Removing the KC earnings tax will do more harm than good (Kansas City: insurance, buying)

[aragx6]

Originally Posted by kcmo

Isn't it the same thing as living in one state and paying taxes in another?

Yes. Yes, it is.

[Samantha S]

Originally Posted by BoomBoxing

It's ridiculous that the Johnny Blumpkin from the bootheel gets to have a say in the taxes in KC and St. Louis. At the very least put it to voters in the metro areas who may actually work in these cities. What really makes me angry about it is that the group that wants to get rid of the earnings tax has not proposed a solution to replace the lost revenue.

So the state's two largest cities and economic drivers will be forced to make do without a third of their budget or find alternative revenue. Which alternatives drive up growth, exactly? Higher property tax? Higher sales tax? Get rid of the library, public schools, police, fire, trash, etc? And this is what the backers of getting rid of the earnings tax think will drive businesses to relocate into Kansas City and St. Louis...it's ridiculous!

Of all of our country's ills and woes, this post is a great example of the most pervasive and destructive: That is, the propensity to take things out of context and get all worked up about them.

It's bad enough when individuals do it. It's most destructive when people in the media do it and it's downright evil when it's done intentionally to stir up a mob mentality. That's not happening here ... yet ...

Deep breath, people.

As has been pointed out:

Originally Posted by aragx6

The state-wide ballot issue would ban any new earnings taxes (say in Springfield or Columbia were they so inclined) and would require residents of the city with the earnings tax to vote every 5 years to continue it.

So, assuming the ballot measure passes in November, city residents will vote in April whether to continue ours or not.

[aragx6]

Yes, but it's going to be a tough thing to pass -- though I believe it's doable at the city level -- and it is going to cost both cities untold millions to launch a campaign every five years.

[kcmo]

The bottom line is taking this tax away from KCMO will eliminate 40% of the KCMO general fund. That will be totally devastating, especially coming after several years of deep cuts do to the recession. Like most cities and states, there isn’t much fat left to cut and you want a city to cut 40% of its general revenue fund?

This could possibly do irreparable damage to the city of KCMO and send it back into a Detroit type tail spin. Removing half the revenue of a city and doubling other taxes all while reducing basic city services is a sure fast way to get it done.

Statewide voters will no doubt vote for this. Then it’s up to the city to mount an expensive campaign every five years to educate local residents of the ramifications to them if that tax goes away. Most people will kneejerk and vote down the tax unless they understand that it will cost them far more taxes and a lower quality of life if they did.

The city’s credit rating will drop like a rock and it will have a far more difficult time getting decent interest rates, selling bonds etc because 40% of its revenue will always be in limbo and could go away at anytime. Creditors don’t like that.

And that’s the best case scenario. If KCMO voters vote it down after MO forces them to vote, then the tax is gone forever.

You will see massive changes overnight. No free trash collection, bus service slashed to nothing, no money for the stadiums (which will free the teams from their lease), no money for bartle hall, starlight, zoo all that regional stuff will be the first to get cut. Then it will only get worse from there.

I just hope everybody knows what they are doing here. The city’s future is on the line.


If there is one city that should secede from the state it's in, I think KCMO would be it. The entire KC metropolitan area would be so much better off if it were governed under a 51st state.

[cp1969]

Originally Posted by BoomBoxing

It's ridiculous that the Johnny Blumpkin from the bootheel gets to have a say in the taxes in KC and St. Louis. At the very least put it to voters in the metro areas who may actually work in these cities. What really makes me angry about it is that the group that wants to get rid of the earnings tax has not proposed a solution to replace the lost revenue.

So the state's two largest cities and economic drivers will be forced to make do without a third of their budget or find alternative revenue. Which alternatives drive up growth, exactly? Higher property tax? Higher sales tax? Get rid of the library, public schools, police, fire, trash, etc? And this is what the backers of getting rid of the earnings tax think will drive businesses to relocate into Kansas City and St. Louis...it's ridiculous!

