Economic development incentives questioned at Sedgwick County Commission

Last week’s meeting of the Sedgwick County Commission featured a discussion of economic development incentives unlike the genial rubberstamping these items usually receive. From the bench, Commissioner Richard Ranzau was the driving force in asking the questions.

The issue was a forgivable loan of $220,000 to be made to Apex Engineering International LLC. The company has already received approval of a forgivable loan of the same amount from the City of Wichita The company will also receive grants and tax credits totaling $1,272,000 from the state of Kansas.

Apex, a manufacturer of airplane parts, claims it has received an offer from Jacksonville, Florida for the company to move there. The actions by Sedgwick County, Wichita, and Kansas is to persuade Apex to remain in Wichita rather than move to Jacksonville.

Some interesting points raised by Ranzau:

Is this an “economic emergency or unique opportunity” as claimed by the county’s economic development staff?

Ranzau notes that our economic development policies need to address the overall climate for business, instead of picking just a few companies to grant money to.

Ranzau questions why the county does not require collateral for the loan it is making. The answer given by staff is that this is a standard agreement and is the same that the City of Wichita uses. Staff said that the county considers the forgivable loan to be an investment.

Financial statements have been reviewed by a CPA on county staff, and also by the Greater Wichita Economic Development Coalition. Other than that, the statements are private and not available to the commissioners for review.

Ranzau made the point in that if the employees of the company would take a pay cut of $0.07 per hour for the next five years, they could finance the subsidy that the taxpayers are being asked to pay. He asked: “Why are the taxpayers of this community having to bear the burden when the average salary there is $46,000? I find it hard to believe that someone would be willing to lose their job for seven cents per hour. I don’t believe this question was ever asked, but this is the thing that should be asked. There are alternatives to this.”

Ranzau also laid bare the motivations of politicians: “It does allow politicians to pound their chests and say ‘See, I care about jobs, because I gave your money to this person over here.’ But that’s very shortsighted.”

The measure passed by a vote of four to one, with Ranzau in the minority.


Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>