Kansas, Missouri battle over companies

[LenexatoKCMO]

Of course, much of that addicted customer base already live in Missouri so you are just extracting more tax from those who are probably least able to afford it. 

Yes - but prior to this announcement it was the state of kansas/wyco extracting income from all of those MO addicts, now their addiction money will at least stay home - plus there is gas tax.  Also given this location, I would speculate that the majority of customers are probably Kansans coming and going from DT - so KCMO gains an additional tool for draining folks from accross the border.  

I would much rather have an architecture firm with 50 employees rather than a Quick Trip.  My reasoning is that QT is going to go wherever they are likely to make a profit; so no net gain in getting one in KC.  Losing an architecture firm is significant beyond the 1% earnings tax.  The employees will shop in Missouri, they may end up living in Missouri (and god knows KC could use more higher income residents), they contribute to the vitality of the local area simply by being there, and they take up office space which contributes to the need for more office space.  It's the overall contribution to the critical mass that matters.  

No doubt there is the loss to be analyzed on both sides and there are clearly ramifications way beyond tax revenue - I was discussing it strictly from a  city revenue perspective.  

Lenexa...ok I get what you are saying.  Stupid tax question....live in one state, work in another....who utimately ends up with the income tax.....I assume its the state the person 'lives' in?

You pay the state where it was earned first and then if the state where you reside has a higher rate you pay the difference there too - thus kansans working in MO pay the bulk of their income tax to MO and then pay a little "overage" (for lack of a better word) to KS - but the opposite doesn't happen since Mo Income tax is lower.  

However, in KS almost all of the income tax revenue is going to the state, and there is no local E tax, so the city of OP doesn't stand to get much back for their investment unless these guys all buy big houses in OP.  

[dangerboy]

However, in KS almost all of the income tax revenue is going to the state, and there is no local E tax, so the city of OP doesn't stand to get much back for their investment unless these guys all buy big houses in OP.  

That's not quite true.  The State of Kansas actually provides a lot of direct funding to cities in the form of cash grants. It comes out of the General Fund, which is largely income tax revenue.  So while Kansas cities don't have municipal earnings taxes, they do get a cut of the state income tax indirectly.

And FYI, KCK is seriously considering asking the state for authority for a local income tax. It has an even bigger imbalance of non-residents working in the city than KCMO.  Also, the earnings tax haters should be happy this is isn't Columbus, Ohio.  They have a 2% earnings tax that is going up to 2.5%.

[KCPowercat]

Thanks danger....that's what I meant, where its earned, not where the person lives....mistype.

So lenexa....its not just hoping they move there....

This poaching has got to stop...

[beautyfromashes]

We weren't getting any taxes from this business anyway.  It is part of Larry Sells bottomless-hole TIF district.  As long as the residents that live on the Missouri side don't decide to pack up and move to Kansas to be closer to work, then it's no loss (except for money spent in the city by employees-lunch, gas, etc.)  

[LenexatoKCMO]

That's not quite true.  The State of Kansas actually provides a lot of direct funding to cities in the form of cash grants. It comes out of the General Fund, which is largely income tax revenue.  So while Kansas cities don't have municipal earnings taxes, they do get a cut of the state income tax indirectly.

There is no direct correlation between state income tax revenue collected in a city and cash grants paid out.  Just because OP whores themselves out for these jobs is no guarantee that they see any additional revenue from the state.  Certainly nothing solid enough that you could make a business case supporting paying out the incentives.  

[GRID]

That's not quite true.  The State of Kansas actually provides a lot of direct funding to cities in the form of cash grants. It comes out of the General Fund, which is largely income tax revenue.  So while Kansas cities don't have municipal earnings taxes, they do get a cut of the state income tax indirectly.

And FYI, KCK is seriously considering asking the state for authority for a local income tax. It has an even bigger imbalance of non-residents working in the city than KCMO.  Also, the earnings tax haters should be happy this is isn't Columbus, Ohio.  They have a 2% earnings tax that is going up to 2.5%.

The Fairfax plant is bringing hundreds of transplants to KC.  Nearly all of them are buying homes in the Northland (I heard 75-80%), the rest probably in Jackson and Johnson, very few in WyCo.

This is one example of the MO side benefiting from a Kansas side investment.  Too bad it's wyco instead of joco .

But KCK can't get its act together.  The city has done almost nothing to improve itself east of 435.  KCK should have a vibrant Downtown.  There is no reason why the downtown area of KCK couldn't be much more desirable.   I don't see why the city can't continue doing what it's doing out by the speedway AND bring the downtown area to life.  Much like KCMO has done with the Northland/urban core.

[LenexatoKCMO]

So lenexa....its not just hoping they move there....

Really it is.  As I said - there is no direct return to the city from income tax.  They do potentially stand to make a little more sales tax from these folks eating lunch and buying the occasional odd or end while coming to or from work - but that is pretty much a drop in the proverbial bucket.

