Kansas City officials have agreed to changes Jackson County had demanded in how a popular business tax incentive is used, and the county plans to drop its lawsuit over the matter.

Kansas City officials have agreed to changes Jackson County had demanded in how a popular business tax incentive is used, and the county plans to drop its lawsuit over the matter.

“Sound public policy won today,” County Executive Mike Sanders said Thursday after the Kansas City Council passed a measure agreeing to changes the county sought. He said millions of dollars of services – including those in Eastern Jackson County – are at stake.

“This is a victory for the taxpayers of Jackson County,” he said.

In its lawsuit filed last week, the county said the city was not following a state law in how tax increment financing is used. Under that law, cities essentially tell developers this: Come and build a project – typically retail – and that will raise the taxes paid from that property. We’ll take those added taxes and funnel them directly back to project-related expenses, lowering your costs. Once those costs are paid, the TIF expires and all the tax money goes back into its regular channels, and the new stores have added to the overall tax base.

Independence, Blue Springs and many other cities have used TIF extensively for years, and Sanders said the county only has a problem with how one city – Kansas City – handles it. By state law, each city has an 11-member board – six members of its own, five from other taxing jurisdictions such as counties, schools and libraries to review each project and make a recommendation to the City Council. The idea is that those counties, schools and libraries are also foregoing tax money, at least for a few years, and should have a say in that.

Sanders says Kansas City has denied those non-city members any meaningful role. Some of those non-city members say they are excluded from voters and can’t get key information.

Although the votes are advisory and the library, school and county members together are in a minority, Sanders has said the more the better when it comes officials critically looking at a project involving public money. The city has about 40 TIF projects, tying up $27 million that otherwise would be in the county general fund, paying for everything from roads to parks to the county jail. About half of county spending is in the eastern part of the county.

“We commend the City Council for taking these steps,” Sanders said Thursday. The county will drop its lawsuit, he said, as soon as the city’s action officially takes effect in 10 days.