Kansas Governor Agrees to Border War Truce

Gail BryantEconomic Policy

Kansas Governor Laura Kelly has signed an executive order to end the border war between Missouri and Kansas. Friday morning, Governor Kelly signed Executive Order 19-09. It directs the Kansas Department of Commerce to end the practice of providing incentives to any company in the Kansas City area solely for purpose of convincing them to move across the state line, but there is a catch.

Governor Kelly’s Executive Order directed local Missouri governments to abide by Kansas state law in offering incentives to relocating companies or risk nullifying the agreement. Missouri law allows tax abatements to be offered for up to 25 years. The Kansas City Port Authority in Missouri may grant abatements up to 35 years. Kansas allows a maximum of ten years. Governor Kelly argues that without her order, the disparity would put Kansas at a disadvantage.

Missouri had been awaiting action from Kansas in order for a new law to take effect. Earlier this year, Governor Mike Parson extended the olive branch by signing SB 182 into law. SB 182 limited the use of incentives in certain counties in Missouri for the purposes of luring companies from Kansas, however that law was contingent upon similar action from Kansas.

State Senator Mike Cierpiot of Lee’s Summit sponsored SB 182. The bill is similar to one that passed several years ago, but it never took effect because then-Kansas Governor Sam Brownback did not adopt the necessary legislation for his state. Cierpiot said he is pleased that Governor Kelly chose to accept Missouri’s peace offering this time around.

“I’m very happy. I think this really lays groundwork for both states so they can focus in areas that truly do increase economic growth and jobs,” Cierpiot said. 

Governor Parson’s office said they are still looking into the specifics of Governor Kelly’s order.

“We appreciate Governor Kelly’s partnership and work on ending the Border War,” said Kelli Jones, Communications Director for Governor Parson.  “We are thoroughly reviewing Governor Kelly’s executive order but are encouraged by the news of its signing, which will help both states better serve the citizens of Missouri and Kansas through fiscally responsible practices.”

The Lee’s Summit Economic Development Council Board of Directors passed a resolution earlier this year in support of SB 182. President & CEO Rick McDowell said he is looking forward to the compromise between the states.

“Healthy, fair competition is a fundamental part of ensuring the economic success of any state and we commend our legislators for working toward a solution is beneficial for both us and our partners in Kansas,” said McDowell.

In a press conference Friday morning Kelly said that while each Governor has a responsibility to grow the economy of their state, the competition between Missouri and Kansas had become too costly for either states to carry on.

“During my campaign I heard how badly the Kansas-Missouri border war affected our businesses in the KC metro area,” Kelly said.

The director of the Missouri Department of Economic Development must certify that Governor Kelly’s order satisfies the requirements of SB 182 in order for it  to go into effect.

Kelly also pointed out the USDA relocation as an example of increased cooperation between the two states. In June, the USDA announced it was relocating the Economic Research Service and National Institute of Food and Agriculture from the Washington, D.C. area to the Kansas City Metro, though the exact location has yet to be announced.