Tracy: Will KCMO Voters Shoot Themselves in the Foot on E-Tax Vote?

Checkmate:  KCMO voters, Pat Gray’s pawns are poised to trap themselves with the E-tax.

In chess, one seemingly simple, kneejerk move can lead to losing the game.

But when the tax formula is wrong, you have to FIX it!  Or lose the game.  It’s that simple.

KCMO voters will trudge to the polls one more time, Tuesday, April 5.  And a NO vote would repeal once and for all the E-tax–the crack cocaine of the KCMO budget. 

The big question: Will voters stop hating on Johnson County long enough to save the resale value on their homes?  Will they wake up: their tax formula is horribly out of whack.  Now they have only ONE CHANCE to force the City Council to fix it.

My former controversial employee from the ’70’s, ad man Pat Gray, misleads voters with his campaign supporting extension of the E-tax.  If he’s successful in manipulating voters as his pawns, Kansas City will likely be locked in, and addicted forever to its losing formula for economic development.  Checkmate.

Then Gray will return to his Spanish hacienda in Leawood, laughing all the way to the bank.

Meanwhile, KCMO homeowners will be trapped in a death spiral. Gray’s campaign actually advertises the impending death of KCMO.  His TV spots say: “Save our city!”  (It’s not his city, by the way.)  And the picture he paints of 500 cops and 500 firefighters being taken off the street?  Preposterous fear mongering.  That assumes the City Council would not replace and rebalance their funding.  (With a NO vote, the E-tax would be phased out permanently over 10 years.)  Those plans are already in the works, including a Trash Fee of $180 per year.

On Tuesday, April 5, election day, KCMO has ONE chance to restructure its tax base, and get it right. One chance to stop the bleeding, the migration of smart businesses and homeowners to Johnson County and elsewhere. 

The vote to “renew the 1 % E-tax for five years” will mean continued overreliance on Johnson County residents, employees who work in KCMO, to subsidize the Titanic government that is KCMO.  By that time, their Ship of State may have sunk. 

Even more businesses will depart KCMO.  Because their taxing formula drives them away.

The addiction began in 1964.  Politicians snorted up the easy money without ANY citizen review.  It became their heroin.

For almost 50 years, the E-tax was permanent.  First ½ %, then only one vote: to increase it to 1% in 1970. 

Naïve voters were tricked by the lure of free trash bags!!!  And avoiding a Trash Fee. 

It was only through the generosity of billionaire financial baron Rex Sinquefield that last fall, a ONE TIME colossal statewide petition campaign allowed the voters to actually decide if this tax should continue.  Sinquefield spent $11 million to act on conservative principle to allow the voters to decide.  Good for him.  He lives in St. Louis, where it is predicted they WILL overturn the tax.  So his work is done.  He gave voters their chance. 

Rex the Wonder Dog won’t finance another election.
 
Gray is a pit bull fighter.  Ever since he worked for me, when my agency ran the campaign to overturn the Missouri Blue Laws in the 70’s, his winning formula has pitted KCMO against Johnson County.  His campaign this time, (like BiState II which he lost five years ago for the Hunt Family) echoes the exact themes we used.  

He’s relying on the old Mizzou v. KU rivalry.

But Johnson County isn’t the enemy.  It’s overreliance on one giant egg in KCMO’s tax basket.

Forty percent of the general fund, half of it estimated to come from Johnson County, is the problem.  So what if $100 million a year comes in now from JoCo?  How much MORE is KCMO losing overall with the mass migration of business revenue?  Plus homeowners who flee their school district and choose to live in JoCo instead?  That math is far more insidious and less obvious. 

It’s far easier to hate on suburban JoCo than design a tax formula that is a magnet for urban greatness.

Business owners aren’t stupid.  They’re smarter than the average voter.  And have better development lawyers.  In fact, KCMO is currently buying off big businesses, one at a time, by quietly and selectively cutting private deals exempting them from the E-tax, to stay in KCMO.  That makes real suckers out of the small business owners and homeowners.  They can never get those deals.

