Friday, October 31, 2014

PETERSON: Kansas: A ‘not too bad’ state of development

By DR. MARK PETERSON, Insight Kansas | 12/20/2013

Herbert Rubin wrote the phrase “Shoot anything that flies, claim anything that falls!” about economic development practices 25 years ago. Economic development (ecodevo) allegedly promotes business growth in communities and states by marketing human capital, available land, proximity to markets and by providing financial incentives like tax reductions, cheap facilities financing and public subsidies.

Ecodevo results in a highly competitive but non-transparent marketplace where state and local governments woo enterprises and entrepreneurs that will bring a dowry of jobs and wealth to the closing. Kansas now is doing this with enthusiasm. Pat George, Kansas Secretary of Commerce, recently was in Wichita claiming some bullseyes — ATT and Creekstone Farms Premium Beef — that will bring a few hundred new jobs. Additionally, the state let us know Kansas was getting dressed to go dancing with Boeing again in hopes of bringing aviation assembly jobs back to Wichita for a new airplane, the 777X.

Herbert Rubin wrote the phrase “Shoot anything that flies, claim anything that falls!” about economic development practices 25 years ago. Economic development (ecodevo) allegedly promotes business growth in communities and states by marketing human capital, available land, proximity to markets and by providing financial incentives like tax reductions, cheap facilities financing and public subsidies.

Ecodevo results in a highly competitive but non-transparent marketplace where state and local governments woo enterprises and entrepreneurs that will bring a dowry of jobs and wealth to the closing. Kansas now is doing this with enthusiasm. Pat George, Kansas Secretary of Commerce, recently was in Wichita claiming some bullseyes — ATT and Creekstone Farms Premium Beef — that will bring a few hundred new jobs. Additionally, the state let us know Kansas was getting dressed to go dancing with Boeing again in hopes of bringing aviation assembly jobs back to Wichita for a new airplane, the 777X.

This kind of activity is very common among states and communities post-recession, and Gov. Sam Brownback has been quite frank about his expectations for stimulating homegrown and outside business growth in Kansas. He says they’ll come because of his income tax reductions and business investment incentives. The research on ecodevo practices suggests places like Kansas often have lots of competitors seeking to capture the same quarry. It appears what the governor is displaying in the front window looks a lot like every other state’s storefront.

A scan of the Kansas Department of Commerce’s Business Incentives brochure is informative. We put our best foot forward on the front page announcing, “Kansas offers a diverse economy perfect for your business.” But the “Quick Facts” page conveys a somewhat different message — one that, in fact, seems to reinforce what some are saying about the real value of government on the cheap.

First, we claim “one of the most” talented labor forces in the nation. The evidence: “Education spending which is 25th best in the nation.” We’re 17th in the nation for percent of adults with high school diplomas, and 16th for college graduates. We’ve also got a lot of roads (140,512 miles) and a lot of railroads (4,776 miles).

In addition to this “we’re mostly above average” data, we’ve got some other data that might be unimpressive. According to the U.S. Census Bureau’s 2012 American Community Survey, about 390,000 Kansans live below the poverty level — that’s 14 percent. The national average was 15.9 percent, so we’re a little better than average — about 22nd least poor. Of Kansas households with children, 21 percent received Social Security, public assistance and/or SNAP (Food Stamps) in 2012. Nationally, that proportion of families is 29 percent. The bottom 20 percent of Kansas families had incomes of $22,158 or less in 2012 and the average income in that bottom 20 percent was $12,565. The national average was $11,490. So, by $575 or $47.92 per month, we’re once again better than the national average. The “upside” to these numbers is, as the state commerce agency points out, a low cost of living and only 6.8 percent of the labor force unionized.

It might be that Brownback and his drumbeaters have it right. Cutting taxes in a state that’s “pretty good” or “not too bad” on its vital statistics might be just the ticket for firms looking for cheap labor, a below average cost of living, minimal pushback from organized labor and where a bit less than a quarter of family households have to rely on some form of public support. We might just feel better about our prospects if we were in the top 10 in something a little more important than college hoops.

Dr. Mark Peterson teaches political science and public administration at the college level in Topeka and is a member of the Insight Kansas writing group. Email him at allenskid@gmail.com

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