Published on -1/29/2013, 10:02 AM
Gov. Sam Brownback makes no bones about the fact he'd like other states in the nation to follow the lead of Kansas.
Unfortunately for him, they might. Looking at Topeka's commitment to eliminating state income tax, other states with solid Republican majorities in their legislatures are interesting in doing the same. Missouri, Nebraska, Oklahoma and others are giving serious consideration, which would eliminate any competitive edge the governor might have been seeking.
While some minority party members in Missouri believe the Show Me State would be wise to see what happens as a result of the massive Kansas tax cuts, many lobbyists are rallying with Republicans.
"What Kansas did really was a shot through the heart to Missouri," said Ray McCarty, president of Associated Industries of Missouri.
McCarty was referring, of course, to the long-standing competition between the two states for corporations, organizations, government agencies and sports franchises. The economic development border war has been ongoing for decades, despite dubious benefits for either -- and promises not to waste taxpayer money raiding one another. Fifteen years ago, the neighbors even signed an anti-poaching agreement.
Still, the practice continues. While the Kansas Department of Revenue knows the anti-poaching pact exists, it reportedly is "unable to produce the document," according to a recent study by the Washington-based watchdog group Good Jobs First. The study examined similar border wars throughout the country, but the Kansas-Missouri tussle gets special highlighting because of its abysmal cost-benefit results.
Missouri and Kansas both offer subsidy packages worth millions to lure companies across the state line. An administrator with Hallmark Cards referred to the practice as "interstate job fraud." Hallmark's Bill Hall said in the Kansas City metropolitan area alone, more than $200 million has been spent in recent years -- with zero net new jobs created. All that changes is which state gets the privilege of counting the positions, and the taxpayers subsidize all of the so-called economic development.
It is difficult to assign blame to companies looking to take advantage of good deals. But it isn't tough to find fault with state governments proposing such corporate welfare, let alone approving it.
As Brownback and the state Legislature watch neighboring states reduce their income tax obligations to match the Kansas experiment -- and the entire region begins cutting necessary services as a result -- perhaps they then could turn their attention to real change that might have a benefit: Ending the practice of interstate job-poaching.
Our guess would be they won't. It won't be too long before the governor is desperate for any benefits to tout regarding his tax reform plan. Jobs "created" likely will be the sole source of good news, regardless of their true cost.
Editorial by Patrick Lowry