Missouri Sen. Ryan Silvey has offered a straightforward plan that could be a strong start toward reducing the costly economic development border war between Kansas and Missouri.
Silvey's bill would prevent Missouri from giving public subsidies to companies for any existing jobs they would poach from the Kansas-side counties of Johnson, Wyandotte, Miami and Douglas.
The bill would be contingent on Kansas not using its incentives to lure companies and their current jobs from Jackson, Clay, Cass and Platte counties in Missouri.
The laws now in effect are pure folly.
In recent years several large businesses have left Kansas City, Mo., for Johnson County, Kan. — and vice versa — and lowered their tax responsibilities in doing so, while simply bringing existing jobs across the state line. As a result, these companies aren't paying their fair share of taxes. That puts pressure on others that don't get the tax breaks to come up with enough money to continue providing essential public services.
The bottom line: The incentives have diverted hundreds of millions of public dollars to private companies for few net new jobs in the region.
In an interview, Silvey made it clear that companies creating new jobs when they move from one state to the other could still be eligible for state incentives under his bill. The key should be to consider rewarding new economic activity with taxpayer subsidies, though both states also could be a lot stricter on even those giveaways in the future.
Silvey's bill should be a high priority for the Missouri General Assembly to act on when it begins meeting in January. It also should get the support of Gov. Jay Nixon.
Locally, the measure has been embraced by leaders of the Greater Kansas City Chamber of Commerce, who properly have criticized the current situation because it favors the chosen few companies that scoot across the state line.
Bill Hall, president of the Hall Family Foundation, an influential proponent of ending the border war because of the financial havoc it causes, called Silvey's bill a "tremendous step forward."
In Kansas, Gov. Sam Brownback appears ready to provide much-needed leadership in working toward meeting the reasonable restrictions laid out in Silvey's bill.
That's a positive change from a few years when Brownback and others — including the mayors of some large Johnson County cities — downplayed the concerns about "competition" between the states, ignoring the fiscal damages both were suffering.
Today, because of excessive tax cuts in Kansas, the state needs all the revenue it can get to provide basic services. Kansas especially shouldn't be giving away precious tax dollars through overly aggressive incentive programs.
Brownback is in a perfect position to tell the mayors and others that Kansas can, indeed, compete with Missouri and other states when it comes to luring jobs.
But keeping the status quo is unacceptable because it ratchets up corporate welfare in both states.
Copyright Kansas City Star. Reprinted with permission.