Missouri’s offer to end the economic border war for jobs within the metropolitan area got a cool reception from Kansas on Tuesday.
As expected, Gov. Jay Nixon of Missouri, a Democrat, signed legislation that will establish a moratorium on the use of state incentives to recruit companies across the metropolitan border if Gov. Sam Brownback of Kansas, a Republican, follows suit. Nixon traveled to Union Station, a symbol of bistate cooperation, to sign the bill.
The governor described the bill championed by Sen. Ryan Silvey, a Kansas City Republican, as an effort to end a controversial practice that enriches local companies by letting them keep their employee state income taxes while adding few if any new jobs to the area economy.
“Senate Bill 635 is not a unilateral disarmament, but rather a commitment to taxpayers on both sides of the state line that Missouri is ready to stop using hard-earned money subsidizing a war that neither side can win,” Nixon said.
Kansas Secretary of Commerce Pat George issued a statement that sidestepped Missouri’s offer of a moratorium on state incentives, saying the matter is more complex and needs to involve suburban communities. George is the top economic development official in the Brownback administration.
“The state of Kansas, local mayors and our economic development officials stand ready to work in good faith with Missouri to achieve a level playing field that benefits the entire Kansas City metro area,” George said.
The major weapons in the area border war have been programs offered by both Missouri and Kansas that let companies pocket their employee state income taxes as an incentive to move. The Kansas program is called Promoting Employment Across Kansas, or PEAK. In Missouri, it’s the Missouri Works program.
Critics, including prominent area business and civic leaders, estimate that since cross-border poaching began in earnest in 2009, 4,474 jobs have moved from Jackson County to Johnson or Wyandotte county, with the companies keeping $136 million in employee state income taxes.
During the same period, 2,929 jobs moved from the Kansas side of the area to Jackson County, with the companies keeping $76 million in employee state income taxes.
In his release announcing his signature, Nixon said both states are using their income tax-based incentive programs for “simply relocating jobs across the state line, without actually creating new jobs.” He added they weaken the region’s ability to compete globally for jobs and investment.
But George said any resolution to the issue should not “damage either state’s ability to compete with areas outside the Kansas City metro.”