As Kansas leaders tout 'successful year in economic development,' workers are too few
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As the year comes to a close, Kansas Department of Commerce officials say it was a successful year.
"As we begin to close out calendar 2023, we want to talk about we've had an extremely successful year in economic development," Bob North, the Commerce Department's chief counsel, told legislators earlier this month.
State economic development efforts, which often feature taxpayer-funded incentives, have resulted in $3 billion in private capital investment, North said. He expected that number to be closer to $3.5 billion by the end of the year.
That comes from about 190 projects with commitments to create or retain about 9,600 jobs.
Gov. Laura Kelly announced earlier this month that business investment since the start of her administration has now reached $18 billion.
"Our laser-sharp focus on making Kansas a good investment for businesses is delivering prosperity and creating jobs in communities across the state," Kelly said. "This milestone shows that our fiscally responsible approach to growing the economy is working — and that this unprecedented surge of business activity continues to rise."
The Commerce Department isn't letting up.
"Our deal pipeline is strong. Very, very strong," North said. "We've got roughly 220 projects in our pipeline. That doesn't mean we're going to be successful with all of them. We get our fair share of those projects. But it does show that there is an awful lot of opportunity out there that we're swinging for and then hope to land as many of those of as possible."
North said the state can expect to attract 35% to 40% of those 220 projects.
North touted the geographical diversity of the state's economic development.
"So all of the economic development is not taking place in our largest urban centers," he said. "This reflects a bit of a conscious effort on our part to improve the economy across the entire state, because that in turn grows the entire state."
10 largest economic development projects of 2023
These are the "top 10 successes for the year" from the Commerce Department's economic development efforts.
Walmart beef packaging facility: The $258 million capital investment in Johnson County is expected to create 667 new jobs.
High Plains Ponderosa Dairy: The $168 million capital investment in Meade County is expected to create 95 new jobs.
Camso Manufacturing: The $113 million capital investment in Geary County is expected to create 181 new jobs and retain 193 jobs.
Koch Fertilizer: The $93 million capital investment is in Ford County.
Infinity Windows: The $76 million capital investment in Wyandotte County is expected to create 600 jobs.
Oppidan: The $71 million capital investment in Johnson County is expected to create six jobs.
Biomune Co.: The $55 million capital investment in Johnson County is expected to create 40 jobs.
Southwest Plains Dairy: The $54 million capital investment in Hamilton County is expected to create 45 new jobs and retain 55 jobs.
DSM Nutritional Products: The $52 million investment in Leavenworth County is expected to create 28 jobs.
Summit Truck Bodies: The $50 million investment in Doniphan County is expected to create 80 jobs.
The list does not include the Wichita megaproject Integra or EMP Shield in Burlington. Both projects are contingent on federal CHIPS Act funding.
How does Kansas economic development compare to other states?
"All this looks fantastic," said Rep. Henry Helgerson, D-Wichita. "But I'm also wondering how we compare with other states."
"We do know that per capita basis, Kansas was No. 1 in capital investment per capita last year," North said.
But he acknowledged that there may be better ways to compare Kansas to similarly situated states.
Helgerson discouraged comparing Kansas to Texas or Florida because their tax structures are different.
"I'm trying to judge how beneficial the programs were with the taxes that we gave, or the program enhancements we gave, and judge that to other states," he said. "When the agency comes before us again next year and says we need the following amount of money in order to put in three new employees in Timbuktu because we can get that company to locate here, how do I judge that?"
North called it a fair question.
He noted the opening of a European office.
"Although they are active — they're meeting with potential suppliers and other projects — I don't think there's been enough time from a longitudinal basis for us to be able to give you a return on investment," North said. "But that's certainly something that we can look at and try to come up with some better information for you."
Kansas economic growth was highest in the nation last quarter
Kansas has experienced some of the greatest economic growth in the nation this year.
The U.S. Bureau of Economic Analysis released two sets of state gross domestic product, or GDP, this month.
First came the Dec. 5 release of GDP data on the second quarter of 2023. That showed real GDP grew 7.4% in Kansas, which was the second-best of the 50 states and the District of Columbia. The real GDP growth nationally was 2.1%.
"At the start of 2023, Kansas had the 2nd strongest economic growth in the nation, a testament to the work we've done to attract businesses to the state and support innovation in industries like ag and manufacturing," Kelly said in a post on X. "I have no doubt we'll keep building on this success in 2024."
