Kansas City Council passes ‘game-changer’ legislation in border war truce
Another piece of legislation designed to end Kansas and Missouri’s longstanding economic development “border war” sailed through the Kansas City Council on Thursday.
The ordinance, which Mayor Quinton Lucas first introduced in September, limits Kansas City’s power to entice companies across the border with generous tax abatements.
For years, Kansas and Missouri spent considerable taxpayer resources to lure companies — and coveted jobs — from each other. Companies pocketed, at times, hefty state incentives to move their operations a few miles across the state line. The two states agreed to halt the widely criticized practice last year.
But in her executive order ending the border war, Kansas Gov. Laura Kelly required that Missouri cities tamp down their local incentives to match what their counterparts in Kansas are allowed to offer. The ordinance the council passed Thursday complies with that request.
“I’m very happy with where this piece of legislation has ended up, and I think it has the opportunity, particularly if we truly work together, to be a game-changer,” Lucas said.
The legislation places a 10-year limit on property tax abatements Kansas City can offer to companies moving from Johnson, Wyandotte and Miami counties. Right now, Kansas City and other Missouri municipalities can offer 25-year deals. Kelly has argued that puts cities in Kansas at a disadvantage because the state constitution limits them to 10-year abatement offerings.
“The passage of the ordinance today is an important step in achieving an equal playing field at the local level, and also will allow the region to become even more competitive,” Kelly said in a statement.
Tim Cowden, president and CEO of the Kansas City Area Development Council, said in a statement that the ordinance “demonstrates a meaningful step towards a real border incentive truce.”
“It can’t just be on the back of both states,” Cowden said. “(Kansas City) stepped up big today, and I am sure other municipalities and taxing jurisdictions across the region will take note.”
In the vein of regional cooperation, Lucas also announced on Thursday a new commission of mayors from both sides of the state line to study opportunities “to address disparities in economic mobility and (bring) development to areas that have historically suffered from underinvestment.”
“Not urban, suburban, Kansas or Missouri,” Lucas said. “It needs to be about how we build a stronger pie together. And that isn’t about just how we attract big business.”
Lucas said the border war truce was a good first step in codifying a regional approach to economic opportunity. But he wants to move beyond just examining incentives and shine a light on residents’ economic mobility.
“We rise and fall together. We’re one place really,” Lucas said. “We can’t just talk about policies like incentives that affect folks at the higher end of the income scale.”
According to release, mayors in Lenexa, Shawnee, Overland Park, Olathe and Kansas City, Kansas, will be part of the group.
Council members also approved an amendment to the incentive legislation to scrap a proposed exemption for projects in economically distressed areas.
After critics said that exemption was unclear and too broad, Councilman Kevin McManus, 6th District, offered the amendment Thursday to strike it and add a line noting that there are some “distressed areas that may benefit from extraordinary economic development tools.” The city plans to work across state lines to invest in those areas.
The legislation comes after council members last year approved a $35 million incentive package for Waddell & Reed, an Overland Park-based financial services firm that plans to move downtown. Officials say Waddell & Reed was grandfathered in to the border war truce. It is also expected to receive $62 million in state incentives.
Councilman Lee Barnes, 5th District at-large, was the sole vote against the ordinance. Councilman Kevin O’Neill, 1st District at-large, and Councilwoman Katheryn Shields, 4th District at-large, were absent.
This story was originally published January 30, 2020 at 5:55 PM.
