The newly announced plan to move the Dairy Farmers of America headquarters across the state line is the early leader as the most irresponsible taxpayer-subsidized project of 2015.
Unfortunately, the year is young. And the Kansas City area’s destructive economic development border war is now pumped up on steroids.
The latest deal checks all the boxes on what’s so financially rotten about the scorched earth battle between Kansas and Missouri, and among Overland Park, Kansas City, Kan., Leawood, Lee’s Summit, Kansas City and other communities.
Building a $30 million headquarters for the nation’s largest milk marketing cooperative in western Wyandotte County:
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▪ Does not immediately create net new jobs for the region.
People who once worked in offices near Kansas City International Airport will now trek to the other side of the state line. Kansas City and Missouri will lose the tax dollars once provided by those workers. With no increased job force, the headquarters will not support the construction or buying of new homes or create a net uptick in sales at grocers, retail stores or entertainment destinations.
▪ Does not help a blighted part of the metropolitan area.
Dairy Farmers of America will get taxpayer incentives to move into the economically vibrant West Village development, which includes Kansas Speedway, new Cerner Corp. offices and Sporting Park — all heavily subsidized with public dollars.
▪ Does not meet a sensible standard for transparency on use of public funds.
State, local and company officials have been unnecessarily evasive about how much taxpayer money Dairy Farmers of America will receive.
▪ Does not help Kansas solve its huge budget problems.
A state with a billion-dollar revenue shortfall cannot afford to give away tax receipts to woo existing Kansas City area businesses.
▪ Does not help officials who want to find good ways to solve the border war.
Missouri officials properly have approved a potential solution that would ban giving state subsidies to companies that merely hop the state line. But Kansas Gov. Sam Brownback and many legislators, desperate to get any jobs they can, haven’t made progress on an agreement. Some Johnson County leaders also appear afraid they can’t compete without doling out incentives.
▪ Does not help a company that actually needs or deserves the tax dollars to make a project work financially.
The Dairy Farmers of America is the region’s largest private employer by revenue, with $18 billion in receipts last year.
▪ Does not help foster cooperation by local elected officials on other matters.
It was particularly telling to see dueling statements from mayors Mark Holland of Kansas City, Kan., and Sly James of Kansas City. Both make a big show out of cooperating on some regional projects, but the border war divides them.
Holland said he was pleased the Dairy Farmers of America was coming to an area “where we offer world-class entertainment and retail.” He ignored the irony of being forced to lavish incentives on the company to get it to move there.
James said, “We can no longer define economic development as engaging in self-destructive bidding wars with our neighbors who, like us, could put these funds to more productive purposes.” Yet Kansas City also has tried, and sometimes succeeded, in getting Kansas-side companies to cross the state line.
In a metropolitan region that desperately needs to attract and create lots of new jobs, the Dairy Farmers deal is another example of the wasteful use of public dollars to support the status quo.