Finance & Business World

KANSAS CITY, Kan. • Missouri and Kansas are divided here only by the yellow stripe of State Line Road. It’s a single community, but the division is sharp when it comes to the cutthroat business of economic development.

The two states have burned through hundreds of millions of dollars to lure businesses to one side of that stripe or the other in the pursuit of jobs. Yet sometimes, those jobs merely have shifted to different buildings across the border with little real growth for the region’s economy.

Amid rising competition nationwide for “job creation,” Missouri and Kansas have committed more than $750 million in tax incentives and bonds in the last five years for nearly 200 businesses to locate or expand in the Kansas City area, according to state records obtained by The Associated Press. The crosstown battle also has drawn in millions more dollars in incentives from cities and suburbs.

The two states sacrificed revenue and incurred debt even during tough budget times that forced cuts to public school districts, universities and social services. Kansas and Missouri each had projected budget shortfalls of around $500 million last year. Calls for a truce in the business border war have been growing from local business leaders, some lawmakers and from former officials who once doled out the incentives.

“You get to a point where you have to say we are wasting taxpayer money,” said Greg Steinhoff, Missouri’s economic development chief from 2005 to 2008.

Yet a truce appears unlikely anytime soon — in part because the states are still scrambling for every job.

“Politically, it sounds good — can’t we all get along? — but competition’s competition,” said Gary Sherrer, who was Kansas lieutenant governor and commerce secretary about a decade ago.

About three-fourths of the $750 million of tax breaks and bonding approved in the last five years has come from Kansas, though Missouri has given incentives — in smaller amounts — to about twice as many businesses to keep them from leaving or to attract new firms.

In part because of the glimmer of its big-ticket projects, Kansas appears to be winning the business border battle.

The spoils of success are highly visible in the sprawling Village West district at the junction of Interstates 70 and 435. Anchoring the development is the Kansas Speedway, the NASCAR track that the state landed more than a decade ago with a $150 million package of bonds, tax breaks and infrastructure aid after Missouri’s $42 million incentive package failed in the Legislature credit report. The Kansas incentives included bonds with a 30-year repayment life.

Nearby is a new, 18,500-seat stadium for the Major League Soccer team Sporting Kansas City, built with $145 million in bonds after Kansas lured the franchise away from the Missouri side. Also in the neighborhood is a new office complex for Cerner Corp., a medical computer systems firm that employs about 5,500 people on the Missouri side and planned to expand. Missouri and Kansas offered nearly equal incentives of about $85 million for Cerner’s expansion, which is projected to employ an additional 4,000.

Kansas’ willingness to issue bonds backed by tax revenue, which Missouri couldn’t match, helped cinch the deal, said Marc Naughton, Cerner’s executive vice president and chief financial officer.

Kansas Gov. Sam Brownback, a Republican, was unapologetic about giving away public revenue. “You’ve got to go out to compete and hustle,” Brownback said.

Missouri Gov. Jay Nixon, a Democrat, appears only slightly more open to a truce. “I’m going to compete for jobs for our state, I’m not backing up on that,” Nixon said.

In Kansas City, the most recent crosstown defection came in April, when Teva Neuroscience Inc. announced that it would move its headquarters — and 400 jobs — from Kansas City to a site about four miles away in suburban Overland Park, Kan. Records provided to the AP show that Missouri offered $11 million in incentives to try to keep Teva. Kansas did not disclose how much it offered, but the Kansas City Star reported the package totaled nearly $31 million.

Some firms have bounced back and forth across the state line. Restaurant chain Applebee’s International moved its headquarters from Kansas City to a Kansas suburb in 1993. Last year, it was lured back to Missouri ith nearly $10 million in state incentives plus additional local aid.

A few months later, movie theater operator AMC Entertainment Inc. announced it was moving to the suburb of Leawood, Kan. Missouri offered $4.2 million in incentives to keep the company, according to state records. Kansas declined to disclose its incentives, but media reports have valued the total aid at $47 million.

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An official says remains of several victims of a jetliner crash on the slopes of an Indonesian volcano have been airlifted to the capital for identification.

