(The Center Square) – Kansas Gov. Laura Kelly is touting Goodyear Tire's plans to modernize its Topeka plant and add 40 jobs in a project that's receiving thousands of dollars in incentives funded by taxpayers.
Goodyear says it will put $125 million into the project and add another 40 workers. Kelly's office claims the updates "are expected to generate a local economic impact of $480 million over 10 years."
"Goodyear's expansion shows that our laser-like focus on creating jobs and supporting manufacturers benefits Kansans across the state," the governor said in a news release. "Now, 40 more Kansans will have quality jobs and $125 million will be brought into our communities, reinforcing our state's ability to compete – and win – in the global marketplace."
The project is getting a taxpayer-funded boost, with up to $585,000 in "performance-based" incentives approved recently by the Topeka and Shawnee County Joint Economic Development Organization, The Topeka Capital-Journal reported. The incentives will come from county sales tax revenue, according to the newspaper.
"It feels good when JEDO has the opportunity to invest in a major local employer like Goodyear," JEDO Chair Aaron Mays said in a recent statement. "This company has a long history in our community and continues to impact and help grow the Topeka/Shawnee County economy. I look forward to seeing Goodyear create more well-paying jobs in the area, as they advance their local operations and serve this community for years to come."
John Mozena, president of The Center for Economic Accountability, a free-market group that researches local economic development subsidies, said what hasn't been mentioned is that Goodyear would have likely moved forward with the project even without the tax incentives.
"When you look at the numbers that are involved, there is no good reason to believe that the taxpayer subsidy of Goodyear was going to change their decision about whether to expand the plant of how many people to hire or anything like that, and the way to understand that is by just looking at the numbers," he told The Center Square.
Tim Davis, the manufacturing director for Goodyear-Topeka, has said the facility is integral to Goodyear's operations, adding "this investment will help position Goodyear to continue to meet the evolving needs of our customers."
Still, Mozena said it's not enough money to matter compared to all the other business factors that are involved.
"This was a topic where for years and years and years people have really only heard one side of this and that's why poling says and the research says people believe these subsidies work," Mozena said. "But the reality is there are few if any topics where economists from all over the political spectrum agree like they do on economic development, and they agree that these ideas of giving one company a subsidy to create jobs, that just does not work."
According to Mozena, it's not as though places that get more subsidies are much better off than places that get fewer.
"Economies are really big, complicated things and the ability of a state government or local government to change them is pretty minimal," he said.
Mozena also wondered why at a time when employers are struggling to fill open positions, governments are spending money to create more open positions that are going to make it harder for the employers to fill them.