Kansas City Earning Tax Measure (April 2011)

A Kansas City Earning Tax Measure was on the April 5, 2011 ballot in the city of Kansas City, which is in Cass, Clay, Jackson and Platte Counties.

This measure was approved

• YES 56,965 (78%)a
• NO 16,494 (22%)

This measure was brought forth by a statewide election in November 2010 on a Missouri earning tax initiative, which was approved by state voters. This measure asked city voters if they wanted to continue the 1 percent local earning tax. This question was designed to be asked every five years of residents unless they reject it and then it would not be able to be renewed again. A vote in favor of this measure was a vote in favor of keeping the earning tax in place. This was the opposite of what a "yes" vote meant in November 2010, which led to some noting that voters could have been confused if they believed it was the same measure as in November 2010. The money from this measure was earmarked to pay for police and fire services as well as trash collection, subsidies to sports teams in the area, and tax breaks for developers.

Aftermath

Lawsuit

On July 25, 2011, Kansas City Fire Chief Richard Dyer and civic leader Anita Gorman, who helped lead the effort to establish the earnings tax in 1963, filed a lawsuit in Cole County Circuit Court. The lawsuit argued that the "Kansas City charter authorizes the local earning tax and does not require the periodic renewal vote."

A lawsuit was dismissed by Cole County Judge Jon Beetem in mid-August 2011. The lawsuit was filed by the Kansas City attorney’s office on behalf of labor leader Pat Dujakovich and City Manager Troy Schulte. Specifically, the lawsuit noted that the election requirement violated the city charter and state constitution, partially because it required an election costing about $500,000 every five years. According to Beetem the measure did not violate the state constitution because "the Kansas City Council could on its own abolish the earnings tax and isn’t forced to conduct a costly election."

The dismissal, however, did not affect the lawsuit filed in July 2011.

Support

The group in favor of this measure, Save Kansas City, had raised near $1 million for their campaign, most of the money from for-profit businesses in the city. This group had hosted a news conference against those opposed to the measure and where their funding was coming from. Those in favor of this noted that, without the earning tax, police jobs would be lost as well as other city services essential to the safety and development of the city.

Opposition

Freedom PAC was the only organized group formed in opposition to continuing the earning tax. The group received $375,000 from two non-profits. People in favor of the measure, however, noted that the funding sources behind the non-profits were not disclosed. Members of the group stated that it was legal to not disclose who funded the non-profits and questions about suspicious activities were unfounded. They noted that the donors were kept secret because they feared a back lash from the city. Those opposed to this measure noted that there were better ways to tax residents and pay for city services. They argued that this tax hurt businesses and was a regressive tax for residents.

See also

a Missouri Earnings Tax Initiative, Proposition A (2010)
a St. Louis City Earning Tax Measure (April 2011)

Additional reading

• KMOV 4 News, "Even after big wins, Slay, James seek scrutiny," April 6, 2011
• Sify Finance, "St. Louis, Kansas City buck anti-tax trend," April 10, 2011
• The Kansas City Star, "Key facts about the earnings tax," March 26, 2011 (dead link)