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Kansas lawmaker says tax breaks to lure $4 billion Panasonic plant weren’t a ‘frivolous giveaway’

Kansas utilized $829 million in state incentives to entice Panasonic to choose the Sunflower State.
Keith Srakocic/AP
Kansas offered $829 million in state incentives to entice Panasonic to choose the Sunflower State.

Panasonic announced on Wednesday it has chosen De Soto, Kansas, as the site of a massive new factory. The plant will be the largest vehicle battery production facility in the world and will cost $4 billion to construct.

As one of the Kansas lawmakers who had to sign a non-disclosure agreement while working for months to land a mysterious economic development project, Rep. Stephanie Clayton, a Democrat of Overland Park, says she could not be happier with the final outcome.

State officials announced on Wednesday that Japanese electronics giant Panasonic would build a $4 billion factory in De Soto to produce batteries for Tesla’s electric vehicles. They estimated the plant would eventually create 4,000 jobs for Johnson County and thousands of other jobs in the surrounding region.

“This was a heavy lift on the part of so many people, not just in the legislature, but also for a lot of our local chambers, local economic development officials, the city of De Soto and the entire state, '' Clayton said.

While Clayton and other members of the House Commerce, Labor and Economic Development committee that worked on this project kept the plans confidential, Panasonic took about three months to finally agree to an investment. Clayton said she believes it took that long because the size of the investment was reason to be cautious and discreet.

Ultimately, state officials said, Panasonic chose Kansas because of its tax rates and a promise of $1.3 billion in tax breaks and incentives. The deal took intensive planning by Gov. Laura Kelly’s administration and Republicans controlling the legislature, Clayton said.

Clayton said the bill for the tax break almost didn’t make it out of the committee multiple times. She and other Democrats were able to negotiate with key Republicans to come to a compromise.

“I supported this economic development tool, the APEX tool, as it was called,” Clayton said of the new law providing assistance to companies planning to invest at least $1 billion in the state.

“I knew that even if it didn't work for this particular one, it would work for others,” she said. “And so we have a lot of tools in our economic development tool box. This is just a really big one for really big companies. One of the best things about this too, is that it does offer safety provisions, lots of clawbacks. So it isn't a frivolous giveaway.”

Clayton said the development would lead to significant change for Johnson County and that decades of work created the atmosphere to land this type of project.

“We have been doing things right for years,” she said. “The time that we've spent investing, just in making this a positive pro-business environment and especially the investment in good quality public education and in excellent quality of life.”

This plant will also have large energy effects on not just Johnson County, Clayton said.

“This is something that will affect Kansans that won't even see or come near this plant. It leads to a greener, more sustainable Kansas, a more sustainable United States, and it's going to save us money on our electric bills,” she said.

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