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Senate Ways and Means adds $50 million PMIB loan for Wichita aircraft paint facility amid questions over taxpayer interest losses
Summary
The committee approved including a $50 million PMIB-backed loan for a Wichita aviation paint facility, with proponents citing 121 new jobs and WSU Tech training. Lawmakers pressed on interest-rate mechanics and whether the state forgoes investment income by lending PMIB funds below market rates.
The Senate Ways and Means subcommittee voted to include a $50 million loan from the Public Building Commission/PMIB program for a proposed large-scale aircraft paint facility in Wichita that project proponents said would create 121 jobs with a five‑year median wage of $91,000.
Supporters described the project as filling a gap in Kansas’ aircraft maintenance ecosystem and said Wichita State University Tech would establish an aviation paint certificate program to staff the facility. A sponsor asked that the proviso be structured under the state's existing PMIB-style loan program so a lending institution would carry the loan and the state would receive a below-market deposit rate.
Opponents and several committee members raised fiscal concerns, questioning whether lending PMIB funds to be reloaned at a discount reduces the revenue PMIB currently earns on investments. Senator Peck asked whether the state would be ‘‘losing 2%’’ on $50 million if the loan rate is set two percentage points below the market rate; a colleague confirmed the statutory framework contemplates a market‑rate benchmark (described in committee as a treasury rate minus 2%) and a minimum basis‑point floor. Committee staff explained the program is administered through the treasurer’s office, competitively bid among eligible lending institutions, and has statutory language that caps how much a lending bank may re‑price the loan to borrowers.
Committee members also disputed whether this was the proper role for state funds and noted prior, similar PMIB-backed loans had been used for hangar projects. Supporters emphasized bank guarantees and prior program use as safeguards. After discussion, the chair called for a division vote; the motion carried. The proviso language was added to the package and will proceed to further consideration in conference.
Next steps: the committee will reconvene tomorrow at 10:30 to continue finalizing provisos and budget language.
