$90 million sought to grow Wichita jobs, possibly from sales tax
07/15/2014 6:15 PM
08/06/2014 11:29 AM
A $90 million economic development war chest is needed to make Wichita more competitive for jobs, city, county and economic development officials said Thursday.
“We have to be more focused,” said Gary Schmitt, who chairs the Greater Wichita Economic Development Coalition steering council. “We have to be more proactive rather than reactive.”
As for funding the war chest, a sales tax initiative – which could go to voters this fall if the City Council approves – was the only alternative the group mentioned.
“It’s something I think we need to look at,” Schmitt said, noting that a quarter of one cent would generate the money needed to make the Wichita area more competitive on incentives for companies.
City officials have been talking about a sales tax increase to pay for a range of projects, including a future water supply.
City Manager Robert Layton did not commit to a sales tax vote Thursday but said the council will spend much of May, starting Tuesday, reviewing the projects it wants to accomplish – water, jobs, quality of life enhancements – and how to pay for them.
He indicated the council is likely to make a funding decision by the end of this month, and that any sales tax probably would be temporary. Council members said the group hasn’t talked formally together, and that it’s not clear whether they would approve a sales tax vote this fall. The deadline to place issues on the August ballot is June 2; the deadline for the November ballot is Aug. 18.
Wichita Mayor Carl Brewer, Sedgwick County Commission Chairman Dave Unruh and a group of local businessmen unveiled “Will Wichita Accelerate Competition for Primary Jobs? Time for a Community Discussion” on Thursday.
It is a three-pronged plan to grow Wichita jobs: maintaining and expanding existing businesses, recruiting new businesses and having more entrepreneurs start more privately-funded businesses here. The recruiting and retention pitch focuses on growing aviation jobs while targeting new and existing businesses that can use the skills of the city’s work force.
The 18-page document makes city leadership’s pitch for the economic development fund, saying that Wichita – despite a skilled but aging workforce, a central location and an improving tax structure – is outgunned as it bids to keep high-paying jobs and recruit more to the city.
Or as Wichita Chamber chairman Wayne Chambers put it: “Wichita goes to a gunfight with a knife.”
The area now has $1.6 million total – in equal contributions from the city and county – to offer companies. Based on statistics contained in the proposal, that’s not close to enough in an increasingly high-stakes poker game for jobs.
For example: Chattanooga and Tennessee paid $288,700 in incentives for each job at its new Volkswagen plant. Closer to home, Overland Park and Kansas paid $239,000 in incentives for each new job at Teva Neuroscience, according to numbers compiled by the GWEDC.
Compare that to Wichita’s biggest venture into the incentives battle: $86,115 per job at NetApp, with $84,115 coming from the state.
Proponents don’t pledge to spend as much as Chattanooga and Overland Park; they’d just like to match the estimated annual per capital economic development funding in Emporia and Topeka, $32 and $30 per person respectively. Currently, Wichita and Sedgwick County are at $6, according to a GWEDC analysis.
Chambers called the jobs issue Wichita’s most urgent challenge.
“The urgency is now,” he said. “The dragon is at the door.”
Despite Chambers’ comments, it wasn’t immediately clear if the Wichita Chamber – traditionally opposed to tax increases – would support any sales tax initiative. Chambers would only commit the chamber to “taking a look at it.”
Wichita-based officials of Americans for Prosperity, the anti-tax group, said that financial incentives don’t generate jobs, according to a study by the Kaufman Foundation.
“We are concerned about the long-term economic growth of Wichita and look forward to the opportunity to see the plan,” AFP spokeswoman Susan Estes said in a text message from Topeka. “Based on the early reports, we are concerned that the plan is heavily reliant on incentives for businesses.”
Brewer acknowledged the opposition of groups such as Americans for Prosperity, which views sales tax hikes as regressive and damaging to both businesses and consumers.
But he said he thinks the community has spoken clearly through the city’s ACT ICT process, a citizen engagement process that collected 4,000 surveys and included a little more than 2,000 participants in a 102-meeting series late last year and early this year: They want a new water source badly.
And as for jobs: “They want that too,” Brewer said.