Two nonprofit groups with ties to anti-tax crusader Rex Sinquefield lobbed fresh firecrackers this month into the business border war between Kansas and Missouri.
The groups — Kansans for No Income Tax and Save Missouri Jobs — are spending a combined $200,000 during the tax filing season on cable TV ads promoting lower taxes in Kansas. They also portray Kansas City as a high-tax place to live and do business.
One ad explicitly urges Missouri businesses to establish their companies in Kansas in order to take advantage of recently lowered state tax rates.
“It’s time to start a new business, income tax-free, in Johnson County, Kansas,” the announcer says, as a red arrow on a bistate map jumps from Kansas City into the Kansas suburbs. The ad is airing only in Kansas.
A second ad, airing in Missouri, takes aim at Kansas City’s 1 percent earnings tax on income and profits.
“If you’re paying the city’s earnings tax at all,” the announcer says, “you’re probably paying too much.”
The ads began running last week.
Woody Cozad, a former chairman of the Missouri Republican Party, is part of the Missouri ad campaign. “It’s about getting the truth out there,” he said.
But some Kansas City leaders reacted angrily to the commercials, noting efforts in both state capitals to declare a truce in the expensive cross-border battle of incentives and job relocations.
Mayor Sly James accused Sinquefield, of St. Louis, of trying to bankrupt Kansas City.
“I’m not as interested as Mr. Sinquefield in experimenting with our economy without facts and data to back up political talking points,” he said in an email.
The new spots are “decidedly unhelpful,” said Jim Heeter, president and CEO of the Greater Kansas City Chamber of Commerce.
Kansas City Councilman Russ Johnson was more direct.
“Rex Sinquefield is attacking Kansas City again,” he said. “Seems to be one of his frequent hobbies.”
Both commercials are airing as lawmakers in Missouri contemplate major tax cuts, and as the Kansas tax cuts continue to dominate the governor’s race in that state.
Both issues raised in the commercials — Kansas City’s earning tax and state income taxes — are longtime concerns for Sinquefield, a retired businessman and multimillionaire. In 2012, he told Forbes magazine that he opposes income taxes because they “punish work.”
A spokeswoman did not respond to a request Tuesday to interview him about the commercials.
But records show he has spent millions of dollars on campaigns and petition drives aimed at reducing or eliminating income taxes at the state and local levels, primarily in Missouri. And he has firm ties to both groups involved in the new ads.
In 2011, Sinquefield provided seed money for Kansans for No Income Tax, a 501(c)(4) social welfare organization. He helped start the group in part because tax-cut supporters in Missouri thought lowering Kansas taxes would put pressure on Missouri lawmakers to do the same.
The current president of Kansans for No Income Tax is David Kensinger. He said Tuesday that the tax season is the “ideal time” to run an ad about revenue policy.
“The point is to help people save money and create jobs by educating them about successful pro-growth tax policy in Kansas,” he said in an email.
He would not comment on Sinquefield’s current role with the group.
Kensinger is a well-known adviser to and confidant of Gov. Sam Brownback, who has made the state’s 2013 tax cuts the centerpiece of his re-election campaign. Encouraging business formation in Johnson County has been a part of that effort.
Kansas law restricts direct campaign message coordination between an outside group such as Kansans for No Income Tax and a candidate for governor. But Carol Williams, executive director of the Kansas Governmental Ethics Commission, said the commercial doesn’t appear to violate those restrictions because it doesn’t specifically mention the governor.
Kensinger said the Kansas ad was not designed to help Brownback and is free speech protected by the First Amendment.
The Missouri ad is sponsored by Save Missouri Jobs, which is owned by a nonprofit company called Better Government for Missouri. Cozad is the company’s president.
Cozad would not comment on Sinquefield’s participation in the new commercial.
The ad running on Missouri cable television urges viewers to seek a review of their earnings tax bills in Kansas City because non-resident income earned outside the city limits isn’t subject to the tax.
“You don’t have to pay when you’re not there,” the announcer says.
The website offers copies of forms taxpayers can use to file for earnings tax refunds if they qualify.
Cozad said the commercial, coupled with the Kansas ad, may help convince reluctant state legislators to pass a tax-cut package.
Through a spokesman, Missouri Gov. Jay Nixon declined to comment on the tax commercials.
The ads could also help in a future tax referendum in Missouri.
“First you win the argument,” Cozad said. “Then you win the vote.”