Kansas-Missouri 'Border War' Brings Nothing But Losses For Both Sides

Is Topeka burning Lawrence to the ground this time?

An illustration of Quantrill and his band of guerillas raiding Lawrence, first published in Harper's weekly on Sept. 5,1863. 


    When I was growing up, my mother informed me, “Missouri is known for good roads and bad schools, and Kansas vice versa.”

   Word has reached me that Missouri’s highways now more closely resemble moonscapes, and that my Mom’s alma mater, the University of Kansas, isn’t what it used to be thanks to several rounds of budget cuts.

   The same applies to the Shawnee Mission School District. Growing up, I knew it as the gold standard for public schools in the Kansas City area, and it’s long been one of those things Johnson Countians point to with pride as one of the attributes that make the quality of life in the county so enviable.

   No longer, according to Emma Webb of Shawnee.

   “I recently moved from Olathe,” she wrote me. “I specifically chose a location that was not serviced by Shawnee Mission schools because of their decline.”

    "Chalk up yet another casualty in our region’s long-running economic-development ‘border war.’”

   This sort of thing is not unique to Kansas City, by the way. Since the 1930s, states have used fat tax breaks to lure companies from other states. The breaks are justified on the grounds that the new jobs and residents they bring will make up for the lost revenue from the tax giveaways.

   But perhaps nowhere is the futility of this strategy made clearer than in Kansas City, where the breaks are used to lure companies to move not hundreds of miles but across a street.

   As a 2011 letter to Kansas Gov. Sam Brownback and Missouri Gov. Jay Nixon signed by 17 top area business leaders states, Kansas City is unusual among large bi- or multi-state metropolitan areas in that it is almost evenly divided between its two states. That means there’s a high degree of interconnectedness in the metropolitan economy.

   Thus, if Kansas lures a company on the Missouri side of State Line Road across it, about the only winner is the company being lured. Missouri loses the taxes the company had been paying, while the chief Kansas incentive lets the company keep the income taxes its employees would otherwise have sent to Topeka. (To be fair, this incentive was patterned after one enacted a few years before in Missouri, but Kansas has been more successful in using it to bribe businesses across the state line.) And if those employees don’t move to Kansas but remain on the Missouri side of the line, Kansas municipalities don’t even get additional property tax revenue from the nonexistent new residents. And that’s on top of losing the income taxes of the Kansans working for it.

   The result is a state balance sheet that’s as full of holes as those Missouri highways, and more and more Kansans are feeling the shocks as the economic engine hits them.

   “I think most Johnson County residents, Republican and Democrat, pride ourselves on the quality of our schools,” Webb says. “Almost every school-related bond issue is passed. We invest in high-quality schools in the area, and Brownback’s policies have resulted in school funding being decreased.”

   A half-hour west in Lawrence, Kansas, KU political science professor Burdett Loomis echoes the sentiment. “The biggest effect in Johnson County has been on the budget,” he says of the “job creation” strategy. There’s been a revenue loss of hundreds of millions of dollars, and diminished economic activity in the state.

   “Also, the state hiked its sales tax, and they now pay 9 percent on everything, including food, while Missourians pay only 2 percent.”

   Which probably means a surge of business in supermarkets just east of State Line Road.

   Webb certainly agrees with Burdett: “What is most concerning to me is that Johnson County, which has been the primary economic engine of Kansas and the Kansas City metro area, fell behind Jackson County in GDP last year.”

   Things aren’t so hot at Loomis’ employer, either. “The University of Kansas has taken several cutbacks, and more are coming because of continuing revenue shortfalls.” Which, in turn, means my mom’s alma mater is that much less able to produce a new generation of leaders who can advance Kansas and Missouri.

   Yet Brownback refuses to budge. He flat-out refuses to consider closing a loophole that allows independent business owners to escape just about all taxes on business income — this in spite of recent revenue figures that show corporate income tax revenue fell 97 percent short of projections in the most recent quarter.

   As a result, even Republicans are souring on the governor. When a Brownback ally, Tim Huelskamp, lost to a more moderate Republican in the rural First Congressional District in last month’s state primary, the shock waves were felt across the state.

   “I believe most people in Johnson County are moderate (Bob Dole) Republicans, and right now we are being held hostage by someone who is catering to the extreme right wing,” Webb wrote.

   Regardless which side of the state line you live on, you benefit from the quality of the people educated in Kansas’ universities and public schools, for they form a huge chunk of Greater Kansas City’s professional and leadership class. (Lawrence, after all, is right next door.) Those schools — along with the kids they educate and the state’s poorest citizens — are the real casualties in this border war. So far, the folks in Topeka have declined to pick up an olive branch extended from Jefferson City, but maybe moderate Johnson County Republicans can get the shooting to stop this time around. At least I hope so.

Sandy Smith is the home and real estate editor at Philadelphia magazine and a contributor to Next City. A native Kansas Citian, Smith graduated from The Pembroke Hill School in 1976 and Harvard University in 1982 before moving to Philadelphia, where he has lived for the past 34 years.