A presentation by the City of Wichita regarding IRBs is good as far as it goes, which is not far enough. Recently the City of Wichita prepared a short video explaining the city's industrial revenue bonds (IRB) program. The video may be viewed on YouTube by clicking here. Several times the presenters emphasized that in the IRB program, the city does not lend money. They properly identify the true purpose of the program, which is to subsidize companies by allowing them to avoid paying property taxes and possibly sales taxes. Several times the presenters emphasized that the IRB program has…
A report on the economic impact of the first ten years of operation of the Intrust Bank Arena in downtown Wichita incorrectly reported tax revenue. Recently Intrust Bank Arena in downtown Wichita promoted the results of an analysis of the economic impact of the arena through its first ten years of operation. [1. INTRUST Bank Arena Reports Economic Impact Study Results Through First 10 Years. February 14, 2020. Available at https://www.intrustbankarena.com/release/366/intrust-bank-arena-reports-economic-impact-study-results-through-first-10-years/.] The arena partnered with the Center for Economic Development and Business Research at Wichita State University to conduct the study. [2. Analysis by CEDBR, version 2, dated 1/6/2020. The…
It would be simple for the City of Wichita to include additional relevant information regarding economic development incentive decisions. When the Wichita City Council makes decisions regarding economic development incentives, the Center for Economic Development and Business Research at Wichita State University prepares an analysis for the city. The purpose of the analysis is to determine benefit-cost ratios for overlapping governmental jurisdictions, purporting to show that these jurisdictions will receive more in benefits than they pay in costs. An example of the analysis for a large project is here. The city does not make this analysis document available to the…
Given recent data and the CEDBR forecasts, Wichita's momentum is a slowly growing economy, with the rate of growth declining. The Center for Economic Development and Business Research at Wichita State University provides forecasts for the Wichita economy. In October, CEDBR wrote, "Total nonfarm employment in the Wichita metropolitan area grew 1.2 percent in 2018, with 3,500 new jobs created to bring the area’s employment to 298,600 workers. This was a turnaround after Wichita’s total employment declined by 2,200 jobs in 2017." [1. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. October 3, 2019.…
Examining job creation in Wichita as compared to the state and the nation. These charts show job changes in Wichita (Wichita MSA, the metropolitan statistical area, as that is the data that is provided monthly), Kansas, and the nation. Each chart shows the percentage, or relative, changes in nonfarm jobs on a common scale, using seasonally adjusted data. The source of data is Bureau of Labor Statistics, part of the United States Department of Labor. These charts are taken from an interactive visualization of this data, which is available here. For the chart starting in May 2015, we can see…
A tweet from a top Wichita city official promotes great news that really isn't so great. The @WichitaEconDev Twitter account is managed by Scot Rigby, who is Assistant City Manager, Director of Development Services for the City of Wichita. Its tagline is "Promoting, building and preserving Wichita's economic strength to ensure Wichita is the preferred location for new, existing and expanding organizations." The tweet observes "great news" in a Wichita Business Journal article reporting on an employment forecast. Wichita jobs are seen to grow in 2019, according to the forecast. But the Business Journal article didn't provide any useful context.…
The unrealized potential of an economic development incentive teaches lessons. This week the Wichita City Council will consider an amendment to an economic development incentive agreement. [1. Wichita City Council Agenda Packet for January 8, 2019. Item V-1.] In 2008 the city awarded an incentive to a company in the form of exemption from paying property taxes, estimated by the city to be $93,175 annually at the time the incentive was awarded. [1. Wichita City Council Agenda Packet for February 12, 2008. Item No. 34] The incentive was awarded based on the applicant company creating a certain number of jobs…
Wichita employment trends are positive for three consecutive months. Seasonally adjusted data from the Bureau of Labor Statistics, part of the United States Department of Labor, shows a rise in the Wichita metropolitan area labor force and job count. This data is through May 2018 and shows three consecutive months of rising employment. This is a reversal of the long term trend for Wichita, in which the labor force and employment have been falling or trending steady while the nation's economy has been growing. An interactive visualization of employment data for all metropolitan areas is available here. While the upward…
How much, if anything, do tax abatements cost? Someone asked a question regarding an item on the Wichita City Council agenda today: How much will this cost taxpayers? The item in question is agenda item IV-1: Public Hearing and Request for a Letter of Intent to Issue Industrial Revenue Bonds (WAM Investments #6, LLC). [1. Wichita City Council agenda packet for May 1, 2108.] Attached was an article from the Wichita Business Journal previewing the matter. [1. Daniel McCoy. Wichita City Council to consider $6 million in IRBs for industrial spec building. Wichita Business Journal, April 30, 2018. Available at…
Opinions vary on economic development incentives, but we ought to expect to be told the truth of the details. The Wichita Business Journal has reported on the economic development incentives used to cement the Spirit AeroSystems expansion announced last week. Following are some quotes from its article How Wichita won the battle for Spirit AeroSystems’ expansion. Background on the aspects of the deal can be found at Spirit expands in Wichita. Wichita Business Journal: "And many aren’t shy about bringing cash to the table as an incentive. In Wichita, in the wake of the defeat at the polls in 2014…
