The other side of the pipeline tax exemption issue
To the editor:
In a recent letter to the editor, former representative candidate Harry Bennett requested support of Rep. Bob Brookens’ efforts to take back the property tax exemption granted to Keystone-TransCanada (KTC). Mr. Bennett also stated that Sen. Jim Barnett and I voted for this exemption in 2006 and that the 10-year loss of property tax could have generated $1.9 million to Marion County.
In an effort to draw businesses to Kansas and encourage expansion of existing Kansas utilities, the exemption bill was an economic development package that granted tax exemptions to a combination of utility/energy related enterprises: (1) the $500 million expansion of a bio-energy processing plant in Hugoton, (2) a liquefied natural gas pipeline from Wyoming to Bushton, (3) construction of another nuclear power plant, i.e., Wolf Creek II, (4) a pipeline through several counties in northern Kansas to southern Illinois, and (5) the KTC pipeline bisecting Kansas from north to south.
If the tax incentive had not been granted to KTC, they most likely would have bypassed Kansas and gone through Missouri to Cushing, Okla., as originally planned.
To qualify for this tax exemption, KTC had to guarantee that they would supply oil to Kansas refineries. KTC plans to do so by pumping oil from Cushing to refineries in McPherson and Coffeyville and possibly El Dorado.
Fifty years ago, Kansas had 20 refineries. Currently, Kansas produces only enough oil to keep the remaining three plants operating at one-third capacity and refines 100,000 barrels of oil per day. It is estimated that at least half of the gas put into one’s tank is imported from out of state. It would be advantageous to Kansas taxpayers if Kansas could sell energy to other states rather than importing it — money coming into the state versus money going out.
It is estimated that over the lifespan of the KTC pipeline it will give Marion County slightly under $60 million in tax revenue. Figure it out. Without the 10-year exemption, the pipeline was planned to go south through Missouri with no money to Kansas or Marion County and with the exemption, approximately $60 million to Marion County alone.
It is interesting to note that some of the same people who are criticizing this tax exemption vote and decry the loss of non-existent money to Kansas and Marion County are the same ones who praised Gov. Sebelius and Kansas Department of Health and Environment Secretary Roderick Bremby for their bogus carbon dioxide standards based upon fraudulent global warming statistics. This hoax cost Kansas millions of dollars in that only half of the planned Holcomb plant will be built and the construction of a new oil refinery was scared away from St. Marys to South Dakota.
I would suggest that people who care about the long-term economic prosperity of Marion County and Kansas urge Rep. Brookens to not support any measure that would rescind, or renege on, the tax exemption granted KTC. This type of action is extremely destructive and would most likely result in an expensive lawsuit that Kansas would eventually lose.
More importantly, it sends the negative message to “start-up” enterprises or companies that might move to Kansas that Kansas cannot be trusted: “To avoid expensive litigation, don’t do business in Kansas; they don’t honor their contracts.”
Donald L. Dahl
Former Representative of District 70
Hillsboro