Tuesday, August 23, 2011

Fun Facts about the Kansas Budget

The Department of Education, Regents, Social and Rehabilitation Services, The Health side of the Kansas Department of Health and Human Services, and the Department of Transportation make up 77.7% of the Kansas Budget.

United States Federal Budget (FY 2012):                     $3,729,000,000,000

Kansas State Budget (FY 2012):                                     $13,904,091,877

The Federal Budget is 268 times larger than the Kansas Budget

Population of the United States:                        307,006,550

Population of Kansas:                                           2,818,747

Just under 1% of the population of the United States lives in Kansas

Per capita ratio of the Federal Budget to the Kansas Budget:                   2.46

P.S. Here is a link to an amazing interactive pie graph on the federal budget from the Center for American Progress. I highly recommend it.  

Originally Posted August 23, 2011

The Kansas Budget

In this article, I will be explaining the spending side of the Kansas Budget. All of my numbers come from the Comparison Report: The FY 2012 Governor’s Budget Report with Legislative Authorizations. This document can be found at budget.ks.gov. Specifically, my numbers are from the FY 2012 Approved Budget column of Schedule 2.1: Expenditures from All Funding Sources by Agency. I will be dissecting the budget for fiscal year 2012. That budget was approved in the last legislative session and funds the Kansas government from July 1st, 2011 through June 30th, 2012.

This budget includes money from the State General Fund that was allocated by the legislature in Topeka. The rest of the revenue in the budget comes from other sources, including the federal government, and cannot be moved from one program to another by the state legislature. Funding from the State General Fund accounts for just over 6 billion dollars of the revenue in the 2012 Kansas budget.

Here is the basic breakdown of the 2012 Kansas Budget.

Percent of Total Budget
Human Services
General Government
Public Safety
Agriculture and Natural Resources
Total Budget

I will explain what tasks each of these categories perform for our state.

Education                                                                               42.93%

Here is the breakdown of the Education portion of the Kansas budget.

Percent of total budget
Department of Education

The Kansas Department of Education oversees K-12 education in Kansas. Public (K-12) schools in Kansas are financed jointly between local school districts and the Kansas Department of Education.

The term “Regents” is just a fancy word for public universities that receive state money. We have 6 public universities in Kansas: Fort Hays, Emporia, Kansas State, KU, Pittsburg, and Wichita. The money that the state spends on higher education makes college more affordable to students; every dollar the state spends on regents is a dollar less students have to pay in tuition.

Other education spending consists of programs that collectively take up less than 0.3% of the budget. These programs include the School for the Blind, the School for the Deaf, the State Library, and the Kansas Historical Society.

Human Services                                                                                34.1%

I will explain this portion of the Kansas budget by explaining its chief components.

Percent of Total Budget
Social and Rehabilitation Services
Health and Environment-Health
Department of Labor
Department on Aging

The Department of Social and Rehabilitation Services

The Department of Social and Rehabilitation Services (SRS) protects children and provides assistance to the mentally disabled.  SRS is the agency that removes children from abusive or neglectful caregivers and facilitates their adoption to other families if the courts decide that the child cannot safely return to their previous household. SRS also runs several mental hospitals whose goal is to give their patients the skills to live independently.

The Kansas Department of Health and Environment

On July 1st, the Kansas Health Policy Authority (KHPA) became a division of the Kansas Department of Health and the Environment (KDHE). The overwhelming majority of KDHE’s funding is for this division which is known as the Division of Health Care Finance (DHCF). The DHCF administers the Kansas version of Medicaid, the state Children’s Health Insurance Program, MediKan, which provides coverage for low income disabled Kansans, the State Employee Health Program, and the State Self-Insurance Fund, which provides workers compensation for State Employees who are injured at their job. 

The Division of Health within the Kansas Department of Health and Environment studies disease, makes recommendations for state health policy, and provides services that aim to achieve state health goals. The Division of Environment regulates a variety of emissions, including landfills, water supplies, air emissions, hazardous wastes, and radioactive materials. The Division of Environment also conducts environmental clean-ups, evaluates environmental conditions across the state, and levies fines against polluters that don’t comply with state and federal environmental standards.

The Department of Labor

The Department of Labor administers the Unemployment Insurance Program, processes Unemployment Insurance claims, pays state employees, and enforces employment standards including wage, hour, and child labor laws. The Department also has a division that compiles employment data for the state of Kansas.

The Department on Aging

The Kansas Department on Aging promotes the security, dignity, and independence of Kansas seniors. The Department on Aging licenses and evaluates the nursing homes in Kansas. The Department on Aging also oversees home and community based services for the elderly.

