Committee recommends more oversight of STAR bonds

After two days of testimony and discussion, the seven-member Special Committee on Commerce is recommending continued discussion and possible new rules on reviews and analysis for the Sales Tax Revenue (STAR) Bonds program. 

STAR Bonds were first considered by the state Legislature in 1997 and 1998 and have been utilized for many different projects over the years including the Kansas Speedway, Village West and Sporting KC Park in Wyandotte County, The Salt Mine Museum in Hutchinson, Water Walk in Wichita, Flint Hills Discovery Center in Manhattan and several others. 

STAR Bonds are intended as an economic development tool. When approved, the bonds can cover a significant portion of a development’s cost, with the debt repayment made through diverting sales tax and property tax dollars generated in the new development. 

Over the years, criticism of the rules and a lack of oversight or analysis of the program has led to many changes, including a one-year moratorium on new projects adopted last spring with the extension of the program. 

The Legislative Post Audit report on how other states inventory and review tax credits indicated that Kansas was lagging by comparison to many states, including neighbors Oklahoma, Nebraska and Iowa.  The LPA report highlighted a Pew Trust report from last Spring that analyzed all 50 States and provided some best practices for states to review the Tax Credit Economic Development tools for effectiveness and value. 

Committee Chair Sen. Julia Lynn, R-Olathe and Vice-Chair Rep. Les Mason, R-McPherson both indicated their support for continuation of STAR Bonds but said they will continue to review best practices and hope to establish new policies for issues and review during the next session. 

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