Sales Tax Increase Approved by Kansas City Voters

The vote, by a 63 percent to 37 percent margin, means the city will be able to keep community centers open longer, improve park maintenance and -- for the first time -- create a specific street maintenance fund.
by | August 8, 2012
 

Kansas City voters on Tuesday heeded City Hall’s appeal for more money and overwhelmingly approved a half-cent sales tax increase to bolster parks, community centers and streets.

The vote, by a 63 percent to 37 percent margin, means the city will be able to keep community centers open longer and provide more programming, improve park and playground maintenance and — for the first time — create a specific street maintenance fund.

“People did understand the need to do what we were doing, and they were willing to make the sacrifice to move this city forward,” a jubilant Mayor Sly James said at a campaign celebration at Union Station. “I think it shows people not only love their parks but understand the value of maintaining their parks.”

James said he was a little surprised by the margin of victory, and now the city has to “make sure we establish the bond of trust with the citizens” by proving it can spend the money wisely.

Voters also supported, by a landslide margin of 80 percent to 20 percent, $500 million in new bonds to start a massive, federally mandated sewer modernization project. Sewer rates will have to double by 2020 to pay for those bonds, but city officials had warned that rates would skyrocket even faster if voters had refused to allow the city to borrow the money.

Money from the sales tax increase replaces a $12.50 annual vehicle fee that was expiring and several small parks-related property taxes, which will no longer appear on year-end property tax bills. The property tax relief will save residents about $10.5 million.

Critics had argued that now was not the time for a sales tax increase, especially one without an expiration date.

“It’s a forever tax,” south Kansas City resident Terrence Nash said, noting that other Kansas City sales taxes come up periodically for renewal so voters can decide if the money has been well spent. “With a forever tax, there’s no accountability.”

But James and others said the parks are a permanent asset so they need a stable, permanent source of funding.

With this sales tax increase, which takes effect in January, Kansas City’s overall sales tax rate becomes one of the highest in the metro area. In Kansas City south of the river, the base rate becomes 8.35 percent (not including special assessments such as those in community improvement districts). In Kansas City/Clay County, it becomes 8.1 percent, and in Kansas City/Platte County, it becomes 8.475. The sales tax rate is still higher in some Johnson County communities, but their tax rates are scheduled to drop next summer.

The sales tax will raise an estimated $30 million a year that will be dedicated to the parks department. Because other revenue will now be eliminated or diverted to streets, the net gain in funding for parks and community centers will be about $3 million. It will help replace some of the $9 million in cuts that the parks department has seen in the last five years.

“It’s the best thing that’s happened (for parks) in years,” parks director Mark McHenry said Tuesday night. “We can plan our future.”

Parks officials said they will use the $3 million a year to expand community center hours, especially on weekends, and to provide more robust community center programming. They will also do more regular cleaning and repairs of parks, fountains and playgrounds, and will plant up to 100 more flower beds.

The general fund money that used to go for parks will now be used to create a dedicated street maintenance fund. As a result, city officials said, money for street maintenance should grow from about $8 million this year to about $20 million annually.

Street engineers said the new money should allow for more street paving as well as whole-street reconstruction, which was not budgeted this year.

Tuesday’s vote was a victory for James, who had put his popularity and political capital on the line. The Sly James for Mayor campaign even contributed $35,000 to the campaign for Tuesday’s ballot measures. The campaign was relatively low-key, raising about $280,000 and relying on political mailings and yard signs, but no television advertising.

Some people had speculated that voters would be in an anti-tax mood because of the sluggish economy, but the ballot measure garnered strong support throughout the city. North of the Missouri River, the measure passed 57 percent to 43 percent. South of the river, it passed 67 percent to 33 percent.The measure was supported by the Greater Kansas City Chamber of Commerce, the Downtown Council, Freedom Inc., and numerous neighborhood and labor groups.

There was no organized opposition, but the measures did not get the endorsement of the influential Civic Council of Greater Kansas City. The Civic Council board said it would not support any ballot measure until Kansas City comes up with a long-range financing plan. James said that plan will come soon.

On the second ballot measure, regarding sewers, Kansas City residents can now expect to see their rates go up 15 percent for two years, and 13 percent each year after that until 2020, to help pay the costs of borrowing the $500 million. The average monthly sewer rate would be about $45 by 2015 and $84 by 2020. (That’s just sewer. Water charges would be on top of that.)

The sewer bond money will pay for giant wastewater storage tanks and other sewer improvements throughout the city. It’s the start of a much larger project, slated to cost $2.5 billion in today’s dollars, to meet a federal court order and a 25-year timetable. The sewer upgrades are designed to reduce wastewater overflows and contamination of rivers and streams.

Water officials said recent sewer bonds have received a AA credit rating, and the city should be able to borrow the money at historically low rates, close to 3 percent.

©2012 The Kansas City Star (Kansas City, Mo.)

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