A national report released Thursday morning charges the economic ‘Border War’ between Missouri and Kansas over jobs in the Kansas City metro area “is a vast waste of taxpayer funds, paying for the geographic reshuffling of existing jobs”, said Greg LeRoy, executive director of Good Jobs First and principal author of the report.
He called it “job blackmail”, as some states use economic developement money to keep companies to stay put, when they may, or may not have any intention of re-locating.
Leroy is with the ‘Good Jobs First’ organization. It bills itself as a non-partisan research center from Washington D.C.
Leroy authored a report that was released Thursday entitled, ‘The Job Creation Shell game’, http://www.goodjobsfirst.org/shellgame.
A statement from the group describes the ‘Border War’ situation, “Kansas and Missouri are singled out in the report for their use of programs such as Promoting Employment Across Kansas (PEAK) and the Missouri Quality Jobs Tax Credit in luring companies such as AMC Entertainment and Applebee’s from one side of the Kansas City metro area to the other.”
“The report also recommends that states end their business recruitment activities that are explicitly designed to pirate existing jobs from other states.”
It continues, “ It also suggests a modest role for the federal government: reserving a small portion of its economic development aid for those states that amend their incentive codes to make existing jobs ineligible for subsidies and certify that they no longer engage in raiding.”
The Director of the Missouri Budget Project Amy Blouin also criticized the ‘Border war’ job poaching in a statement from the ‘Good jobs First’ organization.
“Rather than spending precious state resources on tax credits that merely poach jobs across state lines, states should focus on investing in services that businesses rely on when making relocation decisions, like quality schools and transportation, affordable higher education, and the development of a skilled labor market.”
Missouri lawmakers are expected to work on tax reforms with an eye towards making economic development in Missouri more competitive with other states, Kansas in particular.
Missouri and Kansas, however, are not the only states the groups believes waste tax money poaching jobs from another state.
According to a news release:
“In Texas, the “deal-closing” Texas Enterprise Fund as well as a privately financed marketing group called TexasOne are used to brazenly lure companies from many states, including California.”
• “New Jersey has doubled down on both job piracy and job blackmail payoffs, continuing to lure firms from New York City-many of them Wall Street firms that were likely to come anyway.”
• “Georgia, which we rename the Poach State, stunned officials in Ohio when it successfully lured the headquarters of NCR from Dayton, where the company had been based for 125 years.”
• “Tennessee embodies all the policy contradictions. Its largest city, Memphis, is frequently the victim of poaching by bordering Mississippi, yet Tennessee created a whole new subsidy program to lure the North American headquarters of Nissan from southern California.”
• “The booming Charlotte region has job growth most states would die for. Yet instead of managing their growth, the 16 counties in North Carolina and South Carolina routinely poach jobs from each other, using both state and local subsidies.”
• “Rhode Island has long pirated jobs from Massachusetts, but when it gave a very large package to lure video game maker 38 Studios, founded by retired Boston Red Sox star Curt Schilling, the deal soon blew up and criminal prosecutions are now under way.”
“Huge job blackmail subsidies have left many taxpayers bitter in states such as Illinois and Ohio, and Sears Holding Corp. has continued to shed jobs despite getting a second nine-figure retention deal from Illinois,” the report claimed.