Government & Politics

$800 million bond package is a big political gamble on Kansas City’s April ballot

Mayor Sly James gives details on $800 million 'GO' bond proposal

Kansas City Mayor Sly James held a Town Hall recently to discuss the city’s $800 million general obligation bond proposal that will be for voters to decide on the April 4 ballot. Dan Coffey of Citizens for Responsible Government had a few observat
Up Next
Kansas City Mayor Sly James held a Town Hall recently to discuss the city’s $800 million general obligation bond proposal that will be for voters to decide on the April 4 ballot. Dan Coffey of Citizens for Responsible Government had a few observat

When Kansas City Councilman Dan Fowler talks to his Northland constituents about the city’s proposed $800 million infrastructure plan and tax increase, he can take at least a bit of consolation.

So far, he says, “I haven’t gotten booed.”

Yes, the campaign to win voter approval of the bond package in the April election is a hard sell. Fowler, his council colleagues and Mayor Sly James realize many people think that.

It requires a property tax increase — and a supermajority 57 percent voter approval — at a time when anti-tax sentiment runs high and trust in government nationally is low.

People keep asking the mayor, won’t this be a heavy lift, persuading Kansas City voters to go against that trend?

“I don’t see it that way,” James told about 100 Brookside-area residents at a recent town hall meeting. Instead, he believes residents realize it’s a worthwhile investment to address decades of deferred maintenance.

“We’re asking you to do something that solves a number of problems,” James told the crowd. “If we don’t do the work, it’s not going to get better.”

With three questions on the April ballot, the city wants voter approval to borrow $800 million over 20 years for streets, bridges, sidewalks, flood control, a new animal shelter and other city buildings.

No organized opposition campaign has emerged, but there are plenty of critics. They agree Kansas City has huge infrastructure needs but wonder why elected officials let it get so bad. They believe there’s no assurance the money will be well spent.

And they correctly point out that there’s no specific schedule of projects. That’s because the city wants to maintain flexibility to address emergencies that might arise.

“What we’re opposing is a lot of the ambiguity and misinformation,” said Dan Coffey, head of a loose-knit group known as Citizens for Responsible Government, which in the past has opposed a new airport terminal, streetcar expansion and earnings tax renewal.

James and his council colleagues voted unanimously to put this on the ballot, so they own it and have a lot at stake politically.

They know it won’t be easy but say they are “cautiously optimistic” all three ballot questions will pass.

Fowler is fond of saying that the campaign can’t sell a tax increase but can sell a product. He believes the list of essential street, flood control and other projects, outlined in a nonbinding resolution, fairly covers the entire city and “now we have something to sell.” More information is at kcmo.gov/infrastructure.

Councilman Scott Taylor, on the council since 2011, said residents in south Kansas City believe the investments will be worthwhile. “They’ve been talking to us about the need for streets and sidewalks every year I’ve been on the council,” he said. “I think people know what we’re doing, and they’re going to be supportive.”

These ballot questions are teed up for April specifically because Missouri law spells out that a general obligation bond in April requires 57.1 percent approval. If the city waited until August or November, state law requires an even higher approval margin — 66 percent.

Councilwoman Teresa Loar said that no bond request is easy to pass, but that this package can appeal to a broad base, including animal lovers who know the urgent need for a new animal shelter.

Still, skeptics abound.

At the Brookside town hall meeting, some residents said they’ve already paid for their own sidewalks, so they don’t know why they now must help pay for other people’s sidewalks.

Meanwhile, Pat Clarke, president of the Oak Park Neighborhood Association, wonders if the projects will really help his neighborhood.

“I don’t see the big benefit from the sidewalks and the streets,” he said, adding he’s more concerned about abandoned housing, empty schools and trash.

“Who is going to manage the money?” he asked of the spending, which would be overseen by the City Council. The council promises an annual report card on projects accomplished and future work.

Lillian Anderson said she and her husband, senior citizens living in the Blue Hills neighborhood, just can’t support a property tax increase. She expresses a big concern echoed by many other Kansas City residents.

“We are taxed out over here,” she said, adding that skyrocketing water and sewer bills are already a big burden.

Progress KC

Bond lawyers insisted the City Council divide the proposal into three separate ballot questions, to clarify the infrastructure categories. All three don’t have to pass; any question that gets 57.1 percent approval could be implemented.

The three questions:

▪ Up to $600 million for streets, bridges and sidewalks. Most of that, $450 million, would be spent on roads and bridges, with the rest for a new sidewalk improvement program.

▪ Up to $150 million for flood control. This would be the city matching funds for more than $550 million in federal dollars already authorized by Congress.

▪ Up to $50 million for public buildings, including about $14 million for a new animal shelter and up to $35 million for upgrades to comply with the Americans with Disabilities Act.

For the owner of a $140,000 home and a $15,000 car, taxes would increase, cumulatively, by about $8 annually to a peak of about $160 per year at the end of 20 years. Tax increases might be steepest in the early years, before flattening out as other city debt rolls off.

