Archive for Thursday, February 21, 2008

No clear benefit shown despite $1.5B expended

Economic development related to investment, tax breaks hard to quantify

February 21, 2008


— Kansas has spent about $1.5 billion during the past five years on economic development, and studies indicate it's difficult to determine if such expenditures do any good, according to an audit released Wednesday.

Key policymakers said the report's findings will help in discussions on how the state tries to grow the economy.

But they also noted that the second half of the study, which will focus on the effectiveness of Kansas economic development programs, has not been completed. That is scheduled to be done in May.

"A billion and a half dollars is a lot of money to put on the table without being certain what you're getting in return," said Senate Majority Leader Derek Schmidt, R-Independence, who is chairman of the House-Senate Legislative Post Audit Committee.

The report by the Legislative Division of Post Audit sought to find out how much money has been spent on economic development during the past five years and then review what past studies have shown about the effectiveness of such efforts.

From 2003 through 2007, the audit found that state agencies reported spending $630 million, mostly in federal funds, on various economic development programs. In addition, there was an estimated $860 million in "forgone revenue" through tax credits. Together, that equals nearly $1.5 billion.

And that doesn't include $400 million in additional costs to state and local governments during the next five years because of the recent repeal of the property tax on business machinery and equipment.

But in a review of studies both locally and nationally, the jury was out on whether such economic development efforts actually helped, the audit said.

"There are a number of problems in trying to assess the effectiveness of economic development programs and activities," the report concluded. One of the main ones is that it is difficult to prove that a particular result was caused by economic development assistance.

Kansas Secretary of Revenue Joan Wagnon said she was not surprised by the audit findings.

"That is the nature of the beast," Wagnon said. "It is very hard to put measures in place that will give you exactly the data you need."


Sigmund 10 years, 3 months ago

Your tax dollars (Federal and State) hard at work being spent by government bureaucrats who know better than you do how to spend your money. Please remember this the next time the politicians tell you they need to raise your taxes. Can't wait to see the first report from of the City Lawrence new auditor.

fascinating_person 10 years, 3 months ago

Having had the misfortune of growing up there, I can say with confidence that Topeka sucks.

cowboy 10 years, 3 months ago

Good point marion , or to build incubator districts for normal businesses rather than chasing he bio crapola market. i learned years ago that addresses matter , and kansas isn't the address that many want , Boston , New York , Cali , will win out on much of this due to proximity to research , capital , and manufacturing capability.

Play to our strengths !

BrianR 10 years, 3 months ago

Marion, perhaps that should be studied?

volunteer 10 years, 3 months ago

I'm among those who believe that if government would be more frugal the private sector would do sufficient economic developing. A billion here, a billion there, soon you are talking real money...

georgeofwesternkansas 10 years, 3 months ago

1.5 Billion? That is 14.29 million per kansas county, which would be a very serious investment in many rual counties.

Godot 10 years, 3 months ago

Much of that co-called economic development was funneled into the universities. Some was then syphoned off by profs who pad their income with startups that hire other profs as conultants. Leave it to government bureaucrats to spend economic development dollars on more government.

Richard Heckler 10 years, 3 months ago

Small to medium size business is the key for Kansas I say. Everybody wants the big business. Not only do a lot of big business want our tax dollars they also like ocean front and ski country.

notajayhawk 10 years, 3 months ago

BrianR (Anonymous) says:

"Marion, perhaps that should be studied?"

I hear they're forming a commission to investigate whether or not they should analyze the feasibility of considering the question of doing such a study.

lounger 10 years, 3 months ago

The Flint hills, Lawrence and parts of Kansas city. That is top of the pops for Kansas. Put time and $$$ in those spots and all will work. Keep promoting Dodge city and you will loose money and people. It might be a fun little strip but getting there is a big snooze!!!

lounger 10 years, 3 months ago

Oops I thought it was a tourism article!! We could have a big boom in the western part of the state where you feel like you are on the moon if we would invest in wind power!!!

kansasredlegs 10 years, 3 months ago

Interesting that no one mentioned that this article shows the primary reason for the taxpayers of Lawrence NOT giving Deciphera any money or tax credits/rebates. If the City of Lawrence and its amenities are not good enough for those at Deciphera without a taxpayer handout, then I say, "See ya!"

toefungus 10 years, 3 months ago

This is why giving money to government, at any level, should be resisted. This revenue could have made a big difference in our schools. But, for many years, this "economic development" money has been nothing more than political patronage. Kansans never liked patronage and has always watched for the tale tale signs of it. However, politicians are never to be denied there attempts to appear powerful. So they dream this program up. The politicians are really happy for the coal plant issue. They are hoping it takes your eyes off the real disaster going on with this program. Great audit. I wonder how many auditors careers will suffer now?

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