(Kansas) Attempt to phase out state income tax threatens highway projects

[J N Winkler]

This is the Wichita Eagle's story, so the focus is on Wichita-area projects such as I-235/Kellogg cloverleaf-to-stack/turban hybrid conversion and Turnpike/Kellogg/Webb interchange rebuild, but the problem is statewide in scope.

http://www.kansas.com/2012/02/16/2219113/house-gop-tax-plan-might-delay.html

In brief, Governor Brownback is considered a friend of highways by both KDOT and lobbying groups like Economic Lifelines (whose CEO is Julie Lorenz, former public affairs director at KDOT), but is keen on phasing out the state income tax as part of a Laffer-inspired plan to make Kansas a business dynamo à la Texas.  Brownback introduced a plan at the start of the legislative session which would have preserved a sales tax increment that KDOT currently gets but has proved unpopular because of its effects on education and social services.  The House leadership (which is dominated by tea-party Republicans) has developed a counterproposal which would end this ringfencing of the sales tax.  The loss to KDOT would be about $350 million over the next couple of years.

Economic Lifelines (whose blast emails I get despite never having knowingly subscribed--I think my email address was poached when I joined K-TOC, which KDOT has now closed) has declared this weekend make-and-break.  As a result, I have received multiple mass emails from Economic Lifelines on this subject in the past week, including one yesterday which advises me that I can send an email to my legislators using a pre-populated form on Capwiz.com.

I would be a bit more impressed with this lobbying effort, and more willing to participate, if:

*  I didn't have a sneaking suspicion my email address was pwned.

*  Economic Lifelines would put direct URLs in its blast emails instead of links to a redirect service which makes it impossible for me to preview the sites in advance (the links are all through R20.rs6.net).

Edit:  I have nevertheless swallowed these objections and used Capwiz.com to send an email to my legislator.  I didn't use the pre-populated text, however, since (a) I feel that will be ignored, and (b) I had other issues I wanted to raise, such as the creation of a publicly accessible online repository for as-built highway construction plans.

[route56]

Here's the same story from the Lawrence Journal-World:

http://www2.ljworld.com/news/2012/feb/16/highway-interests-kansas-try-run-gop-tax-plan-road/

Up here in this part of the state, many are opposed to both plans, because they would supposedly shift the tax burden from the upper class to the lower class.

I don't know how you got on the Economic Lifelines mailing list; however, I was also signed up for K-TOC and have never received any email blasts from them....`

[J N Winkler]

Yup, the Wichita Eagle has run stories noting the regressive effects of the various tax plans.  It is telling that when Arthur Laffer himself was in Topeka giving testimony before one of the legislative committees dealing with taxation, Les Donovan (a state senator from Wichita who owns several car dealerships, represents a district neighboring mine, and is--all things considered--a pretty genial guy) felt moved to shush the income-tax phaseout opponents, saying Laffer was a "famous economist" and that his testimony should be heard respectfully.  If he was fishing for a backlash--and I couldn't say for sure that he wasn't--then he assuredly got it.

This is the most recent Economic Lifelines blast email, copied verbatim (except for my own email address):

Economic Lifelines
Stimulating Economic Vitality
Through Leadership in Infrastructure Development
212 SW 8th Ave, Suite 200 Topeka, KS 66603
(785) 233-1903
www.economiclifelines.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Economic Lifelines Update
from the Chief Executive
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Economic Lifelines Members and Friends -

We're in for a real fight, and the next three days count! There was a great show
of support for T-WORKS from across the State at the House Taxation Committee hearing
yesterday. Chambers of Commerce, communities, contractors, suppliers and consulting
engineers all testified in opposition to raiding KDOT again - each using strong
evidence of why taking transportation money is unacceptable.

Word is that the House Taxation Committee is likely to discuss and then vote whether
to advance House Bill 2747 on Monday. Now - today and this weekend - is the time
to let your legislators and members of the Taxation Committee know that they need
to fund their tax plan in some wayother than taking transportation money.

Info you'll want to know:


* To fund income tax reductions, HB 2747 would remove an estimated $350 million
in sales tax revenue from T-WORKS funding in 2013 and 2014 and then "repayments"
of $50 million per year would be made to restore the funds over 7 years. Click
here [http://r20.rs6.net/tn.jsp?llr=4rdnm9bab&et=1109328015465&s=3001&e=001DpdAlHCovIVZ9bs4OmfKghhy_XTiHFfknLkO76eDF_hsVLtuHNX3glKt7dmXZXhlD70VC25aPHttsWDV6M425KiGj0h-tcMdCQ_P5mVY9R_wEhtAgwvG5i2SG1DfEfAO7GltZ1juqYzgVBdc1uN0MT7P2Wm_oIRDPdnUStspnOFfklE3bY-SNy8aSCvYtgawSl0CaE4ePcY=]
to read the bill in its entirety.