Let me ask: Did you stop crying long enough after KU imploded in the Elite 8 Sunday, to watch Leslie Stahl on CBS 60 Minutes? About why so many American big businesses relocated to Switzerland or Canada rather than pay the 35% corporate tax lug to Uncle Sam?

Or have you seen the TV spots–all in Chinese–where they laugh about our stupidity, how America now works for them?  Because America tried to borrow and spend its way out of a great recession? 

Will KCMO voters wise up and take the mulligan? Break the big egg, and replace it with a dozen less onerous ones?  They have this one chance to win in this game. 

 

Tracy Thomas writes political commentary and satire.  Her escape from KCMO’s E-tax, high crime and declining property values to Shawnee went down in 1992.  Take her on at tracy@kcconfidential
 

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19 Responses to Tracy: Will KCMO Voters Shoot Themselves in the Foot on E-Tax Vote?

  1. jjskck says:

    “In fact, KCMO is currently buying off big businesses, one at a time, by quietly and selectively cutting private deals exempting them from the E-tax, to stay in KCMO.”

    Any names/sources here? I’d like to know. I’ve never heard a business use the e-tax as an excuse for leaving KCMO; usually it’s property tax abatements and credits that are cited on the moves.

    BTW, Rex Sinquefield owns property in St. Louis, but thanks to his multiple homes he claims residency outside St. Louis and is therefore not subject to the e-tax.

  2. harley says:

    MORE LIES BY THIS SITE!
    come one…stop lying in this post. Chinese don’t own america….thats a huge lie. china owns about
    7% of american debt…thatsw it.
    We could send these people back to the stone age by stop buying their products and
    throwing tariffs on the crappy dangerous products they ship to u.s.
    You know who owns most of the u.s. debt….the teachers…the fire fighters…the government
    employees….the state and local government employees who’s pension funds have paid
    for this nations debt.
    Can you believe the republicans make these people out to be villains when its actually their
    dollars that are keeping this nation afloat.
    more lies…more bullshit..please don’t keep the lies going….its disgusting.

  3. Ricker says:

    Actually – here’s the truth!
    Harley, you are the one who spreads lies. Here’s the truth:
    China owns up to $1.6 trillion of US debt, which is 11%, and are the largest holder of debt ( actual figures aren’t completely accurate – and Wikipedia isn’t updated, Harley).
    But this article isn’t about that. It’s about how the e-tax is killing Kansas City.
    For a person who keeps ripping on this site, you seem to open your fucking yap ad nauseum.
    Vote NO next Tuesday!!!!

  4. Ptolemy says:

    No on the ETax
    If Kansas City voters are stupid enough to allow the ETax to continue, then their city deserves to continue their reputation as the laughing stock of the metropolitan KC area.

  5. Ross says:

    No facts…. shocking
    We get it – you have a grudge against Pat Gray. Can’t you just post that during every election and leave the ridiculous assertions and poorly written prose to the commenters here?

    By they way – voting yes.

  6. Markus Aurelius says:

    In a vacuum, this is an absolute no-brainer “NO” vote…
    …and the supporters of the e-tax know this. That’s why they’ve resorted to the fear-mongering by stating that voting no will instantly eliminate all the cops and firefighters. This isn’t even close to reality and the public deserves an honest assessment and statement on the alternatives to the e-tax. Where is The Star in reporting on these alternatives? For that matter, where is KC Confidential – or any other media outlet — on this issue? Instead of opinion-oriented blathering the public needs clear facts, sound analysis and an honest discussion regarding options.

    I lived in KC for years and 2 years ago moved out of KC north to another northland municipality, in part to avoid the e-tax. It’s a flawed system and there are countless other major metropolitan areas that function properly and pay their cops and fireman through other sources of revenue. For the past year, the city council should have been looking at how the most successful cities in America, how they generate their revenue to determine what would be the ideal method of taxation (city revenue) for our locale. The original post is right that this IS a potential once-in-a-lifetime opportunity to change the underlying structure of the city’s revenues in a way that positively impacts city growth, development, budgeting, accountability, etc… I just wish the public was given the information it needed to make an informed, wise decision. Apparently, that will not be the case.

