wKREDA 2018 Legislative Positions
Support for Network Kansas
The Kansas Center for Entrepreneurship DBA NetWork Kansas supports the economic needs of entrepreneurs throughout the wKREDA region. One of the mechanisms utilized by NetWork Kansas to support these efforts is the Kansas Entrepreneurship Tax Credit, which is utilized 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. NetWork Kansas also provides matching loans and investments to businesses in the wKREDA region through the Kansas Capital Multiplier Loan and Investment fund.
NetWork Kansas wKREDA Regional Impact
• Provided more than $8.374 million in matching loans to 231 businesses, which created and/or retained 2,300+ jobs
• 83% of the funded businesses are located in communities with populations of 10,000 or fewer with startups comprising 46% of the businesses funded
• 25 wKREDA communities have achieved (E-) Community standing, creating an additional $2.4 million in loan funds to support projects and leverage other business financing options
• Leveraged more than $83 million in additional capital
• Provided Economic Gardening assistance to 19 businesses which created and/or retained 672 jobs
NetWork Kansas Statewide Impact
• Provided more than $33.74 million in matching loans and investments to 741 businesses, which created and/or retained 4,170+ jobs
• Sixty-five percent (65%) of the funded businesses are located in communities of 10,000 or fewer with startups comprising 51% of the businesses funded
• 61 communities have achieved (E-) Community standing, creating an additional $6 million in loan funds to support projects and leverage other business financing options
• Leveraged more than $341.18 million in additional capital
• Provided Economic Gardening assistance to 81 businesses, which created and/or retained 2,536 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 well utilized by rural communities in western Kansas.
A 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.
Since 2012, the MIH program has received more than $33 million in requests and has awarded more than $12 million with an average leverage factor of 6:1. Of the 37 counties receiving funds, 23 are part of the wKREDA region, which resulted in $5.7 million in awards, leveraging roughly $35 million in housing investment for the region.
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. Adding non-profit organizations with a focus on housing as eligible applicants for the MIH program 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.
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 during 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 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 is vital to the economic growth throughout our region. Maintaining safe highways, railways, and airports improves the quality of life of our existing residents and aids in recruitment of new residents and business to Kansas.
Community Service Tax Credit Program
Rural Kansas 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 technical training.
Since 2005, wKREDA counties have utilized CSP to raise more than $20 million to improve hospitals; build rural health clinics; provide much-needed medical equipment; develop community housing, wellness, and childcare care centers; and enhance arts and culture facilities. These tax credits are awarded through a competitive state-wide process, and the resulting developments have contributed greatly to the viability and sustainability of western Kansas.
As Kansas has sought ways to fill shortfalls in the state’s budget, the allocation for the CSP has been reduced. As a result, fewer dollars are available to fund projects that are critical to the survival of rural and, specifically, 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 community development tool.
Tax Incentive Programs
Limited incentive programs exist to fund quality-of-life enhancements and retail developments necessary to attract new residents to rural Kansas communities. STAR Bonds, Community Improvement Districts (CIDs), Business Improvement Districts (BIDs), and Tax Increment Finance (TIF) Districts are among the programs that help Kansas communities attract developers. It is imperative that economic and community developers have access to these programs in order to grow our communities in meaningful, lasting ways.
The Kansas legislature has considered eliminating tax incentive programs as budget constraints have grown. The uncertainty that is created when these programs are put at risk deters developers from investing in Kansas communities as they cannot be assured that the programs needed to create profitable ventures will be available when projects are ready for development.
Kansas economic policy must reflect that public/private partnerships are essential to continued, sustainable growth. By offering programs that assist the private sector in development, Kansas will increase overall revenues, assist our communities in attracting new residents, and create new jobs. Tax incentive programs create long-term benefits that far outweigh the short-term reductions in tax revenues.
Support for the Historic Rehabilitation Tax Credit
In most rural areas, older buildings comprise the bulk of the structural framework, from downtowns to residential neighborhoods. Other older buildings, such as schools and hospitals, may be local landmarks that are no longer suitable for their original purposes. However, they may still offer opportunities for new uses, such as housing and light manufacturing.
Because rural communities often do not have the market rents or sales volumes to support new developments, the state’s historic rehabilitation tax credit provides a critical boost to new investment in buildings and infrastructure that are already in place. Historic rehabilitation projects create new jobs, attract new businesses, create new housing opportunities, provide a draw for visitors and tourists, and demonstrate a community’s pride in its history and heritage.
wKREDA Region Impact
Within the wKREDA region alone, 66 completed projects utilizing the state’s historic rehabilitation tax credit resulted in:
• $11.3 million in new investment by property owners into their
• $13.7 million in total economic impact
• 188 jobs created
• $293,700 in new local tax collections and $330,300 in state tax collections
• When partnered with the federal historic rehabilitation tax credit, an additional $22 million was reinvested in communities, and 361 additional jobs were created
Specific examples made possible by the Historic Rehabilitation Tax Credit
• Rehabilitation of the Heaton Building in Norton, a $1,596,230 investment in an existing building, resulted in several new downtown commercial and office spaces.
• Adaptive reuse of the St. Thomas Hospital in Colby into affordable housing resulted in $5,996,047 in investment and the addition of 30 new housing units in the community.
• Rehabilitation of the First National Bank building in Smith Center, a $470,000 investment into an existing building, resulted in the creation of additional downtown office space.
Kansas’ budget shortfall threatens to reduce or eliminate critical funding that spurs reinvestment into local communities.
The Solution:The Historic Rehabilitation Tax Credit must be maintained at its current level to ensure that Kansas communities can continue to revitalize their historic downtowns and neighborhoods and creatively reuse other significant building such as schools and hospitals.
wKREDA Economic Impact:
• $635M of public funds leveraged $1.9B in private community investment over 10 yrs—leverage factor of 3:1 1
• 2017 Annual Sales Tax was 28% of KS at $67M 2
• 2017 per capita Annual Sales Tax was $187/wKREDA—$82/KS 2
• 2017 Direct Ag Output of $25B or 37% of KS 3
• 2016 Exports of $27B or 13% of KS 4
• 2016 Per Capita Transient Guest Tax of $14.70/wKREDA—$15.60/KS 5
• 2017 Avg. Unemployment Rate 2.4%—3.7% KS 6
• 3,674 jobs available 6
• 44,530 ag sector jobs in the region 3
• 2016 Population of 358,946—9% of KS 4
• Median Household Income $53,498 compared to $53,571 for KS 7
1 wKREDA Data Sample
4 EMSI database
5 KDOR, wKREDA Data Sample