Some Missouri lawmakers are pushing legislation that could end a long-running economic border war between their state and Kansas that has prompted both states to spend millions of dollars in the last decade to lure businesses in the Kansas City metropolitan region across the state line.
Kansas spent $184 million in incentives since 2010 to entice businesses to move, while Missouri spent about $151 million in the same time period, according to the Hall Family Foundation. Those millions resulted in a net of about 1,200 jobs in Kansas.
“We’re using (economic development incentives) to divide the pie, not increase the pie,” said Bill Hall, president of the foundation and a Kansas City metro area civic leader.
Missouri passed a law in 2014 that prohibited the use of state incentives to poach businesses in Douglas, Johnson, Miami and Wyandotte counties. But the law required Kansas to pass a similar bill pledging not to go after businesses in Clay, Cass, Jackson and Platte counties in Missouri.
Kansas lawmakers and then-Republican Gov. Sam Brownback rejected the plan. Brownback suggested a similar proposal two years later but it ultimately failed.
Missouri’s bill expired in 2016. Sen. Mike Cierpiot, a Republican from Lee’s Summit, has filed a bill this session that would renew the legislation through 2021 to provide a chance for further discussion.
“I don’t understand why reasonable people can’t sit down and figure this out,” Cierpiot said. “It’s just bad policy.”
Critics of the tax incentives say companies get millions of dollars in tax breaks to move a few miles and often add only a few new jobs.
For example, Kansas spent $3 million in tax breaks to move about 60 jobs at HCA Midwest Health four miles from Kansas City, Missouri, to Overland Park, Kansas.
New Kansas Gov. Laura Kelly said in a statement that everyone agrees the current situation doesn’t make sense “but the devil is in the details.”
“We will be looking at this issue and reviewing the legislation to determine if it is in the best interest of Kansas,” she said.
Some in the Kansas City metro area question the need for legislation, saying the economic realities are different than they were in 2014.
Blake Schreck, president of the Lenexa Chamber of Commerce, questioned how urgent the problem is now because the economy is healthy and both sides of the state line are flourishing.
“We’re all growing and doing fine, so it hasn’t been a huge issue,” he said.
But he said getting a bi-state agreement to award incentives only for net new jobs would help both sides.
“I would anticipate we’ll take a crack at it sometime this year,” he said.
Bill Hall, who has spent years advocating for a cease-fire in the incentives border war, said now is a good time to get an agreement because of the strong economy.
“The economy is not always going to stay good,” Hall said. “This is the perfect time to deal with it because emotions aren’t as high and more reason can be brought to it, because people aren’t fighting for every last job.”
Information from The Kansas City Star, provided by The Associated Press