Tax abatements Archives - Page 2 of 13 Voice For Liberty

Dec

Won’t anyone develop in downtown Wichita without incentives?

Action the Wichita City Council will consider next week makes one wonder: If downtown Wichita is so great, why does the city have to give away so much? Next week the Wichita City Council will consider a package of incentives for the developer of a large downtown building, the Finney State Office Center. The building has an appraised value of $7,902,570, per the Sedgwick County Treasurer. The city will sell it for $100,000. That's a mere 1.3 cents per dollar, if the county's valuation is reasonable. (But, the $100,000 is non-refundable, should the purchaser decide not to close on the…

In Wichita, developer welfare under a cloud

Oct

By Bob Weeks

In Wichita, developer welfare under a cloud

A downtown Wichita project receives a small benefit from the city, with no mention of the really big money. Today the Wichita City Council approved a subsidy for a project in downtown Wichita. The city will lend the developer of a project at 303 S. Broadway $620,000 to improve the building's facade. The property must repay this amount through an assessment on its property tax. The benefit to the property is that the city is able to borrow money at a lower interest rate, and this reduces the cost of borrowing for the project. The agenda packet for this item…

CID and other incentives approved in downtown Wichita

Sep

By Bob Weeks

CID and other incentives approved in downtown Wichita

The Wichita City Council approves economic development incentives, but citizens should not be proud of the discussion and deliberation. Today's meeting of the Wichita City Council saw the council discuss and approve economic development incentives for a project in downtown Wichita. The item contemplated economic development incentives for redevelopment of an empty building in downtown Wichita to become a Hilton Garden Inn Hotel. The incentives being considered were a Community Improvement District (CID), Industrial Revenue Bonds (IRB), a parking agreement, and a skywalk easement. The discussion by the council was useful for revealing two members who are opposed to some…

May

By Bob Weeks

In Wichita, more sales tax hypocrisy

Another Wichita company that paid to persuade you to vote for higher taxes now seeks to avoid paying those taxes. Next week the Wichita City Council will consider issuing industrial revenue bonds to benefit a local company. In Kansas, IRBs are not a loan of money from government. Instead, the bonds are a vehicle for conveying property tax abatements, and often sales tax exemptions. [1. Weeks, Bob. Industrial revenue bonds in Kansas. Available at wichitaliberty.org/kansas-government/industrial-revenue-bonds-kansas/.] The applicant company is Hijos, LLC/JR Custom Metal Products, Inc. City documents give the value of abated taxes at $44,900 for the first year. Following…

May

By Bob Weeks

Spirit Aerosystems tax relief

Wichita's largest employer asks to avoid paying millions in taxes, which increases the cost of government for everyone else, including young companies struggling to break through. This week the Wichita City Council will consider offering Spirit Aerosystems economic development incentives that will allow the company to avoid paying some $45 million in taxes. This will be accomplished through the authorization of $280 million of Industrial Revenue Bonds. [1. City of Wichita. Agenda for May 3, 2016. Available at wichita.gov/Government/Council/Agendas/05-03-2016%20City%20Council%20Agenda%20Packet.pdf.] Industrial Revenue Bonds are a vehicle for generating and conveying tax exemptions. [1. Weeks, Bob. Industrial revenue bonds in Kansas. Available…

Wichita economic development items this week

Feb

By Bob Weeks

Wichita economic development items this week

Two economic development items on tap in Wichita this week illustrate failures or shortcomings of the regime. Update: Both items passed by seven to zero votes at the March 1, 2016 council meeting. This week the Wichita City Council will consider two economic development items. The first item concerns a company named Epic Sports. In 2012 this company received property tax abatements from the City of Wichita in exchange for a 100 percent property tax exemption. The measure passed by a vote of six to one, with former council member Michael O'Donnell voting no. Now Epic Sports has found greener…

Nov

By Bob Weeks

Wichita to consider tax abatements

Wichita considers three tax abatements, in one case forcing an "investment" on others that it itself would not accept. This week the Wichita City Council will consider three tax abatements to companies in the aerospace business. Two are very large companies, and one is in the small business category. In two cases the tax abatements are implemented through industrial revenue bonds. Under this program the city is not lending money. Instead, the program is a vehicle, created by under Kansas law, for companies to avoid paying property tax. In some cases companies may also avoid paying sales tax. In another…

Kansas cities force tax breaks on others

Nov

By Bob Weeks

Kansas cities force tax breaks on others

When Kansas cities grant economic development incentives, they may also unilaterally take action that affects overlapping jurisdictions such as counties, school districts, and the state itself. The legislature should end this. When Kansas cities create tax increment financing (TIF) districts, the overlapping county and school district(s) have an opportunity to veto its creation. But for some other forms of incentives, such as tax increment financing district redevelopment plans, property tax abatements, and sales tax abatements, overlapping jurisdictions have no ability to object. There seems to be no rational basis for not giving these jurisdictions a chance to object to the…

Wichita to consider three tax abatements

Nov

By Bob Weeks

Wichita to consider three tax abatements

When considering whether to grant three property tax abatements, the Wichita city council is unlikely to ask this question: Why can't these companies expand if they have to pay the same taxes everyone else pays? This week the Wichita City Council will consider property tax abatements for three different companies. One is a new request for property tax relief under the city's Economic Development Tax Exemption (EDX) program. The company is a supplier to the aerospace industry. The second is a request for a five-year extension of a five-year property tax abatement. The company met the goals established five years…

Sep

By Bob Weeks

Sales tax exemptions in Kansas

Can eliminating sales tax exemptions in Kansas generate a pot of gold? Advocates of eliminating sales tax exemptions in Kansas point to the great amount of revenue that could be raised if Kansas eliminated these exemptions, estimated at some $5.9 billion per year. Analysis of the nature of the exemptions and the amounts of money involved, however, leads us to realize that the additional tax revenue that could be raised is much less than spending advocates claim, unless Kansas was to adopt a severely uncompetitive, and in some cases, unproductive and harshly regressive tax policy. A recent advocate for eliminating…