Kansas City mayors, past and present, call for renewal of the earnings tax

A lot of local Kansas City history came together Wednesday for the final campaign event seeking renewal of the 1 percent earnings tax.

Mayor Sly James was joined by four former mayors — Charles Wheeler, Dick Berkley, Emanuel Cleaver and Kay Barnes — in urging support for the tax renewal in the April 5 election.

The 1 percent earnings and profits tax is paid by workers who live in Kansas City and St. Louis and by non-residents who work within city limits. Nearly 50 percent of the tax is paid by non-residents, but they don’t get a vote on renewal because the election is only for voters registered within city limits.

State law requires that it be renewed every five years. If Kansas City voters ever rejected it, the tax would phase out over 10 years and could not be reimplemented.

In Kansas City, the tax is projected to generate $240 million in 2016-17, or 40 percent of the general fund for basic services such as police, fire, ambulance, trash collection and street maintenance.

Wheeler served from 1971 to 1979 and said city services benefited greatly from the 1 percent tax, which was increased from a half percent in 1963 to a full percent in 1970.

Berkley, who served from 1979 to 1991, recalled that before the city first imposed the earnings tax, “we were in pretty bad shape,” having trouble maintaining an adequate police and fire force.

Cleaver, who served from 1991 to 1999, said the earnings tax “is the price we pay for living in Missouri’s premier city.”

Barnes, who served from 1999 to 2007, said it was “absolutely critical to the future of this city.”

Mark Funkhouser, who served from 2007 to 2011, moved to Washington, D.C., after he lost a bid for a second term and was the only living former mayor not at the campaign event.

The pro-tax campaign is spending about $1.1 million and has had workers go door to door to homes of 33,000 frequent voters to drum up support.

Opposition to the tax has largely been funded with $2 million from St. Louis multimillionaire Rex Sinquefield, who believes the tax is a disincentive for businesses to locate in Kansas City and St. Louis.

Opposition campaign spokesman Woody Cozad said the campaign in Kansas City has largely been in the form of mailers and phone calls and will be far outspent by the pro side.

Cozad argues the earnings tax hurts poor and middle class residents while the city doles out too many tax incentives to wealthy corporations.

He also doesn’t buy that the city can’t cut its budget gradually over 10 years.

“It is possible to cut spending and cut the bureaucracy out of the way and get the job done better,” he said.

A grass-roots group called Citizens for Responsible Government has also raised several thousand dollars and sent a mailer opposing the tax.

Group spokeman Dan Coffey also opposes many of the city’s economic development deals and said the city needs to rethink how it funds services.

“Our government is fat, bloated,” he said. “The fact is that we would have 10 years to reconstruct everything.”

But James and others say losing 40 percent of the general fund would be devastating, requiring layoffs of 800 police officers and 500 firefighters over 10 years. They say it would necessitate doubling the city sales tax or tripling the property tax. For the owner of a $200,000 home, that would be a property tax increase of $1,600 per year.

Meanwhile, the average Kansas City earnings tax paid by individual wage earners is about $340. The average tax paid on net business profits is about $2,050.

This story was originally published March 30, 2016 at 3:40 PM with the headline "Kansas City mayors, past and present, call for renewal of the earnings tax."