  7. stephen says:

    Ever lived in a city without an e-tax?
    I moved to KC after growing up in Pittsburgh, PA. Like many cities in the northeast, the city limits are quite confined compared to the midwest — it’s about 18% the physical size of KCMO, despite anchoring a larger metro area in terms of population. The Pennsylvania constitution & state statutes provided very limited ability for cities to collect revenue from non-resident workers, so commuters in pay merely a flat $52 per year.

    So, what’s the result? Pittsburgh city residents pay a 3% tax on their income regardless of where they work, property taxes are extremely high, services such as snow clearing and road repair — which benefits suburbanites as well as residents — are subpar, and the city still had to fall under Act 47, Pennsylvania’s last-ditch approach to prevent municipal bankruptcy. These considerations, not an earnings tax, yield a much more significant decline in how attractive it is to live in the city. This then puts pressure on companies to locate outside the city, as highly-educated workers don’t want to spend an hour commuting through terrible traffic each way to work with all their fellow suburbanites.

  8. Markus Aurelius says:

    no offense but Pittsburgh is an example of how not to do it
    however, that does not make it a sound rationale in favor of the e-tax.

    In other words, providing an example of one method that has failed does not necessarily prove that some other method is the best, or even that the other method will work.

  9. Jen KCSTL says:

    Does anyone not understand that the PEOPLE, the CITIZENS, voted on the e-tax – it wasn’t opposed. And now it represents 38% of the general fund. So where the hell is this money going to come from?? And don’t tell me, dont worry about it, we will have 10 years to figure it out!! Since when do we make decisions and then figure out the consequences. It is easy math – no money to fund services, services go away or we pay more for them. Taxes that will be imposed to make up for the e-tax if it is not renewed will end up being more expensive than the 1% we pay now. I do not think at this point in time within this economy, anyone can afford to do that.

  10. harley says:

    THE END OF KCMO
    end the etax and say goodbye to kcmo….remember the money that athletes….musicians ….and other
    people who live elsewhere pay when they come here…..this is serious and kcmo rolls up the streets
    and shuts down….where’s the money going to come from….increased taxes on the residents

  11. Tracy Thomas says:

    Harley, Let’s Debate. Or Mudwrassle.
    OK, Harley–I say just the opposite. Extend the E-tax and watch KCMO die. Their little trash bag addiction grew to 40% BECAUSE so many of us migrated out. Is there a business left that won’t have this on their radar after this campaign?

    As for the largesse contributed by some one day visits by other NFL teams–ha. Do you honestly believe that all gets COLLECTED?!!! Bet against that. The City of KCMO is preposterously inept . One example: They collect the liquor license fees that are to go to Jackson County, and somehow failed to fork that over for 30 months. Both entities swept that fact under the carpet.

    The City of KCMO was SO dumb they are on the hook for $15 million a year, every year, just to prop up the Power and Light District. And that domino has also hurt the prosperity of Westport and the vaunted Plaza. They borrowed from Peter to pay Paul.

    And how about those super-TIF’s, downtown. All of their taxes, and yes, their E-taxes, get rebated and flow back to the business that played poker and won.

    When you TIF, that also exempts the extortionist business from paying school taxes. The KCMO School District loses $40 million a year that way. So while everyone is whining about what will happen next, if KCMO loses $100 million a year from JoCo residents, maybe they should realize: their house of cards IS the problem. The addiction to the E-tax IS the problem. The City Council that wastes taxpayer money on neighborhood festivals and picnics instead of infrastructure IS the problem.

    Ya got ONE chance to invent a new formula. Sometimes one must give up your good to have your better.

    Only 25 of the 150 largest cities have a stupid E-tax.

    A NO vote allows the residents to start fresh. Remove one egg, replace it with many smaller ones. Maybe charge double for Chiefs tickets to people outside of KCMO or Jackson County. Trust me, JoCo tailgaters would still pay it.

  12. jjskck says:

    “Maybe charge double for Chiefs tickets to people outside of KCMO or Jackson County. Trust me, JoCo tailgaters would still pay it.”