Other Human Services Spending

The rest of the Human Services portion of the Kansas budget (which makes up less than 0.2% of the total budget) consists of the Commission on Veterans Affairs and the Kansas Guardianship Program. The Commission on Veterans Affairs provides veterans and their families information, advice, and assistance in a variety of areas. The Kansas Guardianship Program assures that adults with Mental Illness that SRS decides is in need of a court appointed guardian will receive one.

Transportation                                                                        10.38%

The mission of the Kansas Department of Transportation is to provide a statewide transportation system to serve the needs of Kansas. The Department of Transportation maintains Kansas highways, improves airport runways, and adds train crossing gates to road-rail intersections.

General Government                                                              6.8%

This category consists of 46 agencies each of which individually take up less than 2 percent of the budget. These agencies perform a variety of tasks. The Department of Revenue collects taxes and runs the DMV. The Kansas Department of Commerce promotes economic development a variety of ways, including through tourism and trade.

Several agencies under the General Government umbrella regulate specific professions. The Kansas Behavioral Science Regulatory Board licenses and regulates Psychologists and Social Workers. The Kansas Board of Healing Arts licenses and regulates doctors and surgeons. The Kansas Board of Pharmacy does the same for Pharmacists.

Other expenditures in this category are the operating budgets of elected officials. Agencies with this description include the Office of the Governor, the Office of the Lieutenant Governor, the Attorney General, the State Treasurer, and the Secretary of State.

Public Safety                                                                 4.37%

The largest portion of the public safety section of the budget is corrections, which take up just under 2% of the budget. Corrections spending goes to several state prisons and the Department of Corrections, which operates those state prisons. Other public safety spending goes toward juvenile justice and the Kansas Bureau of Investigation, which is the Kansas state-level equivalent of the FBI.

Agriculture and Natural Resources                          1.39%

The Kansas Department of Agriculture regulates the safety of the food supply, regulates the use of fertilizers and pesticides, and licenses and inspects meat and poultry plants. Other agencies under the Agriculture and Natural Resources section of the budget include the Department of Wildlife, Parks and Tourism and the Kansas State Fair. The Division of Environment within the Kansas Department of Health and Environment is a part of this category as well.  


The Department of Education, Regents, Social and Rehabilitation Services, The health side of the Kansas Department of Health and Human Services, and the Department of Transportation make up 77.7 percent of the Kansas budget.

I did not cover every agency in the Kansas budget, but I did cover all major categories and the largest agencies. I hope you have learned the basics of the Kansas budget. Now you know where your state tax dollars are going.

AUTHOR'S NOTE: Almost all of my information on the responsibilities of state agencies came from the website of that specific agency under an “About Us” or equivalent link.

Originally Posted August 23, 2011

Thursday, August 18, 2011

Obama has a winning political strategy
If only he’d use it

This week, Obama, despite his administration’s insistence to the contrary, launched his reelection campaign with a bus tour in Iowa. While he was there, he used the political message most likely to lose him the White House. Most of my blog is devoted to covering issues of policy, but this article will be analyzing politics in the purist sense of the word.

Obama’s campaign speeches are full of condemnation towards Congress for failing to compromise.

“You’ve got to send a message to Washington that it’s time for the games to stop. It’s time to put country first,” Obama said, his voice rising. “Some folks in Congress ... would rather see their opponents lose than America win.” [Washington Post]

I watched a portion of one of his speeches and it was painful to listen to. Obama is acting as if the problem in Washington is both sides failing to compromise when in reality the problem is Republicans repeatedly manufacturing crises in order to get what they want. The failure to compromise is coming from only one side. Democrats have given in again and again.

What the president, who is the leader of the Democratic Party (although he would never let you know it), needs to do is mobilize public opinion against Republicans for the debt ceiling fiasco and resulting S&P downgrade they created. If the amorphous and unfocused rage against Washington was focused where it belonged, on House Republicans, then the President would have incredible leverage over them. If the public knew how blatantly and recklessly Republicans have discarded their responsibility to govern, then they would be less likely to elect one of them to the Oval Office.

In Washington we have one party who will stop at nothing, not even ruining the full faith and credit of the United States, to achieve their policy goals, and another who gives in completely to avoid catastrophe. This pattern won’t end until the American people recognize what is happening.

Obama has repeatedly proven both in substance and in style to be a poor negotiator. Perhaps the time has come to consider finding a new President, one that will hold Republicans responsible for the messes they create. 

Friday, August 12, 2011

US Military Spending:
An International Comparison

On August 2, 2011, (which was quite a while ago now, but I’ve been busy) Rachel Maddow discussed how the debt ceiling deal affects military spending. She also brought up the liberal talking point that the US spends more on defense than the rest of the world combined. [This quote appears at the 3:15 mark in the video below.]

