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KS: Your $140K helps keep jobs in Kansas, but not many

By   /   December 18, 2012  /   No Comments

By Gene Meyer | Kansas Reporter

PAYING FOR JOBS: New jobs are hard to find, say Topeka developers who just voted $140,000 to lure them.

TOPEKA – Using $140,000 in taxpayer money to keep an employer isn’t a kind of corporate Christmas, the spenders say.

It’s business.

Thing is, those employers probably have no plans to go anywhere. Still, the money flows.

Topeka city and Shawnee County leaders serving on the Joint Economic Development Organization, or JEDO, voted last week to give  $140,000 to Del Monte Foods to help expand the company’s Topeka pet food factory and distribution center.

Will it work? The same group has spent at least $24 million on similar efforts in the past decade. Even so, since 2000 private sector jobs shrank faster in Topeka and Shawnee County than in all of Kansas. Employment in those cities since the Great Recession has recovered more slowly than both the state and the nation.

Non-government jobs growth in Topeka is so anemic that “federal census figures show our population is growing only as fast as people have babies,” said economic development consultant Matthew Gassen, president of Winston Meriwether LLC of Topeka and an advocate of  a more open process for development planning.

No one in the two governments or in GO Topeka, the business development arm of the Greater Topeka Chamber of Commerce, believed that Del Monte was planning to leave Topeka and yank 400 jobs out of the local economy.

“We’ve always been good partners as they’ve expanded in the past,” said Topeka Mayor Bill Bunten, a JEDO board member. “In today’s world, you have to, if you want to compete.”

Topeka, Shawnee County and GO Topeka already invested more than $210,000 in similar incentives to encourage Del Monte to keep 50 jobs in the city in 2010. The money is part of $5.6 million annually that JEDO receives from a special half-cent sales tax voters approved in 2004. Local boosters feared that without the additional incentives, the global food-processing giant might instead expand elsewhere, jeopardizing more than 30 current and potential new Topeka jobs.

Thirty jobs are about what it takes to staff a McDonald’s. And in a one-industry town such as Topeka, where the biggest state, local and federal government employers who hire nearly one in four workers are downsizing, you need every private sector W-2 wage earner you can get to balance an economy, local boosters say.

“We were competing with two other cities for that future expansion,” said Marsha Sheahan, public affairs vice president for the Greater Topeka Chamber. “It’s vital. Eighty-five percent of our economic growth comes from local businesses.”

Del Monte, whose $370 million profit last year is more than 2,600 times larger than JEDO’s latest incentive offering, declined to say what might have happened if the Topekans voted differently.

“We are very pleased that the JEDO committee approved our grant application,” company spokeswoman Corrine Nosal emailed from San Francisco. “Del Monte has strong roots in Topeka and this expansion, supported in part by this grant, will help us continue to grow as an employer in the Topeka community.”

The $140,000 is small change compared to some of the millions spent to attract new business to the city and the county. In 2011, $9.1 million went to land a new Mars Chocolate North America candy factory, where 200 Kansas workers are projected to start turning out Snickers and M&Ms when the plant goes online in 2013.

Mars is the group’s biggest win in a while, though GO Topeka and JEDO also have landed major Target and Home Depot distribution centers and a Bimbo Bakeries USA since 2004. GO Topeka claims its efforts have brought or kept nearly 9,200 jobs in Topeka during the past decade.

But Topeka has lost longtime businesses, too. Within the past year and a half, Hallmark Cards Inc. closed a Topeka production plant where 500 people worked; Josten’s cut more than 370 jobs and moved its high school yearbook production to Tennessee, and the U.S. Postal Service closed its Topeka distribution center, stamping out another more than 130 local jobs.

Bottom line: Kansas Department of Labor statistics show 3,100 fewer Shawnee County and Topeka workers take home non-government paychecks now than did in 2002,  which is a 4 percent drop. Government work also shrank, but not as much — by 818 jobs, or 3.5 percent, based on quarterly averages recorded by the department.

Contact Gene Meyer at gene.meyer@kansaswatchdog.org

— Edited by John Trump at jtrump@watchdog.org

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