TOPEKA, Kansas – Republicans in the Kansas Legislature aren’t eager to give Democratic Gov. Laura Kelly any big wins ahead of her campaign for reelection.
Even so, many are backing her effort to close a potentially transformative business deal offering at least $1 billion in tax breaks and other incentives to lure a mystery manufacturer to Kansas.
Lt. Gov. and Commerce Secretary David Toland calls it “the largest economic development project in our history.”
The enhanced subsidies, Toland said, would go to a company promising to spend $4 billion on a 3 million-square-foot plant employing 4,000 people.
If the firm picks Kansas, Toland said several of the target company’s suppliers would follow, drawing another 4,000 jobs to the region.
Non-disclosure agreements signed by state officials and legislative leaders prohibit them from divulging the name of the company or the possible location of the plant. That bothers lawmakers who say they need to know more about the company’s ownership and what it produces before signing off.
“It could be a wildly profitable, foreign-owned company coming in and doing an environmentally dirty business,” said Sen. Mark Steffen, a Hutchinson Republican.
Like it or not, said Paul Hughes, the head of business development at the Kansas Department of Commerce, secrecy is part of the negotiation process.
“It would cause financial harm to the company if word got out that they were planning this,” Hughes said when responding to questions during Senate hearings.
Secrecy isn’t the only issue. Some lawmakers question the need for an incentive package significantly more generous than what the state has offered in the past.
Sen. Caryn Tyson, a Parker Republican, said a small business owner who contacted her suggested the name of the bill be changed to “crony capitalism kicks existing Kansas businesses in the face.”
Despite such objections, most Republican senators joined with Democrats in a 32-7 Senate vote to approve the incentive bill after it was amended to use money generated by the economic impact of new businesses to gradually lower the state corporate income tax.
Republican Senate President Ty Masterson said he generally doesn’t like subsidies, but that “this is a little different than your typical subsidy.”
“A project of this magnitude,” he said, is “something that can change the state for generations.”
If passed, the bill would authorize the following incentives for companies that agree to invest at least $1 billion in the state:
• A tax credit up to 15% of a company’s investment.
