Kansas Lieutenant Governor David Toland paid a visit to Great Bend Wednesday as part of a week-long tour focusing on economic development throughout central and northwest Kansas. Toland, who also serves as Secretary of Commerce, said the tour is an effort to visit and acquaint himself with businesses throughout the state.
“I was hoping to come to Great Bend last year but COVID prevented that,” Toland said. “This particular tour is part of an effort to get out and just gain an understanding of what’s going on economically in all parts of the state.”
A native of Iola, Toland said communicating with businesses and local workforce centers is important to get the pulse of what’s happening and how communities are responding economically to the pandemic. “I am acutely aware of the feeling of rural areas being forgotten by Topeka and so one of the things Governor Kelly has insisted on, and is also personally important to me, is getting out and visiting all parts of Kansas.”
Toland’s tour includes stops in Colby, Atwood, Oberlin, Norton and Hays. He began his Great Bend visit touring 12 properties owned by Rosewood Services. Toland also stopped by and visited with local staff from the Kansas Workforce Center. Great Bend is part of the Local Area I Workforce Development Board which is a partner with the Department of Commerce. The board serves a 62-county area and assists with connecting employers with job seekers.
Obstacles to economic development
Toland said one of the biggest challenges facing Kansas businesses is inadequate staff. “Businesses need workers,” said Toland, noting the severe worker shortage in Kansas and Barton County. “That is a consistent theme wherever we go. Right now there are 41,000 vacant jobs in our state and 700 vacant jobs just in Great Bend alone.”
He added that another issue impacting the local and state economy is housing. “The fact of the matter is we do not have enough rooftops in our state to be able to support the workforce that’s required for businesses to operate,” Toland said. “So it’s going to take some creative approaches to solve these shortages.”
He also explained some revisions made by Governor Kelly and the Legislature to the Kansas Rural Housing Incentive District Act (RHID), which is a tax increment financing (TIF) recourse for municipalities. A TIF is often one of the only options for communities that generate revenue for affordable housing through real estate transfer taxes or rely on low-income housing tax credits to finance new development projects in targeted neighborhoods.
“Basically you take the increment or the additional tax created when you build something and put that money back to pay for improvements that are bonded,” said Toland.
“For example, if you have an empty lot that’s worth $1,000 and you build a $150,000 house on it, that tax valuation goes back to pay for infrastructure to that lot.”
Governor Kelly’s bill, which was signed into law last week, continues to allow the use of RHID but, in addition, permits vertical construction on upper-story properties.
“Right here in Great Bend, we have terrific old buildings, many of which have second floors that are just being used for storage and collecting dust,” Toland said. “There hasn’t been anything going on with many of those second-floor structures for nearly 80 years.” He added that property owners in several small communities have been investing in second and third floors and converting them into loft-style housing. “These revisions to the RHID will now provide a tool for people to do more of that across Kansas,” said Toland.
This past week the Great Bend City Council earmarked half of the $2 million in COVID-19 American Rescue Plan Act (ARPA) of 2021 funding the city will receive for subsiding sprinkler and fire alarm systems in downtown upstairs lofts and businesses.
How else is the state addressing economic development?
During his visit Wednesday, Toland highlighted the Department of Commerce’s new economic development strategic plan, known as the Kansas Framework for Growth. The plan focuses on four pillars: talent; innovation; community assets; and policy.
“When we worked with the data portion of this plan, we benchmarked ourselves against the other 49 states, particularly our competitor states in the Midwest,” Toland said.
“What we found is that our state’s economy grew over the last decade but not at nearly the rate of our competitor states or the national average.” He added that as a result, Kansas has lost market share against other states. “So what we have to do is accelerate our rate of growth while ensuring that growth isn’t just taking place in our metro areas but also in non-metropolitan areas of the state.”
Toland said the state did set a record for capital investment last year at $2.5 billion, surpassing the previous record of $2.4 billion. In 2019, the state invested $1.3 billion in capital investment, according to Toland. “So we have been making steady improvement,” he said. “We are currently at $1.2 billion this year in capital investment so we’re getting better quickly but so are our competitors.”
Toland reiterated the importance for Kansas to move ahead with a sense of urgency related to economic development. “That includes housing and workforce needs,” he said. “I feel we have an open window right now and it’s incumbent upon us to catapult our state forward.”
Updates on ARPA
While he did not provide a specific time frame, Toland said he expects the state to receive its first tranche of ARPA funding soon.
“Governor Kelly has said she wants this to be an open and transparent process for investing this funding,” said Toland. “This is the same approach we used in the SPARKS process for the CARES Act.”
He said the goal is to establish a taskforce to make recommendations on how to invest ARPA money. “We can then move quickly to get the money out into communities.”
Toland added that the mechanics of ARPA fund distribution will differ from how money from the CARES Act was issued. “With the CARES Act, state and local money flowed through the state,” he said. “Under ARPA, funding will go directly to communities and counties.” Toland stated that the whole scope of the ARPA funds is economic recovery.
“Last year with the CARES Act, we had immediate public health needs and a lot of other non-economic development needs that needed to be addressed,” said Toland. “Again, ARPA is focused on economic recovery and I’m very excited about making investments that will set Kansas up for the next two to three generations to be more competitive as a state.”