Topeka ? While trying to mend a $230 million budget shortfall, state officials also are considering a proposal to make available $500 million in bonds to help Boeing Co. keep production of the company’s next-generation airliner in Kansas.

Gov. Kathleen Sebelius sounded enthusiastic Tuesday about helping Boeing after meeting last week with some of the company’s top Kansas officials.

“This may be something that moves forward fairly quickly,” Sebelius said.

It must move fast if it is to become a reality. Lawmakers are scheduled to adjourn Friday, then return April 30 for a wrap-up session expected to run about one week.

Under one proposal being talked about in the Capitol, the Kansas Development Finance Authority would issue as much as $500 million in bonds, then turn the money over to Boeing, which would use the funds for research and development in connection with work on the company’s new, super fuel-efficient 7E7.

Boeing would pay off the principal of the bonds through a surcharge placed on the sale of each new 7E7. The company would pay off the interest with payroll taxes — money that under normal circumstances would go into the state’s general tax fund.

Supporters of the proposal point out those payroll taxes won’t materialize if Boeing isn’t working on the 7E7 in Kansas. State Sen. Paul Feleciano, D-Wichita, said dollars generated by the new jobs would help the economy and state government’s revenue problems.

Competition

Boeing’s Wichita division is competing for the 7E7 work against other Boeing facilities nationwide and aircraft companies in other countries.

Chicago-based Boeing said Tuesday it would define within the next month or so its criteria for deciding where to assemble the 7E7.

Despite the company’s long history in its native Washington state, where it produces five commercial jet models at factories around Puget Sound, it’s not a given that Boeing would build the jet in Washington — or even in the United States, said Mike Bair, vice president of the 7E7 program.

“My guess is we would most likely sit down with the local officials here first … before we go anywhere else,” he said.

The 7E7 was announced late last year, when Boeing shelved its Sonic Cruiser project, a futuristic jet designed to travel near the speed of sound. But with airlines struggling to stay in business, the need for a new kind of cost-savings airplane became clear, Bair said.

The new jet is envisioned as a twin-aisle, mid-sized, super fuel-efficient plane that would seat from 200 to 220 passengers. It would be about the same size as Boeing’s 767 and offer a 20 percent improvement in fuel efficiency, Bair said.

Massive layoffs

Boeing, too, has been hit by the sharp downturn in the commercial aviation industry since the 9-11 terrorist attacks. It has cut more than 30,000 jobs, mostly from its commercial airplane group, and plans another 5,000 cuts by the end of 2003.

That’s translated into heavy layoffs in Wichita’s aircraft industry. Boeing has laid off about 5,000 workers in the past year, and its workforce of 12,500 is about half what it was in 1989.

“At least those who know about the issue seem to be interested in doing what we can in making sure that this next generation of projects stays in Kansas,” Sebelius said. “And that is really kind of the crux of the issue.”

As envisioned, she described the proposal as “win-win” because Boeing jobs would stay in Kansas and the company’s bond repayment plan reduces risks to the state.

Dick Ziegler, a Boeing spokesman in Wichita, said he wasn’t sure what form the aid to Boeing would take, noting the final package could be “markedly” different from the bond proposal.

He said the Kansas economy would be the winner if Boeing was able to secure a major part of the 7E7 work. “That’s why we’re talking to the state,” he said.