Kansas lawmakers question Cargill incentives package
May. 16, 2018
TOPEKA, Kan. (AP) — Some Kansas lawmakers expressed discomfort with the Commerce Department's operations and authority to reward companies without proving the value of taxpayer investments.
The department crafted an economic incentives package in 2016 to keep a food products supplier's headquarters in Wichita. Cargill is receiving funding from the Promoting Employment Across Kansas (PEAK) program to retain and grow jobs while starting and ending with the same employee total, the Topeka Capital-Journal reported .
Department officials expected Cargill to reduce its staff by more than 100 by last month, which would make it eligible a year later to begin receiving an additional $1.1 million from the state. Employment would be expected to increase again and reach 800 by April 2020.
Some lawmakers said they were unaware of those terms. This kind of agreement would warrant a legislative audit, said Republican Sen. Molly Baumgardner.
"This offering of funding ... if you were willing to have a reduction in force, we'll give you the funding and then you can hire back all of those people," Baumgardner said. "That is, I would say, very inappropriate utilization of public funds and a violation of procedures that are set in place."
The Commerce Department described fluctuating job figures as part of the natural rhythm of business operations. The department also called the deal necessary for a company that contemplated moving out of Kansas.
"The purpose for the PEAK retention package was to keep the headquarters in Wichita rather than lose the project to another state," said Bob North, the department's interim secretary and chief counsel.
Democratic Rep. John Carmichael accused Kansas of giving economic incentives to avoid investing in quality of life.
"Kansas Department of Commerce has been absolutely ineffective during the Colyer-Brownback administration in doing any real good," he said. "If you look at a number of these incentive programs, you will find there are close ties between contributors or former members of the administration and the companies that receive these benefits."
Information from: The Topeka (Kan.) Capital-Journal, http://www.cjonline.com