Debt increased $11,231,381 or 2.5%

The information was compiled from each districts’ Budget at a Glance available on the KSDE website. 

*(Other current is comprised of Student and Instructional Support, General Administration, School Administration, Operations and Maintenance as well as Other Costs.)

Posted by John LaPlante on Wednesday, September 26, 2012

Students in Sharon Springs, Kansas, have produced a YouTube sensation mocking school-lunch guidelines laid down by the federal government.In the video, students collapse from hunger while playing school sports, or even sitting in a classroom. Critics say the "Healthy, Hunger-Free Kids Act" is leaving students hungry by  limiting the calories they can get, and restricting their intake of protein, fats, and carbohydrates. Even so, some students and school officials say the problem, if it exists at all, is overblown. Rep. Tim Huelskamp (R-Fowler) has introduced legislation to overturn the law. He says it represents "a perfect example of what is wrong with government: misguided inputs, tremendous waste and unaccomplished goals."

He is right about that, but the controversy also illustrates the dangers of centralization. Most schools participate in the federal school lunch program, and many even often breakfast, all on money taken from local communities, cycled through Washington DC, and then returned to communities, but with federal strings attached.

As the saying goes, he who pays the piper calls the tune. Or to update that, he who buys the lunch gets to decide what goes on the cafeteria tray.

What should we do? Perhaps it's time to do away with the federal program, let states and local governments make up the difference (if they wish), and stop the idea that everything, including what goes on a high school student's lunch, should be influenced by the federal government.

Would that mean hungry kids? If the video is any indication, the new school lunch program is already producing hungry kids.
Posted by James Franko on Tuesday, September 25, 2012
This post is courtesy of Michael Cannon and the CATO Institute's @Liberty blog.

The Washington Post‘s Sarah Kliff writes that the Department of Health and Human Services has decided to “punt” on the “monumental” task of dictating exactly what types of coverage those who get health insurance through the individual market or small employers must purchase. HHS has decided to let each state decide for its own residents what constitutes “essential health benefits.” It was a shrewd move: under the guise of decentralized decision-making, HHS is offering to let state officials take the blame for an inevitably controversial decision and the inevitable higher costs that will result. Yay, federalism! States have until the end of this month to decide just how much coverage they are going to help ObamaCare force their citizens to purchase.

Kliff reports that many states are now wrestling with the unanswerable question, “What health-care benefits are absolutely essential?”

Is acupuncture essential health care? Weight-loss surgery? Under Obamacare, states choose…

California legislators say acupuncture makes the cut. Michigan regulators would include chiropractic services. Oregon officials would leave both of those benefits on the cutting-room floor. Colorado has deemed pre-vacation visits to travel clinics necessary, while leaving costly fertility treatments out of its preliminary package…

A Virginia advisory board recommended that the state adopt a plan that includes speech therapy and chiropractic care. A District subcommittee has endorsed a plan pegged to an existing BlueCross BlueShield package, and public comment remains open through Friday Sept. 28…


Of course, an objective definition of “essential” coverage is impossible. Like “medical necessity,” the only way to determine whether health coverage is “essential” is if the benefits exceed the costs. That is an inherently subjective question that no legislator or regulator, state or federal, can or should try to answer for a diverse population of consumers. When they do, health care providers invariably hijack the process, demanding that consumers be required to purchase coverage of their services. Since the legislators/regulators are handing out benefits while consumers and taxpayers shoulder the costs, the result is predictable: health insurance premiums rise.

Thanks to HHS’s punt, providers now have an even greater incentive to lobby states to mandate coverage of their services. If a state creates its own list of “essential health benefits,” then any benefits the state mandates will be eligible for federal subsidies. If not, the cost of state-mandated benefits continues to fall on consumers or employers, who tend to complain. (Again, shrewd. Corrupt and irresponsible. But shrewd.)

But since ObamaCare is on the books, and HHS gave states a choice, what should states do?

The choice is identical to what states face with regard to health insurance Exchanges: states have the option to implement part of ObamaCare themselves, but no matter what they decide, Washington is ultimately running the show.

The federal government will not let states pick a menu of “essential health benefits” or establish an Exchange with fewer regulatory controls than HHS would impose itself. Since less regulation than the federal government would impose is not an option, implementing these parts of the law can only lead to more regulation, fewer choices, and higher costs. And of course, state officials will take the blame when ObamaCare starts increasing costs and denying care to people. There is simply no good reason for states to assume this impossible, harmful, and thankless task.

Instead of doing the feds’ dirty work, states should use this opportunity to show how ObamaCare rigs the game against states and consumers alike. State officials that want to rid the nation of ObamaCare should submit to HHS a “benchmark” EHB plan that they know HHS will refuse. It could be either the most affordable health plan they can find in their individual or small group markets, or a plan that state officials designed themselves. Leave out benefits that HHS considers dealbreakers. Push the deductible as high as you dare. Allow annual or lifetime limits. The less coverage you include in your EHB benchmark, the more choice consumers will have and the lower the premiums will be. Submit such a proposal to HHS and dare them to reject it. Let your voters see that under ObamaCare, choice is a mirage. Dare HHS to explain why they rejected affordable health plans and forced the Treasury to subsidize more-expensive health plans.

Alternatively, state who are not inclined to confrontation can tell the Obama administration the same thing they should say with regard to health insurance Exchanges: it’s your stupid law, you implement it.
Posted by John LaPlante on Thursday, September 20, 2012
This entry is written by KPI's education policy fellow, John LaPlante. Read more about John here and for more of his writing click here.

Arne Duncan, secretary of the U.S. Department of Education, has been visiting Kansas this week as part of a national tour designed to highlight the importance of excellent teachers.

Duncan's tour couldn't come at a better time. As he pointed out in Topeka, one million students drop out of high school each year--with serious consequences for them and everyone else. He added that "far too many of those who do graduate need remedial classes."

So what can we do? For starters, we can recognize the importance of excellent teachers by taking the task of evaluating all teachers seriously.

Teachers are not the only factor in how well a student learns; the home environment matters, too. Still, teachers are the most important in-school influence on student achievement. As the experience of some public charter  and traditional public schools demonstrates, even students from low-income families can do well, if given the right environment.

So exceptional or even adequate teachers matter. Unfortunately, exceptionally poor teachers matter as well; the student who is placed in a classroom with a poor teacher is set back months.

Oddly enough, our K-12 bureaucracy doesn't do much to recognize the fact that teachers, like people in any occupation, aren't all the same. As a result, an excellent teacher, a competent but unspectacular teacher, and a dangerously incompetent teacher may all be paid the same. Seniority and number of college credits, not job performance, determine pay in most schools. If a school's finances come to the point where administrators must lay off teachers, a third-year teacher who has won "teacher of the year" may be dismissed to protect the 20-year veteran who is disengaged from his subject and students.

Thankfully, some education researchers and schools are working on ways to evaluate teachers, to separate the wheat from the chaff. Some of the work has centered on using "value added" tests that pinpoint which teachers are exceptional in helping students gain in knowledge and skills over the course of a school year.

Tying teacher pay to student achievement (as measured in test scores) is controversial, and leaders who try to do so risk strikes that throw children out of school for days or weeks at a time. Witness the ongoing drama in Chicago, where Duncan used to serve as superintendent.

Is it difficult to evaluate teachers? Yes, it can be difficult for any business to evaluate its employees. Still, most companies find a way to do it, and schools need to find a way, too. As Duncan says, no teacher should be evaluated solely on the result of one test, no matter how good.  For one thing, the tests are a work in progress, so student test scores should be just one factor in a teacher's evaluation, along with qualitative assessments of student learning and teacher performance.

Students who deal with teachers every day know that "every teacher a great teacher" is a myth. If you ask them in private, you'll get a lot of teachers to say the same thing. Why, then, should we act as if what we know to be true is not?
Posted by Dave Trabert on Friday, September 14, 2012
Today's editorial from the Wichita Eagle:

 The three goals that the Priority Project set for Wichita this week have been kicked around for decades. But there is value in seeing them elevated to the top of the community agenda and treated with new urgency and accountability.

The big three:
  • Develop more downtown activities and events for individuals and families of all ages.
  • Diversify the local economy by keeping industries already here and recruiting new jobs in new industries.
  • Increase the number of people in the region who advance their post-high school education, either through degrees, certificates or retraining opportunities.
There is something for everybody on that wish list, and a lot for Wichita as a whole.

The identified goals are certainly laudable, but projects of this nature are re-introduced every few years...while the Wichita Metro area (Sedgwick, Butler, Harvey and Sumner counties) and Sedgwick County continue to become less competitive. Private sector employment in the Wichita Metro for 2011 was 6.3% below its 1998 level...and was below the 1998 in 9 of the last 14 years (here). But local government employment jumped 14.8%.

The IRS says (here) Sedgwick County lost people and Adjusted Gross Income every year since 2005, looking at interstate domestic migration (left the county for another state or moved in from another state). Even if one counts movement to and from other parts of Kansas, Sedgwick County only had a very small gain in 2009...all other years were losses.

There's a very simple reason that these well-intended initiatives haven't worked: local government and their public-private partners are offering employers what they want them to have instead of what they need to create jobs. The Wichita Chamber's own survey of business owners said taxes were too high. WIBA's member survey identified tax and regulatory issues as their top concerns, as did the US Chamber of Commerce. Yet government and their public-private partners ignore what the customer wants because they don't want the same things.

It's no surprise (or excuse, frankly) that people will say they want more downtown activities or other amenities; that's what happens when you simply ask people what they want without putting anything in context. You get a wish list.

Government and their public-private partners cannot create jobs but they can help create an environment that fosters job growth if they will listen to employers and give them what they need.
Posted by Todd Davidson on Friday, September 07, 2012
A report recently released by the Kansas Legislative Research Department (KLRD) estimates total tax payer support of public schools will reach $5.757 Billion in 2013, topping 2012s record setting $5.672 Billion.  The new numbers show total funding has likely increased $2.17 Billion or 61% since 2001; inflation was up 26% over the same period.

KLRD’s data estimates per-pupil funding will be $12,628 just $32 shy of the record set in 2009. K-12 Per-pupil funding is up $4,604 or 57% since 2001. 

K-12 spending data from 1994 through 2013 is available here.

Posted by Dave Trabert on Wednesday, September 05, 2012
I just experienced a new government intrusion into free market activities...I had to buy a permit from the City of Wichita to have a garage sale at my house.  I even had to certify that "I have not held, nor has any member of my immediate family held within the last six months, a miscellaneous sale the at address listed on this form"

Really?  The City of Wichita feels the need to restrict how frequently I can hold a garage sale?  And boy, do they mean business.  "Only two sales are allowed in a calendar year for a maximum of three consecutive days.  Holding more than two sales per household in a calendar year and/or not allowing six months between sales is punishable by a maximum fine of $100 per day of violation."  Can I get in trouble if I buy something from an 'illegal' yard sale?  If so, could I cut a deal by tipping them off to the black market lemonade stand down the street?

This is really getting out of control.
Posted by Todd Davidson on Wednesday, August 29, 2012
A mere 5% of small businesses plan to create new jobs; a stunning revelation from a recent survey by the National Federation of Independent Business. According to the survey, small businesses' three biggest concerns are taxes, regulation and poor sales.


The game plan for small business expansion seems simple; lessen the burden of high taxes and onerous regulation. Unfortunately, those in government prefer a misguided alternative; special handouts:

The Wichita City Council could not resist the urge to give a 100% property tax abatement, worth $500,000, to a developer in exchange for an empty building.  The developer will still enjoy police and fire protection as well as paved roads; Wichita homeowners will pick up the tab for those services.

Posted by Todd Davidson on Thursday, August 16, 2012

Proponents of high taxes are again quoting a study from the Institute for Taxation and Economic Policy (ITEP).  The study argues high-income tax states perform as well or better than states without-an-income tax. 

