Gov. Nixon to sign Kansas City Border War truce legislation

06/30/2014 11:51 AM

06/30/2014 11:11 PM

Legislation intended to end the contentious economic Border War within the metropolitan area is expected to be signed by Missouri Gov. Jay Nixon Tuesday in Kansas City.

The governor is scheduled to make what’s described as a “major economic development announcement affecting Kansas City” at an event Tuesday at the Greater Kansas City Chamber of Commerce.

Sen. Ryan Silvey, the sponsor of legislation approved by the Missouri General Assembly, said Monday the governor is coming here to sign the bill.

“I’m excited the governor has decided to sign this bill,” Silvey said. “It’s a step in the right direction and I hope Gov. Brownback will follow suit and bring an end to this senseless economic border war.”

Chamber officials also confirmed the governor’s plan and praised his decision to sign the bill.

“Passage of the legislation to end the Border War has been of the Kansas City Chamber’s highest legislative priorities,” Jim Heeter, president and CEO of the Chamber, said in a statement.

“The fact that Gov. Nixon is signing the bill in our board room in Union Station is, I think, symbolic. Union Station is thriving today thanks to bi-state cooperation. The legislation to be signed by the governor holds the same promise--this time for our region’s overall economy.”

The bill would prohibit the use of incentives for border-jumping businesses in Douglas, Johnson, Miami or Wyandotte counties in Kansas, and Cass, Clay, Jackson or Platte counties in Missouri.

It would not go into effect unless the Kansas governor exercised his executive authority to cease using his state's incentives, notably the Promoting Employment Across Kansas or PEAK program, to recruit businesses within the metro.

Two weeks ago, 17 top Kansas City civic and business leader on both sides of the border leaders urged Nixon to sign the Border War legislation. In a letter to both Nixon and Brownback, the leaders described the use of incentives within the metro as a “destructive ... job shuffle."

Among those signing the letter were Donald J. Hall Jr. of Hallmark; Dan Hesse of Sprint; Peter deSilva of UMB Financial Corp.; Greg Graves of Burns & McDonnell; Jonathan Kemper of Commerce Bank; John Sherman, chairman of the Civic Council; and Roshann Parris, chairwoman of the Greater Kansas City Chamber of Commerce.

"For the last several years, both states have followed a destructive practice of encouraging a cross border job shuffle, " the letter said. "This has cost taxpayers hundreds of millions of dollars and it has generated little or no new economic activity.

"Neither state is a winner in this game as one state loses tax revenue while the other state forgives it."

In the letter, the civic leaders offered a list of the negative effects of the Border War job shuffle:

High taxpayer cost for low community benefit.

Unfair competition to non-relocating employers.

Wasting incentives on existing jobs rather than attracting new ones.

Damage to regional cooperation.

Creating a situation where one taxpayer is taxed for public services while another's taxes are directed to his or her employer.

The Kansas PEAK program allows firms to keep 95 percent of their employee state withholding taxes for up to seven years. The Missouri Works program allows firms to keep up to 100 percent of those taxes for a set number of years.

To reach Kevin Collison, call 816-234-4289 or send email to kcollison@kcstar.com. Follow him on Twitter @kckansascity

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