Voters tell Royals, Chiefs owners where to stick their $500m sales tax subsidy demand

access_time personNeil deMause

The votes are counted in Jackson County, and the plan to extend a 0.375% sales tax surcharge and funnel the resulting $500 million worth of tax money to the Kansas City Royals and Chiefs for stadium project got crushed like a bug, losing 58-42%.

Reaction was immediate, and about what you would expect:

  • Royals owner John Sherman said he was “deeply disappointed,” and that he would “take some time to reflect on and process the outcome and find a path forward that works for the Royals and our fans.”
  • Jackson County Executive Frank White, who had opposed the ballot measure, said its defeat “gives us a chance to reset, and the teams take a deep breath and come back to the table” so they and elected officials can “come up with a deal that’s good for everybody.”
  • Kansas City Mayor Quinton Lucas, who was agin’ it before he was for it, said voters “rejected plans and processes they found inadequate” and he looks forward to “working with the Chiefs and Royals to build a stronger, more open, and collaborative process that will ensure the teams, their events and investments remain in Kansas City for generations to come.”

It’s certain that everyone is now going to regroup and try to come up with a stadium funding plan that either voters will approve of, or that can be approved without having to go before voters. Though both Sherman and Chiefs owner Clark Hunt had hinted at looking to move elsewhere once their leases expire in 2031, neither has any offers on the table from either inside or outside the Kansas City area; Sherman even admitted at one point that the whole move threat idea was suggested by “somebody smarter than me [who] finds that is a message that resonates,” presumably the former campaign directors for Ron DeSantis and Ted Cruz who spearheaded the “yes” campaign.

That the sales-tax campaign outspent the opposition by as much as a 35-to-1 margin, and still got steamrollered at the polls, is remarkable, and there are plenty of theories as to why:

  • People hate giving tax money to billionaires. Sure, but that doesn’t stop them from approving ballot measures to do so 58% of the time. For some reason, the usual arguments — it’ll create jobs, you’ll risk losing the teams if you don’t approve this, etc. — didn’t work.
  • There were too many unknowns. Voters went to the polls with no idea how much more public money might be needed (reportedly $650 million or more just for the Royals) or what kind of guarantees there would be that the teams wouldn’t demand more money a few years down the road or lots of other things. But again, this is a common tactic, and other stadium subsidy referendums have passed despite similar unanswered questions.
  • Everybody hates John Sherman. The Royals owner is the opposite of lovable, and managed to thumb his nose at both Crossroads business owners and local community groups who were looking for guarantees he’d fund anti-displacement measures and housing and job development. As one local posted on Twitter following the vote results: “They’ll teach college classes about how badly the Royals bungled every single aspect of this new stadium push. If the word ‘stadium’ never leaves John Sherman’s mouth and this is presented as simply an extension of an existing tax for two beloved teams, it probably passes.”
  • Nobody cares about the Royals. While the Chiefs are certainly beloved right now after winning the Super Bowl, the timing wasn’t best for Sherman what with his team coming off seven straight losing seasons.
  • People love Kauffman Stadium. Sherman’s entire build-a-downtown-baseball-district plan was a bit weird, given that his team currently plays in a recently renovated (at public cost, with the last round of sales-tax surcharges) stadium that routinely finishes in the top half of rankings of most popular ballparks.
  • The teams couldn’t get all the local power brokers on board. As noted here before, sociologists Rick Eckstein and Kevin Delaney have found that the most successful stadium subsidy campaigns are those with strong local “growth coalitions,” where business, political, and media leaders all circle the wagons to speak with one mind in favor of a deal. That didn’t happen here, with White in particular being a consistent “no” voice, and the Kansas City Star coming out against the ballot measure — giving voters plenty of room to feel like they weren’t crazy if they thought this sounded like a terrible deal.

Regardless of the reasons, stick a fork in Royals/Chiefs subsidy 1.0. Whether they come back with something that requires less public money, or has better community benefits, or has stricter lease provisions, remains to be seen, and at this point will likely depend on what opponents like White and the K.C. Star put out there as necessary preconditions for their support. Or, the team owners could still attempt an end run around the public, like happened in Seattle in 1995 when city voters shot down a Mariners stadium subsidy at the ballot box only to see the state legislature overrule them just weeks later. It may take a few weeks or months before we know what the teams’ Plan B is, but Kansas City residents — and anyone wondering what kind of precedent this will set for stadium deals elsewhere — should be watching closely.