The study's result runs contrary to findings by the Organization for Economic Co-operation and Development (OECD), a Paris-based organization comprised of 34 developed countries, including the United States.  The OECD study concluded: Growth-oriented tax reform measures include tax base broadening and a reduction in the top marginal personal income tax rates.

ITEP comes to their counter-intuitive conclusion by carefully choosing three measures: Per Capita Real Gross State Product (GSP) Growth, Real Median Household Income Growth and Average Annual Unemployment rate. One needs only a simple drawing to see why these variables are inappropriate measures.

In the first scenario our state has nine individuals; seven earning an income and two unemployed.  GSP per capita is $3, Real Median Household Income is also $3, the Unemployment Rate is 22 percent and our overall wealth is $28.  Now suppose the four low-income individuals decide to seek opportunities in another state.  Now our state looks like this:

Our GSP per capita and Real Household Median Income rose to $5, the Unemployment Rate decreased to 0 and our overall wealth declined to $25. The out migration of low income earners caused our GSP per capita and Real Household Median Income to grow 66 percent and our Unemployment rate to drop 100 percent.  Although, not one person’s wealth increased and in fact our state is worse off, we have fewer jobs and less wealth.

This is precisely what the IRS' Adjusted Gross Income (AGI) data suggests is happening. From 2000 to 2009 the average AGI for each tax return leaving the nine states with the highest-income taxes was $59,502 (2010 dollars), which is $5,000 lower than the average AGI for all tax returns in those nine states, over the same period.  Now we see why ITEP carefully chose those measures.

Thanks to this map, put together by the Tax Foundation, we can see that the nine states without-an-income tax gained $117.6 billion from interstate migration whilst the nine high-income tax states lost $105.8 billion between 1999 and 2009.  Data from the Census Bureau shows that during this time nearly 4 million fled the high-income tax states, while nearly 3 million found a new home in the states without-an-income tax.  Just as the pictures above illustrate; ITEP’s chosen measures can go up, even as wealth leaves.


Posted by Dave Trabert on Thursday, August 09, 2012
Earlier this week, Steve Rose of the Kansas City Star wrote an editorial outlining what he viewed as a negativity towards public education. Rose quoted from an AFP candidate questionnaire with;

Which of the following do you believe most accurately reflects your view of K-12 spending?

A. School districts operate very efficiently and make good use of taxpayer money.


B. School districts are pretty efficient but there might be a little room for improvement.


C. Aggressive, independent efficiency studies should be immediately implemented to identify best practices and find ways to achieve required outcomes at more efficient costs.


The correct answers are (A) or (B), but (C) is an erroneous, loaded question for conservatives...


Apparently, asking folks to look at the facts and try to be more efficient is little more than thinly veiled hostility.

It’s quite telling that Rose's basis for saying schools operate very efficiently and spending has only kept up with inflation is a lobbying group that advocates for more spending rather that actual figures from the Dept. of Education or the state budget office.

Here are the facts according to official government data for the period 2001 to 2011:

—Inflation was 24.2% (Bureau of Labor Statistics, Midwest Urban Cities)

FTE enrollment increased 1.8% (KSDE)

—Taxpayer support of public education increased 55.8%; state aid +37.6%, federal +155.4% and local +67%. (KSDE)

—2012 is expected to be a record-setting year for taxpayer support of public education, at $5.672 billion (KSDE)

Here are a few more facts that, like those listed above, are not generally known to the public and are routinely denied by education officials.

—$402 million more in state and local aid was not spent between 2005 and 2011 but was used to increase operating cash reserves (KSDE)

—Instruction spending per-pupil increased 84% between 1999 and 2011 (KSDE) while inflation was up only 32% (BLS)

—Taxpayer support of public education in Kansas increased from $3.1 billion in 1998 to $5.6 billion in 2011 (KSDE) yet student proficiency levels are well below 50% (US Dept. of Ed.)

Telling parents the inconvenient truth is not attacking schools, teachers or anyone else. It is giving them the facts they need to make fully informed decisions about what needs to be done to improve public education.


Read more here: http://joco913.com/news/steve-rose-negative-attitude-toward-public-schools-is-scary/#storylink=cpy
Posted by James Franko on Tuesday, July 31, 2012
Too bad for Jayhawk fans this has nothing to do with Charlie Weis' first season on the gridiron.

Also, it is the wrong Top 10. A more apt description would be that Kansas has the 9th HIGHEST combined (state and local average) sales tax rate in the country. This according to a new study from the Tax Foundation in Washington.

As KPI fiscal analyst Todd Davidson wrote in our most recent paper on tax reform,

A higher sales tax increases the cost of a product, and like any other price increase, prompts customers to purchase that product elsewhere (even across state lines) at a lower price or cut back on other purchases to offset the price increase. Either way, state retailers suffer an economic loss that impacts their employees and customers; lower profits reduce the amount available to compensate employees and/or may result in a price increase in an attempt to offset the lost income.

What does that mean in the Kansas City area where it is very easy for people to travel across state lines to make a purchase? Say you want to be ready for the upcoming football season with a new TV and you live in Wyandotte County. BestBuy.Com has a nice looking 65" Sony flatscreen TV for $2,999.98...even Energy Star rated. A purchase certainly outside of most family budgets, but you would pay an extra $62.10 in state sales tax if  you purchased the TV at a Best Buy in KCK instead of going a few short miles into Missouri. Keep in mind, that is before any local sales taxes are applied.

$62 might not sound like to someone spending $3K on a TV, but the point is obvious. Take this in the aggregate and Kansas is potentially losing a lot of sales tax revenue because the state remains uncompetitive.

In their analysis, the Tax Foundation reminds us...

Avoidance of sales tax is most likely to occur in areas where there is a significant difference between two jurisdictions' sales tax rates. Research indicates that consumers can and do leave high-tax areas to make major purchases in low-tax areas, such as from cities to suburbs. For example, strong evidence exists that Chicago-area consumers make major purchases in surrounding suburbs or online to avoid Chicago's 9.5 percent sales tax rate.

At the statewide level, businesses sometimes locate just outside the borders of high sales tax areas to avoid being subjected to their rates. The state of Delaware actually uses its state border welcome sign to remind motorists that Delaware is the "Home of Tax-Free Shopping." State and local governments should be cautious about raising rates too high relative to their neighbors because doing so will amount to less revenue than expected, or in extreme cases, revenue losses despite the higher tax rate.

Posted by Todd Davidson on Wednesday, July 25, 2012

With the threat of closing Judge James Riddel Boys Ranch, to save $1.2 million, some have been calling for an increase in property taxes.  Instead of asking for higher taxes, we should look at some choices Sedgwick County has.

Some of the $12.2 million going to “Economic Development” (tax money for private profit of preferred businesses) could be reprioritized to the ranch.

Perhaps, instead of cutting services, the county could be creative and find cost effective ways to operate that eventually add up to real money.

In 2011 the county paid out $4.2 million in OVERTIME. One EMS lieutenant collected $63,007 in OVERTIME.  Three Sheriff’s Detention Deputies split $119,405 in OVERTIME.  $25,843 in OVERTIME went to one mechanic.  Two zoo keepers took home a combined $31,883 in OVERTIME. 

If Sedgwick County wants to retain the Judge James Riddel Boys Ranch, they seem to plenty of options to do so without taking more money from taxpayers.

Posted by Todd Davidson on Monday, July 09, 2012

The correlation between high taxes and noteworthy economic growth between 1947 and 1979 has caused many to conclude High Taxes = Economic Growth.  Such a correlation fails to account for the different circumstances of the era.  Namely, after the Second World War nearly all foreign competitors were destroyed, the US government alleviated burdensome WWII taxes and rationing and the era saw the implementation of numerous cost saving innovations.  The circumstances of yesteryear no longer apply and we must realize we cannot afford the high taxes of the past.

Economic growth boils down to one equation: Revenues – Costs.  Put simply increased revenues or decreased costs drive economic growth. While taxes and regulations were incredibly costly during the post-war era a multitude of circumstances both raised revenues and lowered costs for producers.  

Foreign countries had been demolished

The late Princeton Economics Professor William H Branson:

At the end of World War II the United States was by far the dominant industrial economy in the world. With industrial capacity largely destroyed in Europe and Japan, the United States produced more than 60 percent of the world's output of manufactures in the late 1940s. As a result, the United States was a net exporter of manufactured goods of all kinds; historically the United States was a net importer of consumer goods, but in 1947 there was a net export surplus of $1 billion in that category.  

The late 1940s were unique in that America companies had somewhat of a monopoly on worldwide production.  This offered a nice boost to revenues.

Government actually shrank following the Second World War

Although government was big from 1950s to 1970s, it was much smaller relative to the 1930s and 1940s, as described by economics professors Jason Taylor and Richard Vedder:

[The US] Government canceled war contracts, and its spending fell from $84 billion in 1945 to under $30 billion in 1946. By 1947, the government was paying back its massive wartime debts by running a budget surplus of close to 6 percent of GDP. The military released around 10 million Americans back into civilian life. Most economic controls were lifted, and all were gone less than a year after V-J Day. 

As Professor Burton Folsom points out taxes were lowered from New Deal and WWII highs:


Income tax rates were cut across the board. FDR's top marginal rate, 94% on all income over $200,000, was cut to 86.45%. The lowest rate was cut to 19% from 23%, and with a change in the amount of income exempt from taxation an estimated 12 million Americans were eliminated from the tax rolls entirely.  Corporate tax rates were trimmed and FDR's "excess profits" tax was repealed, which meant that top marginal corporate tax rates effectively went to 38% from 90% after 1945.

The downsizing of government freed up resources, reduced onerous taxation and eliminated burdensome rationing; significantly lowering costs for producers and consumers.

1948-73 was a “Golden Age” of Innovation

The increased prevalence of affordable electricity augmented manufacturing output by powering mechanized labor.  Productivity on the farm began its exponential trend, thanks to the internal combustion engine.  The internal combustion engine also brought on faster, cheaper travel which reduced the cost of shipping and enabled Americans to travel farther to work; expanding their pool of potential jobs.  The advent of containerized shipping dramatically reduced the cost of transporting goods across the ocean while the interstate highway system provided efficient routes for those containers to reach their destinations.  The result of these and many other cost saving innovations was a “Golden Age” of productivity that boosted economic growth.

(For the charts I thank Stephen Moore, Julian L. Simon, and Pf. David Beckworth.)

As shown in the fourth chart, gains in productivity slowed after 1977.  Tyler Cowen, George Mason University Economics Professor, argues in his book The Great Stagnation; that we’ve ate all the low hanging fruit and innovation is now much harder.  Rather innocently, we’re not innovating as much because we’ve advanced so much already.

Perhaps an example will be more intuitive; going from no refrigerator to a refrigerator in every home was a significant decrease in the cost of food and a substantial increase in our standard of living.  While now  it makes my life only slightly better to have a larger refrigerator that makes ice in cubed or crushed form – some cost reduction but not nearly as much.

My how times have changed

Fortunately, the rest of the developed world is not in a rebuilding state after massive destruction.  And now, thanks to the internal combustion engine and containerized shipping, foreign producers can feed American consumers rather cheaply – great for consumers but inconvenient for American producers’ revenues.  Producers can no longer absorb the high taxes they were forced to pay in the past.

We don’t have the luxury of mitigating our policy blunders with the high innovation rate seen in the post-war era. As Cowen succinctly articulates, the very high background rate of innovation enabled marginal tax rates which would not prove workable today.

