Voters approved a 1/8 cent ($0.125) sales tax in 2008 for the Johnson County Education Research Triangle (JCERT), which advocates promised would deliver $1.4 billion in economic impact over its first two decades and significantly expand higher education degrees. Now, some officials are questioning whether taxpayers are getting what they were promised.
At least one economist finds that goal unrealistic. Ted Bolema, an economics professor at Wichita State University, doubts the taxing authority’s ability to create $1.4 billion in benefits in 20 years.
“That would be impressive,” he said. “By my calculation that would be a 14.2 percent rate of return, which far exceeds what almost any professional fund manager will do in the stock and bond markets over the same 20-year time period. If they really can do that, I’d like to put them in charge of my investments as well as the pension funds for the state of Kansas.”
The county isn’t unique in making outrageous claims, he said.
“We can find plenty of examples of other economic development agencies making far more outrageous claims about how they can somehow produce results beyond the wildest dreams of Wall Street investors.”
However, finding information on the JCERT’s performance over the past few years is challenging.
“It’s somewhat of a state secret with public money and no sunset,” said Johnson County Commissioner Mike Brown. “That is bad government.”
Through September 2019, the JCERT tax brought in $136.8 million. Up to 2 percent may be retained by the JCERT board for administrative purposes and the balance is equally divided between the University of Kansas Edwards campus, KU Med in Johnson County and the K-State Olathe Innovation Campus. So far, each entity has received a little over $45 million.
The Sentinel had many challenges finding basic information about the use and effectiveness of JCERT funds. The most recently published audit, from 2016, merely lists generic spending descriptions (e.g., programs, payroll, administrative, advertising, property taxes, utilities) for a small sampling of expenditures at each entity. Even getting confirmation on the number of students enrolled was arduous.
Finding public officials willing to talk on the record about JCERT funding has also been difficult. A seven-member board of directors oversees the taxing authority, but only one of the board members The Sentinel reached out to responded, and that was simply to say the Board of Regents would be a better source.
The JCERT board of directors is tasked with ensuring the sales tax money is divided equally among the three entities, managed properly, and ensuring that JCERT delivers degrees, research and economic development promised to Johnson County citizens when 57 percent of voters approved the tax in 2008.
The makeup of the board is unusual. Its members must be elected officials, but not every Johnson County voter concerned with one of their decisions can hold them accountable. The current board, for example, includes three mayors. Overland Park Mayor Carl Gerlach was appointed to the board by Kansas State University. The Kansas Board of Regents appointed Olathe Mayor Mike Copeland, and the University of Kansas appointed Leawood Mayor Peggy Dunn. The board members are appointed to no more than two, four-year terms by the Governor, the Johnson County Community College Board of Trustees, KU, K-State, and the Johnson County Board of Commissioners.
The other current board members are state Rep. Jan Kessinger, appointed by Gov. Jeff Colyer, state Sen. Barbara Bollier, appointed by the University of Kansas, Gerald Lee Cross, Jr., a trustee of Johnson County Community College appointed by JCCC, and Johnson County Commissioner Janee Hanzlick, appointed by the Board of County Commissioners.
Brown is in his third year as the sixth district Johnson County Commissioner. In all that time, he’s never been asked to weigh in on anything about the research triangle. He was surprised to learn that fellow commissioner Janee Hanzlick served on the JCERT board of directors.
“I’m unaware of receiving any feedback or information pertaining to the research triangle,” he said.
Through the tax initiative, three new facilities have been constructed or renovated, the $23 million KU Edwards Campus Business, Engineering, Science and Technology (BEST) Building in Overland Park, the $29 million Kansas State University Innovation Campus National Food and Animal Health Institute in Olathe and the $19 million University of Kansas Clinical Research Center in Fairway.
In 2013, university officials at the Edwards boasted that the new building created 11.5 new jobs worth $901,600 in salaries and benefits. At K-State Olathe, officials said the new facility added 50 employees, while the KU clinical research center added 55 new jobs with payroll totaling $4 million.
According to an economic impact report crafted for the JCERT board in 2014, the three entities generated a total of $63 million in economic impact over the first 5 years of its existence.
“The Triangle is on track to achieve the predicted $1.4 billion of economic impact in its first two decades,” the report reads.
