After months of negotiations, Kansas City again delays vote on tax incentive reform
Long-anticipated reforms meant to stem the flow of generous tax incentives from Kansas City to developers will wait at least another week, a City Council committee decided Wednesday.
The legislation, which has been before the committee off and on since June, would cut 10 years off the maximum property tax abatements the city can grant developers and trim the overall level of those incentives. It’s meant to address the stark disparities between inner-city school districts, where hundreds or even thousands of dollars per student are directed away from school budgets, and majority-white school systems that are often spared.
“The way that we currently engage in economic incentives … unfortunately perpetuates inequities, specifically within education,” said Councilwoman Melissa Robinson, one of the sponsors of the legislation.
Robinson, 3rd District, said she was “completely blindsided” by the request to hold the plan and felt it was a stalling tactic. She and co-sponsor Councilwoman Ryana Parks-Shaw, 5th District, hoped it would move forward.
For months, developers and school districts have been negotiating over proposals to restrict the city’s use of property tax abatements that are designed to spur economic development. While the City Council and boards appointed by the mayor make those decisions, schools, libraries, mental health providers and county government, which are all more heavily reliant on property taxes, often stand to lose the most.
Kansas City Public Schools sees more than $2,000 per student, on average, abated to go toward development each year, Parks-Shaw noted to the committee.
“Again, we worked on this for eight months in an effort to establish equity throughout our city, and I want to encourage our colleagues to please assist us in establishing equitable practices for the way that we are implementing our incentives,” Parks-Shaw said.
The legislation, with broad exemptions, would cut property tax abatements to 70% for 10 years and 30% for five after that. Right now, the city can abate 75% of property taxes on a project for 10 years and 37.5% for 15 years after that. It’s not the sweeping reform Robinson and Parks-Shaw set out to pass, and it’s not endorsed by Kansas City Public Schools, which sees twice as much money per student go to development as any other district in the city.
“When people make comments that Black lives matter … then we got to see you back it up with how you vote on these projects that often divert funds away from supporting those that need it the most,” KCPS Superintendent Mark Bedell said in an interview last week, noting that nearly 90% of KCPS’ students are children of color.
Shannon Jaax, director of planning and real estate services for KCPS, reiterated the district’s position on Wednesday that the legislation doesn’t go far enough. She noted the district has given up a lot in the negotiations, foregoing deeper incentive cuts and language that would have given KCPS more of a say over whether projects are granted incentives.
Jaax said there’s more the city can do — most importantly, allow the legislation to go into effect quickly. One of the committee substitutes proposed says the legislation would take effect 120 days after council passes it. Jaax said the city can’t continue to grant 25-year tax abatements to projects that don’t need it.
“Everyone at the table has agreed that the lion’s share of projects require less than 15 years of incentives, so we don’t feel that there is any need to delay this action,” Jaax said.
No one else showed up to offer testimony Wednesday.
The suggestion for a hold came from Councilwoman Teresa Loar, 2nd District at-large, who said she was uncomfortable voting because of a last-minute substitute version authored by Councilman Kevin O’Neill, 1st District at-large, meant to ensure projects receiving incentives pay prevailing wage, a minimum wage rule employed on public construction projects.
That substitute aside, Loar said the legislation was “pretty close” to a point where she would support it. She said she wasn’t stalling, but wanted to be sure she understood the legislation.
Councilwoman Andrea Bough, 6th District at-large, who was chairing the committee, told The Star she had hoped to pass the legislation Wednesday. But as the discussion unfolded and the subject of a hold came up, she wasn’t sure the legislation had the votes to pass.
This story was originally published February 17, 2021 at 4:56 PM.
