Patrick Tuohey

Kansas City’s elected leaders have been speaking far and wide about the GO Bond before voters on April 4. Their presentations focus on what could be done with the money, and attendees often ask about the amounts that will be spent on sidewalks, streets, and an animal shelter. 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 Department Director Randy Landes said, “the average impact to the property tax owner . . . is an $8 increase each year.” The Mayor and other council members have said largely the same thing. A reasonable listener would conclude that the cost is only $8 per year. But that would be incorrect.

Using the city’s own numbers, the cost of the tax to a person with a $140,000 house and $15,000 car would be $13.68 the first year and would increase every subsequent year until it reached $206.13 in 2037. After that point, the payments each year would gradually decrease. After the last bond payment is made in 2056, this property owner would have paid $4,152.98. The owner of a $100,000 house and $15,000 car would pay $3,154.24.

Why city leaders chose the $8 “average annual increase” figure is puzzling, because that number is largely meaningless. Voters should know the annual cost, not the average annual increase in the cost. The city also reaches this number by doing two questionable things. First, the city includes in its estimates the existing GO bonds that will be paid off over the next 20 years and therefore reduce the overall tax levy. But those reductions will happen regardless of how people vote in April. This is money that taxpayers will no longer have to pay; to use it for purposes of calculating the cost of the GO bonds is taking money that would otherwise be in the taxpayers’ pockets. The city is thereby artificially lowering the cost of the GO bond by including unrelated items.

In order to get to the $8 figure, the Finance Department is also assuming that the city will not issue any more GO bonds for 40 years. This assumption borders on being intentionally misleading. Current city leaders have no idea what subsequent councils will do, but it’s difficult to imagine a scenario in which no new GO bonds are issued over the next four decades.

Another concern with the GO Bond is whether money will go to the stipulated projects, such as streets, sidewalks, and so on. City leaders are quick to point out that the money raised by these bonds is required to go to these purposes. But that isn’t the case with general fund money that currently funds these projects. Councilman 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.” Money is fungible, and that means if the bonds are passed, the city will be able to reallocate general funds to projects that the voters have not vetted.

If city leaders want to be accountable, they should not ask taxpayers to commit to 40 years of increased taxes in a single vote. A more transparent approach would be to issue bonds over a much shorter period and be very explicit about where both bond and general fund money will go. As the period of each bond is completed, voters could assess how prudently their money had been spent before committing to handing over more money in a subsequent vote.

Kansas City desperately needs infrastructure maintenance, and public funds are the proper way to address those needs. But based on the city’s questionable assumptions on the cost of the GO bond and on future spending, voters would be well advised to follow the old adage, buyer beware.

About the Author

Patrick Tuohey
Patrick Tuohey

Patrick Tuohey is the western Missouri field manager at the Show-Me Institute.