Wichita Liberty

I’m tempted to ask this rhetorical question: Why don’t we strip away all the confusion and obfuscation surrounding TIF districts and just give the developers $2.5 million? See Reverend Kevass Harding’s Wichita TIF District: A Bad Deal in Several Ways

Taxation without information. I wish I could take credit for inventing this phrase that I recently heard someone use. It captures very well the key characteristic of USD 259, the Wichita public school district, and its campaign for the proposed 2008 bond issue.

The full article is here: http://wichitaliberty.org/node/711

The fact that government spends money does not mean it is spent wisely in ways that create wealth and makes people better off. Does a study the Wichita, Kansas school district relies on have an opinion about the wisdom of school district spending?
 
The full story is here: http://wichitaliberty.org/node/707.

In February 2008, Janet Harrah of the Center for Economic Development and Business Research at Wichita State University produced a report titled “Wichita Public Schools: Impact Analysis Operations Impact, Bond Impact and Success Measures.” This report painted a glowing picture of the USD 259 (Wichita, Kansas public school district) bond issue in 2000. The district uses it to promote the success of the 2000 issue, and to promote the proposed bond issue that may be voted on sometime in 2008. The study may be viewed at the CEDBR website here.

The author of the study told me that the Wichita school district paid $1,500 for this study. Usually, research such as this that is purchased by the customer is treated as just that: something bought because it suits the customer’s needs. Since the customer controls what is done with the product, it is certain that if this study had produced a result that didn’t show a fantastically positive benefit for Wichita school district spending, the school board would not have released it to the public. But as we shall see, the way this study is structured guarantees a positive result. Also, the price of $1,500 is astonishingly low for a study of some 28 pages with three authors.

Perhaps the primary problem with this study is that it treats the cost of the bond issue as though it doesn’t exist. The study presents evidence of the benefits of school district spending, but mentions only in passing school district taxation:

An opportunity cost exists for the use of public funds for education. If public funds were not used to provide public education, they would be available for alternative use. Estimating the potential economic impact of alternative uses of these opportunity costs was beyond the scope of this analysis. (Page 6)

It is the lack of analysis of these “alternative uses” that is most important. Actually, not much analysis is required. All that is needed is to recognize that when money is paid to the Wichita public schools, that money is not available for other spending. It means that when a construction worker is hired to build a Wichita school, that construction worker isn’t working on something else in Wichita. It cannot be any other way. As Henry Hazlitt explained in his classic work Economics in One Lesson:

Therefore for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $1,000,000 taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project.

The study also uses the technique of the “multiplier,” which is to say that spending by the school district causes other spending to happen, and other jobs are therefore created. But the construction worker, whether working on a school building or a shopping mall, is paid the same and spends his wages in the same way. The multiplier effect is the same.

This study also analyzes the impact of the bond issue (and ongoing operations) on local governments such as the City of Wichita and Sedgwick County. From page 6: “These measures view the taxing entities’ expenditures as a public investment. Public benefits are measured by tax collections. If public benefits exceed public costs then the rate of return is greater than 100 percent and the benefit-cost ratio is greater than 1.”

These rates of return can be fantastic. For Wichita and Sedgwick County, their rate of return for the 2000 bond issue is over 1,000%! By way of explanation the study states: “These ROI percentages for the city and county are relatively high since these jurisdictions derive significant benefits from increased sales tax collections as a result of the District’s payroll, while incurring very few costs.”

The problems with this analysis are these: First, the taxing entities’ investment is raised by taxing their residents. Second, the public benefits, as explained above, are the taxes that the government collects. It is as though we tax ourselves so that we can pay even more taxes, all this to feed the machinery of government. And if you believe in limited government and personal liberty, it is not a benefit to pay more taxes.

While it is true that the City of Wichita derive benefits from Wichita school district spending, the city’s benefits are funded by taxes paid to the school district. It is only by considering these local governmental entities to be separate from each other that this fantastic rate of return on “investment” is possible. If the total cost of government is considered, the picture is different.

