Missouri Gov. Jay Nixon “slowed us down a bit” in Kansas with his recent speech in Kansas City on the “border war,” the cross-poaching of businesses between Missouri and Kansas. That’s what Kansas Commerce Secretary Pat George told me last week.
“We’d like to get engaged, before we announce we got married,” George said.
In other words, George — and reportedly Kansas Gov. Sam Brownback — were blindsided by Nixon’s speech and, according to several confidants, were a bit annoyed.
Nixon called for a moratorium within the region on offering generous tax incentives for businesses to move, both ways, across the state line.
Whatever his motive, it apparently backfired in Kansas, where work is going on quietly, behind the scenes.
At the urging of Brownback, George has appointed a seven-member task force from Johnson and Wyandotte Counties to meet with George on a regular basis. George said the governor urged him to pick local people with “boots on the ground.”
They include Overland Park Mayor Carl Gerlach; Mayor Mark Holland of the Unified Government of Wyandotte County; Johnson County state legislators Marvin Kleeb and Julia Lynn; Wyandotte County state legislator Tom Burroughs; and chamber of commerce executives Blake Schreck of Lenexa and Tim McKee of Olathe.
The mission of this task force, which just recently met in person for the first time and has also held a conference call, is to see if there is a solution to what George prefers to call — not a border war — but a “border challenge.”
There are at least 15 obstacles identified so far, according to George, but the number one priority is for Missouri to change its legislation for its “Missouri Works” program to make tax incentives discretionary, rather than automatic entitlements.
As it is now, a business wanting to move or stay in Missouri is entitled to tax incentives if it meets certain requirements, and there is no discretion on such factors as amount or length of the incentives. In Kansas, Commerce Department officials can mold a tax incentive package or reject tax incentives, at will.
George questions how the two states could enter into any kind of agreement as long as Missouri’s incentives are mandatory.
“That has to get fixed,” George said.
Whether it can get fixed or not is very dicey, according to political experts in Missouri. The Republican-controlled legislature is not likely to want to give control of tax incentives to the Democratic governor or his appointees.
Assuming that hurdle is overcome, George sees any solution with “lots of challenges.”
The Kansas commerce secretary admits taxpayers in Kansas are getting “dinged” by the tax incentives, but he added hastily, “We don’t want to do anything to shoot ourselves in the foot.”
George used as an example AMC, which moved from downtown Kansas City to south Leawood.
“Their number one choice to relocate was Hollywood,” he said, “with a second choice of New York.” He said it was Kansas tax incentives that lured them to stay within the metropolitan area.
George said that perhaps a three-to-five person panel could review each individual deal before tax incentives are offered within the metropolitan region.
“But we have to be very careful,” George added, “or the relocating company could end up in Texas.”
George believes his task force will come up with different proposals over the next three to four months, a “fast track” to allow for the legislative remedy in Missouri in the next session.
As one member of the task force, who wished to remain anonymous, told me, “We need to figure something out.”