Search teams who climbed the near-vertical volcano face have been struggling to retrieve the bodies of the 45 people who were aboard the Russian-made Sukhoi Superjet-100 that crashed during a demonstration flight for potential buyers.

Search and rescue agency spokesman Gagah Prakoso said a thick fog that had shrouded the slopes finally lifted Saturday, allowing helicopters to land.

Prakoso says the aircraft brought four body bags with remains to Jakarta.

There is still no sign of the black box recorder that might explain why the jetliner crashed about halfway into Wednesday’s 50-minute flight.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

MOUNT SALAK, Indonesia (AP) _ Search teams who scaled a volcano’s steep slopes found at least 12 bodies Friday near the wreckage of a Russian-made jetliner that crashed in Indonesia during a demonstration flight for potential buyers, an official said.

All 45 aboard the Sukhoi Superjet-100 that crashed Wednesday are feared dead.

“Today we have discovered 12 victims, all dead,” Rear Marshal Daryatmo, head of the national search and rescue agency, told reporters Friday.

Many of the bodies found Friday had been torn apart in the crash, said Lt. Col. Oni Junianto of the Indonesian marines, whose search team found eight corpses before returning to base camp further down the mountain.

“We see many other victims … but the ravines and steep cliffs prevent us from reaching them,” Junianto said in a statement.

Local television showed what appeared to be the plane’s tail with the blue-and-white Sukhoi logo, part of a wing and bits of twisted metal scattered along the slope like confetti.

About 85 soldiers, police and volunteers used ropes to climb up to the wreckage through jungle on the near-vertical slopes of Mount Salak, search and rescue agency spokesman Gagah Prakoso said by telephone.

Thick fog and the mountain’s jagged slopes kept helicopters from landing at the crash site, so the bodies remained there along with the search teams.

The soldiers, police and volunteers fashioned a landing area by hacking down trees, but Prakoso said the helicopters were recalled to Jakarta late Friday because the fog limited visibility to only about 5 meters (15 feet).

The jetliner slammed into the dormant volcano at nearly 800 kph (480 mph) during drizzle. Russian and French investigators have joined the investigation into the cause.

The Superjet-100 is Russia’s first new model of passenger jet since the fall of the Soviet Union two decades ago and was intended to help resurrect its aerospace industry.

The ill-fated Superjet was carrying representatives from local airlines and journalists on what was supposed to be a 50-minute demonstration flight. Just 21 minutes after takeoff from a Jakarta airfield, the Russian pilot and co-pilot asked for permission to drop from 10,000 feet to 6,000 feet (3,000 meters to 1,800 meters). They gave no explanation, disappearing from the radar immediately afterward.

It was not clear why the crew asked to shift course, especially since they were so close to the 7,000-foot (2,200-meter) volcano, or whether they got an OK, officials have said.

Communication tapes will be reviewed as part of the investigation, but it’s unlikely they will be released to the public any time soon.

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ST. CHARLES COUNTY • Longtime banker and civic leader Darrell B. Roegner, who died last November, will be honored posthumously at the annual awards banquet of Partners for Progress of Greater St. Charles.

Roegner was chosen by the civic group for this year’s Lifetime of Progress award in recognition of his business, civic and charitable activities over the years.

At different times he chaired the boards of Partners for Progress, the Salvation Army of St. Charles County and the St. Charles Community College Foundation. 

He also helped organize countywide campaigns to pass and continue a sales tax that helps pay for road construction. He also was on the boards of Barnes-Jewish Hospital St. Peters, the Tri-County YMCA and Habitat for Humanity.

The banquet will be at 6:30 p.m. May 4 at the St. Charles Convention Center in St. Charles.

Among other honorees:

* Education Progress Award:  the River City Robots, which works on robotics and technology with children and teenagers.

* Health Progress Award:  Barnes-Jewish Hospital St. Peters and Progress West Healthcare Center for its anti-obesity program.

* Quality of Place Progress Award:  Team Target, a group of volunteers from Target stores who played a major role in the MO’ Cowbell Half Marathon put on by the partners group last fall.

