Possibly one of the smartest things ever submitted from our blog community. Take a look:
$800,000,000 = $800 MILLION DOLLARS
KCMO Mayor Sly James, the City Council, and City Manager Troy Schulte are pushing KCMO residents to approve a new $800 million dollar bond issue. But, they won't tell you how they intend to spend this borrowed money, if they successfully fool enough residents into voting for it. "Trust Us", they say.
What is a municipal bond? Think of it as a legal IOU contract in which a city borrows money. If KCMO issues an $800 million dollar bond (IOU), the institutions that purchase a portion of the bond will have to be paid back with interest over the life of the bond. The purchasing institutions might be large banks, insurance companies, pension plans, etc., that are seeking a guaranteed rate of return on their invested money. And they want to absolutely make sure that they get their money back, because they can't have their bank, insurance company, or pension plan fail. If they were to fail, whoever depended on them (bank customers, those with insurance policies, or retirement pensions) would in turn lose their money.
So, how would the city of KCMO eventually get this $800 million dollar IOU, plus interest, paid off? Well, how does KCMO get the money currently for their annual budget? Not quite all of it comes from taxing those who live, work, own property, and transact business within the city limits. Hey, that's you!
Now you're probably asking yourself, "But if I'm already being taxed to death for the city's annual budget, how could they possibly come up with an additional $800 million, on top of what residents are already paying?" I think you already know the answer to that one. I'm sorry, but yes, they will absolutely have to raise your tax burden even higher than it is now. And remember, taxes always seem to go higher, but never go lower. As KCMO representatives, if they borrow another $800 million, they're pledging a legal guarantee that you and your neighbors are on the hook for the IOU. The only way that you could escape that debt would be to move out of KCMO and not do business here. About now, you may be remembering some previous conversations about the high tax burden in KCMO, especially among the working class, and how KCMO government is inefficiently managed compared to most other cities our size.
Let's make this personal, so you can get a better understanding of what this $800 million dollar IOU would represent for you and your neighbors. I'm going to compare the city to you as a taxpaying resident.
Here's an excerpt from City Manager Schulte's letter prefacing the Fiscal Year 2016-2017 adopted budget for KCMO: "I am pleased to transmit to you the Fiscal Year 2016-17 Adopted Budget for the City of Kansas City, Missouri. This document reflects the March 24, 2016 adoption of the final budget totaling $1,531,821,269."
Ok, for our purposes, we're going to round that to $1.5 billion, and for you as an individual, we'll say you have an annual household budget of $15 thousand.......sorry about that, but you're one of the working poor. Just go with me on this simple example. With a new $800 million dollar bond (IOU), KCMO wants to borrow a little more than an additional 50 percent of their annual budget ($800M = 53 percent of $1.5B). This equates to you borrowing $8,000 when your annual household budget is only $15,000. Now, of course the money gets paid back over 20 years or so, but as anyone who has purchased a house or car knows, the longer the repayment schedule, the more interest charges pile up. Back to our simple example, if you have $15 thousand dollars every year for expenses, and you run up another $8 thousand on your credit card for undefined purchases, you better be getting a big raise at work soon, taking on a second job, receiving an inheritance, or winning a lottery jackpot! If not, you really screwed up your financial future. Of course, if you're James/Council/Schulte, you're not putting yourself on the hook, you're putting the whole community in deeper debt. And if residents start leaving KCMO due to the tax burden, those who remain will have to make up the difference.
Do you recall Mayor James, the Council, and City Manager Schulte telling everyone that if the 1-percent earnings tax wasn't renewed, that it would mark the end of the world for KCMO? Threats to public safety were especially used in an extortion attempt to coerce a tax renewal from voters. Do you feel safer after 126 homicides in 2016?
Do you remember when city government reported that they didn't have money for basic things like taking care of parks and fountains? Isn't KC supposed to be "The City Of Fountains"?
Have you also noticed that as the city management continues to decline that they keep adding additional taxes for things that once were covered in the general budget? I think taxpayers call that being "nickel-and-dimed" to death. In comparison to other cities the same size, KCMO government ranks as very inefficient.
Did you notice when the City Manager got a contract extension with pay increases? I suppose he feels indebted to the Mayor and Council since he's reaping the rewards of their vote.
Do you know that KCMO subsidized Burns and McDonnell's headquarters expansion after company employees generously donated to Mayor James reelection campaign?
Do you know a similar arrangement is planned for the downtown convention center hotel if it goes forward?
Do you remember when the Mayor and Council recently agreed to declare the luxury InterContinental Hotel on the Plaza as blighted, thereby saving the wealthy owners millions of dollars and granting them special taxing authority for their property?
Do you know how many millions of taxpayer dollars get diverted to bail out the Cordish Company's boondoggle Power and Light District each year? In fiscal year 2014, it was nearly $15 million, and the money drain continues to 2040. After getting screwed over so badly, you might think the city would quit doing sweetheart deals with Baltimore's wealthy Cordish family, right? Absolutely not! They keep making campaign donations so the Mayor/Council/City Manager keep showering them with millions in subsidies for luxury towers and free parking garages.
Did you see where the Mayor and Council are throwing millions more dollars at the money-pit known as 18th and Vine?
It must be so much fun to give away the taxpayer dollars, picking winners and losers from those seeking to buy your influence.
When you vote on this $800 million dollar bond issue, understand that you're being taken for a fool by city leaders who want as much of your money as possible without explaining:
Why they need more money for basic infrastructure which should already be built into each annual budget?
Why they continually fail at budget management?
Where has the money been diverted? And who got it?
Why are my water bills growing exponentially?
Why are you constantly increasing my tax burden? Do you want me to move elsewhere?
KCMO IS IN JEOPARDY = PASS GO, COLLECT $800 MILLION DOLLAR DEBT BURDEN
In the KCMO Monopoly game, the Mayor/Council/City Manager conspire with the top-hatted banker and developers to bleed you dry. Do you really want to be the "old shoe", in this game of life?
VOTE NO ON HIGHER TAXES, DEMAND ACCOUNTABILITY, RECALL THOSE WHO DON'T COOPERATE WITH TAXPAYERS!
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You decide . . .
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