The Docking Institute of Public Affairs at Fort Hays State University has released the results of an economic impact analysis study of the Promoting Employment Across Kansas (PEAK) program.
PEAK is administered by the Kansas Department of Commerce. Participating companies are allowed to retain 95 percent of payroll withholding tax for jobs that are eligible under the program.
Participants are required to create at least five jobs in non-metropolitan counties, and at least ten jobs in metropolitan counties.
According to the study, PEAK has had a $7.59 billion economic impact on Kansas. This includes:-
- $4,895,832,476 in direct economic impact;
- $1,453,674,532 in indirect impact in the form of additional business spending; and
- $1,244,331,450 in induced impact such as change in household spending.
Every dollar spent through PEAK helps the Kansas economy grow by $960. As of April 2013, the program had created 4,725 direct jobs and another 6,350 indirect jobs, adding up to a total of 11,075 jobs.
A survey conducted as part of the study shows a high rate of satisfaction among participants. A full 90 percent of respondents reported satisfaction with the program.
An overwhelming 97 percent of all respondents said they recommend PEAK to out-of-state business owners.
Among the companies that have relocated to Kansas and received PEAK incentives, 93 percent said they would recommend that other employers they know outside the state should relocate to Kansas.
Kansas Commerce Secretary Pat George said in a statement that he was thrilled this program had been so beneficial to the state economy, and said they would keep working hard for ensuring that taxpayers in Kansas get the best value out of PEAK and other programs.
This FHSU study comes on the heels of a state audit that was critical of the PEAK program. The audit said that PEAK, which was approved by the Kansas Legislature in 2009, had created 5,200 jobs and provided $21 million in tax incentives through December 2012.
Withholding tax incentives had grown from $2.7 million in 2010 to around $12.5 million in 2012. The audit found that PEAK had handed out $7.5 million in tax incentives for in-state expansions in FY 2013, exceeding the legislative cap of $6 million.
The audit also noted that the Missouri Quality Jobs program could reduce the value of PEAK in enticing companies to Kansas. Secondly, the audit also points out that changes in the state‚Äôs individual income tax rates have reduced the benefits that participants get from PEAK tax incentives.