There are two defining features of money and government in this lifetime. It’s the fact that our effective tax rates have come down to a 50 year low and that defense spending in this country dwarfs what the whole rest of the world spends on defense. And that spending cannot be challenged politically here. Those are the defining economic features of American government in this lifetime. America spending what the rest of the world spends on defense combined and not debating it at home.  

                                              Visit msnbc.com for breaking news, world news, and news about the economy

I decided to check whether this widely-used claim about US military spending was accurate.  

The Stockholm International Peace Research Institute is a think tank that studies conflict, arms control, and other military issues. They maintain a list that shows how much each of 172 of the world’s countries spends on military expenditures each year. I downloaded their Military Expenditures Database and at their website (SIPRI).  

After doing serious quantitative analysis (a.k.a. fiddling around in Excel), I came up with these totals.

                           Yearly Military Spending (2010)

    United States                         Rest of the World Combined
$698,281,000,000                            $913,155,700,000

The rest of the world spends 1.3 times the amount the US spends on the military. This widely used liberal talking point is false.

However, Rachel’s larger point, that the US spends a lot on the military compared to other countries, is undoubtedly true. Based on the SIPRI data, the US spends more on the military than the next 17 countries combined. The US spends 5.8 times more on the military than the second highest spender, China. The bar graph at Wikipedia (again, using SIPRI data) shows that US military spending dwarfs the next few countries in terms of military spending.

So why does America spend so much on its military? It’s because we’re a superpower. We have hundreds of military bases overseas. We are fighting 3 wars (Afghanistan, Iraq, Libya) and three CIA shadow wars (Pakistan, Yemen, Somalia). Before that there was Korea and Vietnam. If the US wants to maintain its role as global superpower and the foreign interventions that accompany that status, than it will have to keep spending large amounts of money on the military. If we were to give up our pattern of embarking on long and expensive foreign wars, we could cut the Pentagon budget dramatically.

Battles over the budget are ultimately battles over our priorities as a country. And with the debt ceiling super-committee on the horizon, it appears that we will be having that national battle for a very long time to come.

Originally Written August 12, 2011

Thursday, August 11, 2011

Everything you need to know about Income Inequality in America

As Congress (prematurely) shifts its focus away from ending the Great Recession to dealing with our long term debt crisis, a basic question emerges. Who should bear the burden of the tough choices that will be necessary (even if they are not wise in the short term) to reduce our deficits and our future debt? Republican plans would put the burden on the poor and middle class, although they hope you don’t notice. Democratic plans purport shared sacrifice where all income groups share in the pain. I am going to declare something that would get me branded as a Socialist in DC. The rich should bear a large portion of the sacrifice involved in dealing with our debt crisis.

The current income inequality in the United States is amazing in its size, as well as its relation to other developed countries and to what it has been in our past. The following information is all that an analytical liberal needs to win an argument on trickle-down economics.

I do not wish to demonize the rich; they have done and continue to create amazing new products, jobs, and industries for our country. They have also done amazing charitable work (see Bill and Malinda Gates). I simply think they should pay more in taxes.   

A Note on Terminology

Before we begin, I think I should explain a term that is used quite frequently throughout this article. A Percentile refers to dividing a population into 100 equal groups of people based on some criteria. For example, the term 10th income percentile refers to the 10th lowest percent of income earners. In essence the term percentile shows that it is a percentage of the population that is being talked about rather than a percentage of the quantity being compared (income, wealth, income growth, etc.)

There is a difference between the rich and the super-rich

If you look at the lower income marker of Percentiles it shows that there is a relatively steady climb up the income ladder until around the 95th  percentile. Then the difference between each percentile is enormous. This can be most clearly seen on a graph of 2010 income data at the Economix blog at the New York Times website.

I also find this data useful to understand what the income structure of the United States looks like in general. For instance where would an income of $100,000 a year place a person compared to the rest of the country? The following data is from the Tax Policy Center, a joint project between the Urban Institute and the Brookings Institution. These numbers show the (yearly pre-tax) income breaks for all tax filers (aka families) for 2011. They might not match up to the numbers in other sections of this article because economists use different definitions for income and different years for their calculations.

Percentile                                         Lower Income break

10                                                       $9,235
20                                                       $16,358
30                                                       $23,873
40                                                       $32,188
50                                                       $42,327
60                                                       $57,213
70                                                       $73,886
80                                                       $97,298
90                                                       $154,131

95                                                       $200,026
96                                                       $235,687
97                                                       $290,860
98                                                       $360,435
99                                                       $506,553
99.5                                                   $815,868
99.9                                                   $2,070,574

Income is heavily concentrated at the top

The Federal Reserve did an investigation into the distribution of pre-tax income in 2009.  These numbers represent the percent of all income that was earned by different income groups in 2007. These numbers come from the income row of table A5a.

