Development-bill veto seen as small obstacle

A veto by Gov. Mark Parkinson is probably only a temporary stumbling block for a bill amending and expanding a new economic development program.

The bill offers significant changes to the Promoting Employment Across Kansas, or PEAK, program.

Under the program, companies that move to Kansas could keep employee withholding taxes for a time as a direct cash reward for creating an agreed-upon number of jobs.

The program is a flexible — and sensible — way of rewarding new companies, said Rep. Marvin Kleeb, R-Overland Park, who sponsored the bill.

The program would not cost the state additional money because the funding comes from eliminating the Business and Job Development tax credit in the state's six most populous counties.

Getting PEAK is worth losing the tax credits, said Jason Watkins, lobbyist for the Wichita Metro Chamber of Commerce.

"The folks involved thought it was a pretty fair trade," he said. "It was more usable."

The commerce department usually hands out tax credits, which are less welcome than cash, Kleeb said, because it rewards companies months later and only if they turn a sizable profit.

The state does have the IMPACT program, which hands out cash, but only to large companies and only before they actually build, he said.

PEAK allows the state to dole out money as the jobs are created, Kleeb said.

Parkinson was concerned that $250,000 in the bill would be allocated to Kansas Inc., the state's economic development and analysis agency, to provide support for the program.

But the bill has a future, Kleeb said.

It passed both houses with strong support. And the governor, Kleeb said, has signaled that he generally likes the bill.

It just requires more negotiation and more tweaking before it can be resubmitted after the Legislature reconvenes next week, he said.