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Sales tax increase proposed to fund a Jackson County medical research institute

Backers predict it will create jobs and add dollars for the medical safety net
By Mike Sherry for KHI News Service, Aug. 8, 2013

KANSAS CITY, Mo. – Jackson County would become a medical research and development hotbed that could generate millions of dollars in economic development and rival some of the country’s most renowned scientific regions, according to backers of a proposal to raise the local sales tax a half cent to help underwrite the initiative.

Scheduled for formal unveiling later today by key supporters, the plan calls for creating the Jackson County Institute for Translational Medicine on Hospital Hill, perhaps in a newly constructed building.

The institute’s focus would be on commercializing pharmaceuticals, diagnostics, devices, and other health-care-related intellectual property, with some of the potential proceeds earmarked for local needs like indigent health care.

“I truly believe the institute will be transformative for the region,” said Dr. Wayne Carter, chief executive of the Kansas City Area Life Sciences Institute (KCALSI).

The linchpin of the plan is gaining voter approval of the sales tax increase, which organizers hope to have on the ballot in November. Proponents estimate the tax, which would sunset in 20 years under the plan, would generate about $40 million annually.

The deadline for placing the question on the ballot is Aug. 27, and the expectation is that the Jackson County Legislature will begin considering the proposal at its Monday meeting.

People know Rochester, Minn., for the Mayo Clinic and North Carolina has its Research Triangle, said Pete Levi, the former president The Greater Kansas City Chamber of Commerce. “This would be our form of that,” said Levi, who is now head of the Kansas City Region Public Policy Group at the Polsinelli law firm.

The institute would be a partnership between KCALSI, Children’s Mercy Hospitals & Clinics, Saint Luke’s Health System, and the University of Missouri-Kansas City through its schools of medicine, dentistry, pharmacy, and nursing and health studies.

Its organizational structure would include a newly hired scientific director and an Oversight & Transparency Board to maintain watch over the finances. A separate foundation would administer the funds earmarked for community needs – with the money coming from 20 percent of the net revenue from the commercialized products.

A study commissioned by KCALSI concluded that the institute could have an economic impact of more than $600 million during its first decade as the result of job creation and drawing ancillary businesses.

The expectation is that the institute would have nine primary investigators and nearly 240 staff members within the first 10 years of operation.

Under the plan, Children’s Mercy would get half of the tax revenue generated each year, since it has more research underway than the other partners, according to Levi. Saint Luke’s and UMKC would each get 20 percent.

The remaining 10 percent would go toward “research-related economic development initiatives,” such as helping Jackson County residents train for health care and research jobs, according to a plan summary document.

Carter said the origins of the idea date back to 2007, when KCALSI’s Scientific Advisory Committee noted the gap locally between basic science and clinical medicine.

The institute, he said, could link those two disciplines while accelerating development of discoveries.

Initial polling of likely voters appeared favorable, said David Westbrook, senior vice president for strategy and innovation at Children’s Mercy.

The institutions involved are well trusted by the public, he said.

Levi said that behind-the-scenes planning and discussion elevated the institute proposal to be part of the Big 5 ideas initiative launched two years ago by The Greater Kansas City Chamber of Commerce.

The chamber plan calls for the effort to build upon a $20 million National Institutes of Health grant shared by the University of Kansas Medical Center and other regional partners.

If passed, the Jackson County tax would be similar to one approved by voters across the state line in Johnson County, Kan. in 2008.

It was then that voters approved a 1/8-cent sales tax to fund and establish the Johnson County Education Research Triangle (JCERT).

The tax has generated approximately $60 million to help fund the three legs of the triangle: The University of Kansas Edwards Campus in Overland Park, The Kansas State University Innovation Campus in Olathe, and the KU Clinical Research Center in Fairway, which includes space for clinical trials through the KU Cancer Center.

Initiation of the campaign for the county-wide sales tax in Jackson County comes five months after a successful effort in Kansas City, Mo., to renew a 22-cent health levy dedicated to serving the uninsured and the underinsured.

The sales tax in Jackson County now stands at 1.25 percent, which helps fund the Truman Sports Complex, the Kansas City Zoo, and an anti-drug effort.

According to data from the Missouri Department of Revenue, Jackson County’s current sales tax rate puts it around the lower quartile among the state’s 114 counties. (Rates on the department’s website include state sales tax as well.)

But a half-cent increase would make Jackson County’s rate the highest among Missouri counties in the metropolitan area. Clay County has a 1 percent rate, and Platte County has a 1.375 percent rate.

Overland Park attorney Greg Musil represents Johnson County Community College on the JCERT board.
He said the JCERT sales tax has lived up to the vision sold to voters by funding building projects at each of the three locations. The emphasis now, Musil said, is to concentrate on programming in the facilities.

As Johnson County has demonstrated, Musil said, voters can be persuaded to approve a sales tax for education and research. He said campaign leaders did a good job of being open and specific about the goals and objectives of the tax.

“It can clearly be done,” he said, “if it’s done right.”

The Health Care Foundation of Greater Kansas City is proud to partner with the KHI News Service to provide weekly health stories about health and policy issues impacting the greater Kansas City region. Because it is committed to objective coverage, HCF exercises no editorial control over the content. The KHI News Service is an editorially independent initiative of the Kansas Health Institute.


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