* Acting KDOT Secretary Barb Rankin clearly stated in her testimony, "HB 2747 will
prevent KDOT from delivering the T-WORKS program as promised." Click here [http://r20.rs6.net/tn.jsp?llr=4rdnm9bab&et=1109328015465&s=3001&e=001DpdAlHCovIVpUBm0hZVubs23Jn-mBdlpB1WCZx0UHauXmk95mt7__4Yxtfkj_X8VBa0YqgpbRs3pPxKzJpQx6ynPf5sORU_D7aJAPzRSbMM15GB3g4ogu5z5Y6xUh0z6W67SIV4NFXIIR2tBg__L36Gw0I8lOXG1vnt8wzB8V14ea5O6z80C1kmeQDjyn7cvgVY7eq8Mde8=]
to read her testimony and here [http://r20.rs6.net/tn.jsp?llr=4rdnm9bab&et=1109328015465&s=3001&e=001DpdAlHCovIUCRSHsN0-cIAuJuYRJKf2gVVAuPGLoAcw4VjNSCMzVwP-4X4pdzCOjXzfiamoPswYemEWNgUvPdl5cSiJyrFrkomIj-fq7vQu237ZTipiXCkBQkiyMTU1tbPTdB1tfmHCmsikBMqKEBGx6ODPurekiCip5xTX2VatRJ9ZM98nmIa-Ezy3NG9Eu8LT7RKurJbA=]
to read the follow up information presented to the committee.  KDOT has not had
time to complete the analysis of which projects would be delayed if this bill was
to be enacted.  Who knows - perhaps lots of small projects would be delayed or a
couple of really large projects would be delayed - no one really knows how adversely
this bill would impact transportation and our economy. Communities have too much
at stake to be left guessing what KDOT would have to do to address the withholding.


* Strong opposition was demonstrated on Thursday.  In all, there were 34 people
who either appeared in person or submitted written testimony in opposition to taking
revenue from transportation.  Fifteen spoke to the committee, while 19 provided
written opposition.  This was a great, coordinated effort and we need to expand
the effort going forward.  Click here [http://r20.rs6.net/tn.jsp?llr=4rdnm9bab&et=1109328015465&s=3001&e=001DpdAlHCovIW04PjV802F0GUZWbSLdR-utnoP3tipjhAqkzT1PvXUg06C27dZ8iDSziO5xXKz38wDrrV5OxbFRGVSz0g0OX9gYm6hNKK9uv3y-_8lzSuBuZwaKBkwejC4sQZqPUcDSp1x3yFcwvmtD-wYmEDsRGIp2Aq1UoQ9dbDyv9bje9Z8GEhVGCcz2eEbUzhV2NahYjs=]
to see a list of opposing conferees.

Contact Your Legislators NOW!  Don't wait - Monday may be too late.


* Email your legislator directly or use CapWiz, an automated email system that makes
it easy for you to contact your legislators.  Click here [http://r20.rs6.net/tn.jsp?llr=4rdnm9bab&et=1109328015465&s=3001&e=001DpdAlHCovIX8SM057KV6FIgWfkLvrxI8O5a3Mxzbncjkq9c16TFjDd101bqNhJw9F9gVgYVphVXhjAtN42HDR3rJP_Bzteb2IAQbinhVHkt6kEAL2i9kGvN9jJtGPqe2eGQWx2Fr8nlNOIrHBXGYqA==]
to access CapWiz.


* Writing them is simple:

1. CapWiz has a prepopulated message you can use.
2. You email something as simple as "Oppose HB 2747 if T-WORKS money is taken".
3. You can use language from Economic Lifelines testimony (click here [http://r20.rs6.net/tn.jsp?llr=4rdnm9bab&et=1109328015465&s=3001&e=001DpdAlHCovIV7mXtrVklijtuzaPHf9L93rlNDARBC0lzMUrRGlu5l2lWc9mNrcfxzTJk7jxSPN1HTSi9Q2b5OWJH3AgOJz5PShU0vPUCjCIQvbHr80jpvMAxGz5NM--kPPy9gnWZ0HyYcTH9RjDdXEJU1sPtW84gXlRxfO6ioqqfP33t4PVxAEC9DLckbRpaBpwO6J8XiJns=])
or use some of the bullet points below to craft your own message.

