Kansas City’s port authority has unfortunately flexed its oversized muscles once again.
On Monday, Port KC’s board — virtually without discussion or debate — gave initial approval to what could be millions in public subsidies to benefit the federal government, which is relocating more than 500 jobs here from Washington, D.C.
The nation’s taxpayers will get a break because the incentives are designed in part to lower the government’s expenses for local office space. But Missouri taxpayers will pay the price in reduced funding for schools, health care and other state services.
Missouri is essentially subsidizing the United States. It doesn’t make any sense.
The incentives were extended through something called the Advanced Industrial Manufacturing Zones Act, or AIM. Under the program, Port KC can divert half of state withholding taxes from new jobs in an AIM zone into a special fund. That money can be used for a variety of project expenses.
On Monday, Port KC would not confirm that the subsidies are meant for the USDA. Instead, a formal announcement is expected as soon as this week.
First, let’s state the obvious: U.S. Department of Agriculture research positions are hardly industrial manufacturing jobs. And the positions are not part of any port: They’re at 8th Street and Pennsylvania Avenue, some distance from the Missouri River.
But the real problem is that the public incentives will provide only a modest boost, if any at all, to the local economy. That’s bad news for Missouri taxpayers.
The relocation of hundreds of USDA jobs from Washington to Kansas City has been highly controversial, of course.
As it turns out, though, the vast majority of employees in Washington, D.C., decided not to move to the Kansas City area. That means most of the “new” jobs will likely be filled by people who live in the region now.
Those workers are already paying income taxes. Diverting half of their withholding into the project will likely put a dent in Missouri’s budget, reducing resources for important services.
Any indirect economic boost from the relocated offices will likely be small as well.
Public subsidies for private businesses remain an unfortunate shell game, diverting needed resources away from public use. The woeful Strata office project is still lurking about, looking for public support. Waddell & Reed wants incentives to build a downtown office for its employees, who are moving from Kansas.
The Tax Increment Financing Commission has rejected incentives for a proposed luxury hotel downtown, but backers are still looking for city help.
All the while, the city’s poorest neighborhoods remain poor. Had Port KC decided to offer incentives for USDA office space in a distressed neighborhood, that would have been more defensible. Not all incentives are bad.
It did not. Instead, taxpayers are asked to subsidize yet another downtown project with little impact on the local economy. It’s the wrong thing to do.