Wichita economic development solution, postponed

Recent reporting in the Wichita Business Journal on Wichita’s economic development efforts has many officials saying Wichita doesn’t have enough incentives to compete with other cities. That is, we are not spending enough on incentives.

Whether these incentives are good economic development policy is open for debate. I don’t believe we need them, and that we in Kansas and Wichita can chart another course to increase economic freedom in Kansas. That will make our area appealing to companies. But our local bureaucrats, most business leaders, and nearly all elected officials believe that targeted incentives are the way to attract and retain business.

(Charts at the end of this article illustrate the record in Wichita on jobs.)

Our leaders have identified what they believe is a solution to a problem, but have not implemented that solution effectively, in their own words.

I should say have not implemented the solution on a widespread basis, because Wichita has devoted more tax money to economic development. According to the 2010 City Manager’s Policy Message, page CM-2, “One mill of property tax revenue will be shifted from the Debt Service Fund to the General Fund. In 2011 and 2012, one mill of property tax will be shifted to the General Fund to provide supplemental financing. The shift will last two years, and in 2013, one mill will be shifted back to the Debt Service Fund. The additional millage will provide a combined $5 million for economic development opportunities.”

So the city has decided to spend more tax dollars on economic development, but this allocation is being phased out — at the same time nearly everyone is calling for more to be spent in this area.

Isn’t this a failure of political and bureaucratic leadership? We have a long-standing problem, officials have identified what they believe is a solution, but it is not being implemented. These leaders have the ability to spend more on economic development, as illustrated by Wichita’s shifting of tax revenue.

Even if we believe that an active role for government in economic development is best (and I don’t believe that), we have to conclude that our efforts aren’t working. Several long-serving politicians and bureaucrats that have presided over this failure: Mayor Carl Brewer has been on the city council or served as mayor since 2001. Economic development director Allen Bell has been working for the city since 1992. City Attorney Gary Rebenstorf has served for many years. At Sedgwick County, manager William Buchanan has held that position for 21 years. On the Sedgwick County Commission, Dave Unruh has been in office since 2003, and Tim Norton since 2001. Unruh has said he wants to be Wichita’s next mayor.

Wichita City Manager Robert Layton has had less time to influence the course of economic development in Wichita. But as he approaches his fourth anniversary in Wichita, he starts to become part of the legacy of Wichita’s efforts in economic development.

Wichita’s job creation record

Two charts illustrate the record of job growth in Wichita. The first shows Wichita job growth compared to Kansas and the nation. Data is from U.S. Bureau of Economic Analysis, and indexed with values for 2001 set to 1.00.

As you can see, job growth in Wichita trails both Kansas and the nation.

The next chart shows Wichita job growth by sector.

Private sector job growth is prominently lower than government. This is a problem, because more economic activity is directed away from the productive private sector to inefficient government.


6 thoughts on “Wichita economic development solution, postponed”

  1. The entire reign of Mayor Brewer has been a complete failure. We have higher unemployment; more crime; less expenditures on infrastructure; concerned citizens are rudely chastised for disagreeing with city policies, and higher financial bailouts for friends of city hall.

  2. I would like to say at this point that it is very shameful that the City of Wichita always has money for economic development projects and can’t take care of simple neighborhood issues. All summer the Edgemoor Park swimming pool has been down for lack of proper maintenance because the city of Wichita didn’t want to spend the money necessary to fix it. Projects such as economic development downtown seems to be more important than our city’s children enjoying what can be considered a very important part of their education and recreation for the summer. I hope soon that we can elect new city Council members who have a better vision of city parks and swimming pools as a proper function of government to be funded by property taxes as we would any other proper function of government. I also hope that very soon we can have a political discussion about what is a proper function of government.

  3. If, and when you get Wichita straightened up, please come up to Newton next and see what you can do to get them ironed out,,,,,,

  4. Hey John, if you want your kids to go play in a pool, then put one in your own yard. Why do you believe it is more important for the City Council to fix a public pool in your neighborhood than to increase downtown development? Guess what … if more businesses are working and functioning in downtown, that means an expansion of the tax base and therefore, an increase of revenue to the City … maybe after revenues increase, there will be enough money to fix this life-saving-all-important pool.

  5. Dave, the City has already invested in the pools so in my book it is their obligation to maintain it which they don’t do in many instances. another example: the water pumping station at 21st and Webb. The Ritchie family gave this property to the city of Wichita and built a nice building to house all the machinery…yet, the property is not maintained and is an eyesore to the Ritchie’s upscale development. I have a friend in that neighborhood and she told me that neighbors often have to call several times just to get the grass cut and remove dead trees. No one at the City hs oversite of this property. IF they do, they have no authority to maintain it properly.
    Seems to me we need to maintain what we have before adding additional projects funded by taxpayer monies but then left to wither on the vine. The city itself has many properties that should be sited for gross negligence…much like they do to private property owners!

  6. Wichita’s unemployment rate is well above the Kansas rate. While it might be small comfort that Wichita’s is below the U.S. percentage by about a point in the last data that I’ve seen, it is another sign that Wichita’s eco-devo efforts are not working.

    While I am glad that the Ambassador Hotel project is completed, I remain concerned about all of the city/government money backing this project. The hotel doesn’t seem very busy.

    I say this in light of the mess created by the “Minnesota Guys,” unfinished projects strung out around downtown that seemed to sputter out about the same time that the government money had been spent.

    It is a shame that this city has lots of money for the next great eco-devo scheme but can’t properly fund the parks, fix bridges, get streets repaved (look at the debacle on Tyler Rd. between 21 St. N. and 29th St. N.) and end the disputes between the fire dept. leadership and the firefighters union.

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