Business

Business

De Soto packaging plant seeking tax incentives

Huhtamaki wants $6 million in credits, but lawmakers advocate broader changes

February 27, 2008

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— Key lawmakers Tuesday leaned against legislation that would give Huhtamaki Americas additional tax incentives to try to lure a multimillion-dollar expansion to De Soto.

The Senate Commerce Committee held a hearing on SB 634, which would allow Huhtamaki, a packaging plant, to receive a $1.2 million refundable state tax credit annually for five years, for a total of $6 million.

De Soto Mayor David Anderson said expansion of Huhtamaki would help the city increase its tax base and pay for needed improvements.

"This bill will create the type of atmosphere where good corporate citizens already in our state, and who are already producing goods and services and providing good paying jobs, bring new technology to Kansas," Anderson said.

Under the agreement, the company would have to make a minimum investment of $50 million and increase the work force by 100 people, Anderson said.

But state Sen. Karin Brownlee, R-Olathe, and co-chairwoman of the Senate Commerce Committee, said the bill "would be a huge sea change in state policy. We don't do refundability of tax credits at this time."

Kansas Department of Commerce Secretary David Kerr said the state wants to lure more businesses but "we ought to address it from a global perspective instead of an individual company perspective."

Brownlee said lawmakers are working on a more comprehensive bill - SB 497 - that would repeal several tax credits and replace them with new incentives.

Comments

jayhawklawrence 7 years, 6 months ago

hawkperchedatriverfront:

I am not disagreeing with your valid point, however, have you also calculated the impact of 100 good paying jobs.

Also, Huhtamaki subcontracts to other companies in the area for other services and products and that also has an impact.

They also provide technology and skills training that rasises the overall skills level in the area.

JohnBrown 7 years, 6 months ago

The goal, and hope, is that once a company becomes sufficently invested in a community, usually 5-10 years down the road, the taxes kick in.

Understand that "business paying little to nothing in taxes does not expand the tax base or lower other's taxes" is only true AFTER 5 YEARS if the company is bankrupt or leaves for other reasons.

I'm not keen on tax breaks, but the reality is that many places are, and if we want manufacturers then we need to play the abatement game.

jayhawklawrence 7 years, 6 months ago

I am also a little skeptical of the "global perspective" concept the legislator is using. Sounds really good when she says it but I don't think one size fits all. Doesn't that go against the Republican political philosophy?

tolawdjk 7 years, 6 months ago

You know, I could agree with a tax incentive program, except for one thing.

None of these ever have any associated guarentee after the incentive period ends.

What is there to prevent the company from up and leaving, shopping around for a better base of operations, after the five years? Not a damn thing. Why not say for every year of incentive, the company must operate at the same location for an additional year after the incentives expire.

jayhawklawrence 7 years, 6 months ago

You are right about Lawrence. They remind me of the Chicago Cubs sometimes. They just can't get it together long enough to win the big games. I live in Lawrence, but I am happy for DeSoto because Huhtamaki is a very nice company.

Another point is that the infrastructure to provide basic services is too expensive to be only paid for by residential property taxes because there are more hookups, etc. A large industrial company requires only one or a few. So in the long run, it is a better deal for the city than the houses. This is just one argument that I have heard. I do not have the numbers to prove it.

OnlyTheOne 7 years, 6 months ago

Why doesn't somebody ask Kansas City, Kansas their opinions of this considering Huhtamaki Americas bought, If I remember the name correctly "Sealright," which was located in the Fairfax district for many, many years and then moved it out to Desoto for tax breaks! Now with the tax breaks, apparently, about to run out it's time to get more or move again!

tolawdjk 7 years, 6 months ago

Bingo, OnlyTheOne.

The costs of picking up and movinging can be completely offset by a sweetheart tax incentive. This equipment isn't buried into footings, it can be moved. "Good paying jobs" will attract new employees anywhere.

Richard Heckler 7 years, 6 months ago

Better yet if a company wants tax incentives they become a resident first and ten years later they become elgible providing all employees make better than $60,000 per year.

Underpaid workers have little expendable income therefore the community gains little to nothing.

Richard Heckler 7 years, 6 months ago

Off shoring might indicate that it would be best to swoon lots of lucrative small to medium size business. I read not to long ago that several million white collars were destined to India. With a very weak economy every town on earth wants the big fish who will want those tax incentives and laugh all of the way to the bank.

jayhawklawrence 7 years, 6 months ago

I completely agree with Merrill that we ought to be targeting small to medium sized businesses instead of the big fish that are into the tax incentive or else game.

We need to support manufacturing and manufacturers in this country much more if we want to have a strong economy in the future.

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