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16 comments on “Voters tell Royals, Chiefs owners where to stick their $500m sales tax subsidy demand”

  1. It is curious that no one mentioned the ballot language allowing “equipping the stadium” which in the past allowed for funding cheerleader’s uniforms. It would appear every desk, computer, baseball etc could be paid for from a tax sold as a fund for renovations and maintenance. So if most or all of the funds are spent each year where does that leave the fund when the stadiums need legitimate repairs? Most likely back to the taxpayers for more taxes.

  3. Good stuff as always Neil. I think it’s worth re-emphasizing in all of these articles that “Jackson County Executive Frank White” is also “Royals legend, number retired, statue in the concourse of Kauffman Stadium” Frank White which certainly has to have an impact in swaying folks who otherwise might vote Yes out of blind sports loyalty.

    1. But I think he’s mad at the Royals because they wronged him somehow?

      1. He was passed over for a managerial job and then fired from the broadcast crew for not being boosterish enough:

        https://sports.yahoo.com/news/why-royals-great-frank-white-no-longer-associates-with-the-team-whose-stadium-he-built-044453095.html

  4. Wonder if the recent stories on the cost of PSLs at the Bills new stadium scared off many voters? Could the Hunts ask existing season ticket holders to pay PSLs on seats at a renovated Arrowhead?

  5. If people voted against it because they love the K (it is great!), then they’ll need a plan B because Sherman has made it clear there will be no extension of the lease after it expires in ’31, so the K is on borrowed time already.

    1. People say a lot of things when they are demanding money for a new stadium.

    2. So, off to Oakland they go in ’32 then?

      Assuming the A’s aren’t still playing there then…

  6. I’m an A’s fan, so maybe I’m biased, but I’ve wondered if the combination of John Fisher’s obvious incompetence with the creativity of the A’s fandom’s “Sell the Team” campaign has been a factor that affects public perception of stadium finances in other places beyond Oakland. Feels to me like the “Sell the Team” sentiment is spreading to other fanbases.

    Maybe I’m wrong, but I think strategically, MLB might have done better to turn on Fisher and seem like good guys, rather than embrace him and let him tarnish their image. And yes, those of us on this site realized that they are a bunch of scumbag billionaires, but this is a high profile story well beyond this site, and there has been universal disapproval of MLB.

    Put another way, once people see one team’s fanbase chanting “Sell the Team” and blaming the owner, they are more likely to do so as well.

    1. Well said.

      I suspect there is more concern behind the scenes among the owner’s club than we could know. At some point (what I like to call the Loria Point, although many other names would work), they have to realize that guys like Fisher put their whole shell game at risk.

      On the other hand, I know from past history that when it comes to keeping grumbling owners on side Commissioners can really earn their keep by casually mentioning to the disenchanted faction that “at some point in future – god forbid – it might be your franchise that needs the support of it’s friends”.

  7. I think both of the venues being universally beloved across their respective leagues (Arrowhead and Kauffman) played a big role, but I also believe that the Royals and Chiefs didn’t do a great job showing what, exactly, the taxes would be used for. We mock vaporware renderings of stadiums, but they are a key piece of PR in getting fans excited about what *could* be possible if a funding measure was passed. I don’t think either team really did a good sales job of “for only the low low price of a 0.375% sales tax increase you could get the MEGABASEBALLDOME” or whatever. Couple that with venues that the fans are more than fine with, and there wasn’t any “there” there to support.

    I’d also be fascinated to see the breakdown in ballot measure success when it comes to keeping a team versus bringing a new one to town. For example, I know a lot of the Santa Clara ballot measure campaign went heavily on “we could bring the 49ers to town!” I have a feeling that ballot measures for a team that’s already in town have a lower success rate, because fans don’t see the need. Supporting a hypothetical team is also easier, because there aren’t the losses, questionable coaching calls, bad GM decisions, tone-deaf owners, etc that sour fans on a team.

    1. I asked economist Geoffrey Propheter, who is the keeper of the sports subsidy referendum database, and he reports that the numbers since 1987 are:

      Attracting a new team: 43% approval rate
      Retaining an old team: 65% approval rate

      So, your initial guess is exactly backwards: It’s easier to pass funding for teams that already have local fans than for what’s behind Door #2.

      1. Huh, that’s fascinating. I guess the threat of the home team leaving is a more powerful argument than I imagined.

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