Missouri Gov. Mike Parson signed a bill Tuesday to abate the economic border war in the Kansas City metro region.
Now he just has to get the other combatant to agree.
The legislation, passed last month on the final day of the General Assembly, would stop Missouri from offering tax incentives to companies that jump the border from Wyandotte, Miami and Johnson counties in Kansas. But it only goes into effect if Kansas were to do the same before 2021 for companies originally in Jackson, Platte, Clay or Cass counties.
The mood at Kansas City’s Union Station was celebratory as a who’s-who of local lawmakers and business leaders joined Parson for the signing.
“We’re spending a lot of taxpayer money for initiatives for businesses on the border of Kansas and Missouri, and sometimes we’re not getting very much gain for that,” Missouri Gov. Mike Parson said. “There’s no reason we cant be using that money for a lot better purposes than just jumping from one side of the state to the other.”
But the law won’t go into effect unless Kansas takes action.
Kansas has rejected Missouri’s offer once before in 2015. After then-Missouri Gov. Jay Nixon signed a similar bill, Kansas Gov. Sam Brownback balked. Two years later, Brownback offered his own plan but no agreement was reached.
The prospects seem more favorable this time, officials said, although Gov. Laura Kelly’s public comments on the issue have been limited.
“I’m very positive, very optimistic right now that we’re going to come to some sort of agreement between Missouri and Kansas on this,” Parson said. He added that he has had meetings and phone calls with Kelly discussing the measure.
Unlike in Missouri, the Kansas Department of Commerce has the authority to award tax credits, and Kelly could sign an executive order to uphold its end of the bargain, a spokesperson confirmed.
“We need to work together, and not be at odds, when it comes to bringing businesses to the region,” Kelly said in a statement following the bill signing.
But there are already rumblings of dissent among Kansas Republicans.
“If the governor wants to sign on the executive order to get that done, I think that’s a violation of a campaign promise for transparency,” state Sen. Julia Lynn, an Olathe Republican and Senate Commerce Committee chair, said.
Lynn said if Kelly were to not go through the executive order route, the Legislature would work on the issue over the summer and have bills ready to go in the House and Senate commerce committees. There, it would have hearings and lawmakers would have opportunities to make adjustments.
“If you are going to be clean about it, it needs to go through the legislature,” Lynn said. “Then everybody understands and everyone knows what the rules are.”
The border war has cost taxpayers in both states millions of dollars and efforts to shut it down aren’t new.
According to research by the Hall Family Foundation, the combined $335 million spent by Missouri and Kansas since 2010 resulted in a net gain of about 1,200 jobs for Kansas.
Missouri taxpayers spent around $151 million over the last decade luring companies from Kansas border counties across the state line to Jackson County. Kansas reciprocated by spending $184 million enticing border-hopping companies to flee Jackson County for Johnson and Wyandotte, the foundation study found.
Both Director of Economic Development Rob Dixon and Kansas Department of Commerce Secretary Dave Toland have met and discussed the bill, their staff confirmed.
As part of their negotiations, Missouri lawmakers dropped Douglas County in Kansas from the bill, according to House bill handler state Rep. Jeff Coleman.
Even the bill signing setting was symbolic. Voters on both sides of the state line decided to tax themselves to restore the Union Station in 1996 to save it from the chopping block, according Mayor Joe Reardon, Greater Kansas City Chamber of Commerce president. The bill has been a long-time priority of the chamber.
“We believe our true competition is not between us, or across the line that’s not far from outside this door. But it’s with other regions like Dallas, Denver, Nashville,” Reardon said.
Parson told reporters Tuesday he has met with Kelly about the issue. Though he called it a “delicate situation,” he said he was optimistic a deal could be worked out.
“There’s a lot of moving pieces to this, yet,” Parson said.
In her statement, Kelly noted the two states’ joint proposal to attract United States Department of Agriculture operations to the Kansas City metro area, calling it a “prime example of progress.”
“We’re encouraged by the renewed spirit of cooperation and collaboration between the two states,” Kelly said in the statement.
Thomas reported from Jefferson City. Shorman reported from Topeka.