Then came the Dec. 22 release of third-quarter data. Kansas moved into the top spot at 9.7% growth in GDP. The national figure was 4.9%. Kansas also tied for second for increase in personal income at 4.9%, compared to a national figure of 3.5%.
Agriculture was the biggest driver of economic growth and increased earnings in Kansas in the third quarter, the analysts wrote.
"This data shows that our efforts to support businesses, create a stable economy, and grow our workforce are paying off," Kelly said in a statement to The Capital-Journal. "Now, Kansas is outstripping the entire nation in economic growth and attracting business investment. Earlier this week, I announced Kansas surpassed $18 billion in business investment since I took office in 2019. It's clear we have the momentum to continue this trajectory of economic success into 2024 and beyond."
Japan and South Korea aren't just about Panasonic
In September, Kelly went on a business trip to Japan and South Korea where she promoted investment opportunities in Kansas.
That included meeting with leaders of Panasonic, which is building an electric vehicle battery plant in De Soto. Its $4 billion investment is the largest economic development project in Kansas history.
But it's not just about Panasonic's business.
"Over 60 companies and business organizations were represented at the private meetings and Kansas networking events involving the Governor," the Commerce Department told The Capital-Journal. "In addition, she spoke at the Midwest US-Japan Association, which was attended by over 100 Japanese business executives and government officials."
Kelly toured the Tokyo headquarters of Marubeni Corporation, which acquired and has made investments in Arkansas City's Creekstone Farms Premium Beef. In South Korea, she visited CJ CheilJedang, which is the parent company of Schwan's, which build the world's largest frozen pizza manufacturing plant in Salina.
"Governor Kelly's commitment to strengthening ties with Japan and South Korea is exactly the kind of forward-thinking leadership needed for trilateral cooperation," said U.S. Ambassador to Japan Rahm Emanuel. "These partnerships aren't just about business; they're about building a brighter future for Kansans."
More: How much in tax breaks has Panasonic used so far? Kansas auditors don't know.
Germany trip was more than just a Chiefs game
Kelly travel to Germany in November to promote Kansas business opportunities to foreign investors. The trade mission coincided with the Kansas City Chiefs game in Frankfurt, at which the governor got a friendship bracelet that led to her staff making the governor a Taylor Swift playlist.
After the trip, Kelly said the trade mission and rebuilding the Commerce Department's international division have led to strong international partnerships that "are now driving record-setting private investment into the state."
Laura Lombard, the Commerce Department's international director, said Kelly's "presence and participation in business recruitment activities will ensure that Kansas is top of mind for German companies interested in expanding into our region."
The governor's office has said Germany is a top source country for foreign direct investment and international job growth in Kansas. The European country is also the sixth-largest export market for goods produced in Kansas, valued at $529 million last year. The Commerce Department has hired a contractor to attract business from Germany, Austria and Switzerland.
Among the Germany companies with operations in Kansas are Merck KGaA's Millipore Sigma, which invested $25 million into its Lenexa operations, Reifenhauser and its new $20 million manufacturing plant in Maize and Deutsche Telekom, which is the majority owner of T-Mobile and has Kansas City area operations.
Kansas needs workers to fill jobs
North said KansasWorks has 54,000 job postings.
"We know that there's more open jobs than that," he said. "We can't put a fine number on that. That 54,000 is not the whole story there. ... Highest demand occupations would be engineering, hospitals, automotive parts, accessories, health care and social assistance. So if you want a job in Kansas, we've got a job for you."
Kansas has about one unemployed person per every two job openings, said Nathan Kessler, a labor economist at the Kansas Department of Labor.
"Our labor market does remain tight," he said.
The state has more people working jobs now than it did before the pandemic. The unemployment rate is low. The labor force participation rate has remained about the same.
Sen. Rick Billinger, R-Goodland, questioned why it seems like "everybody's looking for help" but can't find people to work.
"The point is, we need more people in Kansas," North said. "We're all working together to create jobs. And that's really important, but we need growth, we need population growth. That ties into quality of life. We've got to make our communities livable, that includes housing, it includes the other amenities that people want to see when they're thinking about moving to a community."
Jason Alatidd is a statehouse reporter for the Topeka Capital-Journal. He can be reached by email at jalatidd@gannett.com. Follow him on X @Jason_Alatidd.
This article originally appeared on Topeka Capital-Journal: Kansas announces top 10 economic development projects of 2023
