An insurance marketing company is receiving $5 million in incentives to move one mile from Kansas City, Mo., across the border to Lenexa, Kan., the latest in a series of business moves that has raised questions about the economic impact on both states.
SelectQuote Senior Insurance Services plans to consolidate its Kansas City-area call center operations by moving about 150 employees with an average salary of $55,000 if a lease is finalized, The Kansas City Star reported. The company already has a call center in Leawood.
The incentive package also calls for 290 full-time jobs to be created over five years.
“I’m pleased that Kansas can offer SelectQuote Senior a business environment that will enable it to bring 290 good jobs to the state over a five-year period,” Kansas Commerce Secretary Pat George said in a statement. “Having a respected company such as SelectQuote invest in our state is a great thing for Kansans as we continue to build a strong economic future.”
However, Kansas City civic leader Bill Hall, president of the Hall Family Foundation, said it’s another business move that has cost the states tens of millions of dollars in lost tax revenue without helping the overall economy.
“This is just a continuation of a policy that’s damaging taxpayers who have to pay for those who aren’t paying,” Hall said. “It’s another example of companies that are moving to take advantage of this situation. Those of us who don’t move are paying for those who do.”
Most of the incentive package comes from a Kansas program that allows employers bringing new jobs to the state to keep 95 percent of their employees’ state income taxes for up to five to seven years. Missouri has a similar incentive program called Missouri Quality Jobs.
In April 2011, Hall and 16 other top executives wrote a letter to Govs. Sam Brownback of Kansas and Jay Nixon of Missouri that called for an end to the business poaching fight.
Since PEAK began in 2009, Hall estimated Kansas has used the incentive program to forgive $131 million in state income taxes for employees moving from Jackson County to Kansas suburbs. At the same time, Missouri forgave about $60 million in income taxes to attract jobs to Jackson County.
During that period, Hall estimated that Kansas has attracted 3,030 jobs from Missouri and Missouri has attracted 2,514 from Kansas, leaving Kansas with net benefit of 516 jobs. He estimates for each of those new jobs, Kansas had forgiven $370,000 in income taxes, money that civic leaders believe could be used for education and other needs.
Andrew Martin, director of finance for the local SelectQuote operations, said the company needs more space because it has grown from two employees two years ago to more than 150 and he expects that growth to continue.
The two local operations are part of San Francisco-based SelectQuote Life, which represents insurance companies including Prudential, ING Financial and Genworth Financial.