KANSAS CITY, Mo. (AP) — There may be a cease-fire, but the economic “border war” involving the use of incentives to lure jobs across the state line in the Kansas City area isn’t exactly over.
Missouri officials plan to award more than $62 million in incentives to financial firm Waddell & Reed, based in Overland Park, Kansas, the Kansas City Star reported last week. Holly Koofer-Thompson of the Missouri Department of Economic Development said the incentives come from the Missouri Works program, which offers payroll tax withholdings or tax credits in exchange for growing or retaining jobs.
The company said it will invest about $90 million in its new Missouri headquarters and employ more than 1,000 workers at an average salary of $157,138. The specific location has not been announced.
Disclosure of the incentives comes about a month after Kansas and Missouri governors celebrated an end to the use of tax incentives to lure companies across the state line for moves that do not create new jobs for the region.
Koofer-Thompson said the company’s move was in the works before the so-called “border war” agreement between the two states. But others called the move a prime example of what was wrong with the previous practice.
“Waddell & Reed is benefiting dramatically from what is bad public policy,” said Bill Hall, president of the Hall Family Foundation, who has advocated for an end to state incentives for Kansas City-area companies that hop the state line.
Hall said Waddell & Reed’s $62 million award is among the largest given by either state. He estimates that since 2011, the states have spent more than $330 million luring companies away from each other.
Roger Hoadley, a spokesman for Waddell & Reed, said in a statement that the firm is “pleased that our current options allow us to remain part of the Kansas City community.”
Kansas City, Missouri, Mayor Quinton Lucas said that generally he wants to see the region recruit new employers rather than shuffling around the current ones.
“This is fundamentally inefficient for our regional economy whether it’s border hopping across states, border hopping across cities,” Lucas said. “This is hopefully one of the last projects that would fall within the framework we had before.”
It was just last month that Kansas and Missouri governors celebrated their truce at a ceremony involving more than 300 people in Kansas City, Kansas.
“Sometimes commonsense does prevail,” Missouri Gov. Mike Parson said at the time.
But Kansas officials did not expect an immediate end to incentives, said Ryan Brinker, spokesman for the Kansas Department of Commerce.
In fact, Brinker said commerce officials had been working to lure Kansas City, Missouri-based Hostess Brands, the maker of Twinkies, to Kansas for six years. The company could be heading to Lenexa, Kansas, after that state approved an incentive package in June that includes up to $5.4 million in withholding taxes over nine years.
Hostess also will receive $930,000 from a program offering tax credits and tax exemptions to employers paying above-average wages.