We obviously need taxes to finance our infrastructure, education, security and other government services – all necessary for a prosperous economy – however we should understand that the circumstances of the post-war era are no longer with us.  Government, much like American producers, must deliver services at the lowest possible cost.  Designing tax policy without this consideration will only slow economic growth.
Posted by Todd Davidson on Thursday, July 05, 2012
Last week the Supreme Court ruled the Affordable Care Act constitutional however as Michael Cannon of the Cato Institute points out, Kansas can still reject its full implementation.
Posted by Todd Davidson on Friday, June 22, 2012

Once again, it doesn't seem unreasonable to call this unsustainable

While Kansas government spending rose 47% private sector GDP per capita only grew 8.9% over the same period.

From Nick Kasprak at the Tax Foundation.

This week's map shows the growth of state government spending over the past decade. These percentages show the growth in direct spending between 2000 and 2010, in real dollars per capita (to eliminate the effects of population growth and inflation). Oklahoma leads the pack with a 74% increase in state government spending over ten years; Alaska, whose state government only grew 17% faster than its population, is at the bottom.

The map doesn’t specify what type of spending this represents but the Tax Foundation blog says it is Direct Spending, which Census defines as Total Expenditures (for this purpose, Expenditure does not include a government's payment of its debt, or purchases of investment securities, loans it has granted, agency or private trust transactions, nor correcting transactions) less Intergovernmental Expenditures.  Direct expenditures therefore would be somewhat less than the All Funds Budget.   For 2010, Census lists Kansas’ Direct Expenditures at $12.4 billion.

Notes:

The data behind my private sector calculation comes from the Bureau of Economic Analysis (Real GDP Private Industry, Kansas) and population data from the Census Bureau.

Here's the math:

2000: ($83,338,000,000)/(2,688,925) = $30,993.05

2010: ($96,334,000,000)/(2,853,118) = $33,764.46

($33,764.46 - $30,993.05)/($30,993.05) = 8.9%

Posted by James Franko on Thursday, June 21, 2012

Government subsidies of one form or another have become as American as apple pie. Everyone goes to Washington with their hand out and politicians looking for votes are more than happy to oblige with other people’s money.

Too often, this practice becomes so entrenched that Americans can hardly be blamed for thinking this is the only way to do things. Can you imagine life without Social Security or the mortgage interest tax deduction? Probably not.

It should come as no surprise, then, that farmers throughout the U.S.  can’t get their mind around operating without federal farm subsidies. As the U.S. Congress debates a new “farm bill” – an all-encompassing legislative package they pass every five years dealing with agriculture and food policy – the debate will be less about whether rural America can exist without federal subsidies and more about how much Washington can throw at favored programs. In fact, the term “farm bill” is probably misleading because 80% of the funding cover in the bill went to things not ag related last year. The lion’s share of the bill is spent on food stamps and other non-ag programs.

FYI, the farm bill passed the U.S. Senate today by a vote of 64-35; committee action in the House is scheduled to begin on 11 July.

With federal spending and deficits driving the discussion in D.C., the Senate version is being hailed for "saving" $23 billion, compared to current policy. That may sound like a lot at first glance, but it pales in comparison to the projected federal deficit of $1.3 trillion or the total cost of the bill itself, $969 billion over ten years.

Pending any last minute amendments, it spends $193 million for farmers to grow crops for biofuels, extending a program that was previously cited by the USDA’s inspector general for extending unequal and improper benefits to farmers, and over $200 million to retro-fit refineries to produce biofuels. Biofuels are but one of numerous examples.

As currently written, this bill does little to help America tackle our budget deficits and does less in freeing Kansas farmers to capture the entrepreneurial and risk-taking heritage that saw our state  turn into the “World’s Breadbasket.” Fortunately, a modern example exists which shows what a subsidy-free agricultural sector can look like.

From the Cato Institute during the 2002 farm bill debate:

In 1984 New Zealand's Labor government took the dramatic step of ending all farm subsidies, which then consisted of 30 separate production payments and export incentives. This was a truly striking policy action, because New Zealand's economy is roughly five times more dependent on farming than is the U.S. economy, measured by either output or employment. Subsidies in New Zealand accounted for more than 30 percent of the value of production before reform, somewhat higher than U.S. subsidies today. And New Zealand farming was marred by the same problems caused by U.S. subsidies, including overproduction, environmental degradation and inflated land prices. New Zealand's plan was initially met with protest marches on parliament and organized resistance by farmers. Bolstering opposition was the government's own prediction that 10 percent of all the country's farms would go out of business. But the subsidies were ended, and New Zealand farming has never been healthier.

So, what does New Zealand’s agriculture sector look like nearly 20 years after they stopped subsidizing it? In a word, bountiful. According to the World Bank, in 1980 New Zealand’s ag sector produced $2.3 billion in value-added product. By 2009, that same number was $4.9 billion – a 111% increase (all numbers in 2000 dollars and are most recent available). Over the same time frame, the World Bank’s production indexes for both livestock and food have also showed tremendous gains in New Zealand. Maurice McTigue, a farmer by trade and member of the New Zealand Parliament when subsidies were kiboshed, has this to say about things in NZ...McTigue is also the vice president of the Mercatus Center at George Mason University in Virginia...

"In 1985 the [NZ]  government removed all subsidies form agriculture whether they were price support, subsidized insurance, input subsidies or production controls. This was a tough love approach with all the subsidies disappearing over the succeeding 9 months...[we] can look back on the last 25 years as probably the best in the history of New Zealand farming.

"Why would this be so? The major effect of subsidies is that they kill off or water down innovation...An example of this unfettered innovation is that the dairy industry in New Zealand in 1985 produced 35 products from milk by 2005 the dairy industry was producing 2200 products from milk and the dairy industry is the boom industry of New Zealand farming. The conclusion, subsidies keep farmers poor."

While the Kiwi’s were busy not subsidizing farmers their rural population grew by 11.6% (1980-2011), here at home our rural population decreased by 8.4%, once again from the World Bank. Certainly, more was at play than subsidies, but you get the point – the rural populations can thrive without government handouts.

The Federated Farmers of New Zealand (picture our National Farmers Union) might have said it best in that New Zealand has "thoroughly debunked the myth that the farming sector cannot prosper without government subsidies."

The 2012 farm bill, as currently written, is only the most recent example of someone in Washington saying one thing and doing something completely different. You’ll hear talk about helping family farms and supporting rural America, but the key thing to remember is that the farm bill is little more than a bunch handouts to politically connected industries (hello biofuels!) and an extension of federal food stamps. It isn’t about an individual farmer in Finney County and certainly isn’t about less government spending or intrusion in the market.

Listen to a good George Strait song as he extolls the virtues of the Heartland and hard work.  The people he is singing too aren’t asking for a government handout, but Washington has distorted the market for so long that it is hard to imagine farm life without subsidies and mandates. Farm profits continue to grow in spite of government manipulation - not because of it.

Pull off I-70 on your way to your next trip to Breckenridge or Estes Park and ask a farmer or rancher if they want more government involvement in their operation. The answer will almost certainly be no. Hopefully, someone in Washington is listening, but if the bipartisan comments following today’s Senate vote are any indication, I’m not holding my breath.

Posted by Dave Trabert on Monday, June 18, 2012

Schools for Fair Funding, the coalition of schools suing Kansas tax payers, has spent nearly $1.3 million in 2010 and 2011 according to their 990s, posted on GuideStar.org. That amount is likely much higher now that the trial has begun.  

What do you think? Should local school boards spend taxpayer money to sue taxpayers for more money?

Posted by Todd Davidson on Friday, June 15, 2012

It doesn't seem unreasonable to call this unsustainable

From Matt Mitchell at the Mercatus Center:

em>State and local governments depend on the private sector for their survival. Almost every dollar that these governments spend is either borrowed or taxed from the private economy. Yet, for more than half a century, these governments have continuously outpaced the growth of the private sector on which they depend.

In the chart below, Mercatus Center senior research fellow Matthew Mitchell uses inflation-adjusted data from the Bureau of Economic Analysis to illustrate the unsustainable growth of [US state and local] governments. The blue line shows the size of the private sector as a multiple of its 1950 value and the red line shows the size of state and local government spending as a multiple of its 1950 value. 

Posted by Dave Trabert on Friday, June 15, 2012
It's always interesting to see how government's view of the world is so much different than the private sector's.  Last week President Obama said the private sector was 'doing fine' even though there are still 6 million fewer jobs than at the beginning of the recession.  Now the City of Wichita says a 0.4% budget shortfall is 'pretty grim'.  Finding $2.4 million in a $549 million budget is barely a rounding error.

In 2011, the City spent $3.4 million on overtime.  Wichita spent $706,343 in payroll on gardeners and $822,037 on tree maintenance workers (5 supervisors for 15 workers).  Did you know the City employs a Tennis Pro for $93,972?  Add about 35% to each of those numbers for payroll tax and benefits.  Details are at available at KansasOpenGov.org

I seriously doubt that we need a Tennis Pro on the city payroll; gardening and tree maintenance are classic examples of things that can be provided by the private sector at lower costs (remember the $1 million or so saved by privatizing parks maintenance?).

It took me about 15 minutes to find these few examples.  Why is City Council and staff agonizing over closing a 0.4% budget gap?  Sounds like we are being set up for a tax increase.

Posted by Todd Davidson on Thursday, June 14, 2012

Wichita’s hotel developments are beginning to follow the same path that many government induced supply surges took before them.  From the Wichita Eagle today:

Wichita hoteliers are struggling to recover after hitting bottom in 2010 because the market keeps adding hotel rooms…

Hotels downtown are seeing a lot of new or upgraded rooms in the last three years with the assistance of local and state tax incentives.

These include the $11.5 million Fairfield Inn & Suites Wichita Downtown, which opened last year; and the $29 million renovation of the Drury Plaza Hotel Broadview, also completed last year. 

If that’s not enough taxpayer funded rooms for your upcoming family reunion, you are in for a treat when the new 117 room, taxpayer supported Ambassador Hotel opens in December.  All of this on-top of the 303 room, city-owned Hyatt Regency.  With occupancy rates hovering around 50% it’s only a matter of time before hotels begin closing up shop.

This is an all too common story of government incentives.

Homeownership enjoys an indulgence of government incentives at the Federal, state, and local levels.  These incentives helped boost housing supply to bubble proportions.  When the glut of housing was realized the bubble popped and we are still reeling from The Great Recession.

The student loan crisis is following this very same path.  Government induced the supply of college education with tax credits and cheap loans; the excess supply caused the value of degrees to drop; the bubble is bursting, (but the debt stays) and many of those with debt can’t find work to earn wages and pay down their loans because the economy continues to tumble.

Kansas STAR bonds program forced taxpayers to subsidize a massive outdoor shopping mall, which merely steals economic activity from other non-subsidized retailers, leading the less fortunate to closure.

Those calling for big empty office and manufacturing buildings should pay attention.  The economic fundamentals are simple, incentives lead to supply increases not matched by consumer demand.  The oversaturated market then leads to the shuttering of homes, shops, and hotels while taxpayers are left holding the bag.

Posted by Todd Davidson on Thursday, June 07, 2012
The Capitol Journal editorial board praised the Legislature and Governor Brownback's recent renewal of the STAR Bonds program – although the CJ did concede life would be merrier if we didn’t need the program.  The program allows Kansas municipalities to loan out a chunk of tax payer dollars to retailers, who then use sales tax revenue from the newly developed area to pay back the loan – instead of paying for schools, fire stations, and police services. I’m giving the Governor and Legislature zero stars for this renewal, as the program often does little more than supplant economic activity.

The CJ argued that the Wyandotte County boom would have taken place in Missouri if it weren’t for the fat loans.  Granted, the closer you get to a border the more effective the STAR bonds will be at stealing business from a neighbor. That would be A-OK if Missouri were the only neighbor losing business.

