Why Kansas City’s earnings tax is the ‘most critical’ item on your spring ballot
AI-generated summary reviewed by our newsroom.
- Losing revenue could force large sales or property tax increases or cuts.
- Earnings tax funds about 30–35% of Kansas City’s $2.5B annual budget.
- Earnings tax funds about 30–35% of Kansas City’s $2.5B annual budget.
As far as special elections go, the 30 words that make up Question 1 on Kansas City’s April 7 ballot almost couldn’t sound more boring.
“Shall the earnings tax of 1%, imposed by the City of Kansas City, be continued for a period of five (5) years commencing January 1 immediately following the date of this election?”
A yawner? You bet. But it is also no exaggeration to note that it is an issue, accounting for hundreds of millions of dollars of the city budget, that is of vital and even existential importance to every resident of Kansas City, as it is used to pay for the day-to-day operation of many of the city’s most basic services
They include: The police. The fire department. Ambulances and medical services. Trash collection. Removal of dangerous buildings. Service on the city’s debt. Affordable housing programs. Street repair. Snow removal.
It is for this reason that residents may have found their mailboxes and television screens teeming with ads — endorsed by some 40 organizations that include the Kansas City Chamber of Commerce, the Hispanic Chamber of Greater Kansas City, the Heartland Black Chamber, the Greater Kansas City AFL-CIO, the Heavy Construction Association of Greater Kansas City, the Kansas City Fraternal Order of Police and the Civic Council of Greater Kansas City — urging voters to approve it.
Early voting begins Tuesday, March 24.
“The earning tax is one of the most critical and stable revenue sources for the city, supporting the core services that residents, business and visitors rely on every day,” said Councilwoman Andrea Bough, chair of the city’s finance committee. “Without the earnings tax, the city would face significant budget shortfalls.”
1% earnings tax makes up the largest part of KCMO budget
Math makes the reasoning clear:
Kansas City’s approximate $2.5 billion yearly budget gets the bulk of its revenue from property taxes, sales taxes, fees, fines, some state and federal money. . . and, significantly, the earnings tax.
Of all those buckets of revenue, it’s the 1% earnings tax —pulled from the wages of people who work in Kansas City (residents and non-residents) as well as from the net profits of companies or self-employed individuals that do business in Kansas City — that make up the single greatest amount of the budget, between 30% to 35%
.
By the city’s own calculations, some $373.6 million of the earning tax money is used to fill about 46% of what is known as the citys “general fund.” The general fund is the part of the city budget that is used, like a discretionary checking account, to a support the day-to-day operation of city services.
What happens if tax is not passed?
Does that mean, if the tax is not passed, that city services would disappear? No. By law, if voters choose not to renew the 1% earning tax, also known as the e-tax, the tax would be phased out gradually over 10 years.
But once gone, it would be gone for good.
The reason is that in 2010 voters approved Missouri Proposition A, section 92.110.1 of which not only established that the tax had to be voted on for renewal every five years, but also it said that if the voters failed to approve the tax, “such city shall no longer be authoritized to impose or levy such earnings tax. ”
Kansas City would need to look for ways to make up the massive budget shortfall. Exactly how the city would replace the revenue is not clear.
Certain scenarios suggest that without the e-tax, the city could be forced to double the city’s portion of the local sale tax from 3.25% to 6.5% while property tax levies on homes, cars and trucks might have to quadrupled — if, indeed, that was immediately possible.
Missouri law, however, does not allow it.
In 1980, Missouri voters approved what is now commonly known as the Hancock Amendment to the Missouri state constitution. The amendment restricts local government from making significant tax hikes without a public vote.
Tax has historic broad support
Lawmakers, however, take heart in history and the desire of voters not to cast the city’s finances into uncertainty and chaos.
In 1963, when a city earnings tax of 0.5% was first proposed, close to 63% of Kansas City voters approved it. In 2011, following Proposition A, it passed by 77%, followed by 78% in 2016 and 77% in 2021.
“The earnings tax is vital to the fiscal health and operational stability of Kansas City,” Bough said. “Preserving it is essential to maintain service delivery, supporting infrastructure, and ensuring the city continues to function as a vibrant economic and cultural hub for the region.”
This story was originally published March 23, 2026 at 12:41 PM.
