Living wagers rap economic development report

By Burk Krohe

Commissioners received the city’s economic development report card at Tuesday’s work session. The 2011 report was generally positive, noting the successes of several current economic development projects.

However, the only significant discussion about the report, and its relation to the renewal of the countywide, half-cent sales tax came during the public comment portion of the meeting. Geri Simon, of the Manhattan Living Wage Coalition, said the city’s wage policy relating to economic development funds has not improved sufficiently to warrant support.

The Coalition has continually campaigned to set a $12-an-hour wage floor as a requirement for companies seeking economic development funds. Simon said many jobs have been created below that wage level, which does not contribute to the economic development program’s goal of creating quality jobs in the community. She added “it’s a waste of tax dollars” to create low-wage jobs.

“We don’t think companies paying less than that, which is just under $25,000 for a full-time job, should get any tax money to create jobs because anything less is low wage,” Simon said.

Simon said because the Commission has refused to put the wage floor in place, the Manhattan Living Wage Coalition will not support renewal of the half-cent sales tax in November.

“If paying a living wage is required, companies who want tax dollars to expand their business will comply,” Simon said.

Mayor Loren Pepperd challenged Simon’s characterization. Pepperd said the newest version of the economic development application states that companies will not receive credit toward their job creation requirements for jobs paying below $12 an hour.

“We changed that, we changed that around because of what your coalition wanted,” Pepperd said.

Simon said the changes don’t prevent the Commission from giving funds to companies that create jobs paying less than $12 an hour — it just means they won’t get credit for those jobs. She said it is a significant change but the Coalition “wants a guarantee.”

Pepperd challenged Simon again, saying that since the change on the application, the city has not given funds to a company creating jobs below that wage level.

“I don’t think it’s fair for you to say that you will not support the half-cent sales tax,” Pepperd said.

Other than the living-wage dispute, the meeting carried on routinely with minimal discussion from commissioners.

Lauren Palmer, assistant city manager, noted that 17 entities were covered in the report, 15 of which were tracked for job growth last year. Those entities, which have received assistance from the current or previous economic development funds, created 280 jobs in 2011. Fourteen of the entities are still be tracked for compliance in several categories, while three are now only receiving tax abatements.

She added entities receiving incentives contributed about $1 million in property taxes to the city during the reporting period, and she said 13 saw job growth.

Collectively, the report outlined expenditures of $12.5 million between 2002 and 2011, with an additional $11 million projected to be expended through 2021. The report lists $19 million in tax revenues received to date, with another $4.7 million expected through the duration of the program.

One entity, Collegiate Marketing Services, is in default. It has paid one loan installment of $60,625 but Palmer said it would still need to pay more than $587,000 to pay off the principal it received.

Palmer said the city is optimistic that additional payments may be forthcoming, but commissioners appeared less convinced.

Palmer said the remaining entities exceeded minimum performance requirements in categories such as job growth, capital investment, wages and benefits to receive their incentives.

She noted that regional jet service at the airport, GTM Sportswear, Meadowlark Hills and Flint Hills Beverage all achieved particularly well in their compliance requirements.

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