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State and Local Government / Budget and Spending

Exposing the GO Bond Campaign Claims

By Patrick Tuohey on Mar 13, 2017

On Saturday, The Kansas City Star published a piece titled, “Campaign flier on KC’s infrastructure proposal understates tax increase” in which they pulled some quotes from a Show-Me Institute press release issued on March 7. In the piece, the Star calls the numbers used by proponents of the general obligation bond (GO bond) an “oversimplication” and sets out to explain the real costs to taxpayers.

The Star piece includes a graphic called, “A comprehensive look at taxpayer impact,” which totals the actual tax that property owners would pay over 20 years if the GO Bond is approved. The Star should be commended for cutting through the financial gobbledygook presented to voters by the city and by bond proponents. The Star writes,

The annual tax increases for the first 20 years for the owner of a $100,000 house total about $1,540. For the owner of a $140,000 house, it’s more than $2,000. It totals about $3,185 for the owner of a $200,000 house.

That is a far cry from the $120/$160/$250 cost claims made on the city’s website. My complaint with the Star piece is that it is incomplete. The tax burden for this GO Bond lasts for 40 years, so the Star’s numbers are half of what they should be. As we wrote last week, the total additional tax paid for a $140,000 home and $15,000 car is $4,152.98 over the life of the bonds. If the Star had calculated the cost for the full 40 years of debt, they would have arrived at our numbers.

The Star’s position is that anything beyond 20 years is speculative—so that is where they stopped. The city could refinance, offer additional non-tax bonds, or the economy could boom. All these things are true, and cast further doubt on the city’s account of an $8 average annual increase that assumed no new increases in the property tax levy for 40 years! In the Star’s defense, they did not claim that the costs were only for 20 years. And in previous stories they made clear that the bond sets up 40 years of debt.

Ultimately, voters will decide whether the costs are worth the benefit, and whether they trust the city to do with the new revenue what they have neglected to do for decades: maintain infrastructure. That the Show-Me Institute and the Star are agreeing on the costs—at least in the first twenty years—is a good thing for transparency and good government.

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About the author

Patrick Tuohey

Senior Fellow of Municipal Policy

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