When Kansas City voters head to the polls next month, they’ll weigh in on a variety of municipal issues: school board trustees and directors, bond issues and more. But they’ll also vote whether to extend the city’s 1% earnings tax for five years.
A “yes” vote would extend the tax and continue business as usual. A “no” vote would ask the city to eliminate the tax over a period of 10 years.
All Kansas City residents and those who work in the city pay the earnings tax, and it applies to profits of businesses inside city limits. The money makes up nearly half the city’s general revenue, and it isn’t limited in how it can be spent, so it’s become vital to the city’s funding structure.
The earnings tax has been in place for decades. But after Missouri voters passed Proposition A in 2010, Kansas Citians have been required to re-approve the earnings tax in a citywide vote every five years.
The law also says that no Missouri city can implement a new earnings tax — meaning that if Kansas City rejects it at the ballot box, it can’t be reinstated.
The earnings tax was approved easily in 2011, 2016 and 2021. But The Beacon reporter Josh Merchant says city leaders are holding their breath until the vote.
“Councilmember Ford back in 2010 was opposed to it,” Merchant said, “because when you're asking voters to renew the tax every five years, that sounds great from a democracy perspective. But on the other hand, it's unpredictable, and so whenever the city's borrowing money, it's unclear whether they're going to have the same revenue in five years that they do now.”
- Josh Merchant, local government reporter, The Beacon