Growing up I often spent my Friday night at the West Glen 18 Movie Theatre at 435 and Midland. After the Legends Shopping Center was built I started going to the fancier Legends 14.  Is this new economic activity or just shifting my purchase at the expense of the sales tax paying West Glen theatres?  Would West Glen have installed Tempur-Pedic seat cushions if the Legends weren’t built, I don’t know, but any expansion by West Glen would have been futile in the face of the legendary STAR bond development to the north.

Another activity I enjoyed growing up was taking a stroll down Mass Street, in Lawrence, to buy sweet new jeans. However, shortly after the Legends Shopping Center was up and running, Mass Street was old news and my friends and I would travel to Village West instead.  Again, did we create new economic activity at the Legends, or just shift purchases from the sales tax paying businesses on Mass Street to the posh stores at the Legends?

A healthy economy must be vibrant and always changing as entrepreneurs seek to fulfill our ever changing wants and needs; that the Legends is new, stylish, and exciting should not be criticized, many people happen to like that stuff.  But asking the good people who earn their living at stores on Mass Street, or in movie theatres in Shawnee to pay for government services while their new hip competitors pay off loans is in a word, mean.

Posted by Todd Davidson on Monday, June 04, 2012

Jay P Greene’s Global Report Card has outlined some strong evidence in support of charter schools:

According to the Global Report Card, more than a third of the 30 school districts with the highest math achievement in the United States are actually charter schools.  This is particularly impressive considering that charters constitute about 5% of all schools and about 3% of all public school students.  And it is even more amazing considering that some of the highest performing charter schools, like Roxbury Prep in Boston or KIPP Infinity in New York City, serve very disadvantaged students. 

Greene did acknowledge that this correlation does not prove causality, and argued a series of academic studies that use 'randomized control trials' – the method used in medical experiments – more rigorously prove the efficacy of charter schools.

Here's a run down of the studies:

From Boston:

… a team of researchers from MIT, Harvard, Duke, and the University of Michigan, conducted a RCT and found:  “The charter school effects reported here are therefore large enough to reduce the black-white reading gap in middle school by two-thirds.

From Stanford for the National Bureau of Economic Research:

On average, a student who attended a charter school for all of grades kindergarten through eight would close about 86 percent of the ‘Scarsdale-Harlem achievement gap’ in math and 66 percent of the achievement gap in English. 

The same Stanford researcher also studied Chicago schools:

..students in charter schools outperformed a comparable group of lotteried-out students who remained in regular Chicago public schools by 5 to 6 percentile points in math and about 5 percentile points in reading…. To put the gains in perspective, it may help to know that 5 to 6 percentile points is just under half of the gap between the average disadvantaged, minority student in Chicago public schools and the average middle-income, nonminority student in a suburban district.

And lastly Greene summarized a study conducted Mathematica for the US Department of Education:

It found significant gains for disadvantaged students in charter schools but the opposite for wealthy suburban students in charter schools.  They could not determine why the benefits of charters were found only in urban, disadvantaged settings, but their findings are consistent with the three other RCTs that found significant achievement gains for charter students in Boston, Chicago, and New York City. 

For more on what it is that makes charter schools effective check out what the National Alliance for Public Charter Schools has to say.

Across the country, public charter schools are creating a wide variety of innovations, including:

  • Curriculum design (e.g., Montessori, Core Knowledge, Advanced Placement Courses, Foreign Language Immersion Programs, Science Technology Engineering and Mathematics)
  • Extended learning time
  • School cultures with high expectations for all students and adults
  • More structured and disciplined learning environments
  • Rewarding high-quality teachers with higher pay
  • Parent contracts
  • Multi-age programs 
Posted by Todd Davidson on Friday, May 25, 2012

The Winfield Daily Courier recently called out proponents of Kansas' recent tax reforms; stating the reforms were based on a discredited economic theory. 

Perhaps if the Winfield Courier wasn’t convinced by our tax reform analysis, we should jump across the pond and see what those folks are saying.  The Centre for Policy Studies, based out of London, recently published this gem:  Small is Best: Lessons from Advanced Economies.

They found:

Econometric analysis of advanced OECD countries for the period 1965-2010 finds that a higher tax to GDP ratio has a statistically significant, negative effect on growth. For example, an increase in the tax to GDP ratio of 10 percentage points is found to lower annual per capita GDP growth by 1.2 percentage points. A similarly statistically significant negative effect on growth is found with a higher spending to GDP ratio. 

In layman's terms; higher taxes hurt economic growth. Also...

There is little evidence that small government countries have worse social outcomes:
  • Health outcomes are mixed: in the past 10 years, life expectancy in small government countries has been higher than in big government countries. Infant mortality has been lower in big government countries.  
  • Statistical evidence from the last 10 years suggests that small government countries achieve higher academic outcomes. 

They even made a video to go along with it:

For further reading check here and here.

Posted by Todd Davidson on Wednesday, May 23, 2012

There’s good news for those who are understandably concerned about the state’s ability to fund core services with implementation of the just-signed tax reform legislation. The billions in deficits that have been predicted in future years will never happen.

The standard analysis performed by Kansas Legislative Research Department (KLRD) makes no allowance for the Constitutional requirement to have a balanced budget. Spending adjustments required in 2014 would have long term effects that are not accounted for in that methodology, thereby artificially inflating future deficits.  KLRD also assumes that State General Fund (SGF) spending would grow by more than $700 million over the next few years, so a lot of the predicted deficits are driven by the assumption of large spending increases. (It’s standard methodology to change just one variable; we’re not here to criticize KLRD, only to take their analysis one step further.)

Below are three spending and revenue scenarios; the first is KLRD’s baseline scenario and the other two show the real world application of having a balanced budget.

Scenario 1: We have numbers pulled directly from KLRD.  As you can see revenue is projected to dive in 2014 and climb to $6.3 billion in 2018 while spending is projected to continuously grow unchecked; resulting in a $2.4 billion ‘deficit’ in 2018.

Scenario 2 uses KLRD’s revenue projections but reduces spending in 2014 by $670 million… enough to leave a $450 million ending balance ($450 million was chosen for math simplification and it’s in the ball park of the 7.5% ending balance requirement). Spending is then allowed to grow in lock step with revenue so long as $450 million is left in the bank.

Scenario 3 illustrates what happens if we implement aggressive efficiency programs and reduce spending by 6.5% in fiscal year 2013. That’s a smaller one-time reduction and still allows more spending than in FY 2011. The ending balance dips lower than recommended temporarily but controlled spending increases allow it to gradually rebuild. 

Rest assured these tax reductions will not result in a spiraling debt, but they will result in common sense spending restraint, economic growth and job creation.  As we have shown before a low tax burden is an essential component of economic competitiveness and the key to a low tax burden is spending restraint.

Posted by Dave Trabert on Monday, May 07, 2012
Today’s Wichita Eagle Blog wants readers to believe that now is the time to increase funding on public K-12 education:

When the economy crashed and the state made large budget cuts to education funding, lawmakers urged school districts to be patient. “The common goal is restoring that money, and we will restore that money,” Rep. Steve Huebert, R-Valley Center, told Wichita superintendent John Allison in 2010. Well, the economy is growing again and the state now has a significant budget surplus. Yet the House has resisted a Senate proposal to restore about 10 percent of the base state aid that was cut over the past four years.

When the economy crashed and the state made large budget cuts to education funding, lawmakers urged school districts to be patient. “The common goal is restoring that money, and we will restore that money,” Rep. Steve Huebert, R-Valley Center, told Wichita superintendent John Allison in 2010. Well, the economy is growing again and the state now has a significant budget surplus. Yet the House has resisted a Senate proposal to restore about 10 percent of the base state aid that was cut over the past four years.

The data for Kansas and the nation in general shows no connection between higher spending and better achievement.

Taxpayer funding of public education increased from $3.1 billion in 1998 to $5.6 billion last year, but test scores on The Nation's Report Card (NAEP) show relatively no change.  Spending on public education in Kansas has grown much faster than inflation and enrollment.

The states with the highest NAEP scores in the region on each student cohort (White, Hispanic, Low Income, etc.) spend at least $1,200 per-pupil less than Kansas.  Colorado has the best scores for White students.  Texas has the highest scores for Hispanic and Black students; Texas also has higher scores than Kansas for White students and trails Kansas by a single point for Low Income...yet spends $1,400 less per-pupil.

Every state, including Kansas, has a lot of work to do to raise student achievement, but more money isn't the answer.

Okay, the economy is growing relative to what was happening in 2008 and 2009 but much slower than in most parts of the country.  Kansas continues to fall farther behind in job creation, wage and salary distribution and private sector GDP.  Kansas continues to have more U.S. residents choose to leave Kansas than to move here.

I'm sure Rep. Huebert meant what he said, but the 'being patient' part still applies.  Yes, the state finally has some small reserves but those reserves pale in comparison to those held by local school districts.  Kansas is attempting to have a 7.5% reserve balance and some see that as justification for increasing school funding.  But many of those same people say schools need every penny of their own 16% ending balance (which grew from 11.7% six years ago).

School districts enter the year with far greater certainty of their revenues than does the state.  School districts have added to their reserves every single year since 2005.  The last two years alone have seen reserves increase by $160 million, meaning that administrators either felt it was more important to increase reserves than spend that money on education services or the formula is giving districts more money than they actually need.  Or some combination of the two.

A review of the data indicates it's probably a little of both.  There is very strong evidence that the funding formula is providing more funding than is needed for Special Education, At Risk and Bilingual.  Districts surely are providing all of those services they believe are necessary, so the fact that they've increased reserves in those funds by $84 million over the last two years must mean that they are receiving more money than necessary.

Recognizing this, the legislature last year passed SB 111 to allow districts to transfer up to $232 per-pupil (about $154 million) from a dozen funds (including those mentioned) and use it for any purpose.  Most districts declined that opportunity; at last report, only $24 million of that transfer authority had been exercised.

Some districts don't have the ability to tap reserves because they don't have much set aside, but the vast majority can do so.  Dozens of districts consistently operate with less than a 10% carryover ratio (current operating reserves as a percentage of that year's operating costs).  Yet the state average last year was 16%, with many districts consistently operating with more than a 20% ratio.

That's just one reason that many legislators may be hesitant to increase school funding.  Another may be that Deputy Commissioner Dale Dennis' last estimate showed that 2012 will be a record-setting year for school spending at $5.672 billion, with per-pupil spending at $12,454 and only 1.6% below the 2009 record of $12,660.  With spending at or near record highs, operating reserves having increased more than $400 million since 2005 and most districts choosing not to use prior years' excess revenue, it's certainly understandable that some legislators might think it's not necessary to give schools more money right now.

Maybe someday we will see these facts in news stories.
Posted by Dave Trabert on Monday, May 07, 2012

Claims that Base State Aid Per-Pupil (BSAPP) has been cut back to 1990s levels are quite deceptive, as they ignore how state funding of schools has significantly changed over the years.  At one point, nearly all programs were funded out of BSAPP, but subsequent years have seen more money added on top of BSAPP for services that previously came out of the base.

Since student populations vary widely some districts receive additional money through ‘weightings’ on top of BSAPP ("At Risk, Bilingual, etc).  Quite a few ‘weightings’ have been added or expanded over the years, with the effect of reducing stress on BSAPP.  A full list of the weightings, their respective values and the complete formula is available on KansasOpenGov. 

The adjacent table demonstrates how those weightings and other state aid have changed.

In 1998, there was only $178 per-pupil in addition to BSAPP, KPERS and Bond aid.  This year’s estimate is more than 10 times that amount. 

It is correct to say BSAPP has remained relatively unchanged since the late 1990s, but that leaves out an increasingly large portion of State K-12 funding.  In 1998, BSAPP accounted for nearly all of State funding of Education (91%) while today BSAPP has been supplemented by allotments made via ‘weightings’ and now accounts for only 55% of State funding of education.

