Koch Industries: If incentives are there, we will take them

Editor’s note: A spokesperson for Koch Industries says Chase Koch’s comments were in reference to the general business business climate in Oklahoma.

Koch Industries – perhaps the largest donor to the campaign against the 1-cent-on-the-dollar sales tax – opposes government incentives and subsidies but still takes them.

The proposed city sales tax would collect $400 million over five years to pay for a water source ($250 million), job development ($80 million), transit ($39.8 million) and street maintenance ($27.8 million).

Of the $80 million job development fund, 40 percent would go toward infrastructure and 40 percent would go toward job training. The remaining 20 percent – $16 million – would go toward incentives offered to companies for things like expansion or relocation.

“We have very, very consistently been opposed to government-funded subsidies and incentives and we will continue to do that regardless of the place, the time or the issue. We believe that, in fact, if we could have an opportunity to vote on government incentives that are funded here in Wichita or any place else we would oppose those at every point,” said Mark Nichols, vice president for government and public affairs at Koch Industries, in a recent interview.

“We play by the rules and where the government incentives are already in place, then our businesses are going to participate. We think the better solution is to let market economies do the work that they’re designed to do and to eliminate the idea of all the subsidies. Otherwise you create this cronyism of picking winners and losers. You’re also therefore driving people to create temporary jobs to get temporary gains and competitively it’s not a good thing long term for our economy or our community.”

Nichols declined to say how much Koch Industries has contributed to the “no” campaign.

As part of a $1.3 billion expansion of its plant in Enid, Okla., Koch Nitrogen received a new tax increment financing district, the Enid News reported in June.

The News reported it was Koch’s single largest project to date. The TIF district would allow Koch to save $148.7 million from property tax increases.

“The climate that you have created here – everyone has created in Oklahoma – is the reason why we like to invest here, and why we’ve invested a lot over the years and why we will continue to,” Koch Fertilizer president Chase Koch told the News. “So please keep it that way. We love the climate in Oklahoma, it’s a great place to invest and a great place to do business.”

A spokesperson for Koch Industries says Koch’s comments were in reference to the general business business climate in Oklahoma.

Jon Rolph, president of Sasnak Management and co-chair of Yes Wichita, the group in favor of the sales tax, said he understands why Koch is ideologically opposed to incentives but that if the company sees the logic in using them to be competitive, the same argument is valid for the city.

“They understand since competitors use (incentives) they need to use them. And we believe the same is true for our hometown because communities and states around us use incentives to grow and recruit business. If we’re not using them, we’re making ourselves less competitive,” Rolph said.

“Sometimes you have to set ideology aside and look at reality. Koch is a great organization and I agree with their philosophy that something could be done on the federal level. But until that time, I think Koch is right to accept them and Wichita is wise to use them because it does play a part in companies’ decisions.”

This story was originally published October 25, 2014 at 8:41 PM with the headline "Koch Industries: If incentives are there, we will take them."