Kansas City civic leaders are again petitioning the governors of Missouri and Kansas to end a metropolitan economic Border War they describe as a “destructive...cross border job shuffle.”
In a letter sent last week to Gov. Jay Nixon and Gov. Sam Brownback, the 17 leaders urged Nixon to sign legislation approved overwhelmingly by the Missouri General Assembly that would prohibit the use of tax incentives to lure companies already in the metropolitan area across the border.
The Missouri legislation would not go into affect 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.
“For the last several years, both states have followed a destructive practice of encouraging a cross border job shuffle,” the letter stated. “This has cost taxpayers hundreds of millions of dollars and it has generated little or no new economic activity.
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“Neither state is a winner in this game as one state loses tax revenue while the other state forgives it.”
The letter is similar to one sent by many of the same civic leaders to both governors three years ago calling for a similar moratorium on the use of incentives to lure businesses back and forth within the metropolitan area.
Among those signing the latest letter are 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.
Specifically, the group urged Nixon to sign legislation championed by Sen. Ryan Silvey of Kansas City that 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.
Nixon has until July 14 to decide whether to sign the legislation and his spokesman, Scott Holste, said Monday the bill remains under review.
Silvey said he was not consulted by the civic leaders about the letter, but appreciated their support.
“I’m very happy the business leaders are continuing to push this,” he said. “It speaks volumes to the companies of the people who signed it. Their firms would stand to gain from these incentives, but they see the benefit of bringing an end to it.”
Bill Hall, president of the Hall Family Foundation, helped coordinate both the 2011 and most recent letter to the governors seeking a truce. He said the approval of the Silvey bill last month by the General Assembly triggered the latest petition.
“We feel relatively comfortable that Gov. Nixon will sign in,” Hall said. “We wanted to assure him we still have strong interest in Kansas City and assure Gov. Brownback there continues to be interest.”
A representative for Brownback could not be reached for comment Monday.
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 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.
Hall said a recent report by the Brookings Institution that found the Kansas City area has trailed its peer metros in recovering from the recession with its job and wage grown below the national average has added more emphasis to ending the Border War.
One observation in the Brookings report was the “highly visible competition between Kansas and Missouri for jobs and firms has distracted focus away from the core assets in Greater Kansas City.”
While the letter to the governors was in the works before the Brookings report, Hall said its conclusions support the plea by civic leaders for the two states to declare a ceasefire to the Border War.
“It underlines we’ve been spending too much time fighting each other and not enough helping each other,” he said.
To reach Kevin Collison, call 816-234-4289 or send email to firstname.lastname@example.org. Follow him on Twitter @kckansascity