February 2008

Feb. 28, 2008
(Distributed to Kansas newspapers Feb. 25, 2008)

Is bonding a problem?

Amid the general un-ease about the national economy—with people losing their houses through foreclosure on mortgages that they probably couldn’t really afford and fears of job losses—this turns out to be an excellent time for fiscal conservatives to get us all spooked about the state issuing bonds.

Kansas has bonds outstanding of more than $4 billion. That’s a big number. It’s also a little misleading but the number itself is large enough to make some fearful that at some point, all the state’s money will be consumed paying off debt.

There really isn’t an overriding state policy on how much in bonds government in Kansas should issue—but there’s a bill to cap future bond issues. There’s probably a good reason for some guideline or rule or bright-line number at which Kansans should be concerned.

It’s hard to tell whether we’re at that point because, well, there is debt and then there is debt.
It all depends on who is responsible for that debt.

That’s where even well-intentioned fiscal conservatives tend to confuse us, because Kansas issues bonds that the state itself, the State General Fund, isn’t responsible for paying off. Huh? Why are we worried about that? Well, some are and some aren’t worried, but the numbers make that $4 billion-plus in debt sound more ominous.

There’s about $700 million in debt for bonds issued by the state of Kansas on behalf of cities and counties. That means while Kansas actually has its name on the bonds, local units of government pay them off. It’s for things like water systems and such. It’s up to the locals to pay them off through user fees or water bills or local taxes.  The state and your state tax dollars aren’t pledged to pay them off.

Then there are other tax-supported bonds issued by state agencies and supported by specific fees and charges, and then there are highway bonds, about $1.7 billion of ‘em, which are paid off through gasoline taxes, federal aid and a slice of sales taxes which are by law dedicated to the highway department. The State General Fund is not obligated to help pay off those bonds.

The numbers are steep, but you gotta wonder if those bonds were sold to people who did their research to make sure that the funding stream to pay off those bonds is sound, why anyone else should be very worried about it. The money to pay off those bonds is separate from the State General Fund from which the Legislature appropriates money for schools, state employee pay, welfare and nearly everything else that the state provides citizens. It’s still out there, but those bonds pretty much take care of themselves.

Less than a quarter of that $4 billion-plus bond total is paid off through general use state revenue appropriated by the Kansas Legislature—basically our state tax dollars that pay for most of what state government does.

That’s the $982 million that probably is the most troublesome, because it is a direct drag on what state government—and the state Legislature—spends for services for Kansans. Figure that the payments for those bonds come out of the pool of money that supports aid to the poor, the schools, the sick, nearly everything that state government does.

So, is bonding by the state a big problem? Even though the real numbers are smaller than the $4 billion-plus boogeyman, there probably still needs to be some upper limit on the amount that should be issued—that doesn’t have a dedicated revenue stream stout enough and dependable enough that people and institutions that buy those bonds are confident will be around to pay them off, plus interest charges, of course.

The issue is probably as simple as the name on the bonds. They all say “Kansas,” but they don’t say that they are being paid off by something other than state tax dollars, like local units of government or motor fuel taxes or water users.

Now, the money for those non-general fund bonds are Kansans’ fees and fuel taxes and such, and it is unlikely that the state would allow those bonds to go unpaid, but that’s a moral and marketing decision, not a hard-and-fast obligation of your general use tax dollars.

There’s a difference, but how much of a difference might be found out this legislative session.

Feb. 21, 2008
(Distributed to Kansas newspapers Feb. 18, 2008)

Downside to transparency?

How in the world is any legislator going to be willing to be on-record against something that sounds as good and solid as the “Taxpayer Transparency Act” that would put a whole lot of public information on the Internet—even if parts of it are worrisome?

There is a lot that goes on in government that people with real lives don’t know. Most people will never hear about some state agency getting permission to hire a couple new employees to provide some service to Kansans. And most people will never know who got the contract to put a new roof on a building, or build a bridge, or place rock in the shoulder of a new or existing road.

If you want to know that stuff, then the Taxpayer Transparency Act is your window—on line—to where nearly every one of your tax dollars goes, for what and to whom.

Now, if you care about where every dime of your tax dollars is being spent, that’s a big deal. Or, it might be fun to look around if you have a sick day at home or you wonder what’s going on in that state building.

