Mayor James’ Corporate Welfare Handouts
The Kansas City Star reported that Burns & McDonnell, the successful architectural and engineering firm headquartered in Kansas City, is considering the purchase of an available plot of land immediately adjacent to its main offices.
The company, which intends to request incentives for the project, plans to tear down the synagogue building and redevelop the property with a phased, 450,000-square-foot office development and 800-space garage.
No one can blame Burns & McDonnell for asking for taxpayer handouts such as tax abatements or Tax Increment Financing (TIF). After all, these businesses answer to their owners and/or shareholders who want to maximize profits. Companies almost always will ask, and they almost always will make the case that they need taxpayer subsidies. What is disappointing is that cities are so eager to give away the shop in these circumstances.
Kansas City is no exception when it comes to giving away unnecessary incentives just to be shortchanged on the back end. The same Star piece included this:
Kansas City Mayor Sly James described Burns & McDonnell as the “quintessential hometown entrepreneurial success story and a tremendous corporate citizen.”
“We welcome their expansion and the new jobs it will bring,” the mayor said in a statement.
City cooperation will be essential if the project is to move forward.
Essential? Really? That is doubtful.
Purchasing the land is likely very attractive to Burns & Mac, as it is known. The land is adjacent to office buildings it currently operates — so the company cannot credibly threaten to run to Kansas if it doesn’t get its way. Furthermore, Greg Graves, the chairman and CEO, has deep roots in Kansas City and has been active in local life — he isn’t moving to Kansas. Here is a perfect opportunity for Kansas City to hold its ground and hold on to taxpayer dollars.
When a city abates property taxes, it freezes the income of other jurisdictions such as the library and schools, which are funded through those taxes. Mayor James talks a lot about how he is concerned about education in Kansas City, but says his hands are tied. Yet here is an opportunity for him to support education funding and he seems to be ready to cave in before the company has even asked.
This should be no surprise. As the Star’s Yael Abouhalkah wrote in December:
Like most politicians, Kansas City Mayor Sly James has been willing to support corporate tax breaks that lower the tax rates for powerful companies but essentially increase the tax burden on others who can’t sweet-talk City Hall…
Indeed, as he and others know all too well, the city has passed numerous public subsidies in the past that have sucked money away from school districts, libraries, counties and other taxing jurisdictions.
Every business will claim poverty if they think they can benefit from it. It’s our hope that Mayor James and the city smarten up and stop making foolish deals that weaken the city’s — and others’ — funding base.