Kansas governor touts billions in new business investments during pandemic years

Republicans balk at claims, point to lockdown and tax law changes

By: - December 3, 2021 9:06 am
Lt. Gov. David Toland, who also serves as secretary of the Kansas Department of Commerce, said the Kansas Legislature needed to adopt an unprecedented package of economic development incentives to help the state solidify its bid for a manufacturing company willing to invest $4 billion in the state. (Sherman Smith/Kansas Reflector)

Lt. Gov. David Toland, who also serves as secretary of the Kansas Department of Commerce, said the Kansas Legislature needed to adopt an unprecedented package of economic development incentives to help the state solidify its bid for a manufacturing company willing to invest $4 billion in the state. (Sherman Smith/Kansas Reflector)

TOPEKA — Commerce secretary and Lt. Gov. David Toland says there is no question the Kansas economy is better now than it was three years ago, when Gov. Laura Kelly took office.

The administration has leveraged the state’s natural advantages throughout the pandemic to secure new investments, including $1 billion in automation this year in southwest Kansas.

“When windows have opened, we have found a way to climb through that window or catapult through the window or shoot ourselves through a cannon through that window to get good things done,” Toland said. “There were opportunities that have been created, and by and large, I’m unapologetic about having aggressively pursued those opportunities to do good things.

“And I do think we are in the process of reshaping the Kansas economy, allowing innovation, in particular, to play a leading role in creating the jobs that will keep our kids in the state, creating the economic opportunities that will really allow communities to flourish.”

The Democratic governor has made economic advancements a cornerstone of her re-election campaign. She faces a challenge from Republican Attorney General Derek Schmidt in next year’s election.

The Kelly administration claims to have set a one-year record for new business investments in Kansas in back-to-back years, with $2.5 billion in 2020 and $3.69 billion in 2021. Republicans question the validity of those numbers, and claim that economic improvements can be attributed to tax changes passed during this year’s legislative session.

The governor is trying to have it both ways, Republicans say, taking credit for investments after repeatedly vetoing their tax proposals. The new plan provides tax cuts for large corporations, applies the state sales tax to out-of-state online sales and expands write-offs that primarily benefit high-income families.

“Politicians will always take credit for the hard work and risk-taking of entrepreneurs and investors, but the government doesn’t create jobs,” said C.J. Grover, a spokesman for the Schmidt campaign. “It can destroy jobs, though, and Gov. Kelly’s pandemic response did.”

 

Luck and fundamentals

Toland said Kansas had a “blockbuster year” in 2020 because the logistics and distribution sector exploded in response to the pandemic.

The state has a natural advantage in this area, he said, because it is in the center of the country, has quality infrastructure, including rail service, and a lot of relatively cheap land.

“Part of this is luck, and the larger part is we’re doing a good job on the fundamentals of economic development,” Toland said.

Toland said there was “a more haphazard approach” to economic development under Republican administrations that preceded his arrival at the Commerce Department in 2019. There wasn’t much focus, Toland said, which resulted in lackluster performance.

The state has kept track of yearly investment figures since Gov. Kathleen Sebelius was in office. The numbers are not adjusted for inflation.

Investments declined in each of former Gov. Sam Brownback’s first three years in office, from $1.95 billion in 2011 to $1.09 billion in 2013. Under Kelly, investments have increased from $1.32 billion in her first year.

Toland said his agency has “gotten back to the fundamentals, the basic blocking and tackling of economic development, making sure that we are taking care of the companies that are already here, who are the ones that create most new jobs and most new capital investments, while also working to grow the pie.”

The state now is chasing 401 open economic development leads, Toland said, compared with 140 when he took office.

Recent investments include $450 million by Hilmar Cheese in Dodge City, $325 million by agribusiness company Bartlett in Montgomery County, $251 million by Summit Prairie Horizon in Phillipsburg, $251 million by Hill’s Pet Nutrition in Tonganoxie, $77.5 million by Medline Industries in Bonner Springs, and $70 million by TriRx Pharmaceutical Services in Shawnee. Those investments are expected to create 787 jobs.

Toland said companies also invested $1 billion this year in automation at meatpacking plants in southwest Kansas.

“What that does, when you’ve got a tight labor market like we do in Kansas, and even nationally, is it creates a little bit of slack in the work force pool that can be applied to attracting other industries, other sectors into the state,” Toland said.

Grover pointed to economic losses he attributed to Kelly’s actions during the pandemic. She ordered a statewide lockdown in April 2020 in an attempt to limit the spread of COVID-19, then re-opened the state in phases the following month.

“On all the metrics that actually matter to Kansas families trying to make ends meet, Gov. Kelly is failing,” Grover said. “Campaign press releases about investment commitments can’t help the owners of the one-third of Kansas small businesses forced to close in 2020 because Gov. Kelly considered them to be nonessential. Or the workers who have fled to other states to find good-paying jobs that aren’t available right now in Kansas because of her leadership.”

 

‘Business is booming’

Toland said the governor has personally negotiated with CEOs to close deals.

She helped secure a $600 million investment at the Schwan’s Pizza Plant in Salina, and a $400 million investment by Urban Outfitters in Kansas City, Kansas.

“She has rolled up her sleeves and done the really hard, painstaking work to turn conversations and recruitment efforts into bulldozers moving dirt and cement mixers pouring concrete and all of that,” Toland said. “It’s really paid off in a major way for the state.”

On Wednesday, Kelly appeared at Integra Technologies, a manufacturing service provider, in Wichita to trumpet the $7.5 billion in new business investments in Kansas since she took office.

“Business is booming in Kansas,” Kelly said. “It’s not rocket science. Businesses want to be in communities that are growing and attracting families. We will continue building on this success by staying laser focused on the issues that Kansans elected us to take care of — like fully funding our public schools, strengthening our roads, bridges and high-speed internet, and protecting access to health care.”

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Sherman Smith
Sherman Smith

Sherman Smith is the 2021 and 2022 Kansas Press Association’s journalist of the year. He has written award-winning news stories about the instability of the Kansas foster care system, misconduct by government officials, sexual abuse, technology, education, and the Legislature. He previously spent 16 years at the Topeka Capital-Journal. A lifelong Kansan, he graduated from Emporia State University in 2004 as a Shepherd Scholar with a degree in English.

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