Business

Blog post critical of Kansas tax policies gets national attention

Jeff Blackwood talks about moving his business from Kansas to Missouri

Jeff Blackwood, founder of Pathfinder Health Innovations, discusses the reasons he is leaving Kansas and moving his business to the Crossroads Arts District in downtown Kansas City.
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Jeff Blackwood, founder of Pathfinder Health Innovations, discusses the reasons he is leaving Kansas and moving his business to the Crossroads Arts District in downtown Kansas City.

Jeff Blackwood stands outside the Kansas City building at 400 E. 17th St. where his company will move in August and admits to being absolutely stunned that he’s landed in the national spotlight.

Many media outlets from all over the country have called since he posted an open letter to Kansas Gov. Sam Brownback criticizing the state’s income tax cuts in 2012 and 2013 that have caused big cuts in services to the developmentally disabled. The tax cuts have led to a $600 million budget shortfall in the state.

Blackwood’s move across the state line from Overland Park to Missouri didn’t come easily.

Blackwood, founder of Pathfinder Health Innovations, was an eager supporter of the Kansas Bioscience Authority and the Animal Health Corridor in the state. But after Brownback’s administration cut the authority’s budget, “from that point I knew it wasn’t going to be good for the state of Kansas,” Blackwood said.

The governor’s office responded Thursday that “while we are not familiar with that particular company’s situation, we do know that Governor Brownback’s tax policy has attracted a record setting number of new businesses for five consecutive years, most recently totaling 17,298 new Kansas businesses in 2015.”

Pathfinder Health Innovations provides software and services for about 150 therapy centers across the country that focus on autism. Through his business, Blackwood saw the effects of Kansas funding cuts on those clients, and his conscience gnawed.

“The cuts morally obliged the move,” he said, noting that financial reality also obliged him to wait until his company’s lease in Overland Park ended and different office space became available.

“It’s really something that has been building up in me over the last few years, and this was the first opportunity to freely move where we’d like,” Blackwood said, juggling the mobile phone that has been ringing on and off with calls from newspapers, TV and radio stations.

Unfortunately, he said, some of the focus has been on the fact that the company is getting a tax incentive when it moves into the East Crossroads building that is being renovated by developer Matt Abbott.

“The thing that’s been missed is that the incentive is worth less than about $40,000,” Blackwood said. “It’s not the reason for the move. But it is enough to allow a small business like us to provide health insurance for our employees.

“Because group health insurance for small businesses is so expensive, we’ve had to recommend previously that our employees purchase health insurance through the Affordable Care Act. With the incentive, we can now afford to give our employees better health insurance.”

The company has 23 employees.

If Pathfinder Health doubles in size, it could be eligible for as much as $370,000 in Missouri incentives.

In Blackwood’s blog post, which he described as personal and not reflecting an official stance by Pathfinder, Blackwood wrote that “Kansas has become a test center of ‘trickle down’ economics, espoused by economist Arthur Laffer during the Reagan years. Nowhere has there been as thorough an implementation of Laffer’s policy recommendations … and nowhere has there been as dramatic a failure of government.”

Blackwood said he was compelled to take a stand, in particular, to “support people with developmental disabilities because we have to be aware of the impact of tax policies on our society.” And when that effect “is on the people who can least afford it, we’re not doing our job.”

Diane Stafford: 816-234-4359, @kcstarstafford

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