The cost of economics

Investment adds growth in past seven years

By Deb Hadachek Telescope editor

A focus on economic development costs $12.64 every year for every man, woman and child living in Republic County.

For that investment, county citizens get fulltime attention on a wide range of subjects from business recruitment and expansion to quality of life assistance.

“(Lack) of housing is the number one factor holding back more investment in our county,” economic development director Luke Mahin told Republic County Commissioners during his annual review recently.

In 2017 Republic County expanded its financial commitment to the Republic County Economic Development agency. The work of the volunteer board is now funded at $62,925 per year. Republic County picks up $35,000 of that tab; the City of Belleville $26,000. Contributions towards the budget are also made by Courtland, Scandia, Munden and Agenda.

RCED contracts with JenRus Freelance, a Courtland marketing agency, for the equivalent of 40 hours a week of economic development assistance, provided mainly by Mahin and owner Jenny Russell. That arrangement began seven years ago. When Republic County and Belleville City hired a director as an employee, the position traded hands seven times in 11 years.

“No where near all (the annual budget) goes for paid hours,” Mahin says. “It’s also going back into RCED for surveys, studies, matching grants if need be for studies on housing, U81 feasibility, the (destination business) boot camp and other marketing training, and conferences.”

Major programs

Over the last seven years, Mahin said three programs, in particular, has helped spur growth in the county:

Neighborhood Revitalization, a plan that provides a five year property tax rebate on a sliding scale to qualifying individual and business building projects.

During that period 67 projects were completed: 17 commercial, 25 ag building, 16 residential and and 9 farm residential. Total value of the construction was more than $10 million.

In Belleville alone, the incremental value on 11 NR projects was $3.3 million, Mahin said.

“Some were projects that may have been built anyway, but people built sooner and larger because the program is available,” he says. “It’s a nice diversification of projects between commercial, ag and residential.”

The program has been renewed through 2020. The county, Belleville City and school districts agree to forego their share of the tax on the new construction during the rebate period.

Application to the Neighborhood Revitalization program must be made before construction starts at the county appraisers office.

Rural Opportunity Zone scholarships, a program in which the State of Kansas will match up to $1,500 student loan forgiveness each year for five years for every dollar the county or a private business contributes.

Republic County budgets $22,500 annually and currently has 15 college graduates enrolled in the program. Two additional participants are employer-sponsored. Eighteen additional participants are on a waiting list “and the list grows each year”, Mahin said.

Mahin said on average, the graduates who participate in the program pay $1,419 in property tax. The group’s participants are parents to 29 children who are, or will be, enrolled in local schools.

Their average student loan debt is $35,000, and their average income at jobs in Republic County is $43,000, Mahin said.

Network Kansas Entrepreneurship Community Program. Republic County has added $357,000 in revolving loan funds through tax credits, grants and interest payments thanks to the Network Kansas program, Mahin says.

Of that amount, $219,000 has been loaned to local businesses, he said. Network Kansas also provides free small business classes, an entrepreneurship competition for young people, helped fund businesses to attend a Destination Boot Camp, and offers a program to help existing businesses expand.

Major expansion

Mahin points to several major business expansions in the county in the past seven years: Reinke Manufacturing, Buffalo Apartments, Love’s Travel Stop, and Lambert Vet Supply. Those businesses alone have added more than 100 jobs (Reinke and Love’s), $2.6 million in payroll, and pay nearly $150,000 in property tax per year.

“When you multiply that payroll by the times it is spent in the community, it has a $6 million impact,” he said.

Mahin noted that the “trade pull factor”, a number that indicates how much money is spent in a county versus how much is spent somewhere else, has increased in all of the northern tier of Kansas counties along US36.

He speculated that the addition of Dollar General stores in every county along that route might allow communities to capture dollar that formerly went to big box stores in larger communities.