Rich guy Rex Sinquefield's game of live-action SimCity will continue with the passage of Proposition A. The lopsided statewide vote means Kansas City and St. Louis will be forced to defend the 1 percent earnings tax they collect.
Sinquefield made a pile of money managing funds. He wants lower taxes and fewer regulations, and he's got the coin and the determination to make the rest of Missouri want the same things. He spent a reported $11.2 million on the Prop A campaign, which adopted the populist theme Let Voters Decide.
Sinquefield's professional message-makers tried to sound agnostic about the decision voters in Kansas City and St. Louis will make next spring, when the "e-tax" comes up for a vote, now that Prop A is the law. But their libertarian instincts were hard to suppress. Campaign literature described the earnings tax was "too much and unfair."
Kansas City annually collects $200 million in e-taxes. The money pays for cops, trash pick-up and other services. E-tax supporters say the mechanism is good for residents because it gets suburbanites who work in Kansas City into the taxpaying fold.
Preservationists did not mount much of a campaign to defeat Prop A. Sinquefield's millions and the fact that people who live in Rolla were going to decide its fate made it a lost cause.
No doubt, the campaign professionals who live in Kansas City and St. Louis were happy to see Prop A succeed. Civic leaders in both cities will now have to form and bankroll committees to make sure residents know that if they vote themselves a tax cut next April, services will erode and property taxes may rise. Someone's going to get paid to produce images of garbage rotting on sidewalks.
As for Sinquefield, it will be interesting to see how he continues to social experiment. His think thank, the Show-Me Institute, has in the past advanced a land tax as a means of paying government services. It's an idea which came out of the Progressive movement, strangely enough.
Or maybe Money Bags will be content to watch the e-tax disappear and leave it up the next mayor and council to figure out how to operate a city with $200 million in phase-out mode.
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To clarify the state income tax situation - if you live and/or work in Kansas, you'll effectively be paying their slightly higher income tax rate (it's 6% in Missouri and 6.45% in Kansas). This is due to the "credit for taxes paid to other states" provision on your return.
If you live in KCMO and work in KS (or vice versa), you're paying the Kansas state rate of 6.45% PLUS the 1% KCMO earnings tax.
One of the more important issues that most people have neglected is this!
Cities primary source of funding * projects* are issuing MUNICIPAL BONDS,
Prop A now puts cities cash flow in jeopardy, having to be voted on every so often. This puts the bond rating-value- interest rate, on shaky ground. KC and St. Louis may only be able to get issued municipal at junk bond rates because of income insecurity. What if they cannot move ahead on many projects because they can't repay at the high yield/ high risk rates? Their financing and corresponding ability to implement these bond funded projects could be over essentially. This is the slow-acting poison of the Prop A snake, that everyone has overlooked.
Realist -
Oh I've noticed... if you drive across state line from Westport road to 43rd Ave it's like someone carpet bombed the Kansas side. Also, the exchange around 435 and lackman road in Lenexa is pretty treacherous, to name a few spots that come to mind right away.
In KC, Holmes between 95th and 435 used to be a death trap, but it's seen some improvements in the last several years (finally). There are several spots on the south 435 loop in KC which could really use some help, but I don't really know who's responsible for fixing that (fed? state? county? city?).
Further out in rural Kansas and Missouri, I'd challenge about anyone to tell the difference. It'd be like playing scratch-and-sniff with buffalo chips and announcing which has a more authentic aroma.
But anyway, we're all in for problems, as this infrastructure ages, and people are only willing to pay the marginal costs of use, rather than meaningful maintenance. (me included)
Missouri workers pay far higher taxes in Kansas
Really? Then they're getting screwed. I live in Kansas and work in Missouri. Every year, I have to file a return in Missouri to get all the withheld taxes back so I can give them (and more) to Kansas.
If you want to know why I'm happy to do this - in other words, why I don't move to Missouri for the lower taxes - just have someone drive you down any street that crosses State Line Road with your eyes closed. You'll be able to tell when you cross the state line pretty easily.
Sales and fuel taxes are not taken out of your check. You are not compelled to shop and fuel up in KS. I do it in MO about half the time,but if I chose to do so,I wouldn't spend any money in MO. You are probably right, it's not the amount it's a matter of principle.
Income taxes are higher in Kansas than in Missouri (as are sales tax, fuel tax, etc). Thus taken by itself, it isn't a two-way street - Kansas "wins".
Since the 1% tax is deductible on both federal and state taxes, for people like you and I, it probably ends up being closer to 0.6%.. for others it can be even lower. For the hippies at the Pitch, it's a little higher. ;)
Anyway someone living in Kansas City and working in Kansas, pays more in total income taxes than they would if had Kansas not harpooned his/her employer.
tacitus: if you live in MO and work in KS you get credit (or you should) for the taxes you paid in KS on your MO return. at least that's how it works for me (in reverse).So between me and you it's a wash - I let MO play with my money and you let KS play with yours. However, KCMO residents are not taxed extra in any other city or county, so it's a one way street.
meesha.v:
I find it difficult to feel good about Kansas mugging me for 6% of my income while giving big corporations 10 year tax rebates to relocate 3 miles to the west.
However, I'm not worried about the tax structure being changed anytime soon, no one wants to lose the access to other people's money.
Realist:
Missouri workers pay far higher taxes in Kansas - yet still have no say in how the funds are spent.
For official KCMO, the success of Prop A might just be a wake up call, although I'm not sure they've ever really understood what actual municipal government is about. In any case, the prospect of a hanging tend to focus the mind, so maybe between now and next April when the local election will take place, we'll actually see some serious responsible governing in KCMO.
It's not a good sign, though, and the ehight of irony when in today's edition of the "Star" an editorial encouraged KCMO officials to show how responsible they are with the public's money, and in the business section of the same edition an article celebrated how much enthusiasm there is for a taxpayer-subsidized hotel.
If elections in KCMO were based on facts, performance, and results, nothing would ever be passed.
Behavior has consequences.
E-tax supporters say the mechanism is good for residents because it gets suburbanites who work in Kansas City into the taxpaying fold
Especially since they don't have to give those suburbanites any say in how such funds are spent.
Good point, Meesha. The e-tax weakens the argument of Funk and others when they complain about having to fund the Sports Complex and the zoo.
you have to admit it's a little hard to make suburbanites feel good about being mugged for 1% of their income while giving KCMO residents 15-30 year property tax abatments.However, I wouldn't worry about the earnings tax being voted down next year, no one wants to lose the access to other people's money (who already pay for their own "cops, trash pick-up and other services")
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