The Show-Me Institute’s Pat Touhey has a gripe with the city of Kansas City. He believes that the propagandists for the $800 million KC Go Bond that will go before the voters in April have been pulling their punches.
In a piece published on the Institute’s website on January 30, Touhey argued that the bonds are not the 20-year deal as advertised but closer to a 40-year deal with the last bond not being paid off until 2055. Said Touhey, “If City leaders want voter support for a 40-year tax increase, the best way to get it is to make clear to the public exactly what they’re asking for. This is a multi-decade commitment!”
This week Touhey revealed just how dramatically those punches have been pulled. As he notes, the city has posted a chart on its website claiming the “average annual” cost to someone who owns a $100,000 house is only $6 in year one and $120 in year twenty.
According to Touhey, however, “The graphic is incomplete as it only represents the cost of a single 20-year, $40 million bond. The April 4 election would approve 20 such bonds, issued each year until FY 2036.”
More problematic is the language accompanying the city’s chart. Says the city: “For a household with a $140,000 home and a $15,000 car, the property tax would average an additional $8 each year, rising to an estimated $160 average additional payment in year 20, the final year of the bond program.”
This would imply that the tax would rise incrementally over the twenty-year period peaking at $160 in year twenty. But then the city throws in this caveat, “Please keep in mind that these are averages. In the beginning years, the increase will be more, but then it levels off in the middle and final years, and in some years it declines.”
Even the savvy taxpayer is left shaking his head trying to decipher this language. According to Touhey, “The timeframe of the debt is 20 times longer than what the graphic shows, and the cost to taxpayers is 20 times greater.”
The CPAs in the audience might want to sort this mess out on their own. The Go Bond spreadsheet can be found here.