COVID-19’s possible toll on Kansas City budget: Fewer cops, firefighters, road repairs
The economic fallout caused by the coronavirus pandemic could force Kansas City to cut essential services, eliminate or delay maintenance projects and sell off park land to offset falling revenues.
Stay-at-home orders issued earlier this year to limit the spread of COVID-19 shuttered nonessential businesses for weeks, leading to a slump in some tax revenues. Hotel and restaurant taxes fell off a cliff.
The city’s April tax collections — the only full month when the city was under stay-at-home order — weren’t as bad as officials feared. Even so, the city is preparing to cut its budget drastically.
Earlier this month, City Manager Earnest Rouse asked department heads to present scenarios cutting 4.5% — nearly $38 million — from every department’s budget for this fiscal year, which began May 1. Those responses were outlined in a spreadsheet obtained by The Star. Kansas City will also likely dip into its reserve funds for more than $10 million to offset falling revenue. The City Council is expected to discuss further after its July 4 break.
The Kansas City Police Department is looking to cut 172 uniformed officers and 40 civilians, Deputy Chief Karen True in a presentation to the Board of Police Commissioners earlier this month.
The Fire Department proposed cutting $4.1 million in “fire suppression and EMS operations,” which could mean more hours for the city’s firefighters and emergency medical technicians or cuts to those positions, Chief Donna Maize said in an email.
The department is studying “what the increase to response times on emergency medical calls and house fires may become as a result,” Maize said.
The department will start receiving new revenue from a 1/4-cent sales tax boost next January.
The Parks and Recreation Department is looking to sell $1.5 million in park lands and cut mowing services at parks and along boulevards.
“This is an ongoing process of analyzing the highest and best use of park land,” deputy director Krista Morrison said in an email. “Before any park land can be disposed of, Kansas City residents will have the opportunity in a public vote to make the final decision.”
The department had proposed canceling plans to build a 12-field $43 million soccer park in the Northland, which was to be paid for by extending a tax-increment financing, or TIF, district. But the city’s Finance Department decided dropping the proposal was not a viable option.
Municipal Court reported it could save $550,000 in contracts for corrections services because arrests and incarcerations for municipal offenses have fallen during the pandemic. The city has contracts with multiple surrounding counties to house municipal inmates.
Recycling services could be slashed to once every two weeks.
Capital maintenance, such as road improvements, could be limited to “basic maintenance and limited emergencies.”
City Hall could lose its building manager, which officials warned in their proposal could lead to a “death spiral” in maintenance problems from the lack of attention.
Last month, staffers warned the City Council that a “worst case scenario” recession could force more than $290 million in cuts over six years.
In a presentation to council members Wednesday, the city’s chief economist, Kolbe Krzyzanowski, said the city took a $15 million hit in the budget year that ended April 30 — only half as bad as officials estimated.
Taxes on hotel rooms fell to less than $1 million in April — an 80% drop. The city only received half as much as it budgeted in restaurant taxes.
But some of those losses were offset with an increase of use taxes, which includes sales taxes companies pay voluntarily on online purchases. Despite a U.S. Supreme Court decision allowing states to collect sales taxes on online purchases, Missouri doesn’t have legislation to do so.
Earnings taxes, the city’s largest and most flexible single revenue source, fell only slightly compared to what city officials budgeted this year. But a continued trend could be a problem because spending increases the City Council passed in March are based on projections that those revenues would grow.
“Obviously, not growing presents a problem for earnings tax since it was one of our stronger and most consistent revenue sources,” Krzyzanowski said.
Krzyzanowski said the city was expecting a 10% decline in sales taxes over the course of the year. In April, they fell 12%.
“To see only 12% fall on our expectations for the first and most severe month of the recession is a sign of good news,” he said.
This story was originally published June 26, 2020 at 12:16 PM.
