Missouri and Kansas agree attracting and supporting businesses is important to each state’s economy. The approaches taken, however, are quite different.
Kansas has been particularly aggressive in offering incentives to potential employers. The state also is cutting individual income tax rates and eliminating income taxes for the owners of 191,000 businesses.
The tax cuts, taking effect in January, have prompted some in Missouri, particularly here on the western side, to urge the Show-Me State to get serious about revising its own tax code. The lobbying group Save Missouri Jobs is running ads to encourage legislators to take action rather than risk “a hemorrhage of business and people to Kansas.”
The game of business attraction is even more fickle than the dating scene. Communities are not well served by flamboyant courting practices where contenders vie to offer the most extravagant package of tax breaks and free land. These deals routinely end up attracting companies with a wandering eye that will leave as soon as someone else offers a sweeter deal.
Workers, money and products move so fluidly between Missouri and Kansas, each state succeeds when the other prospers. We encourage our leaders to work together as much as possible to create a favorable business climate in which each state and community can build on its strengths while enabling others to do the same.
In the upcoming legislative session, Missouri House Speaker Tim Jones has identified a priority to improve the state’s regulatory climate to be more favorable to private business. He also is suggesting a leaner, more effective approach to economic development. A push during the last legislative session for an international export hub near St. Louis was a complicated, unproven package that even some supporters couldn’t explain.
The beauty of the Kansas approach is its centerpiece of tax cuts is simple and applies to all businesses. The downside, critics and even some backers say, is it may go too far in cutting tax revenues needed for state operations.
Missouri should, as is being advocated, move quickly to improve its competitive position. This should include studying Kansas’ initiatives and weighing whether tax cuts are needed. It also should include long-overdue reform and caps on our multiple tax credit programs, which drain revenue away from the state budget.
The overall effort must be focused on adopting a strategy that is welcoming and supportive of responsible firms, large or small, who wish to do business in our state. Our future economic health depends on this.