Missouri senators passed legislation Thursday proposing a truce with Kansas in the intense tax-break battle for businesses in the Kansas City area.
The two states have together waived hundreds of millions of dollars of tax revenues in recent years by offering specialized incentives for businesses to relocate —– sometimes only a few miles from one side of the state line to the other.
The Missouri legislation would prohibit incentives for border-jumping businesses in the eight-county area encompassing Jackson, Clay, Platte and Cass counties in MIssouri and Wyandotte, Johnson, Douglas and Miami counties in Kansas.
The measure passed by a 30-2 vote and now heads to the House. If passed, it would take effect only if the Kansas Legislature or governor enacts a similar measure within the next two years.
This would “solve the problem of the job poaching that takes place on both sides of the state line,” said Missouri Sen. Ryan Silvey, a Republican from Kansas City.
The governors of Missouri and Kansas have expressed support for a truce, as have business groups in the Kansas City area. But some Kansas lawmakers have been less receptive.
A recent analysis by the Hall Family Foundation found that since 2009, one Kansas program waived $141 million of tax revenues to relocate 3,343 jobs from Jackson County to Johnson or Wyandotte counties. Meanwhile, one of Missouri’s main incentive programs waived $76 million in tax revenues to move 2,929 jobs from those two Kansas counties to Jackson County.
The proposed truce would affect only state incentives, not those offered by cities and counties, and would target only tax breaks tailored for specific businesses. It does not affect broad-based tax policies, such as recent reductions in Kansas income tax rates or similar proposals pending in Missouri.