The only way to fairly compare the change in BSAPP over the years would be to deduct those items that once were paid out of the base but are now in supplemental funds (or vice versa; increase BSAPP each year on the same basis). 

Posted by Dave Trabert on Wednesday, April 25, 2012
School districts, and now newspaper editorials, see today's KC Star, only want to talk about base state aid when it comes to discussions about K-12 finance in Kansas. However, base state aid is only about 30% of this year's estimated total funding.

Here are some facts that are conveniently ignored in too many discussions of school funding. Every fact below comes from the Kansas Dept. Of Education; Deputy Commissioner Dale Dennis provided the 2012 estimates to KPI last November.

Total spending in 2012 is predicted to be $5.672 billion and set a record. State aid is set to account for $3.157 billion, at $6,931 per-pupil. That is more than double base state aid.

While there have been recent declines in state aid, they have been grossly overstated. 2012 aid is only 4% below the 2009 peak but is 34% higher than in 2005.

A good portion of these increases have gone directly to Instructional spending, as defined by the state. In fact, that number has increased 87% between 1999 and 2011 and more than double the combined rates of inflation (32%) and FTE enrollment (1%).

At the same time spending has increased, current operating cash reserves (excluding capital outlay, federal and bond payment funds) have increased to a record-high $868 million at the beginning of this year. That’s 90% more than was in those accounts in 2005. The balances increased more than $400 million as state and local tax dollars were not spent.

Some level of reserves is appropriate, but districts had no cash flow problems when they had $500 million in reserves. They could and should spend some of that money left over from prior years while still operating responsibly.

If the Senate gets their way and spends $74 million it would reduce the State’s ending balance. How is it logical for the State to spend reserves but not school districts, especially since districts' reserves are far greater than the State's?

The Senate plan is not logical...or prudent. It is political.
Posted by Dave Trabert on Sunday, April 22, 2012

Last Wednesday, April 18, the Wichita Eagle editorial page made an outrageously false claim about Kansas Policy Institute, saying we were 'playing fast and loose with the truth.  Our crime?  We have a fact-based opinion with which they disagree!

We asked for an immediate meeting to make our case and request a retraction, but the Opinion Page Editor, Phillip Brownlee, said he wasn't available until next week but didn't believe a meeting was really necessary, saying "It's just that The Eagle editorial board (and the Kansas Dept. of Ed, school districts and many other observers) thinks the ads are misleading. Even your last piece to us was misleading, implying that the state had lowered its standards because the cut scores had changed and its terms (proficient, satisfactory) had changed. The cut scores changed because the test changed, not because the standards were lowered. And the terms changed in order to match the NCLB terminology (again, it didn't lower standards)."

The Eagle editorial board, KSDE, local districts and others don't like the ads because they disclosed that proficiency does not require full comprehension of grade-appropriate material.  There is nothing whatsoever misleading about stating that fact.  The 'misleading' part is that parents hadn't been told that standards were that low or that they had been reduced.

Our last piece to the Eagle didn't 'imply' that standards were reduced in 2006, it stated it for a fact based on documents we acquired from the Kansas Department of Education.  According to the Kansas Assessments in Reading and Mathematics 2000 Techical Manual, the five assessment categories were once (highest to lowest) Advanced, Proficient, Satisfactory, Basic and Unsatisfactory; at some point between 2000 and 2006 (when the cut scores were changed) they were changed to Exemplary, Exceeds Standard, Meets Standard, Approaches Standard and Academic Warning.

As explained in this full-page ad we ran in the Eagle on Sunday, April 22 (yes, we had to spend a lot of money to get the truth in front of Eagle readers), the former categories of Proficient and Satisfactory were combined into a single category now called Meets Standard.  (As KSDE says, "...a proficient student has satisfactory comprehension....").  A student formerly had to fall into one of the top two categories to be proficient, but now only has to be in the top three categories.  

The KNEA (teachers' union) likens the current definition of Meets Standard to a 'C.'  If they are consistent in their logic, they must also believe that a student previously had to earn a 'B' to be considered proficient.

KSDE lowered the cut scores in 2006 - the minimum percentage of correct answers required for inclusion in each category.  Some people believe lower cut scores are not necessarily indicative of lower standards (arguing that the test could have been made infinitely harder) but there is nothing in the KSDE Technical Manual that says so. Proficiency under the 2000 standards required having at least 87% correct answers; now it is as low as 63%.

But even if you discount the change in cut scores, there is no denying that the U.S. Department of Education says Kansas has some of the lowest standards in the country.  They say Kansas' 4th grade Reading standard is lower than 40 other states; the 8th grade standard is lower than 35 other states.  

If that's not enough proof, there's more.

That same KSDE 2006 Technical Manual says the standards were changed to such extent that no comparisons to prior years' achievement results should be made.  (Sometimes it's important to note what people don't say; we find no place where they say the standards were made more difficult in 2006, yet no comparisons to prior years should be made.  If standards were essentially the same, comparisons would be OK...but if they were lowered....)

Of course, written policy saying comparisons to prior years results should not be made does not stop KSDE and local districts from doing it anyway.  (Imagine what editorial writers would say about KPI if we did something like that.)  

Who do you think is 'playing fast and loose with the truth'?

 
Posted by Todd Davidson on Friday, April 20, 2012
Capitalism is the most amazing vehicle for social cooperation that has ever existed. And that’s the story we need to tell… to show that it’s about creating shared value, not for the few, but for everyone.

~John Mackey, Co-Founder of Whole Foods Market

Cooperation is as much a part of capitalism as competition.  Both are essential elements of the simple system of natural liberty, and most of us spend far more of our time cooperating with partners, coworkers, suppliers, and customers than we do competing.

~David Boaz Executive Vice-President of the Cato Institute

The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants.

~Adam Smith

Tom Palmer, editor of "The Morality of Capitalism," will be making the moral case for capitalism at a free reception and lecture that is open to the public in Overland Park on 15 May and in Wichita of 16 May. Event details are below and be sure to check out the video for more information.

Overland Park - 15 May 2012
When: 5:30 p.m. reception and 6:30 p.m. lecture
Where: Overland Park Sheraton - 6100 College Blvd.
RSVP HERE, via e-mail at events@kansaspolicy.org, or by calling 316.634.0218

Wichita - 16 May 2012
When: 5:30 p.m. reception and 6:30 p.m. lecture
Where: Hyatt Regency Downtown - 400 W. Waterman
RSVP HERE, via e-mail at events@kansaspolicy.org, or by calling 316.634.0218

Posted by Todd Davidson on Tuesday, April 17, 2012

This week Wichita Downtown Development Corp. (WDDC) is hosting workshops to foster grassroots community engagement for downtown Wichita.  During these workshops participants will be given an imaginary $500 to make Wichita a “better more interesting place,” which begs the question will any group reward the people already working hard to make Wichita an interesting place?

My first thought is to donate $500 to the unfortunate tornado victims.

logoIf it were not for Saturday’s storms I would first use the money to treat the office to authentic Mexican cuisine at Angela’s Café on the corner of E Central and N Mosley ($50).

On my way home I’d stop by Yoder Meats to buy some award winning smoked meats and cheeses.  Next door at the Seafood Shop I’d pick up some fresh lobster tail, ($100, yes you can get fresh seafood in land locked Wichita)!

To go with my surf and turf dinner logoI’d buy a bottle of Grace Hill Winery’s fine Cabernet Franc, made from grapes grown right here in Kansas ($24).  Then travel up northwest to the Wichita Brewing Company to purchase a growler of their handcrafted Half-Wit Wheat ($16).

All this driving around would surely wear down my tires, fortunately Wichita is home to Tracy’s Automotive, where I can receive a much needed tune-up and new set of tires ($250).

logoWhile waiting on my new tires I would enjoy some live music as I chow down on a delectable Maple Bacon donut at the Donut Whole ($10).

Luckily Safe Riders could drive me to the Shockers game where I can enjoy the 70 and sunny weather with friends ($50).

Wichita is home to an “interesting” community; let’s stop implying that our hard working businesses are boring and start rewarding the individuals that have been here making this community great.

Posted by Todd Davidson on Tuesday, April 10, 2012

Today the Bureau of Labor Statistics released Wichita Metro Area February employment numbers, small gains are a positive step, but yet again we see public sector employment growth outpacing the private sector.  One month is nothing to fret over but a 13 year trend can be telling, as this can only mean higher taxes on a struggling private sector.

Since 1998 the Wichita Metro Area has seen all levels government grow and grow, while private sector employment has often failed to stay above water.  The chart below indexes Wichita Metro Area employment growth in the private sector and levels of government, (any value below 100 means employment is lower than 1998 levels).

Source: Bureau of Labor Statistics

Wichita private sector employment peaked in 2008 at 267,000, but has since lost 24,500 jobs. Only 4 of the 13 years since 1998 has Wichita employed more private sector workers than in 1998. 

All local gov't in the metro area fared better, each year setting a new record level of public employment, until shaving a few workers in 2011.

In 1998 there were 10.35 private sector employees supporting 1 local public sector employee, by 2011 that number decreased to 8.45.  Meaning a heftier tax burden must be carried by each private sector employee to support the growing local public sector.

Posted by James Franko on Thursday, April 05, 2012

This post is courtesy of Bob Weeks and his Voice for Liberty in Wichita blog, where the piece originally appeared.

Recently Kansas Governor Sam Brownback and U.S. Senator Jerry Moran of Kansas made the case for extending the production tax credit (PTC) for the production of electrical power by wind.

The PTC pays generators of wind power 2.2 cents per kilowatt-hour produced, a high rate of subsidy for a product that sells for 9.5 cents, according to a March 2010 illustration provided by Westar.

Brownback and Moran contend that this tax credit is necessary to let the industry "complete its transformation from being a high tech startup to becoming cost competitive in the energy marketplace." But wind is not a new industry. The PTC has been in place for twenty years. If an industry can't get established in that period, when will it be ready to stand in its own?

The authors also contend that canceling the PTC will result in a "tax hike on wind energy companies." To some extent this is true -- but only because the industry has enjoyed preferential tax treatment that it should never have received.The proper way to view the PTC is as a government spending program in disguise. That's the true economic effect of tax credits. They are equivalent to grants of money.

Amazingly, Brownback and Moran do not realize this -- at least if we take them at their written word as they describe the PTC: "These are not cash handouts; they are reductions in taxes that help cover the cost of doing business." (Emphasis added.)

It is the mixing of spending programs with taxation that leads these politicians to wrongly claim that tax credits are not cash handouts. But not everyone falls for this seductive trap. In an article in Cato Institute's Regulation magazine, Edward D. Kleinbard explains:

Specialists term these synthetic government spending programs "tax expenditures." Tax expenditures are really spending programs, not tax rollbacks, because the missing tax revenues must be financed by more taxes on somebody else. ... Tax expenditures dissolve the boundaries between government revenues and government spending. They reduce both the coherence of the tax law and our ability to conceptualize the very size and activities of our government. (The Hidden Hand of Government Spending, Fall 2010.)

U.S. Representative Mike Pompeo of Wichita recognized the cost of paying for tax credit expenditures when he recently wrote: "Moreover, what about the jobs lost because everyone else's taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families."

This is an example of the seen and unseen, and also of the problem of concentrated benefits and dispersed costs. Politicians hope we won't notice.

When Brownback and Moran write of the loss of income to those who profit from wind power, we should remember that these profits do not arise from transactions between willing partners. Instead, they result from politicians who override the judgment of free people and free markets with their own political preferences -- along with looking out for the parochial interests of the home state. We need less of this type of wind power.
Posted by Dave Trabert on Friday, March 23, 2012
Today’s Lawrence Journal-World had another ‘sky-will-fall’ story warning of economic catastrophe that would accompany tax reform in Kansas.  “Study says lower state income taxes will lead to higher property, sales taxes” is based on a ‘study’ by the Center for Budget and Policy Priorities (CBPP) based in Washington, DC.  

