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Missouri Offers Truce in Tax Incentive Border War With Kansas

Posted on May 22, 2019

Missouri lawmakers have extended an olive branch in the Kansas-Missouri tax incentive border war, but the bad blood between the states seems destined to live on.

S.B. 182, sponsored by Sen. Mike Cierpiot (R), would extend a bill enacted in 2014 (S.B. 635) that prohibited the issuance of tax incentives to lure businesses across the state’s border with Kansas. The Senate on May 17 approved the bill as amended by the House and sent it to Gov. Mike Parson (R). 

Like S.B. 365, the latest bill would only take effect if Kansas reciprocates. As of press time, Kansas had not enacted any such legislation, according to the Kansas Department of Commerce. Gov. Laura Kelly (D) has said she would monitor S.B. 182, but has cautioned that the “devil is in the details” according to the Kansas City Star.

S.B. 182 is Missouri's second truce offer in a decades-old border war with Kansas. The bill would prohibit the Missouri Department of Economic Development from issuing tax credits to poach Kansas businesses from Kansas border counties under the Building Use Incentives for Large-Scale Development (BUILD), New and Expanding Facility, Urban Enterprise Loan and MO Works programs.

The bill covers the Kansas border counties of Johnson, Miami, and Wyandotte. Missouri border counties were identified in the bill by their county classification, government, and population, but would include Cass, Clay, Jackson, and Platte counties.

Businesses have benefited from the long feud between the two states, which stretches back to the Kansas-Nebraska Act of 1854, a law that overturned the Missouri Compromise of 1820 and led to the Bleeding Kansas border war over the legality of slavery in the state of Kansas.

Kansas didn’t reciprocate when Missouri enacted S.B. 635 in 2014. In April 2016, weeks before the end of the Missouri legislative session, then-Kansas Gov. Sam Brownback unsuccessfully offered his own truce. Missouri's legislation expired four months later, in August 2016.

Over the last decade, the two states have spent a combined $335 million in incentives to lure companies over their respective borders, according to the Hall Family Foundation, a philanthropic foundation based in Kansas City. The foundation estimated that Missouri spent $151 million and Kansas spent $184 million, and the latter had a net gain of 1,200 jobs.

As of press time, Parson had not signed S.B. 182, and requests for comment were not returned.

Missouri legislators have also passed S.B. 68, a tax credit bill offering $50 million to General Motors and creating new tax incentives and a deal closing fund for automotive manufacturers. Parson is expected to sign the bill.

In a May 14 release on the passage of the bill, Parson said, “Today’s final vote is a complete victory for Missourians and jobs in every corner of the state. We are sending a powerful message to the nation that we are ready to compete with every state for more jobs.”

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