Last week, the Kansas City Star compared the Kansas City region’s race-to-the-bottom tax incentive competition to economic cannibalism. The newspaper cited a series of government-backed deals that have continued the region’s decades-long beggar-thy-neighbor development strategy. While all of the projects noted are cringe-worthy, one deal in particular takes the cake.
In January, Kansas City Mayor Sly James announced that Lockton — a large insurance provider based in the Country Club Plaza — would remain in its current location. Notably:
When Lockton officials announced in January they would remain in their building at 444 W. 47th St. through 2030, city and development agency officials said details of the state aid package were being negotiated. Mayor Sly James also said no city incentives would be involved.
And negotiate they did. The state kicked in almost $12 million in incentives to make sure Lockton did not move. And the city? Contrary to the mayor’s initial claim, the city did throw in an incentive package for the company, giving Lockton a 50 percent personal property tax break. As it turns out, even when we are told at a high-profile press conference “for jobs” that the city will not throw taxpayer money into the pot, the city just might be throwing money into the pot.
Maybe — just maybe — the city’s economic development plan is dysfunctional. Kansas City has one of the worst tax burdens and debt burdens in the Midwest. In the last decade, the city built an entertainment district/fiscal sinkhole to help make its stagnating convention center more marketable, “discovered” that the city also needed a government-backed hotel to better link the district and the convention center, and then decided it needed a government-backed trolley to tie all of its government-backed projects together. Kansas City, in short, is not unlike the state in general — an economic basket case, chasing one “hot industry” after another with tax credits and other incentives, but failing to anchor sustainable growth.
You do not build prosperity as the People’s gambler. You build it as the steward of the People’s tax dollars — fast to save, slow to spend, and eager to facilitate a level playing field for all of its citizens. Kansas City officials should reconsider the trajectory they are setting for the city.