The Kansas STAR bonds program provides a mechanism for spending by autopilot, without specific appropriation by the legislature. Under the State of Kansas STAR bonds program, cities sell bonds and turn over the proceeds to a developer of a project. As bond payments become due, incremental sales tax revenue make the payments. It's only the increment in sales tax that is eligible to be diverted to bond payments. This increment is calculated by first determining a base level of sales for the district. Then, as new development comes online -- or as sales rise at existing merchants -- the increased…
Claims of a reformed economic development process if Wichita voters approve a sales tax must be evaluated in light of past practice and the sameness of the people in charge. If these leaders are truly interested in reforming Wichita's economic development machinery and processes, they could have started years ago using the generous incentives we already have. At a conference produced by Kansas Policy Institute on Friday September 19, a panel presented the "nuts and bolts" of the jobs portion of the proposed Wichita sales tax that voters will see on their November ballots. I asked a question: Listening to…
The case of Beechcraft and economic development incentives holds several lessons as Wichita considers a new tax with a portion devoted to incentives. In December 2010 Kansas Governor Mark Parkinson announced a deal whereby the state would pay millions to Hawker Beechcraft to keep the company in Kansas. The company had been considering a purported deal to move to Baton Rouge, Louisiana. (Since then the company underwent bankruptcy, emerged as Beechcraft, and has been acquired by Textron.) The money from the state was to be supplanted by grants from the City of Wichita and Sedgwick County. At the time, the…