    Perhaps you’d like to look at last year’s attendance figures where everyone paid face value. There were two actual sellouts all year.

    I’m not saying the e-tax isn’t flawed. But are you really suggesting that the e-tax is even one of the top 5 reasons you left KCMO?

  13. jjskck says:

    Tax rates
    I have no way to verify what the tax rates were when you left KCMO, but right now KS state income tax is 6.45%. MO state income tax is 6%, which means KCMO residents pay 6+1 = 7%.

    Again: I’m not defending the tax, I’m refuting that it is in any way a significant factor in where people decide to live, work, or set up a business.

  14. HARLEY says:

    tracy….the end is near for kcmo
    where does the money come from…charging more for football tickets…toll booths at
    ward parkway….higher sale tax for joco shoppers…
    half the people who pay the earnings tax are from joco. Do you think they are going
    to take that money and give it back to jackson county or kcmo.
    They’ll take that money and spend it close to home.
    So where does the money come from tracy…make up hundreds of millions of dollars.
    Who replaces the $30,000 jeter pays kcmo when he plays at the k?
    Who replaces the millions of dollars that they lose?
    Its got to comefrom somewhere.
    Does p and l go dark and out of business. What about sprint center…what about
    the streets and sewers…
    who’s gonna make up this financial shortfall.
    You’re like the pigs who say lets spend less money with no ideas where to
    cut the budget.
    I wouldnt mudwrestle you…i wouldnt touch you…i’ve seen you…..i have no need
    to be around idiots without a plan when they attack.
    You are an idiot…point blank…and its easy to make all those stupid comments
    when it doesn’t affect you.
    Now go back to your trough. Maybe funks wife will mudwrestle you…you both have
    the same i.q.

  15. Tracy Thomas says:

    Harley, you weak sissie–is that all ya got?
    Ad hominem attacks?

    (For the sports boys who are not as bright as Harley, that means personal attacks and name calling.)

    Come on, Harley–stop tapping out so fast. You had all the answers for how to save Mizzou sports, on Greg Hall’s post. Put some of your big manly brain cells to work on balanced taxation. I know you are smart enough.

    Actually, there is a city/chamber committee secretly working on ALL the new solutions. (Read TonysKansasCity.) They will start by, duh–making KCMO residents pay for their own trash collection. $180 a year. But there are dozens of plans in the works. It’s not my job to save KCMO. I did MY service, five years as a public servant on the Shawnee City Council. A sensible town that had an awesome City Manager, Gary Montague, who built our City Hall for $2.5 milllion. Then when he retired, his successor, Carol Gonzales, became a big spender, and spent $27 million just building a police/fire station and courthouse.

    So, Harley, stop the namecalling, start solving the problem. Comparing me to a pathetic mentally ill woman who ruined her husband’s career because he refused to get her any help–that’s not the way to play.

    So

  16. Tracy Thomas says:

    jjskck, yes there were other reasons I fled KCK in 1992
    Crime was #1: at work and home. Ouzi shells littered the sidewalk in front of my office at 31st and Main. And in Coleman Highlands, where I lived, they allowed a Simpson House across the street from me on Karnes Blvd. Even tho we had a single family ordinance that prevented renting or occupying a home by more than one family. So much for following the law.

    So pimps prowled the street, calling out to the women who were trying so hard to sober up–trying to get them to come back to prostitution. It was so bad my fiance, who was a big bruiser who resembled Mr. Clean, didn’t feel safe walking the dog.

    Then there was a dyslexic Mexican gang in my neighborhood. They shot up the living room of a 90 year old couple–thought their drug victims lived on 33rd Terrace instead of 33rd St. And the clueless cops just did nothing: told the old couple to go thru their living room on their hands and knees. The cops also took down the net on the basketball hoop at the bottom of the hill–yeah, like that was gonna fool teenager basketball players into thinking they were lost.

    And yes, I hated the 1% earnings tax. So I moved in 1992 to Stepford (JoCo). And now I just visit KCMO for First Fridays, Unicorn Theatre, KCRep, restaurants and friends. I founded a church there. I founded the Kansas City Artists Coalition there. I founded NAWBO there. It’s a great place to visit…

    But let me say this: money is not what makes a police department work. It’s effective leadership that was missing.