New York Times reporter Matt Bai says the Center for Budget and Policy Priorities (CBPP) is funded by the Democracy Alliance.   According to Bai's account, representatives of CBPP attended a May 2006 meeting of the Democracy Alliance to "talk about the agendas they were busy crafting that would catapult Democratic politics into the economic future."  

It's quite telling that the left-leaning Lawrence Journal-World calls this organization 'non-partisan' but consistently labels free market- oriented organizations as 'conservative'.  

The CBPP study's conclusion is based on nothing more than an assumption: "the state will likely find itself both raising other taxes on middle- and low-income families and making massive cuts to vital services that will badly damage the state’s economy."

This is the classic 'either/or' ultimatum that governments typically give taxpayers...either pay higher taxes or surrender some service you want. In other words, give us what we want or pay the price. Instead, governments should examine every program for effectiveness and efficiency, always looking for ways to maintain essential services at the most cost-effective manner. States with lower tax burdens have far greater job growth and wage & salary disbursements; their private sector GDP dwarfs high burden states. They gain population from people choosing to move from other states while the high burden states (including Kansas) lose population from domestic migration.

The key to having a low tax burden is to control spending, and that's exactly what low burden states and those with no income tax do. According to the National Association of State Budget Officers, states with no income tax spent $2,444 per resident in 2010 while the rest of the country averaged $3,572 or 46% more. Kansas spent $3,216 per resident and would have saved $2.2 billion by spending at the rate of states with no income tax.

Tax reform is about job creation and economic growth. The CBPP 'study' is about justifying the continuation of policies that have fed the growth of government and largely contributed to sub-standard private sector economic growth.

Posted by Dave Trabert on Sunday, March 18, 2012
A commentary in the Wichita Eagle by USD 259 school board member Connie Dietz attempts to blame Governor Brownback and the current legislature for school closings and is loaded with false information.

It is disingenuous at best to blame school closings on the current governor and legislature when the changes to school funding, which were prompted by a serious recession, began under a previous governor and legislature.

 And the overall impact of the changes has not been even close to those claimed by Ms. Dietz.  Neither state funding nor overall funding have been 'cut back to 1999 levels' and she knows it.  Ms. Dietz is only referencing a piece of state funding.  The truth, as provided by the Kansas Dept. of Education and Wichita financial reports, is that:

 - State support of public education in 1999 was $2.04 billion; this year it is expected to be $3.2 billion.

 - Total taxpayer support increased from $3.2 billion in 1999 to $5.7 billion this year.

 - KSDE online records for individual districts only go back to 2002 but show state aid per-pupil for Wichita was $4,812; last year it was $7,092.
 
- Total taxpayer aid to Wichita schools was $8,393 per-pupil in 2002; last year it was $13,069.

When governments talk about budget cuts, they are most often talking about reducing their plans to spend more rather than actually spending less money.  According to data provided by KSDE, the Wichita district has spent more money every single year.  The pace of the increase certainly slowed in the past few years but they are still spending more money every single year.

Even their current operating expenses have increased.  The first column below shows total spending for USD 259 from the Kansas Comparative Performance and Fiscal System; the second column shows current spending, with all Capital Outlay and Debt Service removed (all figures in millions):

2005   $422.4   $383.4
2006   $468.1   $429.7
2007   $527.1   $471.3
2008   $552.0   $507.6
2009   $573.9   $523.5
2010   $585.5   $524.3
2011   $603.8   $526.9

The recession certainly created a lot of unfortunate challenges for everyone but taxpayers and parents deserve honesty from elected officials, not political rhetoric and false information.
Posted by Dave Trabert on Friday, March 16, 2012

The Bureau of Labor Statistics annually revises prior year job numbers and the new 2011 numbers show that Kansas and many states actually had slightly more job growth than originally reported.

Each January BLS performs a final revision on all monthly jobs reports or as the BLS puts it:

This year the Bureau of Labor Statistics (BLS) used special model adjustments to control for survey interval variations for all seasonally adjusted data. These special adjustments are designed to correct for variations in the number of weeks between reference periods in any given pair of months. This resulted in revisions to many seasonally adjusted series affecting data from 1990 forward.  Full details available here.

The numbers changed for each month and resulted in an increase of 15,600 private sector jobs on an average annual basis.  As a result, Kansas now officially recorded a 1.65% increase over 2010; previous reports showed an increase of 0.4%.  The revised numbers also show that Kansas has finally pulled ahead of 1998 employment levels.  Previous reports showed Kansas had 1.1% fewer private sector workers in 2011 than in 1998; the revised report now shows an increase of 0.4%.

Data for all states was revised but Kansas’ upward revisions also improved its competitive position.  Kansas’ previous 2011 growth rate of 0.4% had the state ranked #49, or the second worst in the nation.  The revised 2011 growth rate of 1.65% places Kansas at #23.  Among regional states, Texas, Oklahoma and Colorado had stronger job growth; Missouri and Nebraska had gains but grew at a slightly smaller rate than did Kansas.

The improved numbers are encouraging but Kansas’ private sector employment remains 52,000 jobs (4.65%) below its 2008 peak.   


Posted by Dave Trabert on Wednesday, March 14, 2012

Have you noticed that some of the same people who say the State should spend its surplus balance have a completely opposite opinion about school districts?

Today’s story in the Topeka Capital-Journal about House Appropriations recommendations on school funding misstates what was actually proposed.  School funding would not be 'cut' in the sense that money is taken away.  As explained today in the Wichita Eagle, the Governor's budget proposed adding $29 million this year and the House Appropriations action is simply eliminating the proposed increase.

The rationale for not increasing funding is that districts already have the money in carryover cash reserves – state and local tax dollars provided in prior years that were not spent.  Legislation passed last year gives districts the authority to transfer up to $154 million to current operations this year and to date, only $24 million of that authority has been exercised.  Even if districts used the entire $154 million, they would still have about $700 million left over, plus another $837 million in Capital Outlay and Debt Service funds.

School districts' balances in their current operating funds have increased 90% over the last six years, going from $458 million to $868 million.  Those balances increased every single year, which means districts didn't spend all of their tax dollars...every single year.

All government entities need some degree of surplus balances but district balances are much larger than state balances.   And not just in total dollars.  The state's goal is to have the statutorily required ending balance equal to 7.5% of General Fund expenditures.  School districts' ending balances in their current operating funds (everything but capital and debt service) represented 11.7% of current expenditures in 2006 and increased to 16.0% by 2011.  The current reserve ratio is somewhere between 16.6% and 18.8%, depending upon which budget figures one uses from KSDE.  Carryover cash reserve balances by district are available on KansasOpenGov.org.

We agree that excess reserves should be used to fund current operations instead of taking more money from taxpayers.  Those who believe the State of Kansas should give some of it's relatively small surplus to school districts should be consistent and call for school districts to tap their own large reserves instead of asking taxpayers for more money.

Posted by James Franko on Wednesday, March 14, 2012
Last month, Wichita voters took to the ballot box to weigh in on whether the City of Wichita should provide government funded incentives for a new downtown hotel.  This vote reminded everyone that a debate, in Kansas and around the country, remains about the best way to create jobs and economic prosperity.

As the Wall Street Journal wrote after voters decided against this incentive package:

Local politicians like to get in bed with local business, and taxpayers are usually the losers. So three cheers for a voter revolt in Wichita, Kansas last week that shows such sweetheart deals can be defeated. 

Policy beliefs aside, some degree of incentives may be necessary as long as some companies expect them, but pragmatism also dictates that neither Wichita nor the State of Kansas can win an economic development war where the largest checkbook wins.  Fortunately, incentives aren’t the only way to compete and in fact may only be important to a small portion of potential employers.

Should we increase incentives?  What about lower taxes and less regulation?  Targeted government spending or investment? These are some of the important issues that will be addressed on 11 April at an economic development summit hosted by KPI.

National and Kansas experts will join at the WSU MetroPlex for a half-day of panel discussions and expert presentations. This free event is open to the public and you can register here. Breakfast and lunch will be served and you can view the full agenda below;

Eco-Devo Through Economic Competition - 11 April 2012

7:30 – 8:15 a.m.: Registration and breakfast

8:15 a.m.: Welcome
- Dave Trabert – President of Kansas Policy Institute

8:30 a.m.: Implications of "Location Matters: A Comparative Analysis of State Tax Costs on Business
- Joe Henchman - Vice President of Legal and State Projects at the Tax Foundation

9:00 a.m.: Shaping Government to Increase Competitiveness
- The Honorable Maurice McTigue - Vice President of the Mercatus Center at George Mason University

9:45 a.m.: Break

10:00 a.m.: Panel Discussion - Different Perspectives on Competitiveness and Development
- Ron Wilson - Director of the Huck Boyd National Institute for Rural Development at Kansas State University
- Jeremy Hill - Center for Economic Development and Business Research at Wichita State University
- Art Hall, Ph.D. - Executive Director of the Center for Applied Economics at the University of Kansas
- The Honorable Maurice McTigue, Vice President of the Mercatus Center at George Mason University
- Walter Berry - Chair, Wichita Metro Chamber of Commerce Board of Directors
- Nick Jordan, Kansas Secretary of Revenue

11:45 a.m.: Break

12:00 p.m.: Lunch served

12:15 p.m.: A Perspective from Washington
- U.S. Representative Mike Pompeo
Posted by Dave Trabert on Monday, March 12, 2012
A KPI student achievement awareness campaign (an example from the Topeka Capital-Journal is here) has prompted a few people to question whether the ads are correct. The Kansas National Education Association (KNEA) also issued a press release full of blatantly false accusations about KPI and the campaign.

It’s understandable that people might think there is something wrong with the ads. Most people reasonably believe the descriptions listed in the ads – “reads grade-appropriate material with full comprehension” and “usually performs accurately on most grade-level tasks in Math” – are the definitions of Meets Standard or Proficient.

The truth, however, is that those are the Kansas definitions of Exceeds Standard. A student does not have to read grade-appropriate material with full comprehension or usually perform all grade-level Math tasks accurately to be considered Proficient by state standards. The ads accurately reflect the percentages of 11th grade students who perform at or above the listed performance descriptors. Here are their definitions for  Reading:

Meets Standard – when reading grade-appropriate narrative, expository, technical and persuasive text, a proficient student has satisfactory comprehension.

Exceeds Standard – when reading grade-appropriate narrative, expository, technical and persuasive text, an advanced student has full comprehension.

As we have traveled the state discussing education in public forums, we’ve found that parents and even some educators have been shocked to learn that Kansas has such low standards. (The U.S. Dept. of Education says Kansas has some of the lowest standards in the country.) An honest examination of all the facts on student achievement shows that a lot of changes are needed to help every student reach their full potential, but a false sense of high achievement is a tremendous barrier to change.

State assessment results are not the only indication that achievement is lower than most people understand. The U.S. Department of Education reports much lower proficiency levels and shows next to little progress over the last thirteen years. The ACT college-readiness measurement says only 28% of 2010 Kansas high school graduates scored high enough to be considered college-ready in English, Reading, Math and Science. KSDE says 21.1% of Kansas high school graduates who attend a Kansas university sign up voluntarily for remedial training. That all makes sense when you understand that KSDE tests show that only about half of 11th graders in Kansas have full comprehension of grade-appropriate material.


The KNEA press release deliberately misrepresents the ad content by implying that full comprehension of grade-appropriate material is the same as Proficient. KNEA may not want parents to know the truth but we’ve been sharing this information with legislators, parents and educators for nearly a year and KSDE has not denied the facts we include in the awareness campaign.