It is no less ridiculous to let Inner City Ivan decide whether Johnny Blumpkin is going to be involuntarily forced to pay part of Ivan's tax bill.

Originally Posted by kcmo

Isn't it the same thing as living in one state and paying taxes in another?

Yeah. Who said that was right? At least you get to deduct it against your own state's income tax, but it ought to be that you pay taxes to the State, County, and City in which you vote.

[lifelongMOgal]

Gee, and here someone who is complaining about those who don't live in KCMO determining the future of KCMO, but he no longer lives in KCMO. Project much?

A sunset clause on taxes is never a bad thing and I think a 5 yr. renewal is reasonable. The city should learn not to depend upon the earnings tax as much as it has. In a down economy with less money being paid via the earnings tax the city sets itself up to be vulnerable.

Now, if it is such a travesty that the whole state vote on what affects KC & St. Louis, why are the cities not suing over this? Admittedly I have not read the city charter in years but it would seem that it should have had the foresight to cover just such an instance as the ability to control its own municipal taxes. If not, perhaps the charter need to be amended.

In the end, people get the government they deserve. During my lifetime I've not seen Kansas Citians vote very wisely nor have I seen the city administrated wisely.

[kcmo]

Originally Posted by lifelongMOgal

Gee, and here someone who is complaining about those who don't live in KCMO determining the future of KCMO, but he no longer lives in KCMO. Project much?

A sunset clause on taxes is never a bad thing and I think a 5 yr. renewal is reasonable. The city should learn not to depend upon the earnings tax as much as it has. In a down economy with less money being paid via the earnings tax the city sets itself up to be vulnerable.

Now, if it is such a travesty that the whole state vote on what affects KC & St. Louis, why are the cities not suing over this? Admittedly I have not read the city charter in years but it would seem that it should have had the foresight to cover just such an instance as the ability to control its own municipal taxes. If not, perhaps the charter need to be amended.

In the end, people get the government they deserve. During my lifetime I've not seen Kansas Citians vote very wisely nor have I seen the city administrated wisely.

I can't argue too much with this. My only thing is that removing the etax will not all of the sudden make KCMO a more attractive city to residents, businesses etc. All I have heard or read for years is how bad the etax is for KCMO and that's why people move away or businesses move away when the reality is that the etax has little to do with such decisions. I just hope KCMO voters understand they could really damage their city (and bank account) by voting to repeal this tax that everybody loves to hate.

And how is KCMO such a horribly run city? It seems pretty average to me for a large city and actually considering it only has 480,000 people in 318 square miles, I'm amazed it's run as well as it is. The city is geographically way to large to be efficient at much of anything. When you also add in the fact that KCMO supports many regional assets alone and gets almost no help from Jeff City, I sometimes wonder how they plow the snow at all in the winter. Well one big reason is the etax.

[cp1969]

You gotta love it--StL and KCMO are squawking like banshees over the fact that the entire state might get to vote on whether or not they can have an etax, but they sure as hell thought it was fine when the residents of their cities imposed a tax on others who could not vote against it.

[MoNative34]

Originally Posted by kcmo

And how is KCMO such a horribly run city? It seems pretty average to me for a large city and actually considering it only has 480,000 people in 318 square miles, I'm amazed it's run as well as it is. The city is geographically way to large to be efficient at much of anything.

I remember a watching KC Week in Review not long ago and they were discussing the possibility of a movement in the northland (with some support from south) to seceed from Kansas City and create thier own municipality. They believe they're getting less back in services that they're paying. There's also concern from people south of the river that that area will lose council seats and the northland will gain seats when the new census data comes out. I don't have an opinion on it.

[aragx6]

Originally Posted by lifelongMOgal

Now, if it is such a travesty that the whole state vote on what affects KC & St. Louis, why are the cities not suing over this?

They tried and lost.

Kansas City effort to quash statewide earnings tax vote flops - St. Louis Business Journal