City of Kansas City, MO
Kansas City historically had provided substantial incentives to encourage economic development, job creation, housing and business retention. However, the City’s concerns about the potential cumulative impacts of incentives, revenue diversions, and tax abatements on the City’s General Fund revenues streams and its ability to pay for increased operating costs prompted a study of its incentives, economic development policies, and an assessment of their impact on the City’s public revenues and expenditures.
EPS assessed comparable community’s magnitude of debt obligations, incentives policies and practices, and worked with City staff to develop a fiscal model to be used in assessing the fiscal impacts of the use of any of the City’s economic development tools and tax incentives on municipal revenue and expenditures. A series of future scenarios were developed and the model was used to evaluate the short- and long-term effects of incentives, abatements, and debt service guarantees.
Based on the findings, the consulting team recommended a series of alternative policies to guide the City’s strategic investment in future projects.