Income group                                 Percent of all income
Top 1%                                          21.4%
95-99 Percentile                             15.8%
90-95 Percentile                             10.0%
50-90 Percentile                             38.2%
Bottom 50%                                   14.6%

These numbers point out what Bernie Sanders said and Politifact confirmed: The top one percent of earns more income than the bottom 50 percent combined.

The top 10 percent earn 47.2%, nearly half, of all income.

Wealth is even more heavily concentrated at the top

The rich have the ability and the willingness to save more than the rest of us. Many of the poor have a negative net worth due to debt, so that also increases the inequality between the rich and the poor. The following numbers come from the same Federal Reserve study and are found in Table 4. They show the percent of post-tax wealth in the country held by net worth percentile groups.

Wealth Group                     Percent of all wealth
Top 1%                               33.8%
95-99 Percentile                 26.6%
90-95 Percentile                 11.1%
50-90 Percentile                 26.0%
Bottom 50%                        2.5%

Wealth is so heavily concentrated at the top that Michael Moore was able to correctly claim that the wealthiest 400 individuals have more wealth than the bottom half of the country combined (Politifact).

The top 10 percent own 71.5% of the country’s wealth. The top 1 percent owns more wealth than the bottom 90 percent.

Since 1979 higher income groups have seen the largest gains in income

The Center on Budget and Policy Priorities (CBPP), a liberal organization that focuses on fiscal policy, calculated the average percent growth in after-tax income for income groups from 1979 through 2007 (before the Great Recession). These numbers are based on Congressional Budget Office data.

Income group                                 Percent growth 1979-2007

Lowest fifth                                      16%
Second fifth                                     23%
Middle fifth                                      25%
Fourth fifth                                      35%
Top fifth                                          95%
Top 1 Percent                                  261%

The higher the income group, the higher the gains in income. And the super rich saw a phenomenal growth in income.

In the past, income growth was much more uniform (and greater for lower income groups than it is today)

The liberal group United for a Fair Economy reverse engineered (don’t ask me how) Census data to show income growth for various income groups from 1947-1979. Politifact did the calculations and came up with results only a few percent different than theirs. I should point out that this time frame is 4 years longer than the previous data set.

Income Group                                 Percent growth 1947-1979

Bottom fifth                                     118%
Second fifth                                     100%
Middle fifth                                      111%
Fourth fifth                                      114%
Top fifth                                           99%
Top 5 percent                                  86%

Why the stark difference between these two growth patterns? My guess is that the first set reflects the results of the Bush and Regan tax cuts for the rich. I don’t know why the income growth patterns for the poor and middle class were so much larger in the second set.

Income Inequality in 2007 was the greatest it had been since the 1920s

2007 is a better gage of our long term income inequality than it using data from today because the Great Recession caused a (hopefully) temporary reduction in income across the board, but likely affected different income groups differently at different times during the Recession. So the numbers for 2007 are more indicative of the long term trend.

Politifact confirmed that income inequality in 2007 was the greatest it had been since the 1920s based on the analysis of the economists Thomas Piketty and Emmanuel Saez.

This information provides a rather convincing circumstantial case that high levels of income inequality leads to market volatility and financial crashes. The theory is that when the rich have a lot of money, they spend it in ways that create bubbles (stocks, housing, ect.) which are billed at the time as the safest investment imaginable, but ultimately end up crashing the economy.

The United States has one of the highest degrees of income inequality in the developed world

The Gini Index is a statistic (which I do not fully understand) that measures a country’s income inequality. The larger a country’s Gini Index, on a scale from 0 to 100, the greater the income inequality. The CIA World Factbook compiled a list of 136 countries and ranked them based on their Gini Index. [I have been having some problems with the CIA World Factbook link, so here is the URL: https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html]

The UN maintains a list of developed countries based on the Human Development Index. That list includes 42 countries (Wikipedia). Of the countries on their list only Hong Kong and Singapore, small island nations just off the coast of Asia, have a greater Gini Index than the United States. All other developed countries in the CIA World Factbook list have a smaller degree of income inequality than the US. What follows is a selective list of developed countries and their Gini Index.