This is not about assessing blame or criticizing students and educators; we have no doubt that educators are doing their best within the confines of the current system. It’s about taking an honest look at student achievement and deciding whether the current system is producing acceptable results or whether some changes are needed. Our kids deserve nothing less.

[Editor's Note: KSDE released a revised report showing that 21.1% of Kansas high school graduates who attend a Kansas university sign up voluntarily for remedial training whereas the original report said 24.6%.]

Posted by James Franko on Friday, March 09, 2012
By now, hopefully you've seen an advertisement in your local paper about the student achievement levels of your area districts. If not, you can view an example of one from the Topeka Capital-Journal here. A version of this exact same ad is running in multiple papers around the state highlighting surrounding districts; you can find the numbers for your district's reading and math scores at www.KansasOpenGov.Org.

What seems to be drawing the most attention is that many Kansans understand student achievement to be higher than what we published. This is because we looked beyond the top-line definitions of student achievement (e.g., Meets Standard) and examine the underlying verbiage that supports it.

Right up front, we are using data directly from the Kansas Department of Education. As with all data at KansasOpenGov, it is from an official government source, in this case KSDE, and is publicly available (we just put it all in one place) or we filed the appropriate Kansas Open Records Act request.

The question we're asking Kansans to keep in mind as they digest the advertisement and this blog is - Are these levels of student achievement good enough?

For instance, the high school reading definition for Meets Standard, from KSDE, reads as “When independently reading grade-appropriate narrative, expository, technical, and persuasive text, a proficient student has satisfactory comprehension.” It is only when a student achieves “Exceeds Standard” status that they are expected to have “full comprehension.”

Let's look at what this means in real terms and use an example from the advertisement linked to above. In the ad, USD 330-Mission Valley is listed as having 50% of 11th grade students who read grade-appropriate material with full comprehension and 71% are usually accurate on all grade-level math tasks. Those numbers reflect the percentage of students who ranked as "Exceeds Standard" and "Exemplary" on the 2011 state exam in either category.

The confusion arises because often a school district or the state point to the number of student at or above grade-level to include those student who "Meets Standard.” Strictly using the state’s top-line definitions, 100% of 11th graders in Mission Valley meet or exceed the state standard in math and 93.3% at the same level on reading.

Remember, a student who “Meets Standard” doesn't have to fully understand his reading material or accurately complete all of his math problems.

So, the question remains, are these levels of achievement good enough?

Many Kansas students receive a fine education, but too many are being left behind. The only way we can have a conversation about how to move forward is to be honest with what our children are achieving. Let’s also remember that there appears to be no link between student achievement and K-12 spending. For instance, between 1998 and 2011, funding for public education in Kansas increased from $3.1 billion to $5.6 billion and Kansas test scores on the “gold standard” of achievement tests from the U.S. Department of Education are virtually unchanged.

We applaud the hard work of Kansas students and teachers but also think some are taking the easier route of looking for evidence to defend the status quo rather than taking an honest look at where we are and how we can get better.
Posted by James Franko on Wednesday, March 07, 2012
As we tour the state discussing K-12 education, the one constant theme is that No Child Left Behind (NCLB) has been a millstone around the neck of the entire system.  Teachers, administrators, parents, board members, legislators, you name ‘em and people are in near-lockstep agreement that NCLB is, at best, rubbish and, at worst, an educational and constitutional train wreck.

Articulated in countless ways, the arguments against NCLB boil down to more bureaucratic meddling in the classroom interfering with student learning.  From states to teachers to students, the classroom experience is less about learning and more about meeting a national standard.

It should be no surprise, then, that many are starting to offer the same criticisms of the Common Core (CC) curriculum.  CC is being sold as voluntary, but it turning into yet another federal takeover of a state’s prerogative.

CC was originally envisioned as states deciding on their own to agree to basics of student curriculum and standards.  Unfortunately, and unsurprisingly, what was originally envisioned has been polluted by an increasingly political education apparatus in Washington, D.C.

How are the supposedly voluntary CC being hijacked by the Feds?  Both with money and with the desire to get out from underneath that other oppressive, nationally mandated education protocol known as NCLB.

Kansas is like many states and continues to feel the pinch of a very tough economy.  In response, the financing of states priorities are under review.  No different with K-12 education and Race To The Top money being offered to states through the U.S. Department of Education.  Education Week’s blog said it best last March when describing the federal dictate to states on Race To The Top funding.

I'm sure you remember, because it set a lot of people's neck hairs on end, that President Obama recently proposed that Title I [Race To The Top] funding for disadvantaged students be tied to whether states have adopted the Common Core State Standards.

And I am also sure you know that in order to get the most bang for their buck in Race to the Top applications, states have to promise to adopt the common standards.

It is unrealistic to believe that states won’t belly up to the federal bar for this happy hour special.  Policy makers respond to the same incentives as do individuals and what is ceding a little K-12 control to the Feds in exchange for more money?  Nearly every other area of public policy is moving in that direction, so why not education?

Second, as states work to get out from underneath the widely-panned NCLB, they are being encouraged (much like the Corleone Family encouraged filmmakers to hire family members) to adopt CC.  Once again, the Education Week blog offers some insight into what is takes for a state to score a NCLB waiver.



 …a key requirement for states seeking a waiver is that they have adopted "college- and career-ready standards" and assessments. The standards don't have to be the [Common Core standards]. But if they're not, a state will have to certify, through its public higher education system, that its standards are tough enough that mastery of them will serve as a passport allowing students to skip remedial courses in college and go right into credit-bearing work.

That is a pretty powerful ONE-TWO combination for states to ignore, “Hey Kansas!  We’ve got money for you to spend on K-12 education and we’ll even let you off the hook from NCLB.  All you have to do is let us effectively run your schools from Washington.”

Which gets us back to where we started as the one common theme as we talk to people around Kansas – more federal, and Topeka, involvement in education does nothing to help Kansas students learn.  In fact, returning control to local school boards is at the heart of Governor Brownback’s K-12 finance plan.  Regardless of its other faults, the plan recognizes the imperative to put control in the hands of those closest to actual student learning.

Assurances that CC won’t turn into NCLB on steroids amount to a collective “trust us” from its proponents.  “Things weren’t perfect with the previous regulations, but we’re smarter now and have learned from our mistakes.  This time we’ll get it right,” is a common enough bureaucratic refrain as to be cliché.

Let’s stop pretending that CC is voluntary and call it what it is – an offer state can’t refuse.  

Proponents of the education status quo often turn to images of a dedicated teacher, toiling for hours with little pay to help Johnny learn his multiplication tables.  Teacher and student grinding out hour after hour to learn and succeed and it works because we all had a teacher who stuck around after class to help us get past that stumbling block and remember their dedication to us.  

How does more red tape and bureaucratic intrusion help that teacher get through to a struggling child?  It doesn’t and every teacher we’ve spoken with will be happy to tell you about how NCLB is driving them out of the classroom.  

CC is no different and further threatens to undermine the best parts of our educational system and institutionalize the worst.  
Posted by Dave Trabert on Monday, February 27, 2012

The February 21 newsletter published by Kansas Education Policy Report, a subscription-based news service located in Topeka, included the following accusatory statement:

"That’s because districts receive large property tax distributions in May of each year, near the end of the school year, which makes their June 30 carryover amounts look artificially high – a quirk in the system that is often exploited by critics who allege districts carry excessively large cash balances.” 

Saying that critics are ‘exploiting’ what they call a quirk in the system is simply not true and an attempt to brush aside a very substantive issue.  Anyone who has followed our writing on carryover cash balances knows full well that the primary issue is that the balances continue to grow each year, which the commentary completely ignores.

Payments and expenditures occur on the same schedule each year.  These funds operate on a cash basis, just like personal checking accounts.  Since there is an annual reconciliation of outstanding encumbrances as of June 30, the only way that ending unencumbered balances grow is for annual revenue to exceed annual expenditures.  

The July 1 unencumbered balances by district and fund are available at KansasOpenGov.org.  Annual unencumbered carryover cash balances in current operating funds (excluding those dedicated to Capital Outlay, Debt Service and Federal funds) grew every single year since 2005 as follows:

2005 – $458.2 million
2006 – $494.1 million
2007 – $542.3 million
2008 – $587.1 million
2009 – $699.2 million
2010 – $774.6 million
2011 – $868.3 million

The 2011 total includes $8.3 million in Activity Funds which had not previously been reported by districts, but the balance of the $402 million difference between 2005 and 2011 ending balances represents state and local taxpayer funds that districts received but did not spend.  

Districts need some degree of carryover balance but the fact that these balances have grown nearly 90% in the last six years is a clear indication that the funding formula is giving districts more money than they need to provide current services.  

Further evidence is found by examining the trend in Current Carryover Ratio, which measures the beginning balance in current operating funds (as described above) as a percentage of that year’s current operating expense (total expense less capital and debt service).  The 2006 Current Carryover Ratio was 11.7% (July 1, 2005 beginning balance divided by 2005-06 current expenditures).  The ratio dropped a bit in the next two years but look at what happened in the last few years:

2006 – 11.7%
2007 – 11.0%
2008 – 11.3%
2009 – 11.9%
2010 – 14.4%
2011 – 16.0%

The 2012 budgeted ratio is even higher, although the exact amount depends upon which budget data one uses from KSDE.  The Carryover Reserve Ratio report on KansasOpenGov also shows that dozens of districts have consistently operated with less than a 10% ratio…quite a few even operate with less than 5%.  That is a strong indication that many of those districts operating with reserve ratios of 20% (and much higher) are likely doing so by choice, not necessity.

Deputy Commissioner Dale Dennis has said on numerous occasions that districts increased their reserves (by not spending tax dollars on current services) in the last three years in reaction to changes in state funding and because the state has been late making payments.  Motivation aside, districts’ choice to put some of their aid dollars in the bank indicates that at least that amount of money must be considered discretionary; surely, districts would not deny services to students that they believed are truly needed when they have more money to spend.  

It is also noteworthy that districts have reportedly been paid on time this entire year and it is anticipated that that will continue into the future.  Still, the last report from KSDE showed that districts had only chosen to draw down $24 million of the $154 million authorized by SB 111.

The bottom line, if you will, is that every dollar unnecessarily appropriated to one service is a dollar that is either taken away from another service or is unnecessarily taken from taxpayers.  We believe government has a fiduciary and moral obligation to use taxpayer funds efficiently and effectively.   While there is no question that government entities need some degree of carryover reserves, the evidence overwhelming indicates that school district operating reserves are much higher than is necessary.
Posted by Todd Davidson on Thursday, February 23, 2012

The current K-12 funding formula is not designed to provide schools with the minimum resources they need to achieve required outcomes while also operating and being organized in a cost-effective manner because such a study has never been conducted in Kansas.

The Augenblick & Myers 2001 study that was used by the Montoy courts was supposed
to have taken efficiency into account but, as explained by Caleb Stegall in “Analysis of Montoy vs. State of Kansas,” A&M chose to ignore efficiency. 

A&M presented the court with inflated numbers by deliberately including 50 high-spending districts that did not meet their own criteria for 'successful schools' - those achieving required academic outcomes and also operating in a cost-effective manner.  

The subsequent Legislative Post Audit study merely duplicated the bogus A&M study.  It is particularly noteworthy that LPA carefully pointed out on page 2 of their report that they were not asked to determine what it would cost to achieve required outcomes AND have schools organized and operating in a cost-effective manner.

The only logical thing to do is to finally have such a study conducted and then fund it.

Dave Trabert


Posted by Dave Trabert on Tuesday, February 14, 2012

You may have read about a new plan in the Wichita Eagle to incentivize new home purchases.

"With new-home construction foundering and builders buried under the weight of taxes on unsold lots, the Wichita City Council on Tuesday will look at a plan to jump-start the flagging local homebuilding industry.

