Budget Cuts Impact Economic Development

In Incentives and Loans, News, Redevelopment by edckcadmin

This past year saw several state-level budget cuts that have a significant effect on local economic development, and federal tax cuts currently under consideration that would do the same.

Earlier this year the Missouri Housing Development Commission did not issue any low-income tax credits. State low-income tax credits have been a crucial source of gap funding for low income and senior housing development in Kansas City’s most impoverished neighborhoods. Over the last decade, 28 affordable housing developments totaling 1,846 housing units would not have been built without low-income tax credits. St. Michael’s apartment complex, where 117 units were built for our country’s veterans, is just one example of how the tax credits have helped drive development.

Numerous buildings in downtown have used historic tax credits including the Pickwick Hotel at 933 McGee that transformed a sidelined bus station into 260 apartments as a $66 million investment and the pending renovation of Kemper Arena in the West Bottoms, a $39 million renovation.

Additionally, the Missouri Technology Corporation, a public-private partnership that promotes entrepreneurship for new and emerging high-tech companies, saw its budget cut from $23 million to $3.5 million this year. EDCKC relies on MTC funding for a substantial portion of funding for early stage business grants through the LaunchKC program, EDCKC’s joint initiative with the Downtown Council that grows start-up businesses.

Lastly, federal tax cuts now under consideration would eliminate Private Activity Bonds (PABs) and Advanced Refunding Bonds (ARBs), tools that have been and continue to be essential to critical infrastructure projects in this city, including the new single terminal airport project.  “PABs are essential to a number of City infrastructure projects and expected to be a significant tool in financing the new KCI airport approved by voters earlier this month,” Mayor James said. “Elimination of PABs could throw the project’s future into question.”

We hope you will join us in encouraging the state and federal government to restore the funding to these vital efforts that are vital to our local economy.