But there’s a portion of that Taxpayer Transparency Act that might well have an effect on the state we live in.

One consideration is that the act is going to list salaries of state employees. And while that might be interesting to some folks who notice a Department of Social and Rehabilitation Services employee lingering over a cup of coffee at 1:15 p.m. or a highway worker who didn’t seem to have sweated out his/her shirt on a hot day and therefore probably wasn’t working as hard as an observer might like…it also provides information to not just the taxpayer but Kansas business, as well.

Now, let’s say you run a business and are looking for a new worker who does something that some state worker does. The state has thousands of workers and they do everything from sweeping floors to filing paperwork to typing to administering agencies to doing legal work for the state.

If you are going to be hiring a janitor or a file clerk or a lawyer who is ready to work, knows the job and has real-world experience, why wouldn’t you just look up the salaries of those people, offer them a few dollars more in pay, and essentially cherry-pick the state for workers?

Upside, the Taxpayer Transparency Act provides important salary information for those who want experienced workers, and because you know what they are making now, you start salary discussions at just a few bucks more than that amount. The state wage becomes a floor salary, and for business, recognizing that state salaries for many job specialties are “below market,” business finds bargain-basement experienced workers.

And, that data available-on-the-Internet probably works in the reverse, too.

Possible down-side for Kansas workers is that employers now can from the comfort  of their offices see what employees doing similar work are being paid by the state and have very little interest in paying their workers much—if any—more money.

This Taxpayer Transparency Act might just put a lid on salaries and wages across many industries in the state. Not sure that it would send people out of state in search of higher salaries, but it’s something that probably ought to be considered.

Oh, yes, there is that possible downside, that if employers can find state employees who are now working at bargain wages and hire them away, the state winds up being a training ground for business in the state. A few years’ experience at a state job means less training by whoever hires them away.

And for those who aren’t big fans of state government anyway, are you going to be very happy—when you do have to deal with state government for something—to find out the people assisting you are new to the job, not every experienced and probably not able to be as helpful as you’d hope a state employee would be?

Not sure if this is a significant downside to the bill, but sometimes transparency isn’t exactly what you’re after. The salary reports? It’s all public information now but time-consuming and sometimes complicated to find—certainly not browse-your-neighbor’s salary while looking for a new chicken recipe on your laptop. There’s a difference.

It’s why most folks put up curtains in their homes…

Feb. 14, 2008
(Distributed to Kansas newspapers Feb. 11, 2008)

Messy but memorable

It might well have been the candidates—probably more for Democrats than Republicans—but for all the complaints about lines, weather and such that have led some legislators to call for a statewide presidential preference primary election, there is a lot to like about the caucuses that were held last week.

Democrats saw about 37,000 people statewide turn out for their night-time caucuses which produced a landslide for U.S. Sen. Barack Obama, D-Ill., over U.S. Sen. Hillary Clinton, D-N.Y.

For Democrats, the lines, the youths, the excitement of actually getting to do something besides wear buttons for their candidates—all were magical.

The turnout was good, Democrats were swamped, and a couple technical improvements—maybe separate lines for the elderly or disabled so they could be seated first and quickly—probably are needed.

But the enthusiasm among especially younger voters was electric. This was memorable, something that caucus participants will be telling their friends, their relatives, and probably some day their children and grandchildren about.

The Democratic caucuses at which thousands of people were registered to vote—and important to the party, registered as Democrats—were generally crowded, hot, noisy, and memorable.

But there was a moment at each of the caucuses, when a sack or box or hat was passed, when you could see in the eyes of the young people that the dollar or two or maybe a $5 bill that they put in the box was an investment in something very important to them.

There is a decent chance that the caucuses produced Democrats for life, who were now part of something big.

No way to tell, of course, whether a one-candidate race or a race with candidates less energizing than Obama or Clinton would have generated as much wild enthusiasm. But for Kansas Democrats, it worked.  And, it didn’t cost the state a dime.

