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Examiner
  • Jeff Fox: Why is the metro economy slipping?

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  • David Warm has an agenda for 2014 – taking a closer look at the metro economy’s competitiveness.
    “When we look at the Kansas City economy through certain lenses, we’re doing OK. When we look through other lenses, we’re lagging behind,” Warm, executive director of the Mid-America Regional Council, told that group’s board last week.
    The key, he said, is to get inside what really drives a region’s economy, and he suggested a specific focus on innovation.
    One advantage the area has traditionally enjoyed is workers who are more productive than those across the country as a whole, but U.S. productivity is growing at about 6.5 percent a year and Kansas City trails that, at 4.5 percent.
    “ ... our margin of difference is narrowing. We’re losing our edge,” Warm said, adding that the area hasn’t focused enough on developing human capital, that is, investing in the people who do the job.
    This comes after a report several weeks ago by three regional economists, including Frank Lenk, MARC’s senior director of research services, showing that although the Great Recession wasn’t felt quite as sharply in Kansas City as it was for the country as a whole, the area’s recovery has been pokier than it has been nationally. Lenk has said the old idea that Kansas City’s highs aren’t as high and lows aren’t as low as they are for the rest of the country doesn’t seem to be true anymore. Kansas City is slipping.
    The MARC board is made up of local elected officials from both sides of the state line. Council Member Jim Schultz of Independence, for example, was the board chair last year. Warm said he intends to keeping bringing the board information on the competitiveness question in the months ahead.
    That conversation came after the MARC board approved its legislative agendas for Missouri and Kansas. The Missouri list looks a lot like it has in recent years: Find new funding for roads, fix the way 911 service is paid for, maintain – and even expand – Amtrak, ban texting while driving, adopt a tougher seatbelt law, protect funding for early-learning programs and for seniors.
    Wait a minute, said a board member. What about the “border war?”
    That’s the deeply unfortunate phrase – trivializing the suffering and deaths of those caught up in the real thing a century and a half ago during the Civil War – for the tussle between Missouri and Kansas over incentives to get businesses to move across the state line. MARC has taken no stand, but Warm quickly pointed to figures supporting an idea we might have suspected all along: The states give incentives, reducing in their tax bases, for little gain.
    Warm mentioned the Missouri Quality Jobs program and the PEAK program in Kansas, the chief tools used here. One study, he said, shows that 3,289 jobs have been moved from Jackson County to Johnson and Wyandotte counties on the Kansas side, at a cost to that state of $140 million. Meanwhile, 2,824 jobs have moved from those two counties over to Jackson County, at a cost to Missouri of $72 million.
    Page 2 of 2 - Put another way, the states have forgiven $212 million in taxes to shuffle around existing jobs within three metro counties
    But Kansas is ahead, right? Looking at those three counties alone, Kansas is up 465 jobs – at $301,000 apiece.
    “And our region is an outlier nationally,” Warm points out. “We are providing more incentives for less return ...”
    State Sen. Ryan Silvey, a Kansas City Republican, has filed a bill to put a stop to those incentives within eight counties, four on each side of the metro area. It only takes effect if Kansas goes along.
    Noting that “both governors have been on-again, off-again” about pulling back, Warm sees hope in Silvey’s bill.
    “I think there is some possibility for the issue to move forward,” he said.
    Jeff Fox is The Examiner’s business reporter and editor. Reach him at jeff.fox@examiner.net or 816-350-6313. Follow on Twitter @FoxEJC or @Jeff_Fox.
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