Lawmakers Shocked By $1 Billion In Benefits To “Mystery Corporation”

( A bipartisan group of Kansas lawmakers slammed the secrecy behind a new law that may provide over $1 billion in taxpayer subsidies to an unnamed firm contemplating locating a facility in the state.

To discover even the most basic facts about the firm, such as its name and how many jobs it would bring to Kansas, legislators had to sign non-disclosure agreements (NDAs). The governor campaigned for the new law to entice the firm, which provides tax, salary, and other expenditure reimbursements to corporations who spend $1 billion in Kansas.

Republican state senator Mark Steffen said it’s all about openness regarding taxpayer money, which was brushed under the rug.

Regardless, Governor Laura Kelly signed the Attracting Powerful Economic Expansion (APEX) Act into law in February. The subsidy package, she said, places Kansas in a position to land a once-in-a-generation opportunity that may alter the economy potentially.

The NDAs barred politicians from discussing the “who, what, when, where, or why” with the rest of the legislature, according to state Rep. John Carmichael, a Democrat who did not sign one.

He said that, more significantly, they are unable to inform their people about what they knew and why they voted the way they did.

A Commerce Committee employee offered State Sen. Caryn Tyson the chance to sign the NDA one hour before the bill went before the panel.
She said that there was no way she was going to do it. She’s a lawmaker who believes in complete openness.

The enormity of the incentives, according to Tyson, made openness even more vital.

“We need to know who benefits from these benefits,” she stated.

After signing the NDA, State Senator Steffen voted against the measure. He said that the more convoluted a bill might be, the better. You can force something unpleasant down someone’s throat.

Steffen claimed that he was informed flat out by officials in Oklahoma that this was for Panasonic and that they would build vehicle batteries.

Panasonic aims to establish a facility in either Oklahoma or Kansas to create batteries for Tesla’s upcoming Texas plant.

NDAs are “normal procedure,” according to State Senator Jeff Pittman, who voted in support of the law. He claims to have seen them in virtually every other economic development project he’s been across.

Pittman, a Democrat, told Fox News that the NDAs were a necessary aspect of democratic governance but posed transparency issues. An elected governor has selected the commerce secretary to make specific economic development decisions. Those engaged can sign the NDA and learn more to represent their community’s needs better.

The APEX law offers funding options to qualifying firms like the mystery corporation. Reimbursements from the state for employee wages and education, investments, and property and sales taxes are among them.

As Steffen put it, it’s corporate welfare on steroids. Subsidies are a levy on established enterprises. According to Tyson of Fox News, the APEX bill featured possibilities for “refundable tax credits,” which implies the unidentified corporation might receive back more than it paid in income tax.

She said that the refundable tax credits might require Kansas to pay the unknown firm $60 million each year.

Tyson explained that it’s the government selecting winners and losers. For all firms to compete, you need a level playing field. Economic progress is leveling the playing field. In terms of attracting firms, it’s fair taxation.

You don’t turn your wallet inside out. You never give up your future.
Critics also pointed to a lack of transparency in the deal’s finances. According to Kansas Policy Institute CEO Dave Trabert, the bill was not introduced with a fiscal note that indicated its expenses.

Trabert said that the fact that they didn’t do it was revealing. This suggests they didn’t want the legislators to know exactly what they were voting for.

The bill’s amount, according to Tyson, is yet unclear.

He said that no one knows the magnitude of the bill since the tax credits and tax incentives depend on what that corporation plans to invest in Kansas.

According to Trabert, the charges might result in future tax increases for Kansans.
He said that they didn’t want anyone to know. They sought to keep the truth from them.

According to the Kansas Policy Institute, APEX subsidies might cost the state approximately $2 billion, including $1 billion in State General Fund payments.
According to Carmichael, the deal’s secrecy might “flush $1 billion down the drain.”

Pittman said that the unknown company’s potential advantages exceed the costs.

He stated that he believes it is worth the investment to bring a new firm and a new industry to Kansas, expressing his desire to “bring manufacturing employment to Kansas.”

Trabert said that these subsidies don’t work. There is plenty of proof.

He highlighted a report from the Kansas Policy Institute from 2020 on a prior subsidy attempt, which concluded that the state program “had no quantifiable effect” on its intended purpose.

According to Trabert, Kelly proposed the bill in an “extreme hurry” because the unknown corporation was also contemplating another state.

Carmichael said that it looks that Oklahoma and Kansas are competing.
They were also informed that they needed to act before the Oklahoma legislature convened so that they could entice this business to Kansas before Oklahoma could outbid them.

According to the Associated Press, Oklahoma Governor Kevin Stitt signed a law authorizing up to $700 million in state subsidies to an unnamed corporation in April.

Steffen said they’ve heard from Oklahoma that Panasonic has no plans to come to Kansas and that it’s merely a gimmick to get Oklahoma to make a better deal.

As of Monday night, no business had made a decision about the offers.