Hundreds of millions of dollars are at stake in Kansas City’s April 7 election.
Takeaways
- Kansas City’s 1% earnings tax is up for renewal on the April 7, 2026, ballot. A “yes” vote would keep the tax until 2031. A “no” vote would permanently eliminate it after a 10-year phase-out.
- The earnings tax accounts for 44% of the city’s general fund, or about $351 million. City officials warn that if it were eliminated, the city would have to double its sales tax or quadruple its property tax levy if it wanted to replace the lost revenue.
- A campaign committee called Together KC has organized in favor of the tax, including endorsements from nearly every City Council member and local groups including Freedom Inc., the Fraternal Order of Police and several unions. There is no organized opposition, but one City Council member shared that he will be voting “no.”
If a simple 30-word ballot question is approved by voters, Kansas City will carry on as usual. But if it fails, the city will be forced to find other ways to pay for nearly half of its general fund budget.
The issue in question is Kansas City’s 1% earnings tax — a tax that employees and businesses have paid for more than 60 years to fund a wide variety of city services, including the police and fire departments, street resurfacing and affordable housing.
The tax has to be renewed by voters every five years, and every time it has gone to the ballot box, voters have approved it by wide margins. Even so, officials at Kansas City Hall will be holding their breath until the votes are counted.
The official ballot language is as follows:
Shall the earnings tax of 1%, imposed by the City of Kansas City, be continued for a period of five (5) years commencing January 1 immediately following the date of this election?
A “yes” vote will keep the 1% earnings tax for another five years. It will be up for renewal again in 2031.
A “no” vote will eliminate the 1% earnings tax gradually over the next 10 years, with the tax rate declining by a tenth of a point on Jan. 1 of each year until it reaches zero on Jan. 1, 2036. After that, Kansas City will be prohibited from reestablishing the earnings tax ever again unless Missouri statute changes.
What is the earnings tax?
The earnings tax is collected from two key sources.
The first is a 1% tax applied to the wages and salaries of any employee who lives in Kansas City, as well as any employee who works for a Kansas City employer.
For example, an Overland Park resident who works in Crown Center pays the 1% earnings tax to Kansas City. So does a Waldo resident who works in Lenexa.
The earnings tax is also applied to the net profits of businesses located in Kansas City, including big businesses like Costco and self-employed individuals.
The earnings tax does not apply to Social Security, retirement or unemployment benefits.
It was first established in 1963, when voters approved an amendment to the city’s charter. (The charter is the city’s version of a constitution.) Then-Mayor Ilus Davis led the charge, and voters backed the earnings tax with roughly 63% of the vote.
Since then, the earnings tax has become one of the most important sources of income for Kansas City. In the most recent fiscal year, the city collected $351 million in earnings taxes.
Those $351 million represent 44% of revenue for the city’s general fund. For comparison, the city collected $81.6 million in property taxes, or about 10% of revenue for the general fund.
And importantly, Kansas City has the ability to spend the money it gets from the earnings tax however the City Council wants to spend it.
By contrast, Kansas City also gets large sums of money from sales taxes or from the state of Missouri or the federal government, but that money can only be spent on certain things. The city’s aviation and water departments are also self-funded, meaning that the city cannot use water or airport revenues for other purposes.
(Notably, Kansas City is required by Missouri law to spend 25% of its general fund money, which includes revenue from the earnings tax, on its state-controlled police department.)
If it fails, Kansas City will likely lose out on that money forever
Under Missouri law, Kansas City is required to put the earnings tax on the ballot every five years to ask voters for permission to renew it.
But if voters say no, Kansas City’s earnings tax will be phased out over 10 years, and the city will be prohibited from collecting an earnings tax again in the future.
That’s because of a ballot measure called Proposition A that Missourians approved in 2010.
At the time when the question was put to voters, Kansas City and St. Louis were the only cities in the state that collected an earnings tax.
While Kansas City’s earnings tax was first established by voters in 1963, the city was not required to ask voters to renew it.
The 2010 ballot measure changed that. The measure created a requirement that Kansas City and St. Louis had to put the earnings tax to voters every five years. The ballot measure was approved by 68% of statewide voters.
But here’s the catch.
The new law also prohibited any city that didn’t already have an earnings tax from establishing one in the future. That means that if Kansas City ever fails to renew its tax, it will be forbidden to reestablish it.
The 2010 campaign for the ballot question was primarily funded by St. Louis businessman Rex Sinquefield, who donated $1.3 million to a campaign committee in favor of the question. And it was opposed by city leaders like then-Councilmember Ed Ford, who called it a “potential disaster” for Kansas City.
Ford believed that having such a large portion of the city’s budget up for a vote every five years would make the city’s budget much more unpredictable. And unpredictability means a lower credit rating, which makes debt more expensive for the city to take on.
Ultimately, the ballot question was approved by Missouri voters with a wide margin — except in St. Louis and in Kansas City.
In St. Louis, 68% of voters rejected it, and Kansas City voters approved it by a narrow margin.
If local voters reject the earnings tax next month, Kansas City’s finance department told a City Council committee, it would be difficult to find a revenue source to replace it.
“We would have to more than double our sales tax,” interim Finance Director William Choi said at the committee hearing, “meaning that 3.25% (sales tax) would have to be close to about 6.5%. Or in another situation, we would have to more than quadruple our property tax levy rates.”
And both options, Choi said, would still require voter approval, as well as permission from the Missouri General Assembly.
Endorsements
A campaign committee called Together KC has formed in support of the earnings tax vote next month.
No organized committee appears to be opposing the tax.
A “yes” vote has been endorsed by a variety of local groups, unions and elected leaders, including:
- Nearly every member of the Kansas City Council, except for 1st District Councilmember Nathan Willett. Third District Councilmember Melissa Robinson has not publicly endorsed a “yes” vote, but she approved the City Council ordinance placing the question on the ballot.
- Greater Kansas City Chamber of Commerce
- Kansas City Fraternal Order of Police, Lodge 99
- Urban League of Greater Kansas City
- International Brotherhood of Electrical Workers Local 124
- Missouri AFL-CIO
- Freedom Inc.
- Missouri state Reps. Ashley Aune, Michael Johnson (Democrats) and Bill Allen (Republican)
- Missouri state Sens. Patty Lewis, Barbara Washington and Maggie Nurrenbern (Democrats)
“A key part of ensuring we have resources to support our workers,” Kansas City Mayor Quinton Lucas said during his Feb. 11 State of the City address, “is renewal of the Kansas City earnings tax that funds general revenues paying our workers and guaranteeing available dollars for public safety and basic services.”
On the other hand, Kansas City Councilmember Nathan Willett told The Beacon he will be voting “no” on the earnings tax renewal this April.
He also voted against putting it on the ballot during the Jan. 8 City Council meeting, arguing that it should appear on the ballot during a higher-turnout election, like this year’s August or November ballot.
“Major tax decisions should be decided by the broadest possible electorate,” Willett said in a written statement at the time of the Jan. 8 vote. “Putting this question on an August or November ballot would ensure more Kansas Citians have a voice in a decision that directly impacts their paychecks and our city’s future.”
Willett is running for the Missouri Senate as a Republican in 2026 to replace Sen. Tony Luetkemeyer in the 34th District.
When Willett raised that concern during the Jan. 8 meeting, Lucas responded that Missouri statute dictates that Kansas City must put this question on the April ballot and that the August or November ballots are not an option.
Proposition A requires that the earnings tax question be placed on the ballot for a general municipal election. That refers to the April election.
