Why is earnings tax necessary? Just look at dilapidated Kansas City of 1963

1963. Kansas City couldn’t keep up.

Headlines of the period detailed a looming financial crisis: “Police Face Pay, Equipment Dilemmas.” “No Funds to Plug Chuckholes,” “Grim City Struggle on Lean Financial Diet” and “City Grows Too Big for Its Billfold.”

Kansas City as we enjoy it today would not exist had it not been for passage of the devised solution: an earnings tax that was first approved by voters as a half-percent tax in December 1963. But it soon proved not enough. In 1970, voters approved an increase to 1 percent.

In April, voters will be asked to reapprove it. Raising about $230 million annually, the tax generates 40 percent of the city’s general fund. We’re dependent on it.

Monday, representatives of just about every significant group — business, civic, union, neighborhood and elected people — gathered to kick off a campaign pushing for passage on the April ballot.

Anita Gorman remembered the pre-earnings tax days. She noted that the city back then had gone through a slew of city managers in a four-year period, all part of the fiscal turmoil as the metro population grew and spread and the core of the city aged. From 1953 to 1963, the city expanded from 81 square miles to 316.

It’s good history to know, as voters will be inundated in the coming months by tax arguments pro and con.

Unreasonable legislation to repeal the earnings tax in Kansas City and St. Louis by 2017 is being pushed in Jefferson City. If successful, the bill sponsored by Sen. Kurt Schaefer of Columbia would spin Kansas City back toward the type of fiscal crisis that gave birth to the tax.

Old newspaper clips flesh out how dire the situation had become. The Kansas City Star wrote lengthy pieces leading up to the December 1963 vote.

Police salaries were stuck. The state legislature had authorized a $50 a month pay raise for rookie patrol officers. But Kansas City didn’t have the money. The department, already understaffed, was losing officers as they quit for higher-paying jobs.

Newly annexed areas, like in Platte County, went unpatrolled because the force was stretched thin. Criminals took note. Major crimes —including murders, aggravated assaults, rape and burglaries — had tripled in the previous decade.

The municipal farm in the Leeds area was 50 years old and housed an average of 285 inmates. It was built for a maximum of 196. Guards were scarce, one for every 70 prisoners, largely because no one wanted the job due to the low pay.

Major streets were carrying far more cars than they were designed for, raising the need for maintenance and upgrades that the city could not afford. Ditto for the bridges, viaducts and residential streets. Between 1959 and 1963, street and traffic mileage had increased 33 percent, while funding for maintenance per mile had declined 27 percent.

Voters had approved bonds, but the city couldn’t sell them because it couldn’t afford the interest and principal payments.

City Hall was literally falling apart. The fountains out front, with the bronze seahorses, couldn’t be turned on because water would leak into the parking garage below. The ceiling in the mayor’s office dripped during rainstorms.

Police Headquarters had more than 160 cracked and broken windows. The zoo, Municipal Auditorium and the Music Hall all needed improvements.

By the fall of 1963, the population of the surrounding areas had reached 602,200, surpassing for the first time the number of residents in the city, 528,800. Annexed portions of the city were going without the water, sewers and streets necessary to bring development of homes and industry. Unimproved streets and roads had grown from 190 miles to 600 miles in the previous decade.

By passing an earnings tax, voters in 1963 admitted a reality that is still with us.

People might live in outer-ring suburban cities, but they still often work, eat and are entertained within the city limits of Kansas City. And when they come to Kansas City, they expect it to be functioning.

They expect to drive on safe streets, to have a well-trained police officer show up if they dial 911 and to be assured that inspectors are checking the food safety of the restaurant where they choose to dine.

City services cost money. People who live outside the city but who work within Kansas City provide about 50 percent of the earnings tax revenue. About 20 percent of those taxpayers live in Kansas and 30 percent live in Missouri-side suburbs. The breakdown illustrates how connected suburban areas on both sides of the state line are to Kansas City proper.

It’s a relationship of mutual cooperation that must be maintained and nurtured. And that will always include some shared costs.

This story was originally published January 25, 2016 at 7:57 PM with the headline "Why is earnings tax necessary? Just look at dilapidated Kansas City of 1963."