  17. Tracy Thomas says:

    jjskck, yes there were other reasons I fled KCK in 1992
    Crime was #1: at work and home. Ouzi shells littered the sidewalk in front of my office at 31st and Main. And in Coleman Highlands, where I lived, they allowed a Simpson House across the street from me on Karnes Blvd. Even tho we had a single family ordinance that prevented renting or occupying a home by more than one family. So much for following the law.

    So pimps prowled the street, calling out to the women who were trying so hard to sober up–trying to get them to come back to prostitution. It was so bad my fiance, who was a big bruiser who resembled Mr. Clean, didn’t feel safe walking the dog.

    Then there was a dyslexic Mexican gang in my neighborhood. They shot up the living room of a 90 year old couple–thought their drug victims lived on 33rd Terrace instead of 33rd St. And the clueless cops just did nothing: told the old couple to go thru their living room on their hands and knees. The cops also took down the net on the basketball hoop at the bottom of the hill–yeah, like that was gonna fool teenager basketball players into thinking they were lost.

    And yes, I hated the 1% earnings tax. So I moved in 1992 to Stepford (JoCo). And now I just visit KCMO for First Fridays, Unicorn Theatre, KCRep, restaurants and friends. I founded a church there. I founded the Kansas City Artists Coalition there. I founded NAWBO there. It’s a great place to visit…

    But let me say this: money is not what makes a police department work. It’s effective leadership that was missing.

  18. Tracy Thomas says:

    Make that: Fled KCMO.
    I fled KCK in 1973, moved to KCMO to run the Arts Council. Left KCMO for JoCo 1992.

    Also, sorry about the double post. Oh well.

  19. GrowKC says:

    JoCo doesn’t pay half the e-tax
    I love how quickly people take info and start misreporting facts. It was estimated that half the e-tax money comes from NON-RESIDENTS, not Johnson Countians. So that includes Liberty, Lee’s Summit, Blue Springs, and every other municipality in the metro that isn’t JoCo. The reality is there’s now more Missouri residents working in Kansas than Kansas residents working in Missouri. While KCMO was chasing jobs out of the city, JoCo was more than happy to take them. KCMO has been its own worst enemy. KCMO alone had hundreds of thousands more jobs than all of JoCo before the e-tax was enacted. That’s no longer the case. The private sector is now headquartered in JoCo. What KCMO has capitalized on is all the public sector jobs (Federal, county, city) that have no choice in where they’re placed while the private sector fled to JoCo.

    And I love people that are concerned about basic services. Because KCMO has the e-tax, it allows them to use the sales tax for everything but basic services. If you listened to some folks, they think the general fund is the only thing that matters. KCMO doesn’t put a penny of sales tax revenue in the general fund. It just shows you how jacked up the city’s tax structure is. And that’s why a vote for the e-tax will enable the city to do a $300 million convention center hotel and any other pet project the city council wants. Even though it’s unlikely the e-tax will directly fund them, the e-tax pays for the other stuff so they can use things like the sales tax or hotel room taxes to pay for special projects rather than basic services. I actually think it’s important to get a convention center hotel, light rail, etc. so it’s about the only reason I like the e-tax. Most folks think all those things are stupid, but we need them as a city.

    The most mind-boggling thing is that e-tax supporters seriously think KCMO is competitive on jobs in particular with JoCo when KCMO (and JaCo) has been getting it’s clock cleaned for decades. If you read the Star, JoCo is now set to pass JaCo before 2020 when just 5 years ago or so, it was supposed to take until 2030. The amazing thing is to look back to when the e-tax was getting going and to see how the competitive landscape in this metro has been turned completely on its head. It’s almost the exact opposite of before the e-tax was enacted.

    http://www.marc.org/metrodataline/xls/Forecasts/2004_Long_Range_Forecast.xls This has employment data by county. MARC has other data on their site that shows from 1990 to present where you can break it down by city.

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