Guest Commentary

Patrick Tuohey: The unlikely promises of questions 1, 2, 3, and 4

Five things to know: Citywide eighth-cent sales tax on KC's April 4 ballot

Advocates for a citywide one-eighth-cent sales tax on Kansas City’s April 4 ballot want to spur economic development along Prospect Avenue, a central city stretch that has been deteriorating for decades.
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Advocates for a citywide one-eighth-cent sales tax on Kansas City’s April 4 ballot want to spur economic development along Prospect Avenue, a central city stretch that has been deteriorating for decades.

Kansas City voters face four questions on the April 4 ballot that could commit them to years of higher taxes. All four are very unlikely to live up to their supporters’ claims.

City leaders have been speaking far and wide about the general obligation bond before voters — Questions 1, 2 and 3. Their presentations focus on what could be done with the money. But often overlooked are two important points: the city’s assumptions about cost, and how the City Council spends money.

At a public meeting in Waldo, Finance Director Randy Landes said, “The average impact to the property tax owner … is an $8 increase each year,” as other council members have said. A reasonable listener would conclude that the cost is only $8 per year. But that would be incorrect.

Campaign literature understates the cost to taxpayers. The general obligation bond would saddle taxpayers with 40 years of debt. After the last bond payment is made in 2056, the owner of a $140,000 house and a $15,000 car would have paid $4,152.98. The owner of a $100,000 house and $15,000 car would have paid $3,154.24.

The city reaches its low numbers by doing two questionable things. First, officials include in their estimates the existing bonds that will be paid off over the next 20 years. But those levy reductions will happen regardless; including them only serves to confuse the issue. Second, the city assumes there will be no increases in the property tax. Current city leaders have no idea what subsequent councils will do, but it’s difficult to imagine the levy remaining the same for the next four decades.

Another concern is whether the city will divert these taxes to pet projects. City leaders are quick to point out that the money raised by these bonds is required to go to streets and sidewalks. But that isn’t the case with general fund money that currently funds these needs. Councilman Quinton Lucas admitted in the meeting, “If we spend important dollars on this bond obligation, we’re able to free up funds to attack other vital issues.” If the bonds are passed, the city will be able to reallocate general funds to projects other than streets and sidewalks.

A more accountable and transparent approach would be to issue smaller bonds and be very explicit about how bond and general fund money will be spent. Voters could then assess each project before committing to a subsequent bond. On April 4, voters risk funding the same sort of misspending that put Kansas City in the mess we have now.

Also on the ballot is Question 4, a measure to increase the citywide sales tax by one-eighth-cent to fund economic development projects on the East Side.

No one can dispute that decades of neglect from City Hall — combined with the past 10 years of generous taxpayer subsidies to wealthy developers to build in economically successful parts of town — have devastated Kansas City’s urban core. These subsidies not only help steer development away from the East Side, but they also divert resources from basic services such as public education, libraries and health services that are vital to these communities.

While supporters of Question 4 are to be congratulated for wanting to address economic injustice, one more tax-funded subsidy will not solve the problem. In fact, one more increase to an already-high sales tax likely will do more harm.

Questions 1 through 4 seek quick fixes to serious financial challenges in Kansas City. Without substantive long-term solutions to the problems that got us here, voters risk spending more to get the same outcome we have in the past.

Patrick Tuohey is Western Missouri field manager at the Show-Me Institute, a free-market think tank based in St. Louis.