Missouri Gov. Jay Nixon called for a moratorium on using tax incentives to shuffle companies across the state line in the Kansas City metropolitan area, saying the border war for businesses is “terrible” for the local economy. The contestation has shifted more than 5,000 jobs across the state border within the metro area, draining more than $200 million in income tax revenues from the states and resulting in no net gain to the local economy.
Nixon asked for an immediate moratorium on the use of discretionary incentives in cases where jobs are “merely” being moved across the border. Nixon said he had reached out to the administration of Kansas Gov. Sam Brownback to pursue legislation that would make a moratorium permanent. Pat George, Kansas secretary of commerce, acknowledged that discussions have been underway for more than a year to find ways to resolve the issue, but added he was surprised Nixon decided to discuss the subject now.
The major incentive programs fueling the border poaching by both states allow companies that move to retain their employees’ state income tax for a set period. Nixon said although the incentives were created with the intention of making each state competitive in creating jobs and encouraging new investments, those goals have not been the real result in the metropolitan Kansas City area. Whether Nixon’s proposal for a moratorium gains traction in the Missouri General Assembly is uncertain.