Kansas City earns a D on its financial grade card. Taxpayers are on the hook | Opinion

A recent report on the finances of the top 75 cities in the United States paints a gloomy picture. Kansas City and St. Louis both earned a grade of “D,” signifying financial distress. Missouri cities aren’t alone — authors at Truth In Accounting, an organization advocating for greater transparency in city and state finances, found 54 of the cities reviewed lack the funds to meet their short and long-term obligations.

Truth In Accounting analyzed Kansas City’s 2023 financial report and concluded the city needs $1.6 billion more than it has to meet all its obligations. Those obligations include its unfunded pension liabilities. That shortfall works out to $8,800 per resident, earning the city a grade of D and placing 57th of the 75 cities examined.

This will come as no surprise to Kansas City leaders. In their June 2023 budget letter, Mayor Quinton Lucas and then-City Manager Brian Platt wrote, “The demands of a City this size in square miles and infrastructure age far exceed affordable options for residents and available resources.” In other words, Kansas City has financial commitments beyond its ability to pay.

Conversely, Lincoln, Nebraska was ranked second by Truth In Accounting, and has a surplus of $4,300 per person. This is due in part to revenue increases, but also because Lincoln has kept its long term financial commitments in check. Lincoln is half the size of Kansas City, but even similar sized cities such as Louisville (ranked 10th) and Oklahoma City (sixth) outperformed us. (St. Louis was ranked 59th.)

Why use the 2023 budget numbers, you may ask? Truth In Accounting points out that some municipalities — like Kansas City — issue their financial reports long after the standard 180 days after the end of the fiscal year. Kansas City published its report 214 days after, so rankings are delayed. While year-to-year numbers fluctuate slightly, Kansas City has performed poorly in all nine rankings since 2015.

Financial crisis

Mark Moses, a longtime city finance official, warns in his 2022 book “The Municipal Financial Crisis” that cities are running faster and getting nowhere. Every year, officials warn of deficits, propose tax hikes, and then, through creative accounting, produce a so-called “balanced” budget. But this is an illusion — one that is leading many cities toward financial disaster.

Moses argues cities’ financial struggles stem from poor decision-making. Local governments add new obligations while failing to maintain basic services, using opaque accounting to mask their true financial condition. Instead of making hard choices about what government should and should not do, city officials defer maintenance, shift costs to future generations, rely on bailouts or simply raise taxes.

Many of the financial constraints cities face today are self-inflicted. Local governments frequently make financial commitments without fully considering long-term costs. Moses notes that municipal leaders often struggle to answer basic questions: “Why does the city do this? Why does the city do this in this manner?” Rather than make informed choices, cities default to spending more.

Instead of focusing on core services such as infrastructure and public safety, cities expand into economic development, tourism promotion and social welfare programs — areas where private organizations are often better suited to deliver results.

Cities must change

Kansas City, for example, has funneled millions into economic development subsidies with little return. The Power & Light District, one of the city’s most heavily subsidized projects, has never generated enough revenue to meet its debt obligations, leaving taxpayers covering the shortfall. According to the Kansas City’s 2024 financial report, the total amount of total taxes abated or redirected is over $110 million each year. That is just the loss to the city alone, and doesn’t include losses by school districts, libraries, the county or the mental health fund. Yet the same mayor who told us in 2023 there isn’t enough money to meet basic demands claims he has found $1 billion for the Royals? How?

The result is predictable: failing infrastructure, declining public safety and growing tax burdens.

We cannot simply act as we always have. City leaders must adopt greater transparency, be more disciplined in their decision-making, and focus on core services over politically popular but financially reckless initiatives.

If leaders won’t listen, taxpayers must demand accountability — before their cities crumble under the weight of fiscal irresponsibility.

This story was originally published April 18, 2025 at 5:04 AM.