wKREDA 2017 Legislative Positions
wKREDA 2017 Legislative Position Statement
Project Sales Tax Exemption
Rural counties need the ability to incent job creation and expansion so rural businesses are not incentivized to move to urban areas or out of state to take advantage of expansion incentives.
Compared to urban jobs, rural employment historically lags in technical skill and wages, and rural companies add jobs one or two at a time rather than undergo large expansions. In the past, the provisions of state-sponsored incentive programs for rural counties included exceptions for lower wage rates and provided incentives for retail business investment and job creation. Rural communities have limited opportunities to access current incentive programs and have lost the competitive edge necessary to incentivize industrial manufacturing, agriculture, healthcare and retail ventures in their counties.
Re-authorize the project sales tax exemption for all communities in Kansas with guidelines that previously existed within the Kansas Enterprise Zone program. This would allow business ventures, except for retail ventures, to participate in the project sales tax exemption incentive. Retail businesses locating or expanding in cities with a population of 2,500 or less or unincorporated areas of counties with a population of 10,000 or less would qualify for the project sales tax exemption.
*As introduced is HB 2354
Because these sales tax collections are unrealized if the projects are not built, this is a revenue neutral proposal. The project sales tax exemption on construction materials will incent re-investment in downtown properties as well. Economic Development practitioners from all sizes of counties can provide multiple examples of how this incentive worked to create additional opportunities within their communities when it was available.
Lack of available, affordable, and quality housing for middle income families continues to be a hindrance to development and population growth in many western Kansas counties.
From 2012-2016, the MIH program has received $26.3 million in requests and has awarded more than $10.5 million for housing projects. Of the 52 counties receiving funds, 18 are part of the wKREDA region, resulting in more than $6.7 million in awarded projects. The MIH program has achieved a leverage factor of almost $8 for every $1 of state resources. There is a demonstrated need for this program across the state and certainly within the wKREDA territory.
Moderate income housing is vital for economic development, yet it is difficult to achieve since most federal housing programs serve a lower income bracket, and market supply is limited due to high development costs, low appraisals, tight lending conditions and lack of investor interest. Industries and retail businesses looking to expand continue to state that the biggest obstacle to hiring is the lack of housing.
Continue to appropriate funding for housing programs, such as the Moderate Income Housing Program, as it has a proven track record of working in our communities. The addition of non-profit organizations, those with a focus on housing as eligible entities for applying for the MIH program funding, would simplify access to funding for many local and regional organizations across the state. Also, direct application for MIH funding would help support regional housing projects across multiple governing jurisdictions and make the process more efficient.
Support for Network Kansas
NetWork Kansas supports the economic needs of entrepreneurs throughout the wKREDA region. NetWork Kansas makes use of Kanas Entrepreneurship Tax Credits to raise money for program support and two funding partnerships: StartUp Kansas and the Entrepreneurship (E-) Community Partnership. StartUp Kansas and E-Communities provide matching loans for startups and expansions of existing businesses in rural communities across Kansas.
wKREDA Region Impact
- Provided more than 7.48 million in matching loans to 204 businesses which created and/or retained more than 1,900 jobs
- Eighty-five percent of the funded businesses have come in communities of 10,000 or less with startups comprising 43% of the businesses funded
- Twenty-four wKREDA communities have achieved E-Community standing creating an additional $2.27 million in loan funds to support projects and leverage other business financing options
- Leveraged more than $74.7 million in additional capital
- Provided Economic Gardening assistance to 17 businesses which created and/or retained 665 jobs
- Provided more than 24.76 million in matching loans to 603 businesses which created and/or retained 3,800 jobs
- Thirty-five percent of the funded businesses have come in communities of 10,000 or less with startups comprising 27% of the businesses funded
- Fifty-nine communities achieved E-Community standing creating an additional $5.87 million in loan funds to support projects and leverage other business financing options
- Leveraged more than $236.38 million in additional capital
- Provided Economic Gardening assistance to 69 businesses which created and/or retained 2,400 jobs
Most economic development opportunities in the wKREDA region stem from entrepreneurs willing to invest in rural Kansas. Start-up Kansas and E-Community funds provide the necessary financing, not available through traditional methods, to move entrepreneurial ventures from ideas to reality. These funds are made possible through the Entrepreneurship Tax Credit program.
Continue to support NetWork Kansas and its Kansas Entrepreneurship Tax Credit program because they are among the few effective economic development programs that works in rural Kansas.
Transportation for Economic Development and Growth
Transportation continues to be a primary concern for economic development and growth throughout the western Kansas region. Accessibility to markets must be continuously maintained and enhanced.
Funding for KDOT projects has been negatively impacted over the past several years as budget constraints have increased. KDOT has the ability to influence economic growth throughout the western Kansas region through the funding of projects that depend upon access to transportation for the promotion of their products and services. The funding cuts that have occurred have negatively impacted economic development projects in the western region of Kansas.
KDOT funding must be restored and preserved with the recognition that transportation accessibility in western Kansas improves the quality of life of our existing residents, aids in the recruitment of new residents to the area, and enhances economic growth throughout our region.
Community Service Tax Credit Program
Rural communities have limited access to funds for necessary improvements and developments. Since 1994, the Community Service Tax Credit Program (CSP) has enabled Kansas non-profits to access tax credits to fund vital projects related to health, community development, crime prevention, and in a recent adaptation of the program, to youth apprenticeship and youth technical training.
Since 2005, wKREDA counties have utilized the program to raise over $20 million to improve hospitals, build rural health clinics, and provide much-needed medical equipment, develop community housing, wellness, and childcare care centers, and to enhance arts and culture facilities. These tax credits are awarded through a competitive statewide process and the resulting developments have contributed greatly to the viability and sustainability of western Kansas.
Kansas has looked for ways to fill shortfalls in the state’s budget, resulting in the reduction of allocations for the CSP. Thus, fewer opportunities exist to fund projects that are critical to the survival of rural western Kansas communities.
Protect the Community Service Tax Credit Program and maintain current funding levels to ensure that Kansas communities continue to have access to a vital fundraising tool.
Water is the driving force for many of the industries throughout Kansas, but more specifically in rural sections of the state. The current state of water policy leaves uncertainty for the future and is not allowing industries across the board to grow and prosper. Regulatory uncertainty stifles growth. The membership of wKREDA supports the implementation of a water policy that will allow our businesses to move forward in a more predictable environment.