On Monday evening, the Waldo Towers Homes Association in conjunction with adjoining Associations hosted Kansas City Mayor Sly James in a Town Hall meeting on the $800,000,000 general obligation bond issue. The City plans on borrowing $40,000,000 each year for 20 years. Officials are calling this a twenty-year bond issue. Critics, however, believe it will take forty years to retire the bonds.
There were roughly sixty-five people in attendance. That number included several City Hall employees and the GO Bond promotion staff. The Mayor spoke to the audience about the proposed work on roads, bridges, and sidewalks, as well about plans for a new animal shelter and ADA work in City-owned buildings.
James stressed that none of this money could be used for the streetcar or the airport, but some audience members expressed their doubts. The ambiguous “other buildings” clause in “question three” alarmed the skeptics in the audience.
The City handed out a flier that claimed, “Paying back $800,000,000 in twenty years will result in a property tax increase of just $8.00 more on average each year for the typical homeowner.” These figures are based on a $140,000 home, a price already below what the median Kansas City home is selling for.
Representatives from Citizens for Responsible Government (CFRG) challenged these figures and handed out a bond amortization sheet showing the real number to be $14.09 the first year with that figure escalating every year until reaching a peak of $193.47 in year twenty. The amortization sheet argued that it would take forty years to pay off the bonds.
Also of concern to the CFRG is the “unlimited liability” portion of the bonds. The CFRG believes the GO bond will carry an unlimited tax obligation. As such it would grant the city the “ability to tax without limit on all property real and personal to secure the interest and principle in order to repay the debt.” In other words, if interest rates go through the roof, the City could conceivably raise property taxes as much as necessary to pay the principal and interest on the bonds.
In an attempt to deflect questions on the bond issue, the Mayor switched the conversation to the streetcar. He spent ten minutes explaining how successful the “free” streetcar has been and then shifted the conversation to the airport.
Dan Coffey of the CFRG did not feel that his group’s concerns were heeded on the GO Bond let alone on the airport and the streetcar. “There is no limit to the amount of property tax the city can charge,” said Coffey. “They have a blank check to charge whatever they need to cover the bond payment.”