[KCMax]

Really it is.  As I said - there is no direct return to the city from income tax.  They do potentially stand to make a little more sales tax from these folks eating lunch and buying the occasional odd or end while coming to or from work - but that is pretty much a drop in the proverbial bucket.

So how does this make sense for OP if they are offering tax incentives? Just braggin' rights?

[KCPowercat]

Didn't the state give the incentives?

[chrizow]

So how does this make sense for OP if they are offering tax incentives? Just braggin' rights?

even assuming everything ends up revenue-neutral (which i doubt), OP stands to gain everything Highlander mentioned that KCMO loses - critical mass.  every time a family or business flees KCMO for JoCo, it just reinforces the well-worn path of flight that began 50 years ago with the "white flight" generation.  every business OP lures away from KCMO just adds density of businesses to College Blvd or wherever.  those businesses no doubt have some level of networking or synergy or whatever, and it just fuels further business growth out there.  the DNA of most of the business activity out there has roots in KCMO.  think about what KCMO has lost there, and what OP has gained - it has gone from farmland to white collar power-suburb in a few decades, while KCMO went from urban boomtown to half-abandoned shithole in the same decades.  it is almost like OP went from farm to city while KCMO is going from city to farm.

[LenexatoKCMO]

So how does this make sense for OP if they are offering tax incentives? Just braggin' rights?

In their mind it makes sense because all of these high value professionals are going to relocate their homes there - yeah right.  Perhaps down the line it could have a property tax impact - since this space gets occupied, perhaps it will lead to someone building more taxable office space - but that is a pretty remote correlation.  

In the end, it is all about being the politician that helped bring "economic development" and "high paying jobs" to your city - even if that is a load of horse shit for practical purposes.  At least it is not quite as stupid as Lenexa spending $20 mil in order to lure all of those Applebees executives into moving there from OP.  I bring that one up everytime one of my JoCO acquaintences starts harping on a about "out of control kcmo tax incentives".

Didn't the state give the incentives?

The article doesn't really give the specifics about the incentives as far as I can make out.  If it is the state, then that does make far more financial sense, since they are the ones that really stand to gain.  

[KCPowercat]

I f op is really this awesome place to live, they should be using that to bring in companies outside of the 435 loop...its gross and does nothing for the region.

[LenexatoKCMO]

...its gross and does nothing for the region.

Unfortunately the only real hope is state and federal legislation - corporations and developers know they have all the leverage and can shop for the best incentives; its clearly in their self interest.  At this point any city that unilaterally decides they aren't going to play the game is committing economic suicide - your neighboring cities will pick you apart as well as those cross country and meanwhile very little development will take place.  The political chips are stacked against any of it getting fixed - there isn't much of a defined or organized constituency to stand up against tax incentives but many to stand up and defend them. 

Economic development incentives are a nasty menace - but I sure don't want my town to be the one to try and unilaterally change the game. 

[KCPowercat]

Unfortunately our city (funk) is trying....and losing.

[beautyfromashes]

I say we get even instead of getting mad.  Anyone have ideas on sabotaging this company into submission?  We need some kind of economic sleeperhold. 

[LenexatoKCMO]

Unfortunately our city (funk) is trying....and losing.

Indeed - funk seems to think that KC is such an attractive place to invest and do business in that we should be able to unilaterally effect this change and still succeed economically - but hell, cities like NY, SF, Miami, etc. aren't even so brave as to think they can sustain eco dev without incentives.  You either play the shitty game and play it well, or watch the local economic development go to shit.  

[dangerboy]

Funk hasn't really stopped any incentives.  Few if any projects have thwarted by the incentive policy. The mayor and council continue approve new incentives with only marginally more scrutiny, so you can't accurately blame anything like that on Funk.

The biggest impacts of the new policy are 1) ending TIFs that get approved but never built and 2) stopping TIFs from perpetually getting extensions after the original scope is completed and paid for.  The 43rd and Main TIF was example of a project that was paid off but still held onto the tax revenue until the city finally cut them off.

[KCPowercat]

ithis stance towards developers (evil ones, etc) has done more harm than the policy, which I don't have a problem with.

[LenexatoKCMO]

Funk hasn't really stopped any incentives.  Few if any projects have thwarted by the incentive policy. The mayor and council continue approve new incentives with only marginally more scrutiny, so you can't accurately blame anything like that on Funk.

The biggest impacts of the new policy are 1) ending TIFs that get approved but never built and 2) stopping TIFs from perpetually getting extensions after the original scope is completed and paid for.  The 43rd and Main TIF was example of a project that was paid off but still held onto the tax revenue until the city finally cut them off.

There are more facets to eco dev incentives then just TIF for construction projects - don't hear about too many companies these days relocating to KCMO because of the sweet incentive package they were offered. 

[beautyfromashes]

The 43rd and Main TIF was example of a project that was paid off but still held onto the tax revenue until the city finally cut them off.

Is there a way we could do this with the Uptown TIF?