Freshen up Missouri's stale economic development laws
The Kansas City Star
Describing recent measures enacted by Kansas as a “great sucking sound,” economic development officials from Kansas City are pleading with Missouri legislative leaders for help.
The predicament as described during a Tuesday meeting arranged by the Greater Kansas City Chamber of Commerce was somewhat exaggerated, however. Missouri and Kansas City already have tools to attract and maintain businesses. Like the Kansas incentives, they involve giving private companies the opportunity to keep current or future city and state tax revenues.
But local leaders have a point. Gridlock in the legislature the last few years has left the state with a stale economic development package. Missouri needs new and better tools to attract 21st Century jobs.
Thankfully, neither business nor legislative leaders showed any interest in sharp income tax cuts like the ones Kansas enacted this year.
Attorney David Frantze told lawmakers he and others know of businesses considering relocation to Kansas to take advantage of the lower tax rates. But he also agreed with analyses that show Kansas can’t grow fast enough to cover the revenue loss from the tax cuts. Kansas City’s strategy, several people said, must be to “play defense while waiting for Kansas to crater.”
Incoming Missouri Senate President Pro Tem Tom Dempsey of St. Charles and House Speaker Tim Jones of Eureka, both Republicans, noted that a few senators who had obstructed economic development bills in recent years were leaving, and opportunities should be brighter in next year’s session.
The fight in the Senate has been over excessive use of tax credits. Some of the programs are too big and no longer serve Missouri well. As a result, the state has no room to offer incentives to new and emerging industries. Comprehensive reform is needed.
Kansas City leaders correctly asked the state to focus on “angel investments,” or seed money. Combined with Google’s new high-speed Internet service, up-front capital would encourage innovative businesses to locate downtown and elsewhere.
Leaders also made a reasoned pitch for incentives for the booming and good-paying data storage industry, which is looking at Midwestern states. And they asked lawmakers to create an entity to encourage high-tech industries to locate in Missouri.
Most importantly, local leaders asked for incentives that draw new jobs to the region, but discourage the zero-sum enticements that cause companies to move back and forth across the state line.
That is exactly the right approach. Missouri lawmakers should make this the year to pass economic development laws which bring true gains to the region and state.