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Government

Some Lawmakers Question State Return On Development Bonds

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Stephen Koranda
/
KPR/File photo

Some Kansas lawmakers are questioning how much benefit the state is getting for the millions of dollars it has spent over the past 16 years developing retail and tourism districts.

The Lawrence Journal-World reports that the state has spent more than $557 million in state sales tax revenue to repay Sales Tax and Revenue (STAR) bonds. Those bonds are a financing option in which municipalities issue bonds to pay the cost of roads and other infrastructure in new developments. Those bonds are repaid with new sales tax revenues generated by the projects.

But some STAR bond projects have not proved successful, specifically Heartland Park Topeka, a motorsports complex that was foreclosed on in 2015 but is now back in business.

Kansas lawmakers in the 2017 legislative session passed a three-year extension of the law authorizing STAR bonds. But they imposed a one-year moratorium on the creation of any new STAR bond districts to allow a special interim committee time to make recommendations to the 2018 Legislature about changes in the program.

"The sad reality is that, obviously, there's been very few if any dollars generated back to the state beyond the dollars going to paying off the bonds," said Sen. Tom Holland, a Democrat from Baldwin City and a member of the interim committee. "Which is all right, but at some point, we'd like to see a return back to the state."

Holland said the state currently has no way of checking how successful a STAR bond district is after the bonds are paid off because the state at that point stops tracking how much sales tax comes out of the district.