* Leadership Progress Award:  Shared by St. Charles County government and city governments across the county for working together to secure state and federal funding for completion of the Page Avenue extension.

* Economy Progress Award:  General Motors’ Wentzville plant for its expansion plan.

Banquet tickets are $100 per person.  For more information, call 636-441-6880, extension 254.

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House Republicans resurrected the specter of Medicare rationing Thursday in an election-year vote to repeal cost controls in President Barack Obama’s health care overhaul.

In the GOP crosshairs is a board that has yet to be named but would be empowered to force cuts to drug companies, insurers and other service providers if Medicare spending balloons. A Republican plan announced this week, laying down a dividing line between the parties, also would limit Medicare cost increases, but it would rely on competition among private insurance plans.

GOP lawmakers are hoping their symbolic 223-181 vote on Thursday to repeal the Independent Payment Advisory Board will help persuade seniors that Republicans, not Democrats, are the best stewards of Medicare.

The bill is likely to hit a dead end in the Senate. House Republicans all but guaranteed that when they paired the board repeal with caps on medical malpractice awards, which most Democrats oppose. The White House has issued a veto threat.

If it all sounds like a debate among Washington insiders, Rep. Jack Kingston, R-Ga., says he will have no trouble explaining to constituents why he voted to repeal the cost-cutting board.

“Do you remember death panels?” said Kingston, referring to the debunked accusation by former GOP vice presidential candidate Sarah Palin that Obama’s health care law would allow the government to withhold life-saving care from the elderly.

“It’s not necessarily a death panel, but it is a rationing panel and rationing does lead to scarcity for some,” he added. “Who’s going to get the needed treatment, an 85-year-old or the 40-year-old with children?”

The health care law explicitly bars the board from rationing care, shifting costs to Medicare recipients or cutting their benefits. But critics say squeezing service providers will stifle medical innovation, achieving a similar result.

Many House Democrats also oppose the board _ dubbed IPAB for its initials _ but for different reasons. They feel it diminishes the role of Congress. But Republicans made it difficult to attract Democratic votes for repeal by adding other politically charged provisions to their bill.

“Republicans don’t want to see IPAB repealed now because they want to run against it,” said Scott Gottlieb, a former senior FDA official in the George W. Bush administration. “I think there will be an effort to repeal it after the election.”

The House vote came a day before the second anniversary of the health care law, and just ahead of next week’s Supreme Court deliberations on its constitutionality. Politics aside, the vote highlighted major differences between the parties on Medicare, the giant health care program for nearly 50 million seniors and disabled people.

All sides agree that Medicare as currently structured will not be able to pay its bills in the long run. The main options to control costs are unpalatable: tax increases, benefit cuts and cost shifts to middle- and upper-income retirees.

Most Republicans and Democrats also agree now that there has to be a limit on future Medicare increases payday loans no teletrack. The question is how.

Republicans would convert Medicare into a system dominated by private health insurance plans closely regulated by the government. Future retirees would get a fixed payment to buy either private coverage or sign up for a new government plan modeled on traditional Medicare. The plan counts on competition among the plans to help keep costs in check, but the annual government payment would also be limited by tying it to economic growth.

That’s the basic approach embodied in the new budget released this week by Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, and seconded by GOP presidential candidate Mitt Romney.

Theoretically, such a system could help rein in Medicare cost increases, economists say. The question is whether it would be politically acceptable to seniors and future generations, with polls indicating that the public is resistant to major changes. Recognizing the sensitivity, Ryan’s plan would exempt anyone now 55 or older.

Obama and the Democrats would take a different approach to cost control, and that’s where the IPAB board comes in.

IPAB (pronounced EYE-pab) has the power to force payment cuts to service providers if costs rise beyond certain levels and Congress fails to substitute its own plan for savings. But the law explicitly forbids the board from rationing care, shifting costs to seniors, or cutting their benefits. The Democrats would put the burden on service providers, such as drug companies, insurers and eventually, hospitals.

Obama has yet to name anyone to the panel, whose 15 members would have to be confirmed by the Senate. Government economists are forecasting a period of manageable Medicare costs, meaning that IPAB’s services may not be needed until sometime around the end of the decade.

