Kansas Advances Tax Transparency Bill

By John Celock

Kansas lawmakers advanced a bill Thursday to provide public disclosure of the state’s tax credit programs.

The state House of Representatives, on a voice vote, advanced a bill that would require the state Department of Commerce to disclose online a list of all tax credit programs being utilized, which companies are receiving the tax credits and which projects the credits are being used for. The bill has been pushed by lawmakers who have been seeking additional information on the tax credits, frequently used as part of an economic development incentive package.

“If this bill is successful you will be able to track economic incentives by county, by program and by business or recipient,” Rep. Kristey Williams (R-Augusta), who has been heavily involved in pushing increased transparency for tax credit programs.

Williams said that increased disclosure of the tax credits would allow lawmakers and residents a chance to better evaluate the use of the tax credits and determine the future of particular programs. The move comes as lawmakers continue to debate the state’s STAR Bonds economic development tax credit program, which has come under heavy legislative scrutiny in recent years.

The tax credits would not be disclosed until $50,000 is given for a particular project. The disclosure would come on either the website of the Department of Commerce or on another agency’s website, with a link available on the Commerce Department’s website.

The House voted to defeat a proposed amendment from Rep. Ralph Elliott (R-Wichita) to have the online disclosure come a year after the tax credit was awarded. Elliott said that the move would allow the public to see the results of the project, noting the Cargill project in Wichita. He said that he offered the amendment based on comments from economic development officials in Wichita.

“It would provide more tangible evidence of what the tax dollars went to,” he said. “From a PR standpoint, it is a more positive experience for all the stakeholders.”

Two other Wichita lawmakers, Reps. John Carmichael (D) and Brenda Landwehr (R), questioned the need for a one year delay. Both noted that they had not heard from Wichita officials about the need for a delay.

The House Rules Committee also ruled that a proposed amendment from Rep. Brandon Whipple (D-Wichita) to require that the state commerce secretary disclose on the agency’s website about awarding contracts to family members and business partners was not germane to the bill. Whipple said that he was offering the amendment in response to reports that former Commerce Secretary Antonio Soave had awarded contracts to a business partner.

The House also defeated a move from Rep. Dave Baker (R-Council Grove) to send the bill back to the Taxation Committee. Baker said that he believed the committee needed to further study the bill, noting that the legislation did not contain provisions providing context to each project. Baker said that increased context was needed on the projects in order to explain the technical nature of projects.

Baker said that the major concern was that major projects often have issues relating to specific industries that may not be understood by those not in the industry unless context was given. He said that he had discussed the issue with state Budget Director Larry Campbell, who cited several projects he had worked on in Johnson County while a state legislator.

House Taxation Committee Ranking Minority Member Tom Sawyer (D-Wichita) said that the bill would help increase transparency.

“This would provide increased transparency,” he said. “It would be easier for us to find easier information about all the tax credits out there. It helps us do our jobs better.”