WHAT OTHERS SAY: Chosen few get aboard the tax-break gravy train

Monday, June 4, 2012 | 3:13 p.m. CDT

Plenty of Kansas City residents don’t enjoy paying local sales, income and property taxes. That’s a given, right?

Ah, but not everyone has to shell out for their fair share of those taxes.

That’s because a phalanx of development lawyers, business executives and political officials on both sides of the state line have been working day and night behind the scenes to find ways to dramatically reduce taxes — although only for selected companies.

The old way of paying taxes: You provide for schools, roads and public safety.

The new way: You make sure other people pay full freight for those basic services.

This is a skewed way of doing business, especially in the Kansas City area, where numerous efforts are under way behind the scenes to get companies to move from one side of the state line to the other.

This scheme does not create new jobs for the region. Worse, when one state loses tax revenue and another forgives it just to woo a particular business, those decisions damage both states’ abilities to support high-quality universities, public schools and social services.

Consider Applebee’s International taking its headquarters from Lenexa, Kan., to Kansas City in return for tax breaks.

Look at AMC, which is getting ready to yank its headquarters out of downtown Kansas City and head for Leawood, Kan., in return for a large infusion of public dollars.

Still more potential state-line hoppers are out there.

D.H. Pace of North Kansas City — a national distributor for Overhead Door products — is in play, looking for the best deal from local cities.

Freightquote — an online shipping provider in Lenexa — is being wooed by Kansas City. Economic development officials are waving millions of dollars in public subsidies in the faces of the company’s leaders. Kansas City just might win this contest with the help of Missouri because the state can hand out lucrative tax breaks to attract new companies. Kansas can do that, too, if a business wants to jump over from Missouri.

That’s one reason business executives are playing the states and cities against each other, while looking for the highest public incentives.

All of this wheeling and dealing is creating an unfair and unlevel playing field for a growing number of businesses. Those that decide to stay put and pay their fair share of taxes are subsidizing the newcomers to town who don’t.

It’s an increasingly destructive situation, one that’s been warned about for decades. This region needs to better target and restrict such breaks.

Only a few have tried to curb them. Last April, 17 of the Kansas City region’s top corporate leaders said in letters to the governors of Kansas and Missouri that they opposed poaching jobs in the metropolitan area. Govs. Sam Brownback and Jay Nixon, however, have done little to stop the gravy train of tax breaks. Neither have the state legislatures.

Each state seems to be waiting for the other to blink, even though reasonable ideas exist to at least slow down this excessive use of public subsidies.

For example, both states should give no — or certainly only reduced — incentives to companies that decide to relocate by bolting over the state line.

And both states should reduce subsidies for development in green fields and encourage development in urban areas such as downtown Kansas City, a route The Star took when it received incentives for its printing plant.

The recent increase in job piracy won’t stop until responsible leaders act. Meanwhile, a handful of people involved in economic development deals will continue to pick selected winners for tens of millions of dollars in tax breaks.

Copyright Kansas City Star. Reprinted with permission. Questions? Contact Opinion editor Elizabeth Conner.


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