Yesterday’s announcement by aviation manufacturer Bombardier LearJet of an expansion creating 450 jobs is welcome news in Wichita, but the reality under the covers of the deal is more than a little sobering.
First, this is not exactly news, as both the City of Wichita and Sedgwick County had already voted to participate in the subsidies that made the announcement possible. The news from yesterday is that the State of Kansas decided to contribute the last piece of the subsidy puzzle was necessary — purportedly — to make the deal work.
As reported in November (Bombardier Learjet should pay just a little), Bombardier said that after existing government subsidies are subtracted from the Wichita project cost, there was a gap of $16.1 million. Bombardier LearJet asked the State of Kansas to fund this gap, and the state complied.
So now, of the proposed site expansion costs of $52.7 million, all is being paid for by various forms of government subsidy. And that’s not all. Bombardier is also expected to receive millions in property tax abatements.
Besides this, the Bombardier affair is another example of state, county, and local government engaging in the “active investor” approach to economic development, instead of the dynamic “embracing dynamism” approach. See Kansas needs a dynamic economic growth policy for more.
Last week David Kensinger, Chief of Staff for Kansas Governor Sam Brownback, said that based on governor’s announcement yesterday — and subsequent announcements — “you will see Kansas, and Wichita, and Wichita aviation employment grow.”
We’ll have to hope for two things: That subsequent announcements hold new news, and that the state, county, and city won’t have to pay as much as they have for these jobs. We simply can’t afford much more of this type of news.