Uncertain Regulatory Environment Endangers Kansas Business Climate

While the Holcomb power plant bill passed by an overwhelming majority of the Kansas House and the Senate awaits action by Kansas Governor Kathleen Sebelius, the issue of regulatory certainty has risen to the forefront of the debate.

In denying the permit to build two new coal-fired power plants, Roderick Bremby, Secretary of the Kansas Department of Health and Environment, eroded public trust and alarmed business and industry.

In a recent poll commissioned by the Kansas Chamber, only 28 percent of Kansans agreed with Bremby’s denial, while 47 percent disagreed, saying the Holcomb permit should have been approved. Respondents were also asked if their legislator should vote to overturn a possible veto by the Governor. Nearly 60 percent said their legislator should vote to overturn.

“Bremby’s bureaucratic and arbitrary ruling dealt a blow to the Kansas economy and Kansas businesses,” said Alan Cobb, director of Americans for Prosperity-Kansas. “For him to say that he followed the rule of law is shocking and irresponsible.

"Under our well established system of Democracy, the legislative body creates law and the administration implements law. In this stunning situation, our executive branch completely usurped our democratic, legislative process and created a completely new law by fiat. This action should send shockwaves across the country.”

The denial of the air permits by the state has de-stabilized the Kansas business climate and prompted concerns that while businesses must play fair and by the rules, the same rules do not apply to the government.

“Sunflower Electric followed the government’s process and submitted a project that would meet or exceed state and federal regulations,” said Cobb. “Even KDHE professional staff supported the proposal but was overruled by Secretary Bremby, who used an orchestrated attorney general opinion as the basis of his denial.”

The loss of the Holcomb project could cost the state about 2,400 new jobs, $9.3 million in new tax revenue, and more than $56 million in new spending during construction. According to The Tax Foundation, a nonpartisan tax research group based in Washington, D.C., Kansas ranks 33rd in the U.S. for overall business climate.

“Kansas needs a clear regulatory framework to attract new business investment and stimulate growth,” said Cobb. “Threats of additional burdensome regulation and hijacking the rule of law without the authority of the Legislature threaten our state’s growth and prosperity.”