Kansas officials are working for a level playing field to resolve the ‘Border War’

As members of the Kansas Border Challenge Advisory Committee, we are aware of the movement of companies from one side of the state line to the other, aided in some cases by the use of state and local incentives. This corporate relocation, often portrayed as the “Border War,” has been occurring for more than 20 years under both Republican and Democratic administrations on both sides of the state line.

Achieving a solution that contributes to the overall economic growth of the Kansas City region and that uses taxpayer dollars effectively will require considerable work and attention to detail, along with a true commitment to the concept of a level playing field, if a real solution is to be found.

It should be understood that businesses decide to expand and move from their current locations for variety of reasons; and while incentives play a role, they are just one of many factors that are taken into consideration. Site location, workforce availability, business climate, infrastructure, quality education, crime and tax rates are also important factors. The proximity of the business to where the majority of its employees and management team lives can also be a significant factor for consideration before any move is made.

The Kansas and Missouri incentive systems that play a role in the decisions made by companies exploring alternative locations are significantly different.

On the Kansas side, most of the major incentive programs, like Promoting Employment Across Kansas (PEAK), are offered at the discretion of the Secretary of Commerce which gives the Secretary the ability to limit the use of that particular incentive.

On the Missouri side, equivalent incentive programs, like Missouri Quality Jobs/MO Works, operate as entitlements, and any company that meets the qualification threshold is automatically entitled to the incentive. If there is a desire to limit the use of incentives in the metro area, discretionary authority will need to be created in Missouri. Such a bill would need to be approved by the Missouri General Assembly and signed by the governor before other substantive discussions can begin.

Another issue that will need to be examined is the use of local incentives on both sides of the state line. If we are to achieve a level playing field, these discrepancies will also need to be addressed. One major example would be local tax abatements where Missouri communities can provide up to 25 years of abatement under statute, while Kansas statute limits Kansas communities to no more than 10 years.

We also must be careful that we do not damage either state’s ability to compete with areas outside the metro. No one would want to see a local business with hundreds of high-paying, quality jobs leave for Dallas, Oklahoma City or Nashville because neither Kansas nor Missouri could offer a competitive incentive package.

The state of Kansas, local mayors and Kansas-side economic development officials stand ready to work in good faith to achieve a level playing field that benefits the entire metro area.

This story was originally published March 7, 2014 at 6:08 PM with the headline "Kansas officials are working for a level playing field to resolve the ‘Border War’."