The task force that revamped the city’s tax abatement policy last year was filled with experts from a variety of fields: finance, industry and government.

But if anybody stood out as a guru in the group, it was Steven Maynard-Moody.

“He was very important,” said Lawrence City Commissioner Jim Henry, who convened the task force during his term as mayor. “We really relied on his knowledge.”

Moody, director of Kansas University’s Policy Research Institute, was the task force’s expert on “The Model,” a mathematical tool that helps officials analyze the costs and benefits a company will bring to Lawrence if it receives an abatement.

“It helps the community make a good business decision so we don’t get a loser,” Maynard-Moody said.

Indeed, much of the task force discussion revolved around how to use the model. And it was the centerpiece of one of the big revisions to the tax abatement policy: Companies that want a tax break to come to Lawrence must use the model to demonstrate they’ll generate 25 percent more revenues than costs to the city over a 15-year period.

Most companies that have received abatements in recent years have met that standard, officials say, but it provides a new economic baseline that will be hard for local government officials to ignore.

“It will help the community make a sound economic decision whether to abate a business,” Maynard-Moody said.

What the model does

When a company applies for a tax abatement in Lawrence, it pays $750 for the institute to run the model. The model balances costs and benefits by considering the following information:

The number of people a company will employ.

The percentage of those employees from Douglas County.

The percentage of employees moving from outside the county.

The salaries paid by the company.

The equipment the company will buy.

The value of the land and building the company will use.

The amount of utilities the company will use.

An estimate of how much company employees will spend on housing and local purchases.

An estimate of how many new children those employees will send to local schools.

“What’s very easy to determine is benefits, tax revenues,” said Luke Middleton, a research economist for the institute. “Obviously, the employees, the higher their salary, the higher income taxes they’ll pay.

“What’s harder to estimate is costs, how much it costs to add a family to town,” he said.

‘Political decisions’

Such analyses are required by state law, although the law doesn’t specify how detailed they should be. The League of Kansas Municipalities provides a generic model to most of its member cities. But Henry and others say the PRI model developed for Lawrence may be the most thorough in the state.

“We do consider our model the best estimate of the fiscal costs and benefits to a community,” Maynard-Moody said.

Maynard-Moody and other PRI officials warn, however, that the model is not the be-all and end-all for abatement decisions.

“I think there’s sometimes a misperception the fiscal results of the model are the only factor to judge an abatement,” Middleton said.

Said Maynard-Moody: “We’re not the decision-makers here.”

“These are political decisions, about community values,” said Joshua Rosenbloom, director of PRI’s Center for Economic and Business Analysis. “But those values have to be weighed against the costs.

“Knowing the monetary inputs is essential, but not the end point. It’s the starting point.”

Henry agreed.

“The model is a tool,” he said. “It provides some guidance we wouldn’t otherwise have. But like all models, the information you put into it determines the information you get out.”