***

Republicans took a different tack, and maybe it worked for them or at least for the Kansas party’s management style. About 20,000 Republicans caucused, a nice turn-out but it was generally sunny.
Real difference, of course, is that the Democrats used their caucuses to expand the party, the Republicans merely to figure out who they wanted their delegates to the Republican National Convention to vote for.  Republicans didn’t register new voters at their caucuses, but that was the Kansas Republican Party’s choice.

Republicans had lines, too, speeches in support of candidates, too, but the enthusiasm was dialed back a little.

***

It was a week of very different caucuses.

But the choices were made by the parties that sponsored them, and you have to wonder whether the state has to step into this deal at all...or, unless there is same-day voter registration, why Democrats would give up one of the biggest single party-building opportunities that they have had in recent memory.

A state-sponsored primary isn’t likely to affect how parties apportion their delegates, and if either party would agree to allow the state to control its internal operations, well, that’s the end of political parties, pure and simple.

Yes, there were lines, yes, there were crowds, yes, there was confusion, and participants in both parties had something to talk about for the rest of the day, maybe the rest of the campaign season, and maybe for the rest of their lives.

If it had been shirtsleeve weather, it would have been nicer, probably, but less memorable.

A state presidential preference primary?

You gotta wonder why…

Feb. 7, 2008
(Distributed to Kansas newspapers Feb. 4, 2008)

The carbon dioxide issue

There is a basic issue in the continuing fight over construction of two massive coal-fired power plants in southwestern Kansas that, well, changes the whole landscape of the battle.

Very simply, it is whether Kansas should allow construction by Sunflower Electric of the two 700-megawatt coal plants near Holcomb it wants to build or some smaller version of the project.

The major issue—actually the reason that the plant construction which in simpler times would have been a chance for nearly all politicians to be photographed with a shovel spray-painted gold turning earth as if they were helping build the plant—is carbon dioxide.

We didn’t used to worry about it, didn’t used to know much about it. But now it is a greenhouse gas and apparently if enough coal is burned and enough carbon dioxide gets into the atmosphere, it allows global warming, melting of ice caps, raising the level of the oceans, flooding coastal areas—all  that stuff that sounds like it might cause problems more than a day’s drive from Kansas.

It would all be a lot simpler if that carbon dioxide caused problems, say, within the fence of the coal plant, or maybe just some inconvenience in neighboring counties, or maybe  somehow the carbon dioxide would just hang over Kansas and not bother any adjoining states.

So, for a state more used to considering whether this bill or that bill would be good for Barton or Smith or Jefferson County, we have a legislature and governor at odds over the fate of the…world?
Now, the power plant folks make a decent point that their plant will be about as carbon dioxide conservative as anyone now knows how to build one. There’s carbon sequestration, some way to feed carbon dioxide to algae which can be either enjoyed by people who like that sort of thing or more probably be ground up to create the “bio” in bio-diesel. It’s still going to put out a lot of carbon dioxide, but less per megawatt hour of electricity than any other coal-fired power plant in the state.

But the governor figures that Job. 1 is to take care of Kansans’ need for baseline electric power—this is our state, after all—and that Kansans’ needs can be met with considerably less carbon dioxide being created than the Sunflower boys are after.

The concept of Kansas power (and Kansas carbon dioxide production) for Kansans probably makes some sense.  Of course, nobody’s going to apply that Kansas power for Kansans to other products of the state. We talk Kansas wheat for the world, and Kansas corn for the world, and Kansas beef and pork for the world. Exporting is the key to the state’s economy, whether that box of frozen beef is going to Missouri or California or Japan.

So this is all getting pretty theoretical. If you consider that every volt of electricity that is produced in the nation is used for something…whether it is mechanical refrigeration (which, after all, is the reason that there are cattle and packing plants in western Kansas) or just to raise and lower your garage door, it probably makes sense to produce that power with the least amount of carbon dioxide being produced that is possible, and typically the newest power plant that is flipped on generates power with less carbon dioxide being emitted…until the next coal-fired power plant is turned on.

Lots of moving parts to this power plant issue, lots of issues that Kansas government really isn’t experienced at dealing with, and lots of subtle “is this really right” consideration for the state and the nation and probably the world, although it’s hard to be certain about the “world” part.

All of a sudden, it’s not just the effect we’re having on something or someone more than a day’s drive away.

Yes, we’re curious how this winds up.