* Call or visit your legislator. Most legislators will home this weekend - and many
have said they plan to attend local coffees. Below are three coffees we know about
- and there are more out there:

Overland Park

Legislative Breakfast
February 18th (This Saturday)
Ritz Charles (137th and Antioch)
7:30 am - 9:00 am
$20 for members
$25 for non-members

Garden City

February 18th (This Saturday)
Local College Endowment Room
10:00 am
NO COST

Hutchinson

February 18th (This Saturday)
Wesley Towers
9:30 am - 11:00 am
NO COST

Regardless of how you do it - letting legislators know you're opposed to withholding
KDOT funds is the most important message to deliver in the next 72 hours.


1. The bill would NOT allow for the 4/10 cent transfer into KDOT in FY14 and FY15
to fund T-WORKS. While some might try portray this as KDOT being "held harmless"
- the reality is that the sales tax REVENUE is FROZEN, which impedes KDOT's ability
to deliver projects as scheduled in the next two years and beyond.


1. About $160 million less would go to KDOT in FY14 and $190 million less in FY15
for a total of $350 million will be withheld.


1. There are multiple concerns with a "promise" to repay. First, the legislature
doesn't have a good record of repaying. Also, the bill includes a 2% annual spending
cap.


1. That's on top of the $200 million already taken from transportation last year.


1. KDOT will not be able to deliver T-WORKS as promised.  Period.  Communities strongly
support T-WORKS and are counting on highway, transit, aviation and rail improvements.
Remember, all 105 counties passed resolutions in support of T-WORKS in 2010 with
the expectation that projects will be delivered by 2020.


1. KDOT is already on a negative outlook for bonding. Moody's has said that further
changes to the State Highway Fund would negatively impact KDOT's bond rating. Also,
no analysis has been provided to show what the impact of lower revenues in those
two years has on cash-flow or KDOT's ability to bond as they're limited to 18%
of revenues.


1. Jobs - both short-term construction jobs and long-term jobs spurred by transportation
investmentwill be lost.


1. Previously money has been taken from transportation to fill state budget gaps.
This year there is no state budget gap. The sales tax money allocated for T-WORKS
is being raided to support an income tax plan.


1. It's a great time to build new projects with low construction costs. In fact,
the Governor just advanced $50 million in highway preservation projects, and he
had bipartisan support for that action. This isn't the time to slow project construction.

Best wishes for a productive weekend of calls, emails and personal visits at coffees
and please keep us posted on the things you are hearing in community and from your
legislators on this issue.

Julie Lorenz

Chief Executive

Click here to join Economic Lifelines on Facebook!  [http://r20.rs6.net/tn.jsp?llr=4rdnm9bab&et=1109328015465&s=3001&e=001DpdAlHCovIWHMCQyio1BPaOgTBAFIaX61Vdv68WEn8NuVkQausKJ1nzStzZqpQizCzXRgcTi4jDJBJVhDNjk-TCt-7gfokO7IioCSp68NupJAzKlA4QVWVGLnYvRHi_92XPDM-7Zg0soHGf9lwd8_ghO1qIfX4uTfsJyMc23FX6gFUjOy5c5i7I90jEwbK_4]

Economic Lifelines is the statewide coalition of organizations and community groups
which provide the grassroots support for Comprehensive Transportation Programs in
Kansas. Its members believe that the economic development and jobs that are generated
by such programs are vital to the stability and growth of the Kansas economy and
that of individual communities.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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[Scott5114]

Kansas is not alone–Oklahoma's government, too, is wanting to phase out the income tax.

[SP Cook]

So they don't have roads in Texas, Alaska, Nevada, Florida, New Hampshire, or Tennessee?  Wow, didn't know that.

Government always picks something most people like (things governments have done for all time, like building roads, schools, etc) and tells you the tax is for that, but the only way to not fall for that is to understand that all money is fungible, and pick out the stupidest program you can think of and understand that the tax is for that.

[NE2]

Government always picks something most people like (things governments have done for all time, like building roads, schools, etc) and tells you the tax is for that, but the only way to not fall for that is to understand that all money is fungible, and pick out the stupidest program you can think of and understand that the tax is for that.

Ah. So it's for Corridor H.

