Kan. Legislative Proposal to Help Areas Hit by Flooding and Tornado

Two Kansas legislative leaders outlined a $17.5 million relief package Saturday, (Nov. 10) to help flood-stricken southeast Kansas and tornado-ravaged Greensburg, with money to encourage home building and tax breaks for businesses in the disaster areas.

“We are trying to help these regions help themselves,” said Senate Majority Leader Derek Schmidt. “The disaster-affected region is speaking with one voice and proposing long-term solutions so the region can remain contributors to the state economy.”

Schmidt, an Independence Republican, and House Minority Leader Dennis McKinney, a Greensburg Democrat, outlined the package during a news conference in Chanute. Legislators will consider the plan after the 2008 session convenes in January.

Flooding this summer inundated most of southeast Kansas, leaving hundreds of homes and businesses damaged or destroyed. In May, a tornado destroyed nearly all of Greensburg, which is rebuilding.

Schmidt and McKinney headed a group of legislators and members of Gov. Kathleen Sebelius’ administration that drafted the proposals.

Having legislation underwritten by a unified group should make passage easier, as opposed to numerous legislators going in various directions with different ideas. The money would come from what’s left over from the $35 million lawmakers approved for disaster relief at the end of their 2007 session.

A key proposal will jump-start home construction in stricken areas by providing 90 percent of funding, with a 10 percent local match for infrastructure projects, mainly building or replacing sewers, water lines, storm water drainage and curbs and gutters in housing subdivisions. That’s expected to cost $4 million.

Schmidt said there has been a shortage for years in affordable housing, from $70,000 to $100,000, in southeast Kansas, where a large percentage of people work in manufacturing. He said 600 to 1,000 must be bulldozed in the area.

“Employers have to be assured they can find workers, and the bottleneck for economic growth is decent, affordable housing,” he said. “The rains transformed a serious problem into a crisis.”

The program would apply only to those in the disaster areas for the first three years. After that, it would apply statewide.

Another proposal, expected to cost $7.5 million, would create disaster recovery investment zones for three years from the time of a catastrophe. It would give a 10 percent state income tax credit to all businesses in those zones that make capital investments. The credits could be carried forward for up to 10 years and the maximum credit claimed during any three-year period would be $100,000.

It’s modeled after an existing program providing grants to businesses damaged by flooding or the tornado. But Schmidt said a major difference is businesses wouldn’t have to be damaged, only located in the zone. He said making it a specific tax credit rather than a variable grant amount is better for businesses.

“This would entice businesses to relocate and expand and encourage economic activity to get the local economy back on its feet,” he said. “We’re trying to prime the economic pump.”

Another bill would have the state help pay the interest on bonds sold by local governments to get quick cash to deal with their disasters. That’s expected to cost $500,000.

Also planned is a bill earmarking $500,000 to pay the Kansas National Guard and Kansas Department of Transportation to help demolish flood-damage structures. Schmidt said this is needed because demolition of flood-damage structures will occur after emergency authority for state assistance has expired.

Legislators also will be asked to put $1.5 million into the Local Government Outdoor Recreation Grant Program for developing parks and green space. The goal is to develop open ground created by the loss of structures.

An additional $3.5 million will be sought to establish a loan guarantee program so developers can get cheaper loans for building houses. The loans would be guaranteed in part by The Kansas Housing Resources Corp.. Additional state funds also would be used to get additional federal funds, mainly for senior citizen housing.