More than a year ago, Americans For Prosperity Foundation-Kansas (AFPF-Kansas) filed a series of Open Records Act requests with the Department of Commerce related to the State’s STAR Bond program. But Commerce still has not provided all of the requested records.
The limited number of documents provided by the Kansas Department of Commerce showed a startling lack of oversight of a program that involves more than a billion dollars of taxpayer funds.
According to a release from AFPF-Kansas, the 2021 KORA request sought access to all internal or external studies or reports, project feasibility studies, and e-mail communications about the STAR Bond program.
On Dec. 14, AFPF-Kansas formally filed a complaint under the Open Records Act and requested an investigation by the Kansas Attorney General’s Office.
“The agency has yet to provide the final batch of records and instead has extended its response deadline eleven times,” the release said. “The final set of records should include e-mails sent to or from the accounts of Lieutenant Governor and Commerce Secretary David Toland and his chief of staff about STAR bonds. Commerce has not offered any detailed explanation for its interminable delay.”
AFPF-Kansas said this is not the first time that complaints have been made about how Commerce handles KORA requests related to its economic development programs.
“It shouldn’t take more than a year to access public records from a state agency running a corporate welfare program with over $1 billion worth of bonds,” AFPF-KS State Director Elizabeth Patton said in the release. “If Commerce is slow-walking KORA request responses because of perceived political sensitivities, it should be held accountable.”
Sales Tax and Revenue (STAR) Bonds are a tool intended to help Kansas municipalities finance the development of major commercial, entertainment, and tourism projects. The bonds are paid off through increased sales tax revenue generated by the development.
The effectiveness of the program is impossible to determine
AFPF’s Director of Investigations, Kevin Schmidt, who filed the initial requests, said one of his records requests included a follow-up to a request from the Sentinel.
The Sentinel, on November 14, 2019, requested reports done internally or contracted out since January 2017 examining the efficacy of Promoting Employment Across Kansas (PEAK), TIF, STAR bonds, and the High-Performance Incentive Program (HPIP). Ryan Brinker, the Public Information Officer for the Kansas Department of Commerce, replied, “We are currently working to identify and review any records which may be responsive to your request and will need additional time to complete that review. The earliest date records may be available to you is November 26, 2019.” There’s been no further response to this request.
Another KORA request submitted on December 16 asked for studies related to STAR bonds or economic development. Commerce responded, “There was a study commissioned in 2018 which has not been completed and is exempt from disclosure under KSA 45-221(20) as a draft and research data in the process of analysis. There have been no subsequent studies commissioned since then.”
Neither AFPF nor the Sentinel has received any substantive answers. While Commerce did not provide or comment on the McKinsey & Company study referenced in the Sentinel story, it did provide a STAR Bond study authored by the Docking Institute of Public Affairs at Fort Hays State University. The study’s lead author, Dr. Brett Zollinger, told Commerce in an e-mail that the “project has been somewhat more challenging than we envisioned!”
According to Schmidt, that study seemed to be designed to justify the program rather than objectively examine the impact.
“It doesn’t show what it’s trying to show,” Schmidt said.
While the study examines the economic impact before and after the STAR Bond projects, it doesn’t determine if the project would have been developed with or without the bonds.
Moreover, a 2021 study by the Kansas Legislative Division of Post Audit found that only 3 of the 16 STAR bond attractions they reviewed met Commerce’s tourism-related program goals.
A 2020 analysis of STAR Bond projects in Wichita, commissioned by the Sentinel’s parent company, Kansas Policy Institute, found that they mostly shifted economic activity and jobs to other parts of the city rather than creating incremental activity.