These defects and omissions — not realizing that tax funds could be spent elsewhere if not sent to government, not realizing that benefits that government receives are the taxes that people pay, and separating government into compartments that play off each other to create artificial returns — need to recognized as we read this report.

In a letter printed in the May 30, 2008 Wichita Eagle, Margaret Wooldridge of Park City, Kansas criticizes opponents of the proposed bond issue for USD 259, the Wichita, Kansas public school district. The mysterious “Boondoggler” at Wichita 259 Truth exposes the several problems with this letter in the post BOE Meetings and Letters.

In my opinion, the worst part of this letter is where the writer invokes the spirit of President Kennedy with the plea “We need to ask ourselves not what our community can do for us, but what can we do for our community.”

But is the “community” the only way to organize and get things done? By community, I believe Ms. Wooldridge really means government, which develops one-size-fits-all solutions that squash individuality, entrepreneurship, and creativity. Then, it enforces its solution through force and coercion. So if you don’t agree with what the community decides is best for you and your children, what then do you do?

According to this letter writer, you must have an agenda if you don’t agree with what she wants us to do, which is to “try working for the students of USD 259.” Isn’t that an agenda right there, Ms. Wooldridge, one that suits your personal needs? I might also remind readers that the taxpayers of the community work hard enough to supply the Wichita public schools with some $577 million this year.

To understand more about the dangers of the collectivist sentiment this letter writer relies on, I recommend reading the introduction to Capitalism and Freedom by Milton Friedman. About Kennedy’s statement he wrote: “Neither half of the statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society.”

An audio recording of this article may be heard here. 

Supporters of the proposed bond issue for USD 259, the Wichita, Kansas public school district, portray Wichita’s public schools as a “public good.” Therefore, the entire community should pay for — and be happy to pay for — the ongoing operations of the schools, and should be willing to invest in a large bond issue to pay for capital improvements and new facilities.

But is public education a public good?

Economists tell us that one characteristic of a public good is that people can’t be excluded from consuming it. This is the case with national defense. No one can choose not to benefit from it. Schools are different, though. It is possible to exclude people from schools simply by locking the doors. Businesses of all types do this. In fact, USD 259 choses to deny service to about 0.5% of its students each year (average expulsion rate for the last 11 years).

Another characteristic of a public good is non-rivalrous consumption, meaning that consumption by one person doesn’t diminish another’s ability to consume. Broadcast radio and television are such goods. But public education is not this type of good. Overcrowding is given as one of the reasons for this bond issue, and education bureaucrats continuously clamor for smaller class sizes. So overcrowding must — at least according to public school administrators — reduce the quality of the education experience. Consumption, therefore, is rivalrous, and public education fails this test as a public good.

These two characteristics are the traditional definitions of a public good, and public education fails both tests. But today a different, murkier, definition is often applied. I quote at length from Is High School Football a Public Good? by Jim Fedako, published at the Ludwig von Mises Institute. While this article speaks of football, we may remember that athletics are a large portion of the proposed bond issue for the Wichita public schools. His argument also applies to most aspects of the public schools.

But no one really applies the technical definition to derive public goods. … Instead, the collectivist definition — the vacuous, yet now standard, definition — applies the general welfare argument to elevate football from a private activity to that of a public good. The argument goes something along these lines: football is beneficial because it prepares boys for adulthood, keeps them off the streets after school, and provides them with a place where they can excel.

The public goods argument as currently stated says that the benefits that accrue to the child also accrue to society in general. In this collectivist view, raising children is the role of society since society benefits when it’s done right — a better work force — and suffers when it’s done wrong — more crime and criminals.

But this argument can be applied to almost any expenditure that parents make while raising their children. Better to be jumping on ice or practicing a roundhouse kick than to be out loitering on street corners. Why limit the concept of public goods to football, basketball, baseball, softball, etc? Based on recent history, it is only a matter of time before public goods subsume more activities, with the costs spread over the community in the form of increased taxes: the complete socialism of parenting.

