By John Celock
Members of the Kansas state Legislature are questioning Missouri’s attempt to declare a cease-fire in the economic border, noting the need to promote their state’s economy.
Missouri lawmakers are speeding ahead on legislation banning the state from offering tax incentives for companies in counties surrounding Kansas City, but only if Kansas lawmakers adopt a similar law on their side of the border. Kansas lawmakers are telling The Celock Report that they might not be agreeing to the terms of cease-fire, with some saying Missouri is just trying to put Kansas at a disadvantage.
“Frankly our base tax policy is better than their’s in respect to smaller businesses. So based on tax policy, Kansas is a better place to start a small business, especially as an LLC,” state Rep. J.R. Claeys (R-Salina) told The Celock Report. “Anyone who forms an LLC and lives in Kansas would have zero percent tax. There are a lot of incentives that are built in to our tax policy that brings jobs to Kansas.”
Missouri lawmakers have said that the economic warfare needs to end in order to benefit both states. Missouri State House Speaker Tim Jones (R-Eureka) told KBIA.com that the current policies have caused businesses to jump back and forth across the state line in order to get better tax policies.
Missouri state Rep. Kevin McManus (D-Kansas City), a bill sponsor who represents a border district, said in a statement last week that the legislation would help the entire Kansas City region’s economy. He said the bill would prevent businesses from jumping from state to state in search for a better deal, which he said doesn’t create jobs.
A border district lawmaker in Kansas said that Missouri lawmakers are not looking at the complete economic picture in Kansas. State Rep. Barbara Bollier (R-Mission Hills) said that her state’s economic engine is based in Kansas City and nearby Johnson County, while Missouri has both Kansas City and St. Louis as top economic destinations.
By eliminating tax incentives, she said Johnson County would be hurt on a global economic scale.
“We want to attract businesses for all over the country and most likely the place they’d be attracted to is Johnson County,” Bollier, a Johnson County lawmaker, told The Celock Report.
Bollier stressed that she is not trying to promote the border war or encourage companies to jump between states, but said that any solution is more complex than eliminating tax incentives.
“I am not trying to support the border war. I am being pragmatic and analytic,” she said. “I am thinking of the challenges to fix this issue. That is why it is so hard to fix.”
The Missouri legislation comes as the Kansas City metropolitan area continues to grow as an entrepreneurship destination, particularly for technology start-ups.
The economic warfare is the latest in a storied history of battles between the two states that has its roots in bloody conflicts over slavery in the 1850s. The current border war is rooted in economics and athletics.
Claeys said that the current Kansas policy also differs from the Missouri policy because the state can target their tax breaks towards key industries, rather than offering blanket incentives. He suggested that Missouri lawmakers should copy Kansas.
“Our policy is good and our policy is solid,” Claeys said. “If they decided they wanted to do something to make it more of a discretion of their executive, then they wouldn’t have this problem.”
Kansas state Rep. Travis Couture-Lovelady (R-Palco) said that competition is good for business in both states. He also called out Missouri’s policies in other areas as hurting the Show Me State’s economy.
“Kansas should use all tools necessary to recruit business from all across the country. Continuing the path to zero income tax is the best way to promote economic growth but tax incentives have proven valuable for recruiting many jobs to Kansas,” Couture-Lovelady told The Celock Report. “Governor Nixon and Missouri Democrats should focus on the real reasons why businesses are leaving Missouri such as vetoing tax cuts and threatening to veto Right to Work. Competition is healthy and should make both sides of the border have better business climates in the long run.”