According to Bolema, the report contains very thin financial information.
“What it has is bottom-line figures for industry output and household income generated from activities supported by the fund with very little on the methodology used to calculate the amounts of business activity and household income,” he said.
The beginning of the impact report says taxpayers’ investment will “unlock millions of dollars more in private and public funds and research grants in order to realize the $1.4 billion in economic impact.
Bolema says it sounds like the taxing authority is counting those private, research and additional public funds as economic activity created by the agency. The agency might be able to attract such funds, but “it seems like a stretch to call funding raised from other sources as an economic benefit and use it to justify the return on sales tax revenues from Johnson County that go to the fund.” The taxing authority also fails to account for foregone economic activity in the private sector and any multiplying effect that would have occurred if the (so far) $136.8 million tax increase hadn’t been imposed.
Former state Sen. Karin Brownlee helped lead the campaign for approval of the forever sales tax. An original member of the JCERT Board of Directors, she now serves on the Olathe City Council.
“K-State Olathe, they do not have the numbers of students or credit hours that the city of Olathe would have hoped,” she said. “They need to grow. They need to grow faster than they have.”
The K-State Olathe Innovation Campus opened in 2011. The institution launched five degree programs in 2012. Today, K-State Olathe has 60 full-time equivalent students enrolled in a number of programs, including seven master’s programs in subjects including adult learning and leadership, food science, public health, and veterinary biomedical science; three doctoral programs, and one undergraduate program in hospitality management.
Christine Splichal, K-State Olathe director of communications and marketing, says in addition to its academic offerings the institution also provides professional development, K-12 outreach, and applied research.
“Last year, we hosted nearly 1,000 attendees at seminars and workshops,” she said. “…Our team works to build enthusiasm for careers in STEM-related fields with students in K-12. During the last school year, the combined total of students and teachers impacted through programs and activities was 10,700.”
According to Brownlee, some of the original bylaws indicated that K-State Olathe would offer master’s degrees in science fields like food safety and animal safety. Some of the JCERT regulations and Board of Regents rules limit the types of programs K-State Olathe can offer.
“K-State has so many areas that are their strengths that could be really marketable here,” Brownlee said. “Some of the limitations are causing them to not be able to respond to the market in their areas of expertise.”
At least one economist finds that goal unrealistic. Ted Bolema, an economics professor at Wichita State University, doubts the taxing authority’s ability to create $1.4 billion in benefits in 20 years.
“That would be impressive,” he said. “By my calculation that would be a 14.2 percent rate of return, which far exceeds what almost any professional fund manager will do in the stock and bond markets over the same 20-year time period. If they really can do that, I’d like to put them in charge of my investments as well as the pension funds for the state of Kansas.”
The county isn’t unique in making outrageous claims, he said.
“We can find plenty of examples of other economic development agencies making far more outrageous claims about how they can somehow produce results beyond the wildest dreams of Wall Street investors.”
However, finding information on the JCERT’s performance over the past few years is challenging.
“It’s somewhat of a state secret with public money and no sunset,” said Johnson County Commissioner Mike Brown. “That is bad government.”
Through September 2019, the JCERT tax brought in $136.8 million. Up to 2 percent may be retained by the JCERT board for administrative purposes and the balance is equally divided between the University of Kansas Edwards campus, KU Med in Johnson County and the K-State Olathe Innovation Campus. So far, each entity has received a little over $45 million.
The Sentinel had many challenges finding basic information about the use and effectiveness of JCERT funds. The most recently published audit, from 2016, merely lists generic spending descriptions (e.g., programs, payroll, administrative, advertising, property taxes, utilities) for a small sampling of expenditures at each entity. Even getting confirmation on the number of students enrolled was arduous.
Finding public officials willing to talk on the record about JCERT funding has also been difficult. A seven-member board of directors oversees the taxing authority, but only one of the board members The Sentinel reached out to responded, and that was simply to say the Board of Regents would be a better source.
The JCERT board of directors is tasked with ensuring the sales tax money is divided equally among the three entities, managed properly, and ensuring that JCERT delivers degrees, research and economic development promised to Johnson County citizens when 57 percent of voters approved the tax in 2008.