The problem with the concept of public goods is that it misdirects the debate. In modern society, every action I take has a perceived positive or a perceived negative external effect on other members of society, and most of the time there are perceived positive and negative external effects occurring simultaneously. When I mow my lawn, one neighbor perceives the noise as a negative — reducing calm and tranquility — while another neighbor perceives my well-kept lawn as a benefit — invoking calm and tranquility.

I use the qualifier “perceive” because the whole public goods argument for coerced funding of football teams is based on the perception of the observer. The parents of the football player, the player himself, as well as local high school football fans, perceive the team and games as a positive for the community. Some say that it benefits the kids, while others say it strengthens the community. Both views see tax-funded sports, football in particular, as a winner for the community.

Yet the parent struggling to make ends meet each month, the retiree living on an inflation-robbed pension, the lover of freedom, etc., see their ever-increasing tax bill as a negative. For the parent, a child’s dental appointment goes wanting for the sake of the football team; for the retiree, the higher tax bill comes at the cost of a colder house in the winter; for lovers of freedom, additional money lifted from their wallets is another slap in the face by collectivists.

A writer in The Wichita Eagle (May 21, 2008) makes the case that since one of the persons opposed to the proposed USD 259 (Wichita public school district) bond issue in 2008 hasn’t been in a Wichita public school for many years, he isn’t as credible as he could be. If he would take a tour of the schools, he would better understand the magnitude of the problem.

As the person who is the subject of this letter, I can say that I don’t agree with the premise of this writer. That’s because I agree that some school buildings and facilities are in poor condition.

What’s really puzzling about the letter is this: “I have absolutely no faith that the school board will properly maintain any new sports facilities should the bond issue pass.” So this letter writer wants us to spend many millions on sports facilities and upgrades, but has no faith they will be properly cared for. Does this make any sense?

Listen to an audio boardcast of this article here. 

I recently learned that USD 259 (the Wichita, Kansas public school district) considers it a burden when citizens make requests for records. At least that’s what Lynn Rogers, vice-president of the board of USD 259, told me at a May 12, 2008 meeting when I was invited to express concerns regarding my opposition to the proposed 2008 bond issue. I suspect the other board members and administration officials agree with him.

As a government institution, the Wichita public school district is subject to the Kansas Open Records Act, which requires it to respond to citizen requests for information. The ability to smoothly and competently, with a minimum of fuss, provide records to any requesting member of the public is a core competency that we should routinely expect of a public agency.

It is not the fault of a member of the public if a government agency is thrown into disarray by a few public records requests; rather, that suggests that the agency has not yet developed a professional competence in records archiving and management. The budget of the school district is $544,384,275 a year (2006-2007 school year). If they spent 0.01% of that on records management, the annual amount available for records management and retrieval would be $54,438.

I’d encourage the Wichita school district to follow the practice of District 300 in Illinois, which not only provides copies of records requested in a professional manner but posts all records requests and records retrieved under those requests on its own website, so anyone can see them. In this way the effort of the district to produce records is leveraged, and more citizens can become aware of school district information. The Illinois District 300 site may be viewed here: The District 300 Freedom of Information Act Online Program.

In order for school districts to effectively educate their students there must be a strong bond of trust between the school and its stakeholders in the community — parents, students, taxpayers, and district employees. These bonds of trust are undermined when the school district carps about providing records to the very public with whom it needs to build strong bonds. No better example of this is the scolding that interim superintendent Martin Libhart delivered to me at the May 12 meeting. “We do know how many classrooms we have, I can assure you of that,” he said. So Mr. Libhart, why not share those numbers with us?

Wichita school district officials say they want to be held accountable. Responding to records requests is one way for them to fulfill that desire. But the district’s attitude when faced with requests filed by citizens reveals a different attitude.

