Civic leaders kick off campaign to renew Kansas City’s earnings tax

Kansas City Mayor Sly James took aim at “outside influences” that seek to undermine the earnings tax, as civic leaders rallied Monday for the tax’s renewal.

“This is a test,” James told a gathering that filled the Greater Kansas City Chamber of Commerce’s boardroom in Union Station. “It’s about controlling our own destiny.”

James joined labor, neighborhood and business leaders in urging support for Question 1 on the April 5 ballot, which calls for renewing the earnings tax for another five years.

If voters defeat the measure, the tax would be phased out over 10 years and could not be reinstated.

The 1 percent tax, paid by people who live or work in the city, generates about $230 million per year, mostly for public safety but also for trash removal and other basic services.

James said that if the tax is phased out, the city would have to drastically increase property or sales taxes to replace that revenue, but Kansas City doesn’t have authority to raise those taxes to that degree.

James said losing that money could mean laying off 810 uniformed police officers and 550 firefighters over 10 years.

Some people oppose renewing the tax. They include representatives of the Show-Me Institute, a Missouri-based Libertarian think tank whose co-founder is wealthy St. Louis businessman Rex Sinquefield. Sinquefield bankrolled a statewide measure in 2010 that requires St. Louis and Kansas City residents to vote to renew their cities’ earnings taxes every five years.

“The earnings tax is a very regressive tax that places another burden on the working poor in Kansas City,” Patrick Tuohey, the institute’s field manager for western Missouri, said in a statement.

“Rather than growing Kansas City by competing for residents with low taxes and a good infrastructure and city services, the earnings tax doubles down on bad policy by seeking to tax people as they flee the city,” Tuohey said.

Some Missouri legislators also have challenged the tax, introducing bills that would end the tax in one year. One such bill got considerable pushback from Kansas City officials at recent legislative hearing.

James said Monday that legislative opponents don’t live in Kansas City and don’t care about how loss of the tax would devastate city services. He called on residents to assert their right to local control by voting to retain the tax.

Terry Bassham, chairman of the Chamber of Commerce and the president and CEO of Kansas City Power & Light Co., said area businesses support the tax, recognizing its importance to the city’s future. Bassham said business leaders want stability and the tax helps maintain the city’s financial stability, good credit rating and ability to recruit and retain workers and businesses.

This story was originally published January 25, 2016 at 12:16 PM with the headline "Civic leaders kick off campaign to renew Kansas City’s earnings tax."