It is common practice to offer tax breaks and other goodies when communities court new businesses. Any lost tax revenue, the argument goes, is made up by new jobs. Those payroll dollars snowball through the community, buying houses, fueling cash registers and generating new sales and property taxes.

But it's another matter entirely when tax incentives are offered to businesses that do nothing for the community. And it's darn near criminal when local taxing entities have no say in the matter.

That's the situation six Kansas counties and numerous school districts face with the Keystone oil pipeline project, which is being built by TransCanada. An extension of the main leg drops down from Steele City, Neb., nearly straight south through Kansas to Cushing, Okla. It passes through Washington, Clay, Dickinson, Marion, Butler and Cowley counties.

As reported by the Journal's Duane Schrag in Tuesday's Journal, the Kansas Legislature granted TransCanada tax exemptions in exchange for bringing the pipeline through Kansas and making its oil available to Kansas refineries.

But this was done without checking with local officials. Dickinson County stands to lose $400,000 in lost property tax revenue the first year the pipeline is built. The Chapman School District, which was ravaged by a June 2008 tornado, stands to lose the same amount. The Rural Vista School District will lose about $140,000, according to estimates derived from Kansas Department of Revenue data.

Schrag reports that state Sen. Jay Emler, R-Lindsborg, was chairman of the Senate Utilities Committee at the time and recalls meeting with TransCanada representatives. Emler said that TransCanada told him the pipeline wouldn't come through Kansas unless an exemption was granted.

But as it turns out, of the half-dozen states involved in this project, Kansas is the only one to give tax exemptions to the company, which generates roughly $2 billion a year from pipeline operations, before taxes.

There are few local benefits to balance these millions in lost tax revenues. Little, if any, permanent employment will be created. Construction jobs will be short-lived, with contracts typically going to those that have worked with the company in the past.

These counties were conned and are justified in their pursuit of revenue from the pipeline. One idea is to charge $1,500 for every county road it crosses.

That's a good start. But if it doesn't work, then they should send a bill to the Legislature that covers lost tax revenue. It won't get paid, but it might prevent similar travesties in the future.

-- Tom Bell

Editor and Publisher

822-1491

tbell@salina.com

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