An interesting initiative to strengthen Kansas manufacturing is being taken in the state Senate. One of the bills in the “Kansas Works” package would only tax an industry on profits made on the sale of its production in Kansas. Since Kansas is a relatively small market for a manufacturer such as Gates Corporation, Herff Jones, Russell Stover or Tramec, this change could make a real difference to Iola’s major industries, not to mention Wichita’s aircraft companies and the dozens of other plants throughout the state.
The “Kansas Works” initiatives were proposed by business leaders across the state who were called together by state Senate leaders to create what they entitled the Tax Working Group. The object was to find creative ways to tailor the state’s tax structure to attract and retain manufacturing and bioscience jobs.
Among senators leading the effort is Sen. John Vratil of Overland Park who writes an emailed column of comments on goings-on in the Legislature. His report is the basis of this editorial.
He and his colleagues, along with business leaders who are advising them, discovered that South Dakota and Iowa have led the way in creating incentives to encourage particular business segments to prosper. South Dakota makes it easier for financial services to do well; Iowa has targeted insurance companies. Both states have seen their efforts succeed.
Manufacturing, along with agriculture, has been the backbone of the Kansas economy. Sen. Vratil and his co-sponsors, believe their tax exemption proposal will bring new industries to Kansas as well as help those already here to expand and prosper.
Another bill would be even more generous to bioscience industries that will be created when the National Bio and Agro-Defense Facility (NBAF) is up and running in Manhattan. Another “Kansas Works” bill will allow bioscience companies relocating to Kansas to pay no income tax, at least for the first five years, when the law will sunset and its results will be evaluated.
The federal research center is expected to spawn high-value companies that will commercialize its scientific discoveries and develop customers worldwide.
Kansas already has made its mark in the biosciences. The KU School of Pharmacy is ranked number four in the nation and our state is number five in biotechnology. The “Kansas Works” initiatives will build on those strengths.
SEN. VRATIL ALSO teamed up with two other senators to ask the Senate Ways and Means Committee to introduce a bill to increase K-12 funding by $100 million over the next two years to “keep the current school finance formula intact.” That initiative also includes raising the local option budget cap from 31 percent to 35 percent to give school districts more local control.
While that change means a great deal more to the property-rich districts in Johnson County than it does to their poor relatives in southeast Kansas, the increased K-12 funding is greatly needed throughout the state.
And, it should go without saying, a well-educated workforce is the foundation for economic growth.
— Emerson Lynn, jr.