"City staff is recommending adoption of a five-year property tax moratorium for the first 1,000 qualifying new houses built over two years. The city and the Wichita Area Builders Association started developing the plan in October in an attempt to reinvigorate a market that has stagnated with declining sales and tight credit."

This proposal may be a well-intended effort to help home builders and some taxpayers, but it would do so at the expense of all other businesses and taxpayers.  Unless the City of Wichita reduces spending by the amount of the tax rebates, the foregone revenue will have to be made up by everyone else.  Government doesn't just spend money when it writes checks, it also spends taxpayer money when it gives credits, rebates, loans and other types of incentives.

City Council should also recognize that rebating property taxes to buyers of certain new homes will also harm taxpayers who are trying to sell existing homes.  

If the City of Wichita wants to help (all) taxpayers, the best way it can do so is to cut spending and reduce everyone's taxes.  The City's annual financial reports show that property tax collections increased from $59.3 million in 1997 to $115.4 million in 2010.  That's a 95% tax increase.  Over the same period, Wichita's population increased 16% and inflation was up 33%.  There is no good justification for taxes to increase at nearly double the rate of population and inflation.
Posted by Todd Davidson on Monday, February 13, 2012

The Institute on Taxation and Economic Policy (ITEP) recently published a paper arguing that the nine states with the highest income taxes are actually faring better than the nine states with no income tax.  ITEP cites Gross State Product (GSP) per capita, Real (inflation-adjusted) Median Household Income, and the Unemployment Rate as their basis.

Using per-capita data to justify that high-tax states are doing well deliberately discounts overall growth in GSP, employment and population shifts.  One needs only a simple drawing to see GSP Per Capita, Real Household Income, and the Unemployment Rate are not appropriate measures.

In this first scenario our state has nine individuals; seven earning an income and two unemployed.  GSP per capita is $3, Real Median Household Income is also $3, the Unemployment Rate is 22%, and lastly our overall wealth is $28.  Now supposed the first 4 individuals decide to seek opportunity in another state.  Now our state looks like this:

Our GSP per capita is $5, Real Household Median Income is $5, the Unemployment Rate is 0%, but our overall wealth is now $25.  Not one person’s wealth increased and in fact our state is worse off, we have fewer jobs and less wealth.

This is precisely what IRS data suggests is happening.  From 2000 to 2009 the average adjusted gross income for taxpayers leaving the 9 states with the highest income taxes was $59,502, which is $5,000 lower than the average AGI for those states.

Instead of focusing on math trickery to justify our spending habits we need to focus on the policies that foster wealth and job creation.

  • The nation saw 2.9% decline in private sector employment between 2001 and 2010.
  • The 9 highest income tax states saw 4.8% decline in private sector employment.
  • The 9 states without an income tax saw a 2.4% increase in private sector employment.

(Source: Bureau of Labor Statistics)

Posted by Todd Davidson on Wednesday, February 08, 2012

Jonathan Williams of the American Legislative Exchange Council and coauthor of Rich States Poor States, spoke to the Senate Committee on Assessment and Taxation, a pro-growth crowd for lunch, and the House Committee on Taxation.  Jonathan reiterated what has been the case for decades now, a lower tax burden will lead to more output, more opportunity, and more jobs.

Below is a slide Jonathan presented to our legislators yesterday, as you can see,  states with No Income Tax achieved faster growth in Gross State Product, Population, and Jobs within the past ten years.  


Less intuitively Total State Tax Receipt Growth in the non-income taxing states actually outpaced the highest income taxing states.  How is this possible?  Texas gained 4 congressional seats worth of people who now pay sales tax, property tax, as well as any other tax in the state ~ Jonathan Williams.
In-short people move to the opportunities that a low tax environment fosters.

Kansas has a choice, do we take lessons from the other laboratories and propel our state into a high level of economic performance or do we continue to watch as other states pass on by with bold moves to foster more output, more opportunity, and more jobs. 


Posted by Todd Davidson on Friday, January 27, 2012

The Bureau of Labor Statistics December jobs report shows Kansas has a lot of ground to cover before private sector employment returns to its 2008 peak. Kansas began 2011 with private sector employment at 93.4% of the 2008 peak and finished 2011 at 94.4%.

Kansas still needs 63,000 jobs, roughly Butler County's population, to reach the 2008 employment high.Under the current scenario Kansas will not likely reach the 2008 peak for years to come. WSU’s Center for Economic Development and Business Research pinned Kansas private sector employment growth at just under 13,000 for 2012.

Aggressive tax reform that puts money back in the hands of hard working Kansans will help speed the recovery.

Posted by Dave Trabert on Monday, January 23, 2012
A recent story in the Wichita Eagle focused on comments from Senate Minority Leader Anthony Hensley, D-Topeka, regarding a conflict of interest for members of the House and Senate Tax Committees. After examining data gathered by the Eagle, showing that 20 of the 23 members of the House Taxation Committee and 9 of the 11 member of the Senate Tax Committee have business interests that would be exempted from state income tax under the Brownback plan, Hensley suggested that some of the members should consider recusing themselves from voting on the plan.

 “They certainly ought to at least let the general public and the rest of their colleagues know that they have a conflict of interest,” Hensley said. “We have rules in the Senate that provide for that.

“When a bill hits the floor on final action, you cannot be forced to vote if you have a conflict of interest and you announce that publicly before the vote takes place. It addresses this very kind of thing.”

It’s one thing if a piece of legislation targets a specific industry or employer, but when legislation applies uniformly as in this case, it’s simply not practical to have members of a part-time citizen legislature recuse themselves. And no one knows that better than Senator Hensley, a special education teacher in the Topeka district who routinely introduces and votes on legislation impacting public schools. Senator Hensley obviously believes he has no conflict on education issues, yet he has no problem finding fault with others who do the same as he.

It’s also noteworthy that the
Eagle story failed to mention this obvious conflict.
Posted by Todd Davidson on Monday, January 16, 2012

Here are a couple of maps for Monday, courtesy of our friends over at the Tax Foundation.
This first map shows the percent of income residents are paying to their state and local governments, essentially the price for services in each state.

The map below shows how much money each state has lost due to interstate migration. States, much like Wal-Mart and Target, must deliver services at a greater value than competitors to win over consumers, or residents.

Posted by James Franko on Wednesday, January 11, 2012
Too often in Kansas we talk a lot about how much we spend on K-12 education but not nearly enough time talking about student achievement.

Next week the House Education Committee plans to change that (at least for the day) with a series of hearings on Thursday 19 January.  Never mind the usual hearings of one person standing up and giving a canned speech.  Next week, Rep. Clay Aurand's committee will be having congressional style panels with multiple people testifying at the same time.  Hopefully allowing for a more robust discussion.  Check out the proposed speaker line up below...subject to chance, unfortunately.

9:00 a.m. – The State of Kansas Education
Dave Trabert - President of Kansas Policy Institute
Dr. Janet Barresi - Oklahoma State Commissioner of Education and member of Chiefs for Change
Mark Tallman - Kansas Association of School Boards

10:00 a.m. – Public School Reform
Natise Vogt – Walton (KS) Rural Life Center
Gary Lewis – Maize (KS) Virtual Preparatory School
Peter Groff – Visiting fellow at Johns Hopkins University School of Education and the Principal of MCG2 Consulting and the former President and CEO of the National Alliance for Public Charter Schools
Susan Patrick – President of International Association For K-12 Online Learning

The hearings will likely be held in the Old Supreme Court Chamber at the Capitol.

After the hearings, Dr. Barresi will present at a public lunch for legislators at the Topeka Capital-Plaza hotel.  More details to come.

Unless we start challenging the status quo, more and more Kansas kids will be left behind their peers.  Hopefully, this is the first step in the right direction.

Posted by Dave Trabert on Monday, January 09, 2012
A recent column by the KC Star’s Steve Rose (available here) tried to make the case that states with no income tax are only able to do so because they have unique revenue sources. Examples he gave included gambling in Nevada, tourism in Florida and oil & gas in Texas, Alaska and other states. Fortunately, Mr. Rose didn’t do his homework.

The key to having a low tax burden and/or no income tax is not access to extra revenue; it's how much you spend. Yes, some states with no income tax have unique revenue opportunities but they could just spend more and have higher taxes like other states. Instead, they’ve figured out that they can have good quality government services AND high job growth by controlling spending and keeping taxes low.

The nine states with no income tax spent $1,767 per resident in 2009 out of their General Fund. That was 27% less than the national average and 21% less than Kansas. If Kansas had spent at the rate of the no-income-tax states, we would have spent $1.1 billion less that year.

KPI compiled research comparing the states with the highest tax burden to those with the lowest tax burdens and also those with no income tax. The low burden states dramatically outperform high burden states on job creation, gross domestic product, wage & salary distribution and domestic migration (U.S. residents moving in and out of states). The states with no income tax tend to do even better.  Check out the facts here at our tax reform page.
Posted by James Franko on Monday, January 09, 2012

Okay, so this doesn't deal specifically with Kansas but it is a pretty good explanation of the work KPI does.

Around the world, the countries that are most economically free enjoy better health, longer life spans, a cleaner environment, and even their least well off populations have more money.  Why should it be any different in Kansas?

The answer - It wouldn't be any different!  The freer Kansans are to provide for themselves and their family, the better off the entire state will be.

Tip 'o the hat to www.EconomicFreedom.org for the video

Posted by James Franko on Monday, January 09, 2012

Welcome to KPI's latest effort to help make Kansas a freer and more prosperous place to live and work.  (Please note the use of the German word for "welcome" because who doesn't appreciate a tip of the hat to the native language of the Austrian School of Economics.)

My name is James Franko (sorry, not the actor but this one) and I'm in charge of making sure we get this blog started off on the right foot.  To that end, our goal is to create a place to discuss the public policy questions facing our state. We believe this can be done in a courteous way that allows for all voices to be heard and respected.

With that in mind, please remember that Kansas Policy Institute is a 501(c)3 non-profit organization and is governed by rules that will prevent any comments, messages, or other content from being posted that;

  • Constitute a communication in support of or in opposition to any candidate for any public office;
  • Electioneering or lobbying communications within the meaning of applicable federal or state law.

Once again, this is to be a place to discuss, and even debate, the policy issues of the day. This does not include personal attacks, vulgarity, offensive content, spam, or links to things directly selling products. However, we gladly encourage you to post links to other blogs, media outlets, or organizations that advance the conversation and make a meaningful contribution. This means we can delete content that;

  • Is abusive, vulgar, offensive, threatening or harassing language, personal attacks of any kind, or offensive terms that target specific individuals or groups;
  • Off-topic comments or comments that promote services or products;
  • Gratuitous links to sites that could be viewed as spam;
  • Personally identifiable information such as social security numbers, addresses, and telephone numbers.

Something appearing on this blog DOES NOT constitute or imply the support or endorsement of said content by KPI, our staff, or board members. We’re trying to create the free flow of ideas and someone posting a study from the Bugs Bunny Institute for Public Policy does not mean KPI is supporting Bugs Bunny or his policy ideas.

We reserve the right, at our absolute discretion, to remove any comments we feel violate the rules outlined above or the spirit of this blog.

Lastly, while we were all riveted by the debates in Washington, D.C. about raising the debt ceiling or extending the payroll tax cut, we'll be focusing on Kansas issues.  There are plenty of other forums to debate the latest news from inside the Beltway and trust you'll find an appropriate place to make your opinion known. So, unless it deals with a direct impact on Kansas policy (e.g., Medicaid, NCLB), personal liberty, or economic freedom we'll leave those federal topics for discussion elsewhere.

Please e-mail me (james.franko@kansaspolicy.org) should you have any questions or concerns.


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