Economic Development: North Central Kansas Rural Business Tax Credit Initiative
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The North Central Regional Planning Commission (NCRPC) needs your help in creating a regional program that better enables local development organizations to further the economic growth of North Central Kansas.

For over 30 years now, it has been our mission to create a cooperative social network that advances the region as a whole. During that time we have worked with our membership and their constituencies to formulate and implement measures that address the capital needs of business and infrastructure within their jurisdictions. While much of that work has been on a localized scale, the aggregate of that effort has resulted in the attraction of over $216 million to finance infrastructure and housing, $18 million to improve the energy efficiency of 10,091 housing units and over $66 million to finance private business operations, leading to the creation or salvation of 1,364 jobs.

Then, 10 years ago, we began to take an interest in accessing and developing human resources in the region, for access to human capital is a primary concern to rural places. We soon learned such matters typically go unattended since many projects involving human capital are not qualified for traditional federal and state program support. It is on that basis that we, on behalf of North Central Kansas, are asking stakeholders to consider purchasing 50 percent state tax credits through our regional 501(c)3 foundation to help capitalize the program we have in mind.

Why take a regional approach?

We no longer live in a time when our rural cities can or should work in isolation, as traditional programs often promote and practice. Aptly defined regions can provide the critical mass necessary for singular places to compete in the global economy, but this critical mass becomes effective only if our many places have the opportunity to work with one another. Subsequently, a regional approach is essential in establishing the social network needed to close the distance that exists between individual places.

Then too, human development is not the same as capital development. Whereas buildings, streets, water and sewer systems are fixed in place, human capital moves about. And since it is rare for any one place to solely benefit from the knowledge and expertise of any given individual, it is in the best interests of all if existing and aspiring entrepreneurs receive the services they need regardless of where they live or operate.

What is economic development?

Economic development is first and foremost a process, the outcome of which produces increased prosperity within a defined geography. The process itself is made of many things, including a demand for continuous growth in leadership and business services, as well as the presence of sound infrastructure. The first is required to develop and maintain a vision of the future, to set goals and to focus available energy and resources; the second to address ever-evolving business needs. Infrastructure then responds to the demands of the other two. Once implemented and successful, the process leads to greater job creation and improved per capita income.

Program Being Developed

The Kansas Legislature passed the Rural Business Development Tax Credit Act in 2004. It establishes a tax credit for rural business development in the seven designated economic development regions (Northwest, North Central, Northeast, East Central, Southeast, South Central and Southwest) of the state. This program is administered by the Kansas Department of Commerce, in collaboration with seven regional foundations approved by the Secretary of Commerce.

The purpose of the program is to help regional foundations utilize tax credits along with the funds generated by such tax credits to benefit rural communities of the state. The following eligible projects must exclusively benefit rural communities.

• Job Creation or Retention, including business start-ups, business expansions or business retentions.
• Business Support Services, including business counseling, technical assistance and business plan services to existing or prospective small businesses (under 100 full-time equivalent employees) or entrepreneurs. Examples of organizations that offer such services include, but are not limited to, Small Business Development Centers, Certified Development Companies, Enterprise Facilitation Projects and Economic Development Districts.
• Regional Leadership Development that enables the region to develop community leadership capacity for the communities located within that region that will strengthen the economic and social environment in that region.
• Technology Improvements that result in the region being able to enhance service in areas including broadband access, Web site creation, wireless Internet services, computer programming, computer servers, computer networks, computer databases, electronic training modules, electronic media and other technological areas, as deemed eligible by the Secretary of Commerce.

Working with representatives of each of the 19 counites, the NCRPC submitted an application that described what those individuals believed was needed in the region. As a means of implementing the new program over a new region, we suggested the following approach in each county.

• Education - $5,000 be set aside to underwrite local ED board and staff attendance at conferences recognized for their economic development value, provided attendees are willing to share information learned at the conference and become a long-term regional resource on the subject(s) detailed.
• Community Incentives - $15,000 be set aside to underwrite program development initiatives of solely local design. Examples of possible uses include the creation of a marketing plan promoting a specific county; underwriting local economic development program activities; underwriting design studies to better understand solutions to specific infrastructure needs; capitalizing county-level micro-loan programs; and sponsoring other initiatives of similar composition and impact
• Job Creation and Retention - $80,000 be committed to each county to promote local job growth, especially business development leading to the provision of needed business services. Possible uses include the creation of an equity fund for investmentment in justifiable business ventures; loans to justifiable businesses; purchase of equipment for lease with rental rates set to ensure equitable recapture; and other uses that enable the dollars to be recaptured and used again.

Outcomes Expected

The long-term goal is to create avenues whereby local entrepreneurs can find the resources - both human and physical - they need to further or maintain their business interests in North Central Kansas. Once achieved, this goal will produce increased opportunities that attract outside job seekers, leading to a more stable population base.

Meanwhile, expected short-term outcomes can be explained in the following manner.

• We expect to advance everyone's knowledge and understanding of economic development, and in doing so, better position ourselves and others to identify what needs must be addressed at both the local and regional levels for economic prosperity to occur.
• We expect to underwrite at least one local economic development project in each of the 19 participating counties, thereby furthering individual development initiatives across the region.
• We expect to establish a long-lived program that can be used to leverage other dollars for program development, as well as provide equity financing for deserving projects.
• We expect to establish a working relationship with investors seeking to have an impact on just how North Central Kansas grows and develops.
• We expect to create a better social network that lends itself to cooperative ventures when such ventures can be shown to be beneficial to all.

Future Plans

The NCRPC will continue to work with local economic development groups, relying on them to help us identify the important needs across the region. We also will continue to build upon the social network we believe necessary by engaging representatives of these groups in regional meetings where solutions to common needs are developed and implemented.

And finally, the NCRPC will continue to promote its belief that our rural communities must establish ways to fund local program activities and that local stakeholders must be more involved to ensure that happens. Rural growth cannot be left to the design of others nor can it subsist on the willingness of others to fund such activity. It is in the best interests of all if we use our non-profit foundations to attract the capital necessary to create sustainable resources. This is especially important when one considers the fact that federal and state programs are increasingly driven more by urban center demand, not by rural places.

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