Economy
12:36 pm
Tue July 1, 2014

Missouri Wants To End Economic 'Border War,' But Kansas Will Need To Act

Missouri Gov. Jay Nixon signs legislation agreeing to end economic incentives and tax breaks for companies that move across the state line, but only if Kansas also agrees.
Missouri Gov. Jay Nixon signs legislation agreeing to end economic incentives and tax breaks for companies that move across the state line, but only if Kansas also agrees.
Credit Elle Moxley / KCUR

Missouri lawmakers want to put a stop to economic incentives for businesses who move across the state line from Kansas.

But the legislation Gov. Jay Nixon signed into law Tuesday only goes into effect if Kansas agrees to a similar measure to end what's commonly known as the "Border War."

"The competition that matters is not just which side of the state line you're standing on. The competition is much bigger than that," Nixon told community and business leaders during a bill signing at the Greater Kansas City Chamber of Commerce. "We have to find our place in the world, not just the region."

The Chamber backed proposals in both statehouses to end tax breaks and other incentives for businesses who move across the Kansas City metro area in search of them.

"The very companies who could benefit the most if they played the system have pushed the pause button and said, 'Let's get a better strategy,'" says Nixon.

So far, only the Missouri plan has advanced. It will take action by the Kansas legislature or Gov. Sam Brownback to move the initiative forward, as the legislation Nixon signed requires reciprocity.

"Theoretically, it is in the interest of both states, without any question," says University of Kansas political science professor Burdett Loomis. "If you can end the war between the two states, you can end the race to the bottom."

But Loomis says action on the Kansas side of the state line is at this point unlikely. The pro-business Republican state legislature is unwilling to tell local municipalities they can't rely on tax incentives to spur economic development.

"They want to bring in industry, particularly in Kansas, where you have a very stagnant economy," says Loomis.

Still, Kansas City Chamber Board Chairwoman Roshann Parris praised Missouri lawmakers for taking an important first step toward compromise. She says a recent report from the Brookings Institute and Mid-America Regional Council shows the metro is losing its competitive advantage.

"We now find ourselves at a critical crossroads," says Parris. "Successful metropolitan regions, as the report says, are working from a common set of objectives, and those regions organize for success."