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Kansas Offers Business Tax Incentives, Encourages Biosciences and Aviation

Feb/Mar 08
In a message issued at the beginning of 2008, Governor Kathleen Sebelius called 2007 "a year full of challenges, opportunities and accomplishments." She noted that the state gained more than 23,000 new jobs, putting the unemployment rate below the national average. To continue the momentum, the state passed $175.8 million in tax relief for employers and lifted the franchise tax on more than 16,000 small businesses.

Kansas' three major traditional industries - energy, agriculture and manufacturing - remain strong, says David D. Kerr, secretary of the Kansas Department of Commerce. Emerging sectors include alternative energy, animal science and nutrition, human health and pharmaceuticals, and advanced composite materials.

To facilitate the biosciences, Kansas Economic Growth Act of 2004 allowed for the creation of the Kansas Bioscience Authority, a $581 million economic development initiative to be distributed over the next 15 years. Research in animal sciences is a focus. "Thirty percent of the global industries for animal health are in the corridor that spans from Kansas City to Manhattan in the Northeast of the state," says Kerr. The area is home such companies such as Fort Dodge Animal Health, Cargill, Nestle Purina PetCare, and Hill's Pet Nutrition.

The plant health sciences cluster is cultivated at Kansas State University in Manhattan. "Our incredible strength in the biosciences is why a site at Kansas State University in Manhattan is one of five finalists announced by the Department of Homeland Security as a possibility for the federal government's soon-to-be-built National Bio and Agro-defense Facility (NBAF), a $451 million project," says Kerr. Final site selection will be announced later this year.

Advanced manufacturing's concentration in aviation continues to give the economy a lift. "With 50 percent of airplanes manufactured in Kansas, our state has become known as the Aviation Capital of the World," says Kerr. He adds that Cessna has committed to adding 1,500 new jobs, and Boeing, Raytheon, and Hawker Beechcraft employ many of the industry's 34,000 workers.

The advanced materials sector is exploring composites to replace sheet metals for the aviation/aerospace and healthcare industries. A recent $5 million WIRED grant from the U.S. Department of Labor is expected to help link the aviation sector with the related advanced materials/polymers industry.

Kansas' central location makes it the center of attention for logistics firms. Besides next-day freight service to 75 percent of the country and the confluence of three major interstates, rail service continues to expand. Burlington Northern Santa Fe (BNSF) is developing a new logistics park in Gardner in southern Johnson County that covers approximately 800 acres.

Alternative energy sources abound in Kansas. Kerr notes that the state is the seventh-largest ethanol producer in the nation, with eight ethanol facilities already online and five under construction. For wind-energy generation, Kansas boasts the third-highest wind potential in the nation, with several wind farms currently in production.

New legislation continues to ease the burden on business. In 2007, Kansas made significant reductions to unemployment insurance rates for existing and new employers. Existing employers who are current on their account will see a reduction of 40 to 100 percent of their tax rates, depending on their rate category.