Renew Kansas City’s earnings tax on April 6? For voters, the decision should be easy

Kansas City voters will decide on April 6 if the city’s 1% earnings tax will be extended for another five years, beginning next January.

We strongly recommend a yes vote.

Kansas City’s earnings tax has been an essential component of local government since the mid-1960s. This year, the city expects to collect $268 million in E-taxes from workers and businesses, making it the single largest source of Kansas City’s public revenue.

The money pays for police and fire protection. It pays for neighborhood services. It supports snow removal and trash pickup. Pension programs for city workers, salaries, and benefits are also paid for through the tax.

It’s true that other cities pay similar expenses without an earnings tax. But the money for public services has to come from somewhere, a fact opponents of the earnings tax consistently overlook. End the earnings tax, and your property taxes will go up — or the already-too-high sales tax will.

Kansas Citians should remember the earnings tax is paid by nonresidents who work in the city. By one estimate, more than $125 million in revenue each year comes from suburban workers who commute into the city, benefiting from its streets and public safety departments.

That’s money Kansas Citians would have to replace if the earnings tax is phased out.

We’re confident voters see the logic in the tax. In 2016, voters approved the measure with more than 77% of ballots cast. In 2011, the measure passed by a similar margin. The overwhelming support for the tax reflects a basic faith in city government — something goofy state legislators should keep in mind.

If Jefferson City wanted to be helpful, it would remove the requirement for an earnings tax election every five years. There are many reasons urban areas resent state intrusion into their affairs, but the ongoing challenge to local government is an insult.

To be clear, the 1% earnings tax isn’t perfect. For one thing, nonresidents who work in Kansas City provide half the revenue. That figure is expected to slump if commuters continue to work from home, outside the city limits.

Earnings tax revenue will drop almost 8% this year, and City Hall needs to understand what this decline in office work means over the long term.

There are other concerns. Far too much city tax revenue is diverted into subsidies for rich developers, and that needs to end. Additionally, the E-tax isn’t collected on unearned income, such as investments. That means the burden falls mainly on working residents and nonresidents.

And because the tax is a flat 1%, it hurts the poor more than the wealthy. A better approach might be to exempt the first $15,000 of earnings from the tax, and replace the revenue with a higher levy on higher incomes — say, a 2% tax on income over $100,000.

A more progressive earnings tax would require state government approval, so that’s unlikely. The last thing Missouri lawmakers want is a fair tax system.

Despite these concerns, voters should not be fooled by the usual anti-tax charlatans who say Kansas City could easily do without one-fifth of its general revenue. It isn’t true. Ending the earnings tax would be dangerous and self-defeating. Vote yes April 6.