The Pandemic Sparks an Overdue Reckoning with Kansas City's Growth Obsession
The economic downturn sparked by the coronavirus pandemic has already begun to wreak havoc on city budgets. And Kansas City, Missouri might end up being one of the worst hit, according to a recent Brookings Institution study. KCUR, the city's NPR affiliate, has the details in a recent story that has prompted a lot of conversation among Kansas Citians. It's titled, ”Worse Than Great Recession? Pandemic May Force Kansas City To Change Expensive Ways.”
Part of the immediate problem, according to the story, is the city's unusual tax structure:
A recent study by the Brookings Institution ranked Kansas City, the only local municipality with an income tax, among the nation’s top 20 cities that will feel the most immediate fiscal impacts from COVID-19. To make matters worse, tax pros expect the city to pay back refunds next year as out-of-towners claim earnings tax refunds after working at home — outside the city limits — for months on end.
But it would be a mistake to view this issue, or the final straw of the pandemic, in a vacuum. Kansas City leaders have been making this bed for themselves for a long time. And they're far from alone.
As we at Strong Towns have been outlining in an ongoing series, Kansas City is a poster child for the radical shift in development pattern that virtually all of North America undertook in the post-World War II era: a shift we have called the Suburban Experiment. In this shift, we stopped reinvesting in our existing neighborhoods, and instead rapidly expanded outward, gobbling up farmland and taking on liabilities for which the bills are still coming due. After 1946, Kansas City went on an annexation binge, quadrupling its land area while its population remained roughly unchanged. In Kansas City and many other places, after the 1940s we stopped building the kind of walkable places that hold their value well over time, and we started slicing up cities with freeways, literally demolishing whole neighborhoods in a process that, in Kansas City, was so rapid and destructive residents likened it to the London Blitz.
The KCUR article doesn't refer to the Suburban Experiment in as many words, but it does cite the work of Strong Towns as an influence on the conversation. Our goal in writing at length about this one place is to spark local conversation about a better way forward. We do this by helping provide a vocabulary and context for why so many beloved places are going broke.
And that context is clear from details in KCUR's investigation:
By several measures, Kansas City’s budget picture was already souring well before the pandemic. In 2012, a special commission on municipal revenue warned that Kansas City’s future expenses would outpace revenues without spending cuts, tax hikes or other reforms.
…. Kansas City has increasingly come under pressure for investing in new developments — stretching already thin resources and undercutting revenue streams.
And several outside studies have highlighted the fact that Kansas City carries a higher debt burden than its peer cities, cramping its ability to tighten the budget during difficult times. This year, the city plans to spend nearly $200 million on debt and interest payments. By comparison, the city’s general fund this year was budgeted at $565 million, which pays for police, roads and other services.
That debt doesn’t account for hundreds of millions in unfunded pensions, healthcare liabilities and deferred maintenance. For example, almost half the city’s roads are classified as poor or failed.
Researchers figured that the city’s debt has left each local taxpayer with an individual burden of nearly $10,000.
Kansas City has spent decades buying into the Growth Ponzi Scheme: a model of development in which cities take on ever-increasing debt and unfunded liabilities in the pursuit of new development. What they get from this pursuit is revenue today which can be used to pay off the liabilities associated with the previous generation of growth. That cycle can’t go on forever: sooner or later the bills will all come due.
Examples of this abound in KCUR's reporting, including major loans to "help build Power & Light’s KC Live!, improve Bartle Hall and construct the Sprint Center." And, most glaringly, to finance a $43 million sports complex in a deal approved at the end of April 2020—well after the pandemic had struck and the national unemployment rate had reached its highest level since the Great Depression.
Kansas City is not alone in banking on growth now as an important source of short-term cash flow, without regard to the liabilities it imposes in the future. These two paragraphs are a great illustration of how those liabilities accrue:
While [the soccer project] may now be on the chopping block, developers have already invested heavily in the area, bringing in tidy subdivisions full of new homes and a big shopping center complete with a Costco and Target. But so has the city: it spent some $40 million to build 10.5 miles of sewers in the area, which was largely rolling hills and woods before.
It’s the kind of endeavor opposed by a small group of community leaders who say city officials must rethink their approach to growth. It’s difficult enough keeping up with the significant web of sewers, roads and water lines already installed, they say, let alone adding more pipes and roads to serve new development.
The Good News: The Conversation is Changing
We've spotlighted here the work of Dennis Strait, principal at the Kansas City offices of the Gould Evans planning firm. (Regular Strong Towns readers/listeners will also be familiar with Abby Kinney of Gould Evans, who is the host of our Upzoned podcast.)
Strait has been a leading figure in a push to get Kansas Citians talking about a better way forward. In talks he gives throughout the community, he combines a local's credibility with a deep understanding of the data that reveals Kansas City's harsh fiscal reality. And we're proud that Strong Towns has been a key influence on Strait’s work and on this conversation. From KCUR:
Each time he speaks, Dennis Strait begins with a simple, but damning, proclamation: “We’ve built a city we can’t afford.”
The series, inspired by the national “Strong Towns” movement, has asked Kansas Citians to completely rethink longstanding development patterns and to reject the idea that growth and expansion are always meritorious.
Kansas City has a lot to be proud of: it is a city with an astounding cultural heritage and great old neighborhoods that reflect all of the best lessons in city-building that thousands of years of civilization have produced. The coming fiscal reckoning is going to be painful, but the light at the end of the tunnel will be a better city, one committed to building on its strengths rather than the path of growth for growth’s sake.
Cover image via Nicolas Henderson on Flickr.