Lee’s Summit, April 4, 2011 – On Tuesday, the City of Kansas City comes up for a vote on the Earnings tax. The current Earnings tax accounts for roughly 40% of the budget for the city. This is a major issue for the folks in Kansas City but more importantly for city council who will have to figure out how to fill in the $200 million brought in by the earning’s tax.
Proponents of the tax argue that it is “not” a disincentive for businesses to move into Kansas City; yet City Officials use the exclusion from the earning’s tax as a way to incent companies to come to the City itself. Lenexa has taken advantage of the Kansas City earnings tax to bring companies there. Overland Park has been the greatest beneficiary of the exodus from Kansas City, and now Lee’s Summit is finding ways to meet their budget and still be attractive to new businesses.
The earning’s tax is a debate that is truly worth having on periodic basis. The five year intervals both give some stability and some incentive for cities to prove the value of the earnings tax. This is a debate that will not be finished tomorrow at the Polls, it will come back up.
The question that I’m going to be most interested in is; will people vote themselves a 1% pay raise or vote to let the city to keep the earnings tax. I’m going to assume that a large portion of those who fight to make ends meet every day and every week just to get to the end of the month will find it difficult to not give themselves a raise.
Before we go jumping to conclusions, a recent study shows that wages from 2010 to 2011 for the reporting month of March were up 1.7% over the previous year. Yet inflation over the same period was up nearly 2.5% so in fact those who struggle, are now struggling harder as we lose our fight against inflation.
Kansas City and the metropolitan area are far better served if Kansas City’s City Council spent their time, effort and energy to bring in new businesses to the City than by focusing on keeping the Earnings Tax.
Note to KC City Council and to the Mayor: Focus your energy on jobs and bring to the inner city strong job opportunities so that those who are unemployed today, can be working, earning and spending: but it all starts with jobs – not an earnings tax.
The Lee’s Summit Conservative.