‘Not a slush fund’ — KC can’t go on a spending spree with federal COVID-19 relief

Kansas City’s budget crisis appears to be over, for now. The new federal COVID-19 relief bill is expected to send the city $195 million directly, more than enough to cover the projected $70 million deficit of just a few weeks ago.

While details are still hazy, city officials believe they’ll be able to use the cash to pay for some general expenses, as well as additional costs for pandemic-related programs. It’s good and welcome news.

But it’s also extraordinarily dangerous. Now is not the time for City Hall to relax, or to assume its budget headaches have disappeared. In fact, the opposite is the case: Given this federal reprieve, the city must do everything it possibly can in the next three weeks to pass a careful and focused budget.

Opening the spending spigot, in the face of overwhelming political pressure to do so, would be catastrophic.

There are signs Mayor Quinton Lucas and City Manager Brian Platt understand this. Next week, they’re likely to propose a list of spending priorities for the $195 million. “It is not a slush fund,” Lucas said this week.

Let’s begin with the obvious: The money is a one-time windfall. That means any long-term spending from the fund in 2021 will have to be paid for in 2022, and beyond, out of local revenues.

City Hall must avoid exorbitant raises for city employees. Double-digit payroll increases this year would have to be paid for in future years — no one is going to cut back salaries when the federal dollars dry up.

Hiring sprees must also be discouraged. Again, adding 50 or 100 police officers with federal money now means big expenses later. Kansas City would be right back in the fiscal hot water.

Does that mean City Hall should forgo any raises for city workers this year? No. The federal money is intended to cover gaps in revenue caused by COVID-19, and to keep cash circulating through the community. Modest raises would do that.

There are other investments possible because of the federal grant. Housing, certainly. Transportation. Health care and accelerated vaccine distribution. Public safety.

There may be capital needs that some of the money can address, including street repair and sidewalks. Here, too, the City Council will want to think about the long-term implications of any one-time capital projects.

Kansas City should also use the funds to replenish the city’s reserves, which were devastated in the last fiscal year. The fund balance of $100 million, assembled over many years, was cut in half.

Lucas says the federal money should not simply replace the cuts in the current budget, since some reductions eliminate inefficiencies and address future concerns.

That’s fine. Kansas City is changing.

“Work from home won’t just be a fad of 2020,” the mayor said. “To the extent there are earnings tax challenges now, they may continue for some time. … I see this (stimulus) as exactly what it’s meant to be, a short-term assistance to cities.”

Pressure to add to spending will be enormous. A million here, 2 million there. Long-delayed oversight. A more generous early retirement program. Easier negotiations with public unions.

That pressure must be met with facts, logic and foresight. Otherwise, next year’s budget will be a disaster.

A year ago, the mayor and council passed a budget that ignored the dangers from COVID-19, which were just then becoming apparent. They have no excuse this time. Washington has provided a lifeline, but City Hall must use it wisely.