Some concession made in state plan to end Main Street program

Written by Patty Decker Tuesday, 16 October 2012 14:08

The Kansas Main Street program is being discontinued following an announcement late in September by Secretary of Commerce Pat George, but some concessions are being made for the 25 programs affected to include Peabody.

After the announcement Sept. 20, the Kansas Department of Commerce worked with Main Street communities to transition the program out of the state’s control earlier this month, said Dan Lara, with KDOC operations.

“Secretary George talked with different Main Street communities and a plan to continue Main Street as a non-profit entity,” he said.

Lara said the DOC has agreed in the current year, as far as funding with certain obligations still out there, to contribute money to the Main Street Conference scheduled in late October at Emporia.

“(KDOC) agreed to pay for part of it,” he said.

Another key component of the program has been the $3.74 million in Incentive Without Walls funding used by 35 communities since 1997, said Dan Lara, with KDOC operations.

The IWW provided money to communities and, in turn, the communities loaned the money out to help businesses expand or for redevelopment types of activities.

“Then once (the project) was done, the money went back to the city and the city redistributed it again,” Lara said.

“As long as the city is using it, they do not have to pay it back to the state.”

According to Lara, there are now only 25 current Main Street programs in operation.

In the Sept. 20 announcement, 18 positions were also eliminated in the DOC.

From the beginning

Lara said the decision for restructuring was not something done a few days ago.

“I think it’s important to back up to the beginning of last year when (Secretary George) came on board with the new administration,” he said.

During that time, he said, there were a series of reorganization and restructuring to make the DOC more efficient and responsive to the communities it serves.

“Of course, this was under very tight fiscal constraints and have been for the last 20 months and so,” Lara said.

Beginning this year, he said, another restructuring was done and now further restructuring, but this was the first one with 18 positions eliminated.

“It was a very difficult decision and, in that restructuring was the discontinuation of Main Street program,” he said.

Even though George “ultimately made the decision,” he said he was in consultation with commerce leadership and other administration officials.

“It had been something talked about and debated internally over a period of time since the beginning of the year,” Lara said.

Reason for the cut

One reason, Lara said, the decision was made to eliminate certain program is in light of the state’s future budget constraints.

“The department must focus on programs that impact the most communities and businesses as we work to expand economic development and grow private-sector jobs statewide,” he said.

Tight state budgets ahead

In the next couple of years, Lara said, the state is anticipating a tight state budget noting it has become necessary to focus on programs that will help the most communities and bring businesses the most benefit Kansas can afford.

“The DOC, and I can’t speak for other departments, receives a large portion of funding from the federal government in the form of grants—about 31 percent,” he said.

The state needs to be cognizant of the fact that this funding will decrease for Kansas.

“That’s not to say Main Street wasn’t a valuable program and did a lot of good, which the secretary would be the first to admit.

The problem is that there are other programs in the DOC’s economic toolbox that can be used to help communities.

“The secretary has been in conversations since the announcement and is adamant about not abandoning our commitment to communities,” he said.

The Main Street programs affected by the announcement included Peabody, Augusta, Belleville, Chanute, Coffeyville, Dodge City, El Dorado, Emporia, Garden City, Holton, Hoisington, Hutchinson, Independence , Leavenworth, Marysville, McPherson,Ottawa, Parsons, Phillipsburg, Russell, Seneca, Sterling, Wamego and Winfield.

Programs to help rural area

Some of the programs Lara talked about included the Community Development Block Grant, which has been effective since the 1980s.

“This program has contributed millions and millions of dollars across Kansas,” he said.

Another program is the recent addition of the Rural Opportunity Zone program started last year with “great success,” he said.

Thus far, 50 counties in Kansas are in the ROZ, he said.

The program would mean a tax free income for someone out of state to moves into one of those 50 counties, Lara said.

“If they have a student loan debt and graduated from an accredited post secondary institution, they can have up to $15,000 paid in the five-year period,” he said, “This is for non Kansas and Kansas residents.”

The student loan payment is a state/county match, but the income tax part is picked up by the state, he added.

“We have had over 550 applicants to the program in the past year and have 35 counties employing people from other parts of the country,” he said.

“We are getting back the young, working professionals that will start a family and put roots in the community and, hopefully become lifelong residents of that community.”

Although the state realizes some won’t stay beyond five years, Lara said that if we can get half to stay that is huge to the counties.

“These are doctors, lawyers, teachers, engineers, paraprofessionals—the kind of people Kansas is wanting to recruit,” he said.

Creating jobs

George, he said, pointed out that the one thing the DOC can do, which is his top priority is to expand the economy and create private sector jobs.

“The number one thing that will help all communities across Kansas, large and small,” he said, “is to continue to actively recruit businesses and people to Kansas, especially rural Kansas.”

Some examples Lara cited included a cheese processing factor currently under construction in Hugoton that will supply cheese and dairy products to major companies like Dannon.

The construction project created 100 part-time construction jobs and the plant will have 50 to 60 working people in Hugoton, Lara said.

Other locations for economic development include a plane manufacturing plant in southeast Kansas where the work was previously done overseas.

Another company, Valent Aero?Structures, he said opened up a facility late last year in Fredonia and is employing between 75 and 100 people.