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'This is systemic racism': Kansas City school leader criticizes tax incentive plan

Kansas City Star logoKansas City Star 6/24/2020 By Allison Kite, The Kansas City Star

After 20 years of tax subsidies for a Kansas City construction firm, a plan to give the company even more is tantamount to systemic racism, Kansas City Public Schools Superintendent Mark Bedell told City Council members in a letter urging them to vote down the deal.

BlueScope Construction has already received a property tax abatement on its West Bottoms offices for 20 years. Now, it’s being offered more than $20 million to move to Kansas, according to city officials.

Missouri has offered the company $5.6 million in state incentives to stay and add 90 jobs over six years. And the city is considering a 13-year 75% extension of the company’s property tax abatement.

School officials often push back against such tax deals, which divert property tax funds from the district, city libraries and mental health resources. But Bedell’s scathing letter was unusual.

“I am exhausted with the development community pitting the City against the public entities that are doing the work of trying to give our students and their families access to the world they deserve,” Bedell said in the letter dated Wednesday. “This is systemic racism.”

He accused the city of frequently offering incentives that harm Kansas City Public Schools while sparing districts in the Northland where white students are the majority.

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For weeks, the U.S. has been in the midst of a reckoning over its history of racism and discrimination. Protests over police brutality have filled streets and public spaces left empty for much of this year because of the coronavirus.

Bedell noted several City Council members have “stood up in the recent weeks to say Black Lives Matter.”

“I commend them for doing so, but as the adage goes, actions speak louder than words,” Bedell said. “If Black Lives Matter to you, then so should the schools south of the river.”

Mayor Quinton Lucas said he had “always thought our incentive policy ties back to systemic racism.” He said he hadn’t “been sold” on the incentive requests.

“I’m not inclined to favor the BlueScope project unless the school district and the entity get to some level of agreement,” Lucas said.

He said a combined 33-year tax abatement is “too long.”

“So much of the theory of incentives is … it is an incentive to develop others around you,” Lucas said. “Well, if we’re actually just perpetuating then in perpetuity, then it seems as if we’re not actually even hitting our fundamental policy goal.”

The deal is also reminiscent of the widely criticized economic development border war waged for years by Kansas and Missouri. The two states often used substantial tax incentive packages to poach companies and jobs from each other, moving employees across the state line without necessarily creating any new jobs.

The two states agreed last year to halt that practice, but companies have continued to get state incentives despite the truce by saying they were grandfathered into the agreement. Kansas Commerce Secretary David Toland said the state began talks with BlueScope long before the ceasefire.

Last year, the city offered $35 million in local incentives to Waddell & Reed, an Overland Park-based financial services firm, to move downtown. The company will also receive up to $62 million in state incentives. Its headquarters is under construction at 14th Street and Baltimore Avenue.

As part of BlueScope’s original incentive package, it received a discount on its employees’ parking in a nearby city garage. Part of the proposed extension is providing that parking for free. Combined with the proposed property tax abatement and state incentives, the company would receive about $14 million to stay put.

The City Council’s Neighborhood Planning and Development Committee voted 3-1 last week to send the parking deal to the full council — without recommendation.

It’s expected to come up at the full council meeting Thursday.

The Planned Industrial Expansion Authority discussed the property tax abatement last week but tabled it.

At last week’s council committee discussion, KCPS’ director of real estate and planning services, Shannon Jaax, said the promise of the incentives was that at the end of the 20 years, the company would start paying its “fair share” of taxes and provide more tax revenue to the city and taxing jurisdictions, including the school district.

“What we have instead is a company with $1 billion in annual net profit that is shopping for another incentive package, pitting Kansas against Kansas City,” Jaax said.

Bedell’s letter also took aim at the difference between development projects south of the river, which often redirect property taxes away from schools and libraries, and those in the Northland, which are more likely to spare schools.

In supporting the deal in committee, Councilwoman Heather Hall, 1st District, acknowledged that.

“Yeah, we do do (tax incentives) differently in the Northland,” Hall said. “And we always work with our school districts and all the taxing jurisdictions to make sure everybody is in agreement before we do it, but sometimes they work differently in different parts of the city because of different needs.”

In 2019, more than half the students in the Kansas City district were Black, according to the Missouri education department. By comparison, the North Kansas City school district’s student population was more than 55% white last year.

Bedell said: “Financial decisions can be moral ones and this request is a violent economic practice that would never be inflicted on the majority-white school districts in the Northland.”

BlueScope did not immediately return a request for comment.

The Star’s Kevin Hardy contributed to this report.

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©2020 The Kansas City Star (Kansas City, Mo.)

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