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Researcher: Judge incentives on effects
by Angela Howell Kansan staff writer
University Daily Kansan / Wednesday June 28, 1989
When cities want to bolster their economies they often use tax breaks to attract new business. But, according to a KU economics researcher, the use of tax breaks can be counterproductive.
Tax breaks should be judged on their direct effects rather than speculation on potential indirect effects, said David Burress, assistant professor of tax law and research associate at the Institute of Public Policy and Business Research.
A local cost-benefit study should be completed before a city grants tax abatements, he said. Tax abatements are cuts in property and other taxes.
"How is it going to affect government? How will it affect the average citizen? How will it affect the citizens that are better off and how will it
affect the worst-off citizen? These all should be taken into consideration." Burress said.
"They have an ad hoc approach now," Burress said. "But they're moving toward a more systemized environment of abatements and I encourage that."
Mike Wilden, assistant city manager, said the city granted two types of concessions: tax abatements and industrial revenue bonds.
Industrial revenue bonds are often less expensive for businesses, Wildgen said. But because of new restrictions on industrial revenue bonds, the city might abandon them within a year, he said.
Bill Martin, economic development director of the Lawrence Chamber of Commerce, said Lawrence gives 50
The most recent abatement was granted to Standard Liquor Corp. in March.
percent property tax abatements to businesses.
"A good quality company will be willing to pay its fair share," Martin said.
Instead, cities often make their decisions on whether to aid a business based on economic multipliers.
Burress said cities should consider such direct effects as the number of jobs a new business would create or the effects it would have on existing businesses. Cities also should consider possible costs of street, sidewalk and sewer construction and police protection, he said.
Multipliers are figures that translate a known direct effect of a new business, such as the number of jobs required, into an estimated total impact.
Burress gave the example of a new manufacturing plant providing 100 jobs, indirectly leading to 60 more jobs in the local service sector. The total impact would be 160 jobs and the multiplier would be 1.6.
Economic multipliers could be used to justify public concessions such as land acquisitions, new roads and sewers, job training programs, subsidized loans and tax incentives, Burress said.
Martin said Lawrence does not give away land, water, sewers, streets or subsidize loans for business. Those owners are not the final word, he said.
"These economic impact things are kind of nebulous." Martin said. "There's such a wide range of studies, it's hard to pin anything down. I look for a quality company that's going to provide new jobs."
Minority chief outlines plans
He may be new to his job, but Marshall Jackson knows what he wants to accomplish.
by Dick Lipsey Kansan staff writer
'My role is to support and help in recruiting, retaining and
JACKSON
graduating minority students," he said in an interview last week. "Whatever is necessary to help students graduate by providing a supportive atmosphere — that's our purpose."
Jackson has been interim director of the office of minority affairs since
"I hope to hire a secretary soon, and an associate director and assistant director this summer," Jackson said. "I don't want to rush it. I want people with a commitment to minority students and education."
June 19. He said his first challenge was to fill out his staff.
Jackson is reviewing the current minority support programs on campus.
"I'm taking a hard look at existing programs," he said. "There is no point in duplicating programs other offices are doing. I want to assist students in identifying existing programs we can help, I like to provide support to them."
Jackson said his office could help to coordinate the various programs for minorities.
"I'd like to see this office be a clearinghouse for information on minority programs." he said. "Then someone could come here for information about campus programs and get it. There are a lot of programs, but no one has looked at the overall picture and tried to coordinate it."
Jackson said the office of minority affairs also had a more subtle role.
"This office can help bring the institution to the point where it really accepts diversity," he said. "I am really happy that we are able to contribute on cultural diversity. New students and transfers probably need to be more aware of
it."
Jackson said support and orientation programs should be conducted throughout the school year, rather than during the summer.
"His years of experience make him able to step in and become immediately effective," she said yesterday. "He will be a valuable colleague."
Caryl K. Smith, dean of student life, said Jackson's knowledge of the University and Lawrence would be helpful.
Jackson has bachelor's and master's degrees from KU and in the past 17 years has served as assistant director of admissions, acting director of admissions and acting director of the KU placement center.
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