The Buzz

Kansas and Missouri battle for Boeing with incentives

Updated: 2013-12-05T03:39:28Z

By JASON HANCOCK and BRAD COOPER

The Kansas City Star

— Drooling at the prospect of thousands of manufacturing jobs, politicians in the states that sandwich Kansas City moved this week to land plane maker Boeing Co.’s latest jumbo manufacturing operation.

They’re competing with a dozen-plus other states for 7,000 to 10,000 jobs. Even if Boeing does touch down in Kansas or Missouri, it won’t come to Kansas City. Rather, St. Louis and Wichita — cities where Boeing has had roots for decades — would be the likely winners.

Any impact on Kansas City would be secondary — either improvements to the regional economy or the financial impact of government giveaways on state budgets.

On Wednesday, the Missouri Senate approved an incentives package that could top $1.7 billion over two decades as a way to tempt Boeing to build its next-generation airliners in St. Louis.

Final approval now rests with the House, where little opposition is expected. Gov. Jay Nixon has said Tuesday is the deadline to submit a proposal to the aviation giant.

“The impact of this legislation could be enormous,” said Sen. Eric Schmitt, a Glendale Republican who sponsored the legislation. “It could mean thousands of jobs, the kind of jobs you want for your state.”

Meanwhile, Kansas economic development officials scrambled to put together a competing package, although largely outside public view.

Republican Gov. Sam Brownback said the state is aggressively pursuing Boeing, which decided last year to move its Wichita operations to Oklahoma City, San Antonio and Puget Sound in Washington state.

“Kansas has a great deal to offer Boeing,” Brownback said in a statement. “We … have put together a competitive bid package.”

Under Missouri’s proposal, Boeing’s incentives would be tied to payroll. If the company adds 2,000 jobs in the state, it could get an aggregate of up to $435 million of state incentives by 2040.

For adding 8,000 jobs, the incentives could total as much as $1.74 billion.

Critics of Missouri’s proposal argued that incentives to tempt Boeing should be offset by reducing the tax credits available for other purposes. They also questioned providing tax breaks for one company instead of cutting taxes across the board.

As many as 15 other states are pursuing the company, which began shopping for a new home for its Washington state manufacturing facility after its machinists union rejected a proposed contract tied to the deal.

Boeing already employs about 15,000 workers in Missouri. St. Louis area building trade unions have agreed to work around-the-clock shifts with no overtime to build a Boeing assembly plant in the region.

Kansas Commerce Secretary Pat George declined to discuss details about the incentives package his state planned to offer, citing a nondisclosure agreement signed with Boeing.

“It will be a very robust bid,” George said.

While Missouri may need legislative approval for its incentives, George said Kansas law gives the Brownback administration authority to quickly develop a response to Boeing’s inquiry.

“Businesses move so quickly, and this is a project that certainly highlights that,” George said. “You’ve got to be ready to move when they are.”

George said Wichita would be a logical landing spot for Boeing because so much aviation manufacturing infrastructure is in place, including the National Institute for Aviation Research at Wichita State University and the National Center for Aviation Training.

George said Wichita’s deep roots in the aviation industry give Kansas an edge over other states.

Kansas, he said, offers Boeing a ready-made workforce that might not be available elsewhere.

“We have a ready-trained, advanced manufacturing workforce that could go to work pretty much tomorrow and be building these planes,” George said.

It’s unclear what, if any, economic impact the project will have on the Kansas City area if the assembly plant does end up in Missouri or Kansas.

Still, Mayor Sly James of Kansas City pledged his support for the Missouri incentives to lawmakers studying the plan, calling it a “win for the entire state.”

“At the end of the day,” James said in a statement, “every job is a step in the right direction for the state of Missouri.”

To reach Jason Hancock, call 573-634-3565 or send email to jhancock@kcstar.com.

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