Democrats say they’d rather defend IPAB before older voters _ and attack the GOP’s Medicare overhaul.

“The rationing is in the Republican plan,” said Rep. Chris Van Hollen, D-Md., the ranking Democrat on the budget committee. “What they do is allow insurance companies to ration people’s health care.”

The nonpartisan Congressional Budget Office said this week that both Obama’s health care law and the new Ryan plan could potentially create access-to-care problems for Medicare recipients. The CBO cautioned that those could turn out to be greater under the GOP approach, which would squeeze Medicare growth harder. Republicans say that won’t happen because competition among health plans will keep costs down by reducing waste.

The House bill is likely to hit a dead end in the Senate. The White House issued a veto threat against it earlier this week. House Republicans all but guaranteed that when they paired by IPAB repeal with caps on medical malpractice awards, which most Democrats oppose.

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Germany’s government says it is speeding up its plans to cut its borrowing as it works to balance its budget by 2016.

A senior official said Friday that the federal government will reduce its new borrowing between 2013 and 2016 to euro45.6 billion ($59.5 billion) from the previously planned euro73 billion.

A robust economy has helped increase Germany’s tax intake, allowing the country to run up less new debt. Germany plans to balance its budget in 2016, when it expects to borrow only euro1.1 billion.

Germany has pushed hard for the other 16 countries that use the euro as their currency to get their public finances in order as the continent recovers from the debt crisis.

The official briefed reporters on condition of anonymity because the plan hasn’t officially been released.

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White House Chief of Staff Jack Lew said hundreds of billions of dollars in spending for roads and bridges, education and manufacturing are necessary to keep the U.S. economy growing.

Much work remains to achieve maximum U.S. employment and stable prices, and the central bank will do its part, an influential Federal Reserve official said on Friday.

The pace of the U.S. economic recovery remains “sluggish” and is likely to slow somewhat this year, New York Fed President William Dudley said in prepared remarks. Unemployment is likely to remain “unacceptably high” for some time, he added, while inflation is likely to be below the Fed’s new 2-percent objective for several years.

“Clearly, much work remains to achieve the Fed’s dual mandate of maximum sustainable employment in the context of price stability,” Dudley said in a briefing to media.

The Fed, which has kept interest rates near zero for more than three years, “has done and will continue to do its part in supporting the recovery - but it is not all-powerful,” he added.

“Other complementary policy actions in housing, fiscal policy and structural adjustment or rebalancing of the economy will be essential if we are to achieve the best available recovery free business cards.”

Besides the low rates, the Fed has also bought $2.3 trillion in long-term securities in an unprecedented drive to spur growth and revive the economy after the worst recession in decades. Yet the recovery has been slow and the outlook issued by the Fed this week was bleak, leading the central bank to say it expects to keep rates “exceptionally low” at least through late 2014.

Dudley, a permanent voter on the Fed’s policy-setting committee, added that he expects “moderate” growth this year, and warned the risks are skewed to the downside in part because of Europe’s debt crisis. The economy continues to operate with “significant excess slack,” he said.

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World stock markets rose Friday, driven higher by a successful bond issue in Europe that eased worries over the continent’s sovereign debt crisis.

Benchmark oil rose to nearly $100 per barrel and the dollar fell against the euro and the yen.

European shares rose in early trading. Britain’s FTSE 100 advanced 0.6 percent to 5,694.38. Germany’s DAX gained 0.7 percent to 6,221.96 and the CAC-40 in Paris gained 0.9 percent 3,229.17. Wall Street, too, was set to open higher, with Dow Jones industrial futures up 0.1 percent to 12,424. S&P 500 futures rose 0.1 percent at 1,293.

Asian shares were mostly higher. Japan’s Nikkei 225 index rose 1.4 percent to close at 8,500.02 and South Korea’s Kospi index moved 0.6 percent at 1,875.68. Hong Kong’s Hang Seng index vacillated before closing in positive territory, up 0.6 percent to 19,204.42.

Australia’s S&P ASX 200 was 0.4 percent higher at 4,195.90. Benchmarks in Singapore, Indonesia, India and Malaysia also rose.

