As a small state with a declining population and a worsening financial picture, Kansas needs to be smart about promoting economic development.

The state has a least five major initiatives and a host of smaller ones aimed at recruiting employers and growing the jobs base. But the efforts don’t always fit together neatly, the result being an incomplete puzzle with some pieces missing and others out of place.

Gov. Kathleen Sebelius wants to rearrange the picture by eliminating one of the largest pieces.

She has vetoed the Legislature’s recommendation that the Kansas Technology Enterprise Corp. receive $12.1 million in state funding next year, and proposed that some of its functions be transferred into the state Department of Commerce.

Supporters of the agency, known as KTEC, are fighting to keep it intact. They say the loss of KTEC’s network and expertise will slow economic development in Kansas.

The agency is well-connected within and outside of Kansas, and has unquestionably helped to recruit businesses, encourage entrepreneurs and assist universities with technology-related programs. Some studies have given Kansas a high rating for its entrepreneurial climate, and credited KTEC’s work.

But a recent review of the agency by an Indianapolis-based research firm, Thomas P. Miller and Associates, raised questions about whether KTEC is accomplishing its mission. The state continues to rank in the bottom quartile of many technology-based rankings, it noted.

The agency is also under fire from some state legislators, and even some past members of KTEC’s own board. They have accused the staff of not willingly sharing information about finances and the way decisions are made.

Generous compensation packages have also drawn criticism. KTEC, which listed 16 full-time employees in 2008, spent more than $1.3 million on salaries and about the same amount on contractual services, according to Kansas budget information.

The highest salary, nearly $280,000, was paid to Tracy Taylor, the president and chief executive officer.

With new budget forecasts showing Kansas revenues falling short by $328 million in the coming fiscal year, the state clearly can’t afford to spend precious dollars to sustain a fiefdom.

States are smart to spend money to recruit high-tech companies that will create good-paying jobs and provide opportunities for talented workers.

But those efforts must be done strategically and with clear goals in mind. Success must be defined not by activities — of which KTEC can list many — but by measurable results.

Evaluators over the years have had difficulty assessing KTEC’s outcomes.

Kansas’s budget struggles and the new opportunities emerging in the biotech and energy industries suggest that a revamp of economic development efforts is in order.

Sebelius’s veto of KTEC’s funding is intended to get that job started. Lawmakers should seize the opportunity.