Small business owners in Kansas like to receive handouts from large corporations
Small business owners in Kansas have criticized a new law that exclusively provides huge companies with huge benefits and said they would hire more employees and invest in growing their companies if they received similar tax breaks.
The Act of Attracting Powerful Economic Expansion (APEX) provides companies with more than $1 billion in public benefits through measures such as tax and salary payments. The bill, which applies to companies investing at least $1 billion in Kansas, passed the Republican-led state legislature after Democratic Governor Laura Kelly pushed it to lure an undisclosed company that was considering opening a site in the state.
“I’m skeptical about any tax money I pay, and that other members of the community pay, given to one company,” Kansas-based founder and CEO Steve Roach told Fox News. “I’m doubly skeptical when that price is in the $1 billion range.”
“I would be three times skeptical if the legislature or the Commerce Department was trying to speed it up in a short period of time and without complete transparency,” Roach continued.
Kansas politicians have responded to a law offering $1 billion in public incentives to a shadowy institution
Opponents have criticized the secrecy surrounding the shadowy company, as lawmakers have been asked to sign nondisclosure agreements to learn essential details, including its name. They also said that the APEX bill unfairly benefited large corporations and that these support programs do not usually help a state’s economy.
“In addition to attracting large projects and growing our workforce, [APEX] “It also has residual effects on small businesses by increasing revenue, whether it’s more people eating at restaurants, shopping at local stores, or sponsoring other businesses,” Kelly spokeswoman Lauren Fitzgerald told Fox News.
Kelly’s office said the undisclosed company would “create 4,000 new jobs in Kansas and inject $4 billion in business investment into the Kansas economy.”
I’ve read all the franchises,” State Representative Ken Corbett, who owns Ravenwood Lodge in Topeka, told Fox News. [the undisclosed company] I got. I can’t think of anything else you could have asked for.”
I will return it to the company.
Small business owners told Fox News that they would invest additional profits in their companies if they had access to the resources that APEX provides to large companies. In addition to paying taxes and salaries, the APEX Act also provides benefits related to employee education.
“People who work in small businesses are like farmers,” said Corbett, the Republican who opposed the bill. “If we had a chance to make money, most people would put it right back in the business, grow it, buy new equipment, try to expand, and hire more people.”
“If small businesses own any of that package, the country could potentially explode with small business,” he added.
Kansas Governor David Toland, who is also the secretary of commerce and helped advance the APEX bill, said the law would help the state’s overall economy.
“The APEX bill gives us a realistic opportunity to win large economic development projects that will bring huge business investment and job creation to our state,” he said after Kelly signed the legislation into law. “We are excited about our opportunities with current prospects that will be transformative for our state and deliver long-term benefits to Kansas.”
Roach told Fox News that he will use the increased revenue from the tax credits to hire more employees, start internship programs and invest in new technologies.
“I’m going to give it back to the company,” said Rob Arnold, founder of We Got Your Back Apparel & Local Goods. “Basically the same thing I’ve done since day one is constantly reinvesting in myself and my company, you know, my people as well because they come in for the ride.”
Arnold told Fox News that his company serves the community by selling the products of other local artisans.
Mike Tracy, owner of Omni Human Resource Management, said he would invest in more staff to better serve local markets if he had access to government subsidies like APEX. He told Fox News that his top priority as a business owner is “the health, welfare and well-being of other small businesses,” including nonprofits, that his company serves.
Complete series of picking winners and losers
Small business owners felt that the state government, through APEX, was prioritizing the undisclosed business over local businesses.
“The one thing we say in small businesses is that the tax cuts are for the other person,” Roach told Fox News. “They never seem to come to us.”
“if [government officials] They want to create opportunity, they have to do it on a level playing field, which is something that all businesses in the state can benefit from, not just one big company,” Roach added.
State Senator Jeff Pittman, a Democrat who voted for the bill, defended the support as a common occurrence in Kansas.
“We have a whole gamut of picking winners and losers,” he said. Pittman cited examples of agricultural subsidies and domestic bond programs.
The Kansas Department of Commerce offers a variety of business incentives, including programs dedicated to minority and women’s business development, rural opportunity areas and industrial training.
Tracy told Fox News there was “no chance” that the state government would consider granting subsidies to his company like those under APEX.
Kansas has the nation’s highest effective tax rates on established businesses, due in part to its subsidy programs, according to the Kansas Policy Institute.
“It annoys me because we didn’t get a lot of breaks,” Arnold said. “I don’t like seeing it go to someone who probably doesn’t even need it.”
State Senator Karen Tyson, a Republican who opposed the APEX bill, told Fox News, “We’re not taking care of ourselves. We’re creating competition for our existing business.”
The unemployment rate in Kansas of 2.5% is the lowest in the state’s history, which means companies are already competing for a limited pool of talent, according to the Kansas Department of Labor. There were 90,000 job openings in Kansas as of February 2022, compared to 74,000 the previous year, according to the U.S. Department of Labor.
“We couldn’t find anyone to work,” Corbett told Fox News. “Business services can’t save anyone, so we had to invest some money to automate as many things as we could to stay in business.”
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Pittman said that Kansas workers would benefit from working for an undisclosed company because it would likely offer higher wages than current job opportunities.
“We have a labor shortage for low wages,” he said. “I’d rather get a job at a facility like the one we’re looking at than work on the minimum wage.”
Mass transfer of wealth from Kansas to Japan
Roach told Fox News that subsidies provided through APEX boost the profits of an international company at the expense of Kansas taxpayers. He described the program as “net negative for KS”.
“I’ve heard from representatives in Oklahoma who have told me that frankly [APEX] “It was for Panasonic, and the goal was to make car batteries,” Senator Mark Stephen, a Republican who voted against the bill, previously told Fox News.
The Japan Times reported that Panasonic plans to build a factory in Oklahoma or Kansas to produce batteries Tesla New factory in Texas. The Japanese company did not respond to a request for comment.
“The benefits of this support and the additional earnings go to shareholders, who are global, and C-level executives who receive higher bonuses,” Roach said. “This is a mass transfer of wealth from Kansas to Japan.”
“There is no such thing as government-funded,” Corbett told Fox News. “It’s all taxpayer-funded.”
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“So the gift that was given to [the undisclosed company] “He wasn’t from Kansas. He was from all the people who live here,” he added.
Tracy was more optimistic about the law.
“I’m going to take the position that these are countries that make an investment not unlike a private equity firm,” he told Fox News. “I hope this keeps the tax base low, keeps property taxes low and does all the things you’re supposed to do when you have it when you have a business.”
Ethan Barton contributed to this report.