Here come the misleading ads against Kansas City’s earnings tax

Get ready for a deluge of negative — and misleading — ads in mailboxes and on televisions regarding Kansas City’s bid to renew the 1 percent earnings tax on April 5.

After all, the “Vote No on the E-Tax” campaign has just a few more weeks to spend the mega-dollars it’s getting from St. Louis multimillionaire Rex Sinquefield. He’s almost single-handedly funding bids to kill the tax in Kansas City and St. Louis.

The Star has endorsed extension of the earnings tax for five more years, the longest period possible under a restrictive and unneeded law that Sinquefield bankrolled at the statewide ballot box in 2010.

In Kansas City, the tax this coming year will generate $240 million, most of it for public safety. The tax is imposed on the earnings of people who live or work in the city. It enables non-residents to help pay for the public services they use in the city. Notably, the tax is not charged on pensions or Social Security.

Here are the most recent developments in the earnings tax debate worth the public’s attention:

▪ “Tell the mayor no more special deals for the wealthy,” warns a new mailer from the “Vote No” team.

Featuring a large photo of Mayor Sly James, the ad says he “finds money for wasteful, big business pet projects.”

Only two are featured in other photos: A proposed extension of the downtown streetcar line and potential changes to Kansas City International Airport, a “One billion-dollar decision.”

However, both projects have zip to do with the earnings tax.

Moreover, Kansas City voters in 2014 rejected plans to establish a larger streetcar funding district.

And almost all the money to pay for KCI upgrades will come from higher fees on flights, parking and other services provided at the airport — not from higher taxes and certainly not from the earnings tax. Finally, local voters will get to weigh in on the airport improvements if and when the city asks to issue bonds for them.

▪ The Show-Me Institute, co-founded by Sinquefield, is another detractor of the earnings tax.

Unfortunately, the free-markets think tank still hasn’t figured out a coherent argument to present to Kansas Citians on what would happen if the $240 million disappeared over 10 years, as the 2010 state law mandates if the renewal fails next month.

Patrick Tuohey, western Missouri field manager for the institute, says in a video on The Star’s website that the earnings tax campaign is leading to meaningful discussions about the city’s tax policies. We agree: That’s a good thing.

But Tuohey — as other critics also have been unable to do — doesn’t give one example of what would be required at City Hall to replace the earnings tax funds.

That’s because the city would have to try to raise property, sales and utility taxes solely on Kansas Citians — not non-residents — if the tax is rejected.

Opponents don’t want to admit that. It’s a lot easier to decry any tax and call for “trimming the fat” and “being more efficient” without giving strong examples of how to actually deal with a potential shortfall of $240 million in the city budget.

Finally, Tuohey also claims “wealthy developers” are gaining from the tax by investing in “the nice part of town.”

Hmm. Cerner is the biggest recipient of a City Hall-approved subsidy plan in which the company will keep earnings tax revenues created by its employees to help it build a $4.5 billion campus in south Kansas City. In return, Cerner promises to build a large, new office campus and create up to 16,000 jobs where Bannister Mall once stood. The long-blighted redevelopment site itself does not qualify as a “nice part of town.”

Ditto for the Power & Light District downtown, where earnings tax revenues have helped create an entertainment district credited with helping revive the long-blighted heart of the city.

▪ Kansas City’s firefighters and police officers need to be more engaged in passing a tax that largely benefits them, keeping their departments fully staffed.

Instead, leaders of groups that represent the firefighters and cops are essentially trying to hold the city’s taxpayers hostage, demanding better pay before they kick in to help the earnings tax pass.

Not surprisingly, the fire union is the worst offender. The well-financed political arm of the union contributed about $150,000 to help renew the earnings tax first time around in 2011. This year, as of Thursday, the union had given nothing to the “yes” campaign and a nearly yearlong battle with City Hall over a new contract plodded on.

The City Council would be foolish to cave to pressure from the fire union and reward this kind of bullying, especially if the union’s demands pile a larger burden onto taxpayers during the contract.

Both public safety agencies need to get their acts together and help the city pass a tax that sends tens of millions of dollars their way.

This story was originally published March 17, 2016 at 5:03 PM with the headline "Here come the misleading ads against Kansas City’s earnings tax."