Country                                             Gini Index
Hong Kong                                       53.3
Singapore                                         47.8
United States                                   45.0
Israel                                                  39.2
Portugal                                            38.5
Japan                                                 37.6
New Zealand                                   36.2
Poland                                               34.9
United Kingdom                             34.0
Switzerland                                      33.7
Greece                                               33.0
France                                               32.7
Canada                                              32.1
Italy                                                    32.0
Spain                                                  32.0
South Korea                                     31.4
Netherlands                                     30.9
Australia                                           30.5
Ireland                                               29.3
Denmark                                          29.0
Belgium                                             28.0
Iceland                                              28.0
Germany                                          27.0
Finland                                              26.8
Austria                                               26.0
Czech Republic                                26.0
Norway                                             25.0
Sweden                                             23.0

Lower income groups have higher rates of unemployment

Researchers from Northeastern University’s Center for Labor Market Studies found that the less someone makes, the more likely they are to be unemployed. This trend is true during times of economic growth as well as during economic downturns. The numbers also show that the poor are bearing the overwhelming brunt of the recession. The middle class has been hit hard, but not quite as bad as the poor. The rich have a labor market that isn’t in recession at all. The report’s authors conclude,

What has been missing from the public debate over the labor market crisis is an honest and detailed analysis of which American workers have been most adversely affected by the deep deterioration in labor markets.

All of my information, including the table below, comes from a blog post at the Time Magazine website.

Income decile   Unemployment 4th Q 2007  Unemployment 4th Q 2009

$12,160 or less                           18.4%                                                  30.8%
$12,160-$20,725                        10.7%                                                  19.1%
$20,725-$29,680                        7.5%                                                    15.3%
$29,680-$39,000                        5.6%                                                    12.2%
$39,000-$50,000                        4.0%                                                    9.0%
$50,000-$63,000                        3.7%                                                    7.8%
$63,000-$79,100                        3.3%                                                    6.4%
$79,100-$100,500                      2.4%                                                    5.0%
$100,500-$138,700                    2.0%                                                    4.0%
$138,700 +                                 1.6%                                                    3.2%

The US tax code is only barely progressive

The organization Citizens for Tax Justice did an analysis of our country’s tax system by comparing the percent of income earned by various income groups to the percent of taxes that they pay. The results show that sales taxes and the Social Security payroll tax, both of which are regressive, almost completely counteract the progressivity of income taxes. They also computed real tax rate for various income groups, the percent of a person’s income that is taken up by taxes. All that ever seems to get talked about in tax discussions are marginal taxes, taxes on the highest portion of someone’s income. Marginal tax rates are always higher than real tax rates. This focus on marginal rates obscures how much people actually pay in taxes. These numbers are for 2009.The link for Citizens for Tax Justice has a couple graphs that show these numbers quite nicely, I would suggest you take a look at it.

Income Group     Share of total income     Share of total taxes   Taxes as a % of income
Lowest 20%                 3.5%                                      1.9%                             16.0%
Second 20%                 7.1%                                      5.0%                             20.5%
Middle 20%                 11.6%                                    10.2%                            25.3%
Fourth 20%                  18.9%                                    18.9%                           28.5%
Next 10%                      14.3%                                    15.2%                           30.2%
Next 5%                        10.2%                                    11.2%                           31.2%
Next 4%                        14.2%                                    15.8%                           31.6%
Top 1%                          20.4%                                    22.1%                           30.8%

The Overwhelming Majority of Americans support raising taxes on the wealthy

With republican legislators unwilling to consider any new revenue in deficit reduction plans, you might think that there are no changes to the tax code which the vast majority of Americans would support. But what is going on in Congress right now does not reflect public opinion. In poll after poll, an overwhelming majority of the public favor raising taxes on those who make over $250,000 a year. The following polls come verbatim from a Politifact article. [Emphasis added]

"In order to reduce the national debt, would you support or oppose raising taxes on Americans with incomes over 250 thousand dollars a year?" Support: 72 percent. Oppose: 27 percent. Unsure: 1 percent. (ABC News/Washington Post Poll. April 14-17, 2011)

"Do you support or oppose doing each of the following to deal with the federal budget deficit? … Increase taxes on income over $250,000." Support: 64 percent. Oppose: 33 percent. Unsure: 3 percent. (
McClatchy-Marist Poll. April 10-14, 2011.)

"Now looking ahead to next year's federal budget, do you think it should or should not include higher taxes for families with household incomes of $250,000 and above?" Should: 59 percent. Should not: 37 percent. Unsure: 4 percent. (
USA Today/Gallup Poll. April 11, 2011.)


By various markers, income growth, market volatility, public opinion, the country would be better off with a smaller degree of income inequality. The level of income inequality in the United States is astonishing in and of itself, but also in comparison to other countries and our country’s past. As we ask ourselves who will bear the burden of deficit reduction, keep these figures in mind.