Effort to reform KC taxes fizzles out
The Kansas City Star
After 10 months of meetings the Citizens Commission on Municipal Revenue has reached these conclusions: Kansas City’s taxes are generally sound, diverse, mostly stable and efficient to collect.
While that’s positive news, it’s not exactly a wow-why-didn’t-we-think-of-that conclusion.
At the outset, the grand hope was that this group would delve into the city’s byzantine world of taxes and fees, and then make strong recommendations on how to produce a fairer, simpler system for taxpayers. Mayor Sly James had pledged that this group would give the City Council a road map on how to improve the city’s financial systems.
City staff members, led by Finance Director Randy Landes, weren’t interested in promoting large-scale changes of the city’s tax collection efforts.
Commission Chair Susan Stanton adopted an agenda without a strict focus, allowing plenty of wandering discussions.
And most commission members were content to ask few thorny questions or raise sustained concern over the city’s taxes. In short, they didn’t rock the boat.
The panel, for example, spent much time discussing ways to reduce the tax burden on poor Kansas Citians. But in the end, the panel said such moves could reduce city revenues. It weakly suggested “continued discussion and research” on a topic that no one else will touch.
The commission did make several timely recommendations. But James and the City Council, after giving lip service to the panel for its work, then ignored several of them.
It properly suggested not renewing the quarter-cent sales tax for the Fire Department. But that idea was dead on arrival, said James, who had just gone through heated contract negotiations with the fire union.
The panel recommended against dedicating the earnings tax for capital improvements, reasoning that almost 80 percent of voters renewed it in its present non-earmarked form in 2011. But the mayor and council rejected that advice. Last week they decided to ask voters this August to set aside millions of dollars in earnings tax revenue for a new street maintenance fund.
The commission recommended a new half-cent sales tax that would dedicate 60 percent of its revenues for the Parks and Recreation Department and 40 percent for the Water Services Department to reduce the rate of increases in future water bills. But the mayor and council — while placing the sales tax on the August ballot — killed the idea of setting aside any funds for rate relief for water customers. Instead, the parks agency would get all the sales tax receipts.
In the commission’s most notable victory, the City Council has endorsed the reasonable idea of simplifying the property tax by getting rid of three parts of the annual bill. Combined, they raise $10.5 million a year. However, residents would get the property tax relief only by approving the new sales tax. It would create $34 million, giving the city a $23.5 million net increase in revenue.
The citizens panel’s report includes additional responsible warnings. The city does need to spend more on basic maintenance and should have a larger rainy day fund.
Still, this commission chose not to accept the open invitation to delve deeper and suggest bigger, sustainable changes in how Kansas City taxes its citizens and businesses.