Overland Park mayoral candidates on the issues: tax incentives

The four candidates vying for the primary race of Overland Park mayor share their views on the city's use of tax incentives for development projects in recent years, including the construction of The Vue apartments on Metcalf Avenue near downtown. File photo.

In early June, we asked our readers about the issues you wanted to hear the candidates running for Overland Park mayor address in the lead up to the Aug. 3 primary.

Based on your feedback, we developed a five-item questionnaire touching on the most important issues to the citizens of Overland Park.

Each day this week, we will publish the candidates’ responses to one of these five questions.

Read the candidates’ responses to previously published questions about affordable housing, police transparency, climate change and chip seal.

Below are the candidates’ responses to the fifth and final item:

The city’s use of tax incentives to attract businesses and spur new development have become the subject of extensive debate in recent years. What’s your general view on the use of tax incentives? Should they ever be used for greenfield projects? Are there any tax incentive tools you believe should never be used? Why or why not? 

Here are the answers the Post received from the candidates:

Mike Czinege

I support tax incentives for business development when used judiciously. Tax incentives should be used as the exception and not the rule, in areas that would not attract development on their own.

Specifically, tax incentives should be used for blighted, high crime, or geographically undesirable locations and not prime real estate in desirable areas. Too often in Overland Park tax incentives are given away to developers in areas that would have attracted development without the incentives, increasing the tax burden on existing Overland Park residents, schools and businesses.

Reforming city development incentives must be done to restore equity to the local tax burden. Every dollar abated is a dollar that comes directly from residents through an increasing residential tax burden. The Tax Foundation rated Kansas the worst state in the nation for taxes on mature businesses, partly because of the subsidies for new businesses. We must reverse that trend.

Faris Farassati, PhD, PharmD

Fighting for fiscal responsibility and logical expenditure of tax dollars has been one of my top priorities during the last 4 years. I have consistently been promoting the investment of tax dollars in what is beneficial for all residents of Overland Park and enhances the quality of life such as schools, parks, libraries, streets and public safety and out of the pocket of undeserving private projects with no public benefit.

A body of academic work, including publications by Professor David Merrima, a University of Illinois-Chicago professor and a member of my campaign advisory board, and the Lincoln Institute proves that other than verifiable blight, tax giveaways are mainly irrelevant to economic development.

Tax incentives originally started in California as a mechanism to remove blight. In Overland Park, luckily, we don’t have blight. Businesses have (and will) come to OP for great schools, amenities, services, and the workforce that it offers. Unfortunately, we are currently facing a situation that under the pressure of lobbyists and special interest groups, hundreds of millions of dollars are given away to private developers diminishing our ability to support a level of services that the people of OP deserve.

A clear example of this is the tax giveaway offered to the Brookridge project in sharp contrast to the objection of the people. This package depleted about $60 million in collectible revenues from the Shawnee Mission School District, $7 million from JoCo Library, $6 million from Johnson County parks and close to $18 million from Johnson County Community College, in addition to $26 million from OP itself. Another $40 million is also lost due to sales tax exemptions. Such irresponsible policies result in erosion of the city’s projected fund balance.

Beyond this data, the negative effects of tax giveaways on our daily life is obvious: bonds on school districts resulting in higher taxes, lack of funds for replacing chip seal with a safer road resurfacing technology, lack of funds to avoid toll lanes on U.S. Highway 69, removing traffic lights to save money (at 91st and Glenwood, resulting in 11 crashes so far) and a lower salary scale for our police force, resulting in inefficient recruitment and retention.

These policies are obsolete, illogical and irresponsible. The city council should support the quality of life in OP by redirecting these tax dollars to public amenities and services so our beautiful city will always be an attractive destination.

Clay Norkey

Tax incentives are important tools in our toolbox when it comes to attracting new businesses and guiding development in our city. But they must always be used wisely so that any incentivized project benefits the residents of Overland Park above all else. If a company is already planning to come to our city or a construction project will move forward anyway, we should not use incentives. But we are in a competitive environment, both regionally and nationally, so we need to have options available to attract top businesses, good-paying jobs, and high-quality development projects to our city.

To be clear, there is no pot of money that is being given away to developers that could instead be used in other ways. These referenced incentives are more like discounts that reduce the overall cost of a project. When they are used appropriately, they result in more tax revenue for the city, and it ultimately benefits the residents in the form of more jobs, better services, and a more thriving economy. It is essential to have the option to use these tools in the limited cases where they make sense, and we simply can’t wait until areas become blighted before we are willing to invest in our city. That is not what the people of Overland Park want.

Every incentive package that the city considers should be evaluated on its own merits with consideration of what the project is bringing to the city and its residents. With these investment packages, the city is able to play a part in determining what a new development will look like, which allows us the ability to encourage projects that address our residents’ needs. Any incentives should also come with conditions, so that developers only receive benefits if they are meeting the goals laid out for the project or risk losing their benefit if they fail to meet certain benchmarks, whether that be in construction progress, jobs brought to the city or other milestones. By electing leaders who will make smart, diligent decisions about how, when and if to offer these incentive packages, we can direct our city’s growth to ensure that our community remains vibrant well into the future.

Curt Skoog

Tax incentives or public investments are just one of the many tools in Overland Park’s toolbox to deliver high-quality jobs and gathering places for our residents. As Mayor, I will lead the city in playing a major role in growing jobs and investments in our community. My track record on the city council clearly demonstrates my support for growing local business and recruiting new companies to Overland Park.

Attracting and growing companies with high paying jobs is a very competitive activity. With office vacancy rates of around 15% there is limited existing space in Overland Park. Working with building owners to construct new office space is critical to Overland Park’s success. The new office buildings must be part of a dynamic place. For example, the Edison Building in downtown Overland Park, is adjacent to restaurants and open space, which allows workers an exciting place to live, work and play in a walkable neighborhood.

I will continue to partner with the State of Kansas and leverage their programs to attract businesses that are new to the Kansas City Area.

As mayor, I will only use public investments to further community priorities. When projects meet our established objectives and pass the “but for public investment it will not be built” test they should be considered. In addition, the public investment must provide an expected return on that investment. To date we have utilized Tax Increment Financing (TIF) 13 times. All north of 435. Twelve replaced blighted buildings and parking lots. The resulting projects have fueled the new energy and re-greening of our neighborhoods. These have been smart investments, and as mayor, I will continue to consider smart investments that keep Overland Park moving forward.

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