Kansas City Must Learn Lessons from Cerner Failure
The recent Kansas City Business Journal report about Oracle drastically reducing its Kansas City workforce in the former Cerner offices is troubling but not surprising. It serves as a harsh reminder of commitments unfulfilled and a stern warning regarding future economic development endeavors.
In 2014, Cerner received the largest economic development project subsidy in the state’s history. The company pledged to add 16,000 *new* jobs in Kansas City in exchange for substantial taxpayer subsidies to construct its new headquarters. However, by 2019, Cerner had only managed to expand its workforce to 14,000 total, and not all the jobs were in Kansas City proper. Cerner fell short of its promise. Now, under Oracle’s ownership, the local employee headcount has been nearly halved to a mere 6,400. This is far from the 26,000 jobs—the 16,000 new plus the 10,000 Cerner had at the time—that were supposed to be in place by this year.
The issue runs deeper than just the numbers; it’s more about the impact on the local economy and the trust that was placed in these corporations. The Kansas City region was promised significant economic growth and job creation. Taxpayers delivered, but Cerner, and now Oracle, have failed to keep their promises.
Just like the Power & Light District, and the proposed downtown stadium, the Cerner project reveals the misplaced faith in economic development incentives. Time and again, we see that these incentives often fail to deliver. Instead, they serve as generous gifts to corporations, paid for by taxpayers, with little to no accountability.
The Cerner deal has been an abject failure. All city and state leaders who cheered this project should be held to account.
Current and future Kansas City leaders must learn from these missteps. They must scrutinize these large-scale economic development projects more rigorously and demand transparency and accountability. Tax incentives and subsidies, if issued at all, should include meaningful and measurable outcomes, strict legal standards for what constitutes a new job, and oversight from a clearly defined agency that will monitor the subsidy recipient over time. Holding corporations accountable for their promises will not only protect taxpayers; it may reduce the demand for subsidies in the first place.
The April 2 stadium outcome showed that voters demand more details and accountability from those who seek public funds. Leaders must provide them.
