Firms seeking tax abatements from Lawrence get thorough examination beforehand, but little follow-up scrutiny.
That's what members of Mayor Jim Henry's task force on economic incentives heard during their Wednesday morning meeting at city hall.
Steven Maynard-Moody is director of Kansas University's Policy Research Institute, which does a complex cost-benefit analysis on new companies seeking abatements from the city. He said the analysis uses a pages-long equation but that some of the factors, like projected spending of new company employees in town, are based on assumptions.
"Our goal is to make the assumptions as fact-based and reasonable as we can," he said.
Maynard-Moody said the city should generally limit abatements to businesses that will generate benefits 1.25 times the costs.
Members of the task force closely questioned some analysis assumptions, including how much employee pay stays in the city and how many children are added to city schools.
Maynard-Moody said the analysis favors new businesses instead of expanding existing ones. And he said the analysis can't answer some questions, such as which kind of growth is best for Lawrence. That's up to policy-makers, he said.
"There's always going to be judgment calls," he said.
Task force members also asked how the city gauges the effectiveness of abatements.
"Have you determined if the (analysis) is accurate after they've been here for a while?" Richard Gutierrez asked.
No, Maynard-Moody said. For one, the city hasn't asked for such an analysis. And, he said, it would be impossible to track every dollar generated by the new company. But PRI could do a new cost-benefit analysis based on the company's actual investments, he said, and compare it with what was promised.
City Manager Mike Wildgen said the city creates an annual report tracking the progress of companies receiving abatements. The report compares actual employment levels to the company's promise, but no deeper analysis is made.
The city has made no effort to retract partial abatements from companies that aren't meeting their employment promises, Wildgen said.
"That's what this debate is about," he said.
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