Audit Criticizes Kansas Incentives Used To Lure Missouri Businesses

Photo courtesy of Creative Commons
Photo courtesy of Creative Commons

All but a handful of the 38 companies using Promoting Employment Across Kansas, or PEAK, tax incentives to move since the program was enacted in 2009 have moved just across the state border into Johnson County, according to a performance audit. About 1,550 jobs went to Johnson County as of December 2012, the period covered by the audit. All but 110 were from Missouri. The PEAK audit, commissioned by the Kansas Legislature, paints a picture of an understaffed office within the Kansas Department of Commerce that has done a poor job monitoring companies receiving millions of dollars of tax incentives.

PEAK allows a firm creating jobs to keep 95 percent of those employees’ state income taxes for up to seven years. The state auditors estimated it has created 5,200 jobs in Kansas, 2,800 of them moving from outside the state, in exchange for $21 million in forgone withholding taxes through December 2012. An audit a year ago of the Missouri Quality Jobs program, which allows firms to keep up to 100 percent of their employee withholding taxes for a set number of years, also found inadequate recordkeeping and other problems.

Read more from the Kansas City Star

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