Kansas Gov. Laura Kelly received a standing ovation after announcing the details of a plan to build a $4 billion Panasonic EV battery plant near DeSoto at the Townsite Tower in Topeka on July 12, 2022. The Japanese electronics giant is expected to invest $4 billion in the battery plant, but it could receive up to $6.8 billion in taxpayer incentives through the federal Inflation Reduction Act. Good Jobs First, an incentive watchdog group, analyzed the potential windfalls that five electric vehicle battery plants could receive from a new tax credit program and found that the 45X Advanced Manufacturing Tax Credit could cost American taxpayers $200 billion over the next decade.
Panasonic’s battery plant in De Soto has already received significant subsidies from state and local taxpayers. Kansas officials awarded the company $829 million in incentives from a new program designed for the firm, while De Soto added another $200 million in local property tax incentives. Johnson County committed $15 million for new infrastructure, and the state transportation department allocated $26 million for road improvements. In addition, the state handed over the Kansas Bioscience Authority building in Olathe, valued at nearly $5 million, to Panasonic for free. Overall, Good Jobs First estimates that the company could receive $8 billion in support from local, state, and federal governments.
However, some lawmakers have expressed concerns about the amount of taxpayer subsidies being provided to Panasonic. U.S. Sen. Roger Marshall, a Kansas Republican, stated that he is concerned about the company being subsidized on the backs of hardworking Kansans. Meanwhile, U.S. Sen. Jerry Moran, another Kansas Republican, expressed concerns about the Inflation Reduction Act, which he voted against, as he believes it will worsen inflation.
Good Jobs First’s analysis revealed that the tax credit program for manufacturers of batteries and other electric vehicle components does not include any job or wage requirements. Instead, the awards are based on overall production. This means that companies like Panasonic could receive billions of dollars in federal tax credits even if all the work is done by robots. The organization also found that early indicators show the plans for the De Soto factory to pay less than the average wage for automotive production employees. While the average wage for automotive production employees is $28.41 per hour nationally, Kansas officials previously indicated that Panasonic would pay an average of $50,000 per year. However, the state’s agreement with the company does not include any commitments on hiring or minimum wages.
Good Jobs First argues that companies receiving government subsidies should be held to higher standards and recommends implementing job creation requirements. Jacob Whiton, a research analyst at Good Jobs First, stated that the lack of job creation requirements is indefensible and that companies should be more demanding when seeking subsidies.
Despite the concerns and criticisms, Panasonic’s De Soto plant is moving forward. The company’s technology chief has stated that federal programs like the Inflation Reduction Act make the United States a more favorable environment for major investments. Panasonic plans to allocate the tax credit funds back into investments in its EV battery business in the U.S., creating thousands of jobs and revitalizing communities. The exact amount of tax credits Panasonic will receive will be determined by the ongoing federal rule-making process.
In conclusion, Panasonic’s battery plant in De Soto, Kansas, is set to receive significant taxpayer incentives through the federal Inflation Reduction Act. While the company plans to invest $4 billion in the plant, it could receive up to $6.8 billion in incentives. Good Jobs First estimates that the tax credit program could cost American taxpayers $200 billion over the next decade. Lawmakers and experts have expressed concerns about the amount of taxpayer subsidies being provided to Panasonic and the lack of job creation requirements. Despite the criticisms, Panasonic’s De Soto plant is moving forward, with the company planning to create thousands of jobs and revitalize communities in the U.S. through its EV battery business.
Original Story at www.kansascity.com – 2023-07-13 10:30:00
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