The makeup of the board is unusual. Its members must be elected officials, but not every Johnson County voter concerned with one of their decisions can hold them accountable. The current board, for example, includes three mayors. Overland Park Mayor Carl Gerlach was appointed to the board by Kansas State University. The Kansas Board of Regents appointed Olathe Mayor Mike Copeland, and the University of Kansas appointed Leawood Mayor Peggy Dunn. The board members are appointed to no more than two, four-year terms by the Governor, the Johnson County Community College Board of Trustees, KU, K-State, and the Johnson County Board of Commissioners.
The other current board members are state Rep. Jan Kessinger, appointed by Gov. Jeff Colyer, state Sen. Barbara Bollier, appointed by the University of Kansas, Gerald Lee Cross, Jr., a trustee of Johnson County Community College appointed by JCCC, and Johnson County Commissioner Janee Hanzlick, appointed by the Board of County Commissioners.
Brown is in his third year as the sixth district Johnson County Commissioner. In all that time, he’s never been asked to weigh in on anything about the research triangle. He was surprised to learn that fellow commissioner Janee Hanzlick served on the JCERT board of directors.
“I’m unaware of receiving any feedback or information pertaining to the research triangle,” he said.
Through the tax initiative, three new facilities have been constructed or renovated, the $23 million KU Edwards Campus Business, Engineering, Science and Technology (BEST) Building in Overland Park, the $29 million Kansas State University Innovation Campus National Food and Animal Health Institute in Olathe and the $19 million University of Kansas Clinical Research Center in Fairway.
In 2013, university officials at the Edwards boasted that the new building created 11.5 new jobs worth $901,600 in salaries and benefits. At K-State Olathe, officials said the new facility added 50 employees, while the KU clinical research center added 55 new jobs with payroll totaling $4 million.
According to an economic impact report crafted for the JCERT board in 2014, the three entities generated a total of $63 million in economic impact over the first 5 years of its existence.
“The Triangle is on track to achieve the predicted $1.4 billion of economic impact in its first two decades,” the report reads.
According to Bolema, the report contains very thin financial information.
“What it has is bottom-line figures for industry output and household income generated from activities supported by the fund with very little on the methodology used to calculate the amounts of business activity and household income,” he said.
The beginning of the impact report says taxpayers’ investment will “unlock millions of dollars more in private and public funds and research grants in order to realize the $1.4 billion in economic impact.
Bolema says it sounds like the taxing authority is counting those private, research and additional public funds as economic activity created by the agency. The agency might be able to attract such funds, but “it seems like a stretch to call funding raised from other sources as an economic benefit and use it to justify the return on sales tax revenues from Johnson County that go to the fund.” The taxing authority also fails to account for foregone economic activity in the private sector and any multiplying effect that would have occurred if the (so far) $136.8 million tax increase hadn’t been imposed.
Former state Sen. Karin Brownlee helped lead the campaign for approval of the forever sales tax. An original member of the JCERT Board of Directors, she now serves on the Olathe City Council.
“K-State Olathe, they do not have the numbers of students or credit hours that the city of Olathe would have hoped,” she said. “They need to grow. They need to grow faster than they have.”
The K-State Olathe Innovation Campus opened in 2011. The institution launched five degree programs in 2012. Today, K-State Olathe has 60 full-time equivalent students enrolled in a number of programs, including seven master’s programs in subjects including adult learning and leadership, food science, public health, and veterinary biomedical science; three doctoral programs, and one undergraduate program in hospitality management.
Christine Splichal, K-State Olathe director of communications and marketing, says in addition to its academic offerings the institution also provides professional development, K-12 outreach, and applied research.
“Last year, we hosted nearly 1,000 attendees at seminars and workshops,” she said. “…Our team works to build enthusiasm for careers in STEM-related fields with students in K-12. During the last school year, the combined total of students and teachers impacted through programs and activities was 10,700.”
According to Brownlee, some of the original bylaws indicated that K-State Olathe would offer master’s degrees in science fields like food safety and animal safety. Some of the JCERT regulations and Board of Regents rules limit the types of programs K-State Olathe can offer.
“K-State has so many areas that are their strengths that could be really marketable here,” Brownlee said. “Some of the limitations are causing them to not be able to respond to the market in their areas of expertise.”