[J N Winkler]

So they don't have roads in Texas, Alaska, Nevada, Florida, New Hampshire, or Tennessee?  Wow, didn't know that.

Aren't you forgetting Washington?

Many of those states have sources of revenue which are unavailable in Kansas--for example, Texas has an oil franchising tax, Alaska collects enough through an oil bounty program to pay its citizens a stipend, etc.  The fair comparison has to be with states which have no income tax but have economic and fiscal bases which are otherwise similar to Kansas'.  This is an issue which, as far as I know, has not been explored in media coverage or legislative testimony on the proposed income tax phaseout.

Texas and Nevada in particular have had serious problems financing highway construction.

[Scott5114]

Honestly I wouldn't have a problem with Oklahoma's income tax if they made Form 511 less of a clusterfuck. I generate Form W2Gs and W9s for a living and I still can't comprehend half of the damn 511.

[J N Winkler]

In Kansas the personal income tax return uses Form K-40 and is straightforward to figure out because it uses the same calculations of gross and taxable income as the federal Form 1040.  As a family we prepare our taxes using TurboTax and the state tax form is just a small coda to the federal tax form.

There has not been a whole lot in the media on how Brownback's tax phaseout plan would affect the purely administrative detail of compiling tax returns, aside from some rumbling about how it would change filing procedures for some types of small business, with unintended and poorly understood consequences.

My personal impression is that Economic Lifelines' lobbying effort is likely to succeed.  My judgment all along has been that support for income tax phaseout is very soft, unlike, say, support for photo voter ID and the requirement to provide citizenship proof when registering to vote.  I believe that Brownback won the last gubernatorial election because he had name recognition and has occupied enough of the political spectrum over his career to allow Kansas Republicans of both stripes (moderate and socially conservative) to convince themselves that he is a safe choice.  This is, quite frankly, a coronation, not a mandate to pursue any specific policy or combination of policies.  You don't want election by acclamation if you are going to pursue controversial policies--you want clear, explicit buy-in, secured in advance on the basis of a reasonably diligent effort to build consensus on points of agreement.

He did not spell out his policies in detail during the campaign (aside from ratification of voter ID/citizenship proof, which was more Kobach's idea than his, and which he needed to endorse in order to avoid being outflanked by Kobach), and no serious successful efforts were made to force him to be explicit.  Now that he has come out with specific policy proposals, his approval ratings are underwater, and the legislature is trying and failing to come to grips with an overcrowded policy agenda.  The latest sign of this is that Mike O'Neal, House speaker and no softy-lefty, has said No to immigration bills (Kobach's other big obsession) for this session.

In a climate such as this a well-organized interest group is in with a chance if it pushes hard.  I just wish the pressure was as hard for the policies I am interested in (more openness from KDOT, including establishment of an online as-builts database and an end to the presumption that record requests will be charged for) as it is for highway funding in general.

Edit:  It is Mike O'Neal, not Ryan O'Neal.  Fixed.

[Scott5114]

Have you considered contacting a general openness-in-government group, or possibly starting a more KDOT-focused one yourself? With the Internet it is easier than ever to start such a thing...

[J N Winkler]

Have you considered contacting a general openness-in-government group, or possibly starting a more KDOT-focused one yourself? With the Internet it is easier than ever to start such a thing...

I have thought about it and I have tried to familiarize myself with the groups that have a reasonable interest in open government in Kansas--Kansas Press Association, Kansas Sunshine Coalition for Open Government, etc.  I have also listened to other people's KDOT war stories and read both the appellate and state supreme court judgments handed down in the Garden City Telegram case.

I don't mind putting energy and effort into campaigning, but I expect to see a payoff for it, and my continuing problem has been thinking of a game plan which would maximize my chances of it.  My intuition is that the Kansas Press Association is basically not interested in FOI issues.  Their main concern (in common with sister associations in other states) is defending requirements for legal publication in newspapers because many of their members, especially the small-town newspapers, see that as a bread-and-butter issue.  Newspapers are already cutting investigative journalism (which depends heavily on open-records requests) because of the expense, and while one might think that would make them more friendly to efforts to reduce the cost of such requests, in reality I think they would be more concerned about increased competition from bloggers and citizen journalists.  On top of this, the newspaper world in Kansas is fairly incestuous, especially outside Wichita.  For example, the current president of the KPA is Doug Anstaett, a newspaper editor in Newton, whose daughter Ashley works as the Attorney General's spokesperson.  Ashley Anstaett in turn is married to Matt All, a Yale Law graduate who acted as legal counsel to Kathleen Sebelius (who was then governor) and came into the public eye when he responded to an open records request for Sebelius' official emails by quoting some obscene fee for review and redaction (running into the thousands of dollars and calculated on the basis that the emails would need to be printed out for review, at so many cents per page).

