Missouri and Kansas are no strangers to border conflict. No, we’re not talking about the chaos that inspired “The Outlaw Josey Wales.” The fear today is over cross-border job poachers. However, that doesn’t justify giving Fidelity Security Life Insurance $12.7 million just to stay inside Kansas City. No one gets a gold medal in a race to the bottom — but politicians will waste endless taxpayer dollars trying to tell you that they’re “winning.”
Fidelity’s new headquarters — less than a mile from its current home — will be luxurious. The real estate is the most desirable in metro area, overlooking greenspaces in Penn Valley Park and Union Cemetery and sitting on a “transit node” of the expanded streetcar route. One-third of the office space will be rented out at the highest price in the area — more than double the average rate for Class A office space. The building will use less than half of the site, allowing for another high-rise in the future.
But should the public fund a project that overwhelmingly benefits one company? What if the company would likely be successful without subsidies? And why do local leaders even consider subsidizing these kinds of projects?
The answer won’t surprise you: It’s just a sad symptom of the larger problem exemplified by border-hopping businesses. Kansas City politicians might have worried that if they didn’t offer subsidies, Fidelity could be stolen by a suburb, much like how they nearly poached Waddel & Reed from Overland Park.
There have been hopeful signs that everyone is tiring of these border wars. In 2019 and 2020, city and state leaders took the first steps to limit the misuse of subsidies. The two state governors agreed to end subsidies that lure businesses across the state line, and then Kansas City, Mo. reduced its own subsidy program to mirror that offered by Kansas suburbs. More, however, remains to be done.
Denver offers a good example of how to escape metropolitan economic warfare. Since 1987, the mayors of municipalities around the city have met every month to ensure they are cooperating on shared economic growth, rather than undercutting each other.
Moving forward with similar ideas along the Missouri-Kansas border is important for multiple reasons.
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