A Global Strategy Group poll of 400 likely voters in early January showed all three questions passing. Streets and sidewalks had 62 percent support; flood control 65 percent support; the animal shelter and other buildings 64 percent. With a 5 percent margin of error, it’s close.

“It’s not a slam dunk. This is a winnable election, but there’s not a lot of room for error,” said Mark Nevins, the campaign’s chief strategist, with Dover Group of Philadelphia. He has helped run James’ mayoral campaigns and said James’ popularity and 80 percent job approval rating are pluses for selling this plan to voters.

Kansas City campaign coordinator Steve Glorioso points out that local voters have approved other challenging tax increases in the not-too-distant past.

For example, in 2005, voters approved a 22-cent property tax levy for health care for poor people at Truman Medical Center and clinics. That increased taxes by about $53 per year for the owner of a $100,000 home, which was higher than the initial increase required by this bond. Voters renewed the indigent care tax with 76 percent approval in 2013.

Kansas City voters also approved a sales tax increase for the city’s buses in 2003, and renewed that tax several times, even though the vast majority of residents don’t ride the buses.

But voters south of the river rejected a 2014 proposal for higher property and sales taxes to support a streetcar expansion. That effort failed 60 percent to 40 percent.

This year’s campaign is dubbed Progress KC (www.progresskc.com). So far, the biggest contributors include Burns & McDonnell, JE Dunn, Mark One Electric, and several development and law firms.

Supporters are counting on the Heavy Constructors to help fund the campaign. That group, whose members stand to benefit from the infrastructure jobs, won’t officially decide until later this month.

Key endorsements came Friday from the Greater Kansas City Chamber of Commerce and the Civic Council. But the African-American political club Freedom Inc., which has discussed the proposal, didn’t take a position and is still deliberating.

If this election is to be won, it’s likely at the grass-roots level.

To that end, groups like Northland Neighborhoods Inc. and the Ivanhoe Neighborhood Council are on board.

“Yes, people are aware there will be a tax increase, but it’s a modest increase,” said Ivanhoe Executive Director Margaret May. “People feel very strongly that the kinds of things they’re talking about doing really need to be done.”

Northland Neighborhoods chief executive Deb Hermann acknowledged many residents of older Northland suburbs already struggle to pay their bills. Still, she said they realize Kansas City’s sprawling infrastructure desperately needs more funding, and the problem will only get worse without it.

“We all know that quality of life, and infrastructure and basic services cost money,” she said. “In the Northland, they get it.”

Opposition

Dan Coffey and Citizens for Responsible Government campaigned unsuccessfully against the earnings tax renewal in 2016. He said they have no current plans for a formal campaign this time.

Coffey sent out an email in January that claimed, falsely, that if the property tax money is insufficient to pay the bond debt, then bondholders could seize people’s homes.

That is not correct. The city clarified that, in the very unlikely event the property taxes are insufficient, the city can use other legally available funds to make the payment.

But Coffey and others still argue there’s not enough information about how the money will be spent, and no guarantee it will be spent wisely.

Woody Cozad, a consultant who also campaigned against the earnings tax, said he is not involved in any campaign against the bonds. He agrees the city needs to fix its infrastructure but decries the city’s high debt load and says the city should have addressed these basic needs long before now.

“Deferred maintenance is another phrase for bad management,” he said.

The Show-Me Institute, a free-market nonprofit think tank, does not take official campaign positions. But it has pointed out that the last batch of 20-year bonds likely won’t be paid off until 2055.

Crosby Kemper III, co-founder of the Show-Me Institute, has been a frequent critic of Kansas City’s development incentives and other financial management. But in this instance, he says he will likely support these ballot questions, despite reservations.

“I think we have to do it,” he said on KCPT’s “Ruckus” program. “But we’re a very high tax city already. ... We put the most on the people who can least afford it. So it’s going to have a hard time.”

Much of the skepticism comes from African-American ministers and others pushing a different ballot question, a petition initiative for a one-eighth-cent sales tax for East Side economic development. The Rev. Vernon Howard, president of the Southern Christian Leadership Conference of Greater Kansas City, said infrastructure doesn’t address their biggest concerns.

“Our people are suffering severely from lack of housing, jobs, business development,” Howard said. “So this piece does not get to the core of what our very basic needs are.”

Some bond supporters worry that so many tax questions on a single April ballot may doom them all.

James doesn’t think about failure. He believes the city has to seize this time of low interest rates and a reviving economy to get this moving. But if voters don’t support this general obligation bond proposal, he’ll work on other priorities until he leaves office in August 2019.

“I’ve got 2  1/2 years, and a whole bunch of other stuff,” James said. “If it fails, somebody else can pick it up and go with it down the line.”

Lynn Horsley: 816-226-2058, @LynnHorsley

  Comments