But mainland Chinese shares fell as investors continued to cash in on recent gains. The benchmark Shanghai Composite Index lost 1.3 percent to 2,244.58, while the Shenzhen Composite Index dropped 3.5 percent to 845.93.

“The market will be volatile for the next one or two weeks after this correction, since there is just no support for the market to rise in the long term,” said Xu Xiaoyu, an analyst at China Investment Securities, based in Beijing.

PetroChina, the country’s biggest oil and gas company and the Shanghai benchmark’s biggest component, gained 1.4 percent as oil prices rose to near $100 a barrel in Asia on Friday on worries over supply tightness.

Elsewhere, raw materials and industrial companies advanced, following their U.S. counterparts higher. Japanese heavy equipment maker Komatsu Ltd guaranteed payday loans. jumped 4.1 percent and Hitachi Construction Machinery gained 3.8 percent.

Energy Resources of Australia soared 6 percent and Paladin Energy Ltd., an Australian uranium miner, gained 3.1 percent. But shares in Australia’s QBE Insurance group dropped 3.1 percent, after the company warned its earnings could halve following a spate of natural disasters in 2011.

South Korean tech shares advanced, with Samsung Electronics Co., the country’s largest company, up 1.8 percent and Hynix Semiconductor, a global leader in chip-making, surging 4.1 percent. Its largest banking group, Woori Financial Holdings Co., jumped 3.9 percent.

Strong bond auctions in Italy and Spain on Thursday pushed stocks higher. Italy was able to sell one-year bonds at a rate of just 2.735 percent, less than half the 5.95 percent rate it had to pay last month. Spain was able to raise double the amount of money it had sought to raise in its own bond sale as demand for its debt was strong.

Investors have been worried that Italy and Spain might get dragged into the region’s debt crisis. Greece, Ireland and Portugal have been forced to get relief from their lenders after their borrowing costs spiked to levels the countries could no longer afford.

Benchmark oil for February delivery rose 78 cents to $99.88 per barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled $2 to finish at $99.10 per barrel in New York on Thursday.

In currency trading, the euro rose to $1.2843 from $1.2827 late Thursday in New York. The dollar was slightly down at 76.73 yen from 76.76 yen.

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So the U.S. economy added hundreds of thousands of jobs last month and everything is fantastic, right?

Well, not exactly. More than 40,000 of those jobs were couriers and messengers, which were in demand during the holidays because of the increased focus on online shopping rather than retail. But these jobs tend to be temporary seasonal hires and not permanent additions.

"People are happy to get those jobs for the time they have them, but come January, they’re out looking for jobs again," said Dean Baker, co-director of the Center for Economic and Policy Research.

The U.S. Labor Department reported that the economy added 200,000 jobs, which was stronger than economists expected, and the unemployment rate dipped to 8.5%.

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But spokeswomen for FedEx (, Fortune 500) and UPS (, Fortune 500) confirmed that they increased temporary hiring during the 2011 holiday season even more than the year before. However, many of those jobs have already evaporated.

"The hiring boost this holiday season was greater than the prior holiday season," said Kara Ross of UPS, noting that her company hired 55,000 temporary workers for the 2011 holiday season, an increase of 5,000 from the year before credit reports free.

Ross said that many of those new hires were drivers, driver helpers, loaders and unloaders. Many of them won’t remain on the payrolls after the holiday season, she said, though the level of attrition is yet to be determined.

"It just depends on our volume loads," she said. "Some of them we might keep on; some of them we might not."

Carla Boyd of FedEx said her company hired 20,000 temporary seasonal workers from October to December, an increase of 17,000 from the prior holiday season.

Unemployment rate, state by state

"There’s an incredible holiday surge," said Boyd. "We had our busiest day in history on Dec. 12."

On that day, FedEx had 17 million shipments, compared to the year-ago holiday peak of 15.6 million. But the annual average is 8.5 million, so FedEx doesn’t need that many workers year-round.

"The problem is that you have a lot of reporters touting this as a really strong report, and if that creates a view among policy makers that the economy is on the mend, then that undermines the need to do anything," said Baker. 

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