In preparation for the city commission elections, the Mercury has asked each candidate to address several questions on various issues facing the city. These questions are designed to help voters understand each candidate’s position to facilitate the voter’s ability to make a more informed decision at the polls. This edition addresses budget issues. Here are the candidates’ responses. This week’s questions and responses focuses on economic development.
The following responses have been edited for space and content. To view the candidates responses in full, visit the Mercury website.
INCENTIVES AND A ‘LIVING WAGE’
To what extent should the city link economic development incentives to specific wage levels, and what should those wage levels be?
John Ball: I support the current city process that awards more points to businesses that pay their employees higher salaries when they are being considered for economic development incentives. I don’t support the idea that businesses that receive economic development incentives to relocate to Manhattan should be required to pay the so-called living wage.
Daniel Hogan: The federal government already dictates a minimum wage; let them handle it. If the city fiddles with wages there could be a potential negative impact to business owners and their ability to pay employees, which could lead to higher unemployment in the city.
Rich Jankovich: I am not a proponent of the living wage mandate. I believe the economic development model or scorecard…has worked well since inception. It is a more comprehensive evaluation of the incoming business for the commission to review. I do not disagree with the premise that we should be working toward bringing companies to Manhattan that provide good wages and fit the primary workforce that is available.
Karen McCulloh: Manhattan is in a great position at the moment. We have an educated workforce complemented by a steady stream of retirees from Fort Riley. We have a source of development dollars to assist companies coming in and we have NBAF, which will be a magnet for related research facilities to locate here. We can afford to be choosey in deciding which companies should get enticements to locate in the area…Local unemployment is low so now is the time to bring in companies that pay well, offer benefits and provide satisfying jobs. Low wage earners often need more social services and are a drain on our resources. Let us approach economic development prudently and with caution.
Debbie Nuss: The city should require, by ordinance, that businesses that receive economic development funds pay their employees a wage of no less than $12 per hour. (130% percent of the poverty level for a family of three). Public tax dollars should not be used to subsidize low wage jobs. While the current economic development formula gives credit to businesses that pay at least $12.80 per hour, it is only a guideline.
Usha Reddi: If the city is providing economic development incentives, then those businesses should strongly be encouraged to create high paying jobs. I believe the city of Manhattan is heading in the right direction…Although, the living wage is currently set at $12.20, I don’t believe there should be a set wage.
Bob Strawn: I do not favor a living wage ordinance. Any economic development application should consider wages but not require a specific level. Low wage applications should be avoided.
ECONOMIC DEVELOPMENT PROJECTS
What kinds of economic development are most important to the city?
Ball: The kind of economic development that increases the opportunity for employment or provides new services to the community or both. The opportunity would provide high wages, fit into the character of Manhattan, and increase the tax base without competing with existing businesses. The most probable area of economic expansion in the near term would be businesses related to biotech and the NBAF. A specific example would be the construction of lower level bio-safety research labs that will be required to support the Bio-safety Level 4 research labs within the NBAF.
Hogan: The city needs to lure more industry to the area, and less retail. More industry leads to higher numbers of jobs, which leads to higher employment, which leads to more tax revenue, which leads to lower taxes. Lower taxes leads to a better Manhattan through increased spending by the consumer, which means more tax revenue.
Jankovich: I believe that as a community, we need to identify what types of businesses we want to attract and will fit the workforce and infrastructure that is available. However, as a region we need to support one another in putting a strong regional identity forward and attract businesses to the region…This is shown in NBAF and is a good model to follow. I also believe that we should not be looking at businesses that are immediately looking for handouts. The business should have real capital in the game in investing in their own business. When companies have their own cash into a project, its likelihood of success is significantly improved and they are and will be more engaged in success and the community.
McCulloh: The most important consideration with economic development is that the newly recruited companies are a good fit with our communities…We need to concentrate carefully on strengthening our present businesses and support new enterprises that have a connection to Manhattan and Kansas State University and avoid those who are just floating through, picking up economic development money on their way to another location. We also need to have a conversation with our schools and tech-college to explain and layout our economic development priorities so that they will be training the workforce new companies need.
Nuss: The city should focus on recruiting and supporting existing businesses that provide job security and upward mobility for Manhattan’s existing workforce and that encourage K-State graduates to remain in our community…Our economic development initiatives should continue to build on the research strengths at [K-State], the work force being developed at Manhattan Area Technical College, our existing skilled labor force, and the possible construction of [NBAF].
Reddi: The best economic development for the city of Manhattan would be businesses that can be established here permanently. I prefer locally owned businesses that offer job opportunities to our residents…More diversity in businesses would keep Manhattan interesting and would generate more revenue.
Some areas I think we should try to attract are technology-based businesses, entertainment establishments for all age brackets and affordable daycare providers.
Strawn: Generally, [economic development] applications that reflect the core strengths of the city should be targeted, like those with direct ties to [K-State] – NBAF, NISTAC and CivicPlus being good examples. I would question those without direct ties or with questionable plans like fertilizer companies, call centers, distribution companies, and the auto industry.
Should the city use tax abatements to bring businesses to Manhattan?
Ball: Companies should not be paid to relocate here, but should be attracted here because of low taxes and the exceptional quality of life…While negotiating economic incentives with potential new businesses, the taxpayer must always be protected with low risk incentives.
If a minor tax incentive is part of the package and makes sense, then the business must be bound via bond or other legal document to fulfill the length of the agreement so that the full return on the taxpayer’s investment is repaid.
Hogan: No. The taxes these new businesses don’t pay leads to higher taxes for the citizens.
Jankovich: Normally no. However, from time to time when it does make sense, Civics Plus as an example, it can be a good mechanism…It is always an option when there are limited options available, but one that should be used with great caution.
McCulloh: One reason I worked hard to get the half-cent sales tax renewed last November was that I think cities and counties do need to have monetary enticements in their [economic development] tool box…Tax abatements should be the last to be offered…Eco-devo offerings should be tangible items which can be withdrawn if a company does not perform as promised. Tax abatements also tie the hands of future city commissions and lessen their ability to make policy by tying up future funds.
Nuss: Tax abatements should only be used under extraordinary circumstances and only with the unqualified support of the county and the school district because of the potential loss of revenue to both.
Reddi: Yes, the city should use tax abatements to attract businesses to Manhattan. These abatements/incentives are given based on a variety of factors such as number of new jobs created, average wage of new jobs being created, or capital investment of the business.
I support the city using tax abatements so long as there are benchmarks and accountability factors in place to maintain established goals…
Strawn: Tax abatements are tools more worthy in my mind than outright grants. At least with tax abatements, the applicant has invested capital in the city.