The incentive war between Kansas and Missouri -- Kansas is winning -- made it into the pages of The New York Times. Reporter and heir A.G. Sulzberger talks to the chief executive of AMC Entertainment, who sounds almost embarrassed by the fat offer to relocate the company's headquarters from Missouri to Kansas. "In all candor, it's unusual and a little disconcerting," Gerry Lopez, the executive, says. Lopez was photographed in his office, making the "What are you going to do?" gesture with his hands.
The takeaway from Sulzberger's piece is that Kansas and Missouri are playing a destructive game, and everyone knows it.
Self-interest rules the day. David Frantze, one of the city's most active development lawyers, says it's "horrible public policy" to subsidize companies that move from one side of the state line to the other. But as long as the programs exist, he says he's going to continue to try to "get the best deal" for his clients.
Headquarters poaching is nothing new. But the stakes went up in 2009, when Kansas passed a law that allows companies relocating to the state to retain 95 percent of their employees' payroll taxes. The program enabled Kansas to lure J.P. Morgan Retirement Plan Services, Hoefer Wysocki Architects and KeyBank Real Estate Capital from Missouri.
AMC has been offered more than $40 million to leave downtown Kansas City. Lopez indicated to Sulzberger that the gift package will be hard to ignore. But even he can see that what is good for AMC won't create wealth for the metropolitan area. "Will there be any net improvement to the region?" Lopez asked. "Probably not."
The candid discussion was brought down by John Vratil, a Kansas state senator who lives in Leawood. Vratil says the incentive war is "just an inherent aspect of the free market." Government subsidies are "free market"? Hmmm.
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From the article: "When you’re tax driven, that’s important. Now the State of Kansas gets the tax instead of the State of Missouri.” ...
No. The state of Kansas also does not get the tax revenue, since it's rebated back to the company for 10 years.
Too bad the Star is too lazy to do a REAL article on this.
Well, the KCMO Earnings tax is just a tax on those living in JOCO but work in KCMO. I am not going to feel bad for Missouri or KCMO.
For years now, the sells at the Chamber of Commerce have held their highly-touted (at least by them) Governors' Summits where the governors of Kansas and Missouri commit to supporting a more rational policy of economic development incentives along the state line, and then go away and nothing whatever happens. It's very much like the Chamber's prioritization of public safety in KCMO last year, which disappeared without a proposal or even public discussion of any kind.
Now that the e-tax is safe for another five years and there's plenty of money to fund expensive studies, consultants' fees, and subsidized development, you're not going to be hearing much from the boys and girls at the Chamber.
Please wake them back up if anything of any importance to their wallets seems threatening.
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