Tax abatements

Wichita presents industrial revenue bonds

Wichita presents industrial revenue bonds

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…
Read More
Freestanding emergency room in Wichita closes

Freestanding emergency room in Wichita closes

The conversion of a medical facility should receive city scrutiny due to tax breaks granted based on its original use. The Wichita Eagle reports that a freestanding emergency room in northeast Wichita has closed after two years. It will be converted to a cardiology office under the same ownership. As I reported in Free standing emergency department about to open in Wichita, the facility received property tax abatements worth an estimated $61,882 per year in the first year. The abatement was scheduled to last for five years, with a likely extension for an additional five years. These abatements were obtained…
Read More
Missing from Wichita city documents: Sales tax

Missing from Wichita city documents: Sales tax

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…
Read More
Sedgwick County tax exemptions

Sedgwick County tax exemptions

Unlike the City of Wichita, Sedgwick County has kept track of its tax exemptions. As part of an effort to increase efficiency and management of Sedgwick County government, former county manager Michael Scholes implemented numerous changes, as detailed in the document Efficiencies in Sedgwick County government. One management accomplishment was described as this: Developed a tax system and business intelligence query to identify Industrial Revenue Bonds (IRB) & Economic Development (EDX) tax exemptions and report foregone property tax revenues for Governmental Accounting Standards Board (GASB) 77 reporting. The report provides the ability to report by tax authority, company, and real…
Read More
Wichita business press needs to step up

Wichita business press needs to step up

If a newspaper is going to write a news story, it might as well take a moment to copy and paste information from a city council agenda packet. Especially when what is missing from the story is perhaps the most important information. When the Wichita City Council approved an Industrial Revenue Bond issue at its July 10, 2018 meeting, the city's business press covered the matter. In the Wichita Eagle, the story fails to mention the motivation for the item. [1. Finger, Stan. Wichita City Council approves bonds for Cargill expansion. Available at https://www.kansas.com/news/business/article214622565.html.] The meeting agenda packet for this…
Read More
How much will this cost Wichita taxpayers?

How much will this cost Wichita taxpayers?

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…
Read More
Sedgwick County’s David Dennis on economic development

Sedgwick County’s David Dennis on economic development

Following the Wichita Mayor, the Chair of the Sedgwick County Commission speaks on economic development. Last week Sedgwick County Commissioner David Dennis penned a column for the Wichita Eagle praising the county's efforts in economic development. [1. David Dennis. Sedgwick County part of drive to strengthen area workforce. Wichita Eagle, March 5, 2018. Available at http://www.kansas.com/opinion/opn-columns-blogs/article203559734.html.] Dennis is also chair of the commission this year. In his column, the commissioner wrote: "Economic development is a key topic for the Board of County Commissioners and for me in particular. Right now we have a lot of momentum to make our community…
Read More
Spirit expands in Wichita

Spirit expands in Wichita

It's good news that Spirit AeroSystems is expanding in Wichita. Let's look at the cost. While it is good news that Spirit AeroSystems is expanding its Wichita operations, it is not without cost to several governmental agencies. Here's a summary of what is publicly available so far. First, a new "entity" will be formed in order to facilitate the construction and ownership of a new building on the Spirit campus. [1. "The CITY, COUNTY and COMPANY would each take action to establish a new legal entity separate and apart from the CITY, COUNTY and COMPANY for development of the PROJECT…
Read More
Sales tax incentives yes, but no relief on grocery sales tax

Sales tax incentives yes, but no relief on grocery sales tax

Is it equitable for business firms to pay no sales tax, while low-income families pay sales tax on groceries? Last week I wondered if the city's agenda packet for economic development incentives proposed for BG Products was complete. [1. Weeks, Bob. Wichita Business Journal grants city council excess power. Available at https://bobw7.sg-host.com/wichita-government/wichita-business-journal-grants-city-council-excess-power/.] Since the city's narrative had no mention of a sales tax exemption, but the accompanying ordinance that was passed authorized a sales tax exemption, I wondered if the analysis performed by the Wichita State University Center for Economic Development and Business Research was correct. Now that I've received…
Read More
Cash incentives in Wichita, again

Cash incentives in Wichita, again

The City of Wichita says it does not want to use cash incentives for economic development. But a proposal contains just that. Update: The council did not approve this project, by a vote of four to three. This week the Wichita City Council will consider a package of incentives for the developer of a large downtown building, the Finney State Office Center. While the city has said that it does not want to use cash incentives, they are proposed for this project.[1. Wichita City Council agenda packet for April 11, 2017.] Elements of the proposal are these: The Wichita Public…
Read More