Kansas City’s Property Tax Abatement Problem

Just the other day, an unsigned Kansas City Star editorial considered the near future for the new Kansas City Council:

Supporters of universal pre-kindergarten have discussed asking voters to endorse a property tax increase, within the Kansas City Public Schools boundaries, to finance programs designed to get young children off to a stronger start in life. James has made education one of his four main tenets when it comes to improving the city’s quality of life. But will the full council agree to back a tax increase that doesn’t flow into the city’s coffers and instead goes for someone else’s priority?

Never mind that this is the same Star that just asked the City to excuse it from paying $10 million in property tax to the school district. Now that it has been exempted, it wonders if the tax rate should be increased for others.

This would be humorous if it weren’t so sad. The Star is not alone; the city regularly abates property taxes in the name of economic development. In fact, whenever you hear about development in Kansas City, the chances are that the city offered the developer a subsidy of some sort. 

As a result of these abatements, schools, libraries, the county and programs that support mental health services and the zoo are being denied funds. As of 2013 the Kansas City school district suffered a $470,000,000 gap between the assessed value of real estate and the value at which it is taxed. 

That’s almost a half-billion dollars of land value that is going untaxed in the Kansas City school district alone. At the 2014 county property tax rate, that amounts to over $23 million each year in forgone revenue. As a result, the district doesn’t have money to pursue a universal pre-K program the Star thinks is so laudable.

City leaders who allow property owners to pay less than the full share of their tax may be the greatest obstacles to fully funded education. Are they really going to ask rank-and-file taxpayers to make up the difference?

Kansas City doesn’t need a higher property tax rate, it needs to make sure more people are paying their fair share.