### Financial Impact Assessment for Topeka
Based on the details in your proposal letter (a 125,000 sq ft manufacturing facility creating 150 jobs at $42/hour starting wages, with $110 million in combined annual sales from panel and cabinet operations), I'll outline the estimated financial impact on Topeka. This includes direct effects (e.g., wages and property taxes), indirect/induced effects (e.g., supply chain spending and employee consumption), and broader economic contributions. Estimates use conservative multipliers derived from Kansas-specific data on manufacturing (e.g., output multipliers of 2.5–3.74, employment multipliers implying 3–6 total jobs per direct job, and income multipliers around 1.5–2). Assumptions include annual figures, a building construction cost of ~$150/sq ft (leading to a $18.75 million valuation), and no major city incentives offsetting revenues unless specified.
#### 1. **Direct Economic Contributions**
- **Job Creation and Payroll**: 150 jobs at $42/hour equate to ~$87,360 annual salary per employee (assuming 40 hours/week, 52 weeks). Total annual payroll: **$13.1 million**.
- This injects money directly into the local economy via worker spending on housing, goods, and services.
- **Output/Sales**: $110 million in annual sales (assuming ongoing operations). This represents direct revenue generation, much of which could support local suppliers if the facility sources materials in Kansas.
- **Property Taxes**: With a building valuation of ~$18.75 million, annual property taxes are estimated at **$662,000** (based on Topeka's total mill levy of ~141.35 mills, a 25% commercial assessment ratio, and an effective rate of ~3.53% on market value).
- City's share (~26% of total, based on city's 36.956 mill levy portion): **$172,000 annually**.
- Other shares: County (~35%, $231,000), schools (~33%, $218,000), and minor portions to state/library.
#### 2. **Indirect and Induced Economic Effects**
Using Kansas manufacturing multipliers (e.g., every $1 in manufacturing output adds $1.50–$2.74 to the economy; each direct job supports 2–6 additional jobs via supply chains and spending):
- **Total Employment Impact**: Direct 150 jobs could support **300–750 additional jobs** (total: 450–900), including suppliers, retailers, and services. Conservative estimate: **450 total jobs**.
- **Total Economic Output Impact**: Applying a 2.5–3.74 output multiplier to $110 million in sales yields **$275–$411 million** in annual economic activity. This includes ripple effects like local vendor contracts and employee respending.
- **Income Impact**: Payroll of $13.1 million, with a 1.5–2 income multiplier, generates **$19.7–$26.2 million** in total household income (including induced effects).
#### 3. **Tax Revenue Impacts to Topeka**
- **Sales Tax Revenue**: Increased local spending from wages and operations.
- Assume ~30% of total income ($19.7–$26.2 million) is spent on taxable goods locally (~$5.9–$7.9 million in taxable sales).
- At Topeka's 9.35% combined sales tax rate: **$551,000–$738,000** total annual sales tax.
- City's share (1.5% portion): **$89,000–$118,000 annually**.
- **Other Taxes**:
- State income taxes from wages (~4.5% average effective rate on $13.1 million payroll): **$590,000**, but this benefits the state, not directly the city (though state aid could indirectly flow back).
- Potential utility franchise fees or other minor revenues: ~$50,000–$100,000 if the facility uses city services.
- **Net Annual Tax Revenue to City**: **$261,000–$390,000** (primarily from property and sales taxes). This could grow if operations expand or if railhead access boosts logistics-related activity.
#### 4. **Broader Fiscal and Community Impacts**
- **Positive Multipliers**: The facility could stimulate ~$275–$411 million in annual economic output, boosting GDP contributions (manufacturing is 14.5% of Kansas GDP). This aligns with recent Kansas examples, like a rubber company expansion generating $71 million in regional impact.
- **Costs to City**: Potential upfront incentives (e.g., land, infrastructure, or tax abatements) could reduce net gains initially. If the city invests ~$2–5 million in site prep (similar to other KS projects), ROI could exceed 10x over 20 years via taxes and growth.
- **Long-Term Benefits**: Over 10 years, cumulative impact could reach **$2.75–$4.1 billion** in economic output, with **$2.6–$3.9 million** in city revenues. This supports schools, infrastructure, and reduces unemployment (current KS manufacturing growth: 2.4%).
- **Risks**: If sales are mostly out-of-state, local tax capture drops. Inflation or supply chain issues could raise building costs (current range: $100–$238/sq ft for industrial).
This is a high-level estimate; a full IMPLAN analysis (used in KS economic studies) would refine it based on specifics like industry type (e.g., wood products). If you provide more details (e.g., exact building costs or incentives), I can refine further.
Henry McClure
Time kills deals
785-383-9994
www.henrymcclure.live
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