Olathe council unanimously approves Chiefs subsidy after just two hours of discussion; Wyandotte County to follow tomorrow

Both Wyandotte County, where a new Kansas City Chiefs stadium would be built under a proposal by the state of Kansas, and the city of Olathe, where a Chiefs training facility would go, held hearings yesterday to hear from residents on whether they should kick in local tax money to help the state pay off what could total $4 billion in subsidies for the combined project. Despite only having since Friday to look over the plans, residents turned out in force to speak their minds:

• In Olathe, the hearing was “standing room only” as “many spoke against the ordinance, while a few spoke in support of the proposal,” according to KSHB, with many wondering if the city will be able to make up for the lost tax revenues and complaining about the rushed timetable for the proposal to give the Chiefs virtually all city taxes from a 165-acre sports district: “I feel this is not a public hearing, this is a presentation of what has already been decided,” said one resident, Pete Marsh. This proved to be foreshadowing, as the city council listened for two hours, then promptly approved the tax district in a unanimous vote.
• In Wyandotte County, which under its proposal would kick in all of its future sales and hotel taxes from a 200-acre district around a new stadium in Kansas City, Kansas, more than 50 residents testified, many likewise expressing concerns about the cost in lost taxes and the lack of information on the hastily arranged deal: “I think the people need more information,” one speaker said. while another pleaded, “Please, be transparent.” Unlike in Olathe, Wyandotte commissioners said they would put off a vote — for two whole days, with a final decision on the tax district to be made in another hearing tomorrow at 5:30 pm.

To be clear, neither of the new local tax districts would increase the total amount of money going to Chiefs ownership. Rather, city and county tax money would defray some of the state’s costs of paying off $2.775 billion in bonds for the stadium and surrounding development, which otherwise will come from state taxes collected across a mammoth 293-square-mile swath of Wyandotte and Johnson Counties. (This is a different tax district from the Olathe and Wyandotte County tax districts, something one article in particular seems very confused about.) And while some may insist that redirecting all the tax money collected by the county and city in and around the stadium and practice facility for the next 30 years is bonkers, local officials insist that the lunch will be entirely free:

“As I see it, we’re not currently generating any sales tax on this otherwise empty spot of land, there’s really nothing to lose here,” Olathe Councilman Matthew Schoonover said.

Yes, it’s the Casino Night Fallacy again, where any money that is so much as touched by a team is considered to belong to the team, even if it’s tax money that any normal business would pass along to pay for government services. To follow Schoonover’s argument to its logical extreme, no one should ever pay any taxes, because if you didn’t exist, the government wouldn’t collect anything — try telling the IRS that “I should owe no income taxes this year, because if I had quit my job I wouldn’t have earned any income” and see how far that gets you, but when you’re a sports billionaire, suddenly this is standard business practice.

Instead of Schoonover’s “What if nothing were built?” thought experiment, let’s consider this in terms of two other hypotheticals:

• What if the city and county held on to the land and it were used for something else? Once the Chiefs tax districts are carved out of local budgets, that land and any money it could generate is gone forever. Losing the opportunity to make future tax revenues off a parcel of land may be a bit more abstract than losing tax dollars that are currently being collected, but it’s just as much of a cost to local taxpayers.
• What if spending in the Chiefs tax districts gets cannibalized from elsewhere in the local area? If somebody builds a restaurant across from a Chiefs stadium and the only people who eat there are fans who otherwise would have spent their money across the border in Missouri, that’s indeed a net positive; if anybody eats there who would otherwise be eating somewhere else in the county, though, that’s money coming directly out of local government’s existing budget, no future hypotheticals needed.

Or looked at yet another way: Chiefs owner Clark Hunt wants to get the benefit of intercepting all the taxes paid in and around his team facilities and spending it on himself, while all costs associated with any new development — roads, police and fire protection, any schools needed to educate the kids of new residents in a mixed-use district — will fall entirely on city and county taxpayers.

Exactly how much city and county tax money is at stake here? We don’t know, as neither Olathe nor Wyandotte County appears to have tried to calculate the total tax expenditure during the four whole days legislators had to think about it. Wyandotte commissioners promised more information at tomorrow’s meeting; hopefully residents will have time to read it before the commission votes to rubber-stamp the deal.