The Sunshine Coalition is different.  Its center of gravity is in Wichita (executive director Randy Brown is an old Eagle hand, and three out of twelve members of the board of directors are from Wichita) and it is more sharply focused on FOI.  However, it doesn't campaign for abolition or restriction of cost recovery, which I think has to be at the heart of any serious effort to reform FOI in Kansas.  Instead they nibble at the edges:  please, sir, can we have fewer exemptions?  (The Kansas open records statute has 44.)

Cost recovery is the major problem with the Kansas open records law because it allows agencies to constructively deny requests by claiming that various expensive services are necessary ancillaries to providing access to the records sought.  Cases like the Garden City Telegram are actually pretty exceptional in that they revolve around denial of access to records that the law says are open.  With more run-of-the-mill KDOT requests, they charge you for employee time to search for what you want, media cost to transfer it to CD or whatever if you want a copy, and employee time for someone to supervise you if you choose to examine the record in person.

A year ago I approached KDOT about the possibility of examining their as-built construction plans in person.  My ultimate goal was to retrieve a complete set of as-builts for every project KDOT had built since the mid-1950's that had pattern-accurate signing.  Since KDOT does not have an online repository of as-built construction plans (unlike, say, Georgia DOT or Minnesota DOT), I anticipated that I would need to drive up to Topeka to examine the plans in person at the Eisenhower Office Building.  It took me about three months to get a concrete answer as to how this might work, which was as follows:

*  The as-builts KDOT has in electronic form (I was not told what proportion of the total as-built corpus this represented) were on a collection of CDs and on a single PC to which only four people had authorized access.  The PC in question was in more or less continuous use during office hours, so there was no possibility of fitting me in.

*  None of the as-builts are indexed by project type, which makes it impossible to search for signing contracts specifically.

*  If I wanted to inspect the electronic copies of the as-builts in person, they could be copied to a separate PC for this purpose.  I would then need to pay for someone to look over my shoulder while I worked at this PC, and then I would have to make separate requests for the projects I was interested in because USB ports on the PC would be disabled to frustrate data extraction.  (The KDOT FOI officer told me that the design personnel, who have charge of the as-builts, were adamant that there should be no general release of them.  My reaction was:  why not?  Other state DOTs allow you to drink as-built plans out of a firehose if you are so inclined.)

In relation to the FOI issue generally, I also have to acknowledge some limitations.  I am interested in KDOT records only, basically--I have every sympathy for citizens and journalists trying to get information out of other state agencies, but that is not the same as being willing to go to bat for them in the absence of a clear strategy which brings with it assurances of future reward for present sacrifice.  Moreover, at this stage I am basically interested in only one class of KDOT record:  as-built construction plans.  If KDOT were to set up an online repository tomorrow, that would put FOI in Kansas on the back burner for me.

Another problem in dealing with generalist FOI campaigning organizations is that they like to structure arguments around public interest.  How do you explain to them the public interest in as-built construction plans?  "I like to look at them" does not sound very convincing.  They, on the other hand, are disturbingly receptive to counterarguments which superficially look like they are in the public interest, such as, "If we release this very specific information about infrastructure, maybe the terrorists will come and blow it up."  (I don't agree with this mentality, but I can see the rationale behind it.  It is basically similar to the reasoning that led the instigators of the Montgomery bus boycott to put Rosa Parks, a respectable secretary, forward as the test case, instead of Claudette Colvin, who rebelled earlier but was an unmarried teen mother.)

My latest idea about KDOT and open records (not fully germinated yet) is to try to encourage the creation of an online as-builts database specifically as an efficiency measure.  At the moment they are stuck in the last-generation model of storing the plans locally and then having staff spend their working days pulling them up so they can be pushed out to external customers (other KDOT business units, consultants, public requestors, etc.) on CD/DVD or via online file transfer service.  They can recover the cost from public requestors, but not from consultants (there would be no point--the consultants would just charge them back on overhead) or from themselves.  So a database of as-built plans, indexed to allow quick retrieval, has the potential to cut out this frictional loss.  KDOT is not now, has never been, and possibly never will be a friend to transparency, but KDOT brass like efficiency savings, especially if they allow employee numbers to be cut painlessly.