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Around the USA, people asking questions about economic incentives

February 22, 2019




By Brian Kaberline  – Editor, Kansas City Business Journal - February 22, 2019


....The situation with New York and Amazon’s HQ2 project has captured national attention, with one side bemoaning the lost opportunity to add 25,000 tech jobs and the other furious with a deal that would grant roughly $3 billion in incentives to a company run by the world’s richest man. The basic forces behind this collision can be found in Kansas City, albeit with a few zeroes knocked off.


A fundamental problem is that the payback on incentives is debatable — literally. Kansas City commissioned a big study on the effectiveness of incentives, which was released in August. The consultants said the city received $3.83 in additional tax revenue for each dollar of development incentives granted during the decade ended in 2015. They couldn’t present information on the relative effectiveness of the incentive programs and — the biggie — how much development might have occurred if there were no incentives.


You can’t honestly point to all the new and redeveloped buildings in Downtown and claim that none of it would have happened without healthy tax abatements. And you can’t seriously believe that this transformation would have happened to the same extent even without incentives.


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