As Randy Brown recently wrote in The Wichita Eagle: “Without open government, you don’t have a democracy.” I rely on a greater authority, Thomas Jefferson, who said: “The same prudence, which, in private life, would forbid our paying our money for unexplained projects, forbids it in the disposition of public moneys.”

A popular measure proposed to produce better educational outcomes in public schools today is to reduce class size. The Wichita, Kansas public school district is currently proposing a bond issue with a partial goal of reducing class size. At least some of the recently-mandated increase in school spending in Kansas was used to reduce class size.

It seems that smaller class sizes should be great for students. Research, however, doesn’t always verify this assumption. The Harvard economist Caroline Hoxby, now at Stanford, has stated this about her research into class size:

I have a study in which I examined every change in class size at every elementary school in Connecticut over a 20-year period. In schools, class size varies from year to year because enrollment varies. Therefore, with 20 years and 800-some schools, there is a tremendous amount of variation in class size to examine.

I found there was no effect of class size on achievement at all, even when children were in small classes for all six years of elementary school.

There is, however, one study that shows increased student performance with smaller class sizes: the Tennessee STAR experiment. It is probably the study cited most often by education bureaucrats, so learning a little about it is useful. In this experiment, students were assigned to either a regular class with about 24 students, a class of the same size but with a teacher’s aide to assist the teacher, or a smaller class of about 15 students.

Jay Greene has written about the problems with the STAR experiment. The first problem he finds is that “students were not tested when they entered the program. Such point-of-entry tests would establish a baseline for each student’s performance as it stood before the experiment began. Without this baseline measurement, we cannot confirm that the STAR project’s random assignment method was successfully carried out.”

Second: “[there is] an anomaly in the research findings: the improvement in test scores was a one-time benefit. … This is an unusual and unexpected finding, because if smaller classes really do improve student performance we would generally expect to see these benefits accrue over time.”

The STAR program produced a one-time improvement in tests scores that are the equivalent of a student in the 50th percentile moving to about the 58th percentile. Greene says this increase “may not amount to an educational revolution, but it is not trivial.”

One interesting aspect of the STAR program is that participants, particularly the teachers, knew they were part of an experiment. Caroline Hoxby describes the implications of this:

More importantly, in the Tennessee STAR experiment, everyone involved knew that if the class-size reduction didn’t affect achievement, the experimental classes would return to their normal size and a general class-size reduction would not be funded by the legislature. In other words, principals and teachers had strong incentives to make the reduction work. Unfortunately, class-size reductions are never accompanied by such incentives when they are enacted as a policy.

Education bureaucrats and teachers often claim that schools are not like a business or other areas of human endeavor, so incentives don’t work. Education, they say, is somehow different. But it appears in the STAR program that teachers had a powerful incentive to make the small class sizes work, and they responded to that.

Reducing class size is a very expensive measure to implement. The STAR program reduced class sizes by a large amount: from 24 to 15 students, a reduction of 38%. Many more teachers and classrooms are needed to implement reductions of this scope, and that’s why it is so expensive.

That leads to an aspect of the problem that’s not often mentioned. Right now Wichita has a teacher shortage. The district can’t hire and retain enough teachers. Implementing class size reduction programs requires more teachers and makes the shortage even more acute.

Compounding this problem is that research shows that teacher quality is a very important factor in the success of students. If we can assume that the most highly-qualified teachers are hired first, then increasing the number of classrooms means hiring more less-qualified teachers. So some students will be taught by poor teachers, and since class sizes are smaller, fewer students will be in the classrooms led by good teachers.

There is no doubt that teachers and the education establishment like smaller class sizes. Smaller classes mean an easier workload for teachers, larger budgets for school district administrators and politicians, and more teachers union members paying dues. The local board of education can tell parents that they have “saved the children” and the parents will believe them. The research, however, is not settled on the benefits of smaller class sizes, and the unintended consequence of more students being taught by less-qualified teachers is a large negative effect.