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Missouri-Kansas economic border continues to scuffle over health care deal

Missouri-Kansas economic border continues to scuffle over health care deal

February 14th, 2018 in Missouri News

KANSAS CITY, Mo. (AP) — A health care operator's recent deal to move from Missouri to Kansas has reignited criticism of the economic border issue that has seen both states dish out millions to dozens of companies to move across the state line.

Kansas is giving HCA Midwest Health about $3 million in tax breaks to move its headquarters 4 miles from Kansas City to Overland Park, the Kansas City Star reported .

Kansas Gov. Jeff Colyer is a surgeon who works for the hospital chain. Information released by Colyer's office show Kansas agreed to give HCA Midwest about $1.5 million in tax breaks the company is entitled to "by right of law" and another $1.5 million in "discretionary" tax breaks. The discretionary incentives come almost entirely from the Promoting Employment Across Kansas program, which allows the hospital chain to keep nearly all the state income tax withholding for five years for the employees that make the move.

The deal was done before Colyer replaced former Gov. Sam Brownback and he didn't know it was in the works, said Kendall Marr, spokesman for the governor.

"This HCA deal was marked in (Department of) Commerce's system as a 'success' on June 15, 2017," Marr said. "Gov. Colyer had zero involvement with this deal."

But the deal has raised questions about how Kansas could make an agreement with Colyer's company without his knowledge.

"If these deals are going on and being brokered and the second-highest ranking official in Kansas is not aware of it, that sounds like another problem the state should probably deal with as far as transparency goes," Ryan Silvey, a former Missouri state senator who was heavily crucial of the border issue while in office, said.

Critics of the border war said trying to lure companies across the state line drains the tax base of both states while not creating any new net jobs.

"They (HCA) weren't going anywhere," Bill Hall, president of the Hall Family Foundation, said. "There was no threat they were leaving Kansas City. This is the most egregious example of the misuse of tax incentives."