Kansans may be feeling buyer's remorse as the final tab emerges on what it took last year to land a Panasonic factory that will make batteries for Tesla electric cars. The state out-maneuvered Oklahoma to win the contract.
As it turns out, Oklahoma might not be the losers in that bidding war. And, there are lessons to take away from what happened.
About a year ago, the Japanese-based Panasonic Energy announced Kansas beat out Oklahoma to build the factory in an old Army munitions plant near De Soto. It was touted as creating 4,000 jobs in a $4 billion factory.
Kansas lawmakers passed the APEX act that gave Panasonic an $829 million incentive package to lure the plant. Oklahoma's legislative incentive package, called Project Ocean, offered $698 million to build the factory at the MidAmerica Industrial Park in Pryor.
Some Oklahoma lawmakers balked at the amount and what they considered liberal policies of the company, such as diversity programs and support of LGBTQ+ employees.
Since then, the Kansas City Star has been reporting the increasing costs to taxpayers for the factory. The incentives have reached about $1.2 billion when adding various local tax breaks, road improvements from its transportation department and "opulent" office headquarters in Olathe that was left from a failed state authority.
The Star discovered Panasonic will be eligible for billions — possibility another $6.8 billion — in federal aid through provisions in last year's federal Inflation Reduction Act. That could bring the total taxpayer package to bring the $4 billion factory to Kansas at about $8 billion.
That equates to about $2 million per job created. By any economic measure, that's a bad deal.
Many Kansans are now in autopsy mode over how that happened.
The Star's columnist Tammy Ljungblad was never a fan of the project, particularly the secrecy around these deals. Calling it a "Pyrrhic victory," she noted that only a handful of legislators were told of the factory's location, costs and who would get funding. Most lawmakers didn't know what they were approving.
Keeping public dealings completely in the dark and without input rarely works out well.
In May, the Oklahoma Department of Commerce announced that it had an agreement with Panasonic for an electric vehicle battery factory at the MidAmerica Industrial Park using the $698 million tax incentive. The plant would create 3,500 jobs with a $5 billion investment.
Though, some legislators argue the company is not eligible for that tax package, and there is dispute on who will pay for about $245 million in site work at the industrial park.
We are encouraged by Oklahoma lawmakers doing their due diligence on the tax eligibility and return on investment. We hope the process is inclusive to different perspectives.
Kansas ought to serve as an example that winning a big-corporate contract might not be worth bragging rights.
[Editorial / Tulsa World]
