Thursday, January 5, 2012
The talk of the town continues to be Wednesday's devastating announcement that Boeing is leaving Wichita.
Boeing says the cost of doing business in Wichita is just too expensive.
Just about all states offer some kind of incentives, trying to attract jobs and, perhaps, Kansas can learn how to do a better job of it from the Boeing experience.
"The cost of Boeing doing business here is pretty high, comparatively to other places," Boeing vice president Mark Bass said during Wednesday's announcement.
Boeing cites high costs at its Wichita facility as the number-one reason for shutting it down by the end of next year.
"Business costs in Wichita are not competitive in the military, maintenance, modifications and upgrades market," Bass said.
Boeing has to account for space in Wichita not being used when pricing the work it bids on. With two million square feet of workspace, the company would have to have the hangars constantly packed with planes and programs to make it cost-effective and it just wasn't happening.
That being said, other cities - San Antonio and Oklahoma City, for example - are finding ways to make Boeing's business case work there.
"Aerospace is one of our targeted economic sectors," said Roy Williams, President and CEO of the Oklahoma City Chamber of Commerce. " So we have a specific tax credit for aerospace engineering jobs."
Former Kansas Congressman Todd Tiahrt explained how the tax credit works.
"It's a $12,000 per employee tax credit. Half for the company, half for the employee," he said. "And it's very attractive. Boeing experienced that in moving people from California to Oklahoma City."
Tiahrt worked for Boeing before entering politics and currently consults for Boeing and other plane makers. He blames the Pentagon for allowing the subsidized Airbus to bid on the tanker as one reason Boeing changed its mind about bringing the work to Wichita.
He says the competition forced a Boeing low bid. That aside, he says, Kansas must become more business-friendly.
"There's no one thing," Tiahrt said. "But the bottom line is we have to make the business environment in Kansas receptive to keeping and creating jobs."
Tiahrt suggests the legislature do away with the state income tax, claiming that states without an income tax are growing faster than those with an income tax.