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As COVID-19 crisis continues, Kansas City budget officials propose deeper budget cuts

Kansas City Star logo Kansas City Star 8/3/2020 By Allison Kite, The Kansas City Star

Even if most departments at City Hall take a proposed 4.5% cut, the economic downturn brought on by the coronavirus pandemic could leave Kansas City’s budget with a $200 million hole in a few years.

A memo from the city’s Finance Department obtained by The Star shows a more dire budget picture than Kansas City officials considered in March before adopting a budget that increased spending in most departments.

As the crisis deepened this spring and summer, city officials asked department heads to find ways to cut 4.5% from their budgets. Ideas included selling park land, cutting recycling services and limiting road projects.

But now, even with the proposed cuts, which City Council members are expected to discuss in committee Wednesday, the city would run a deficit of more than $23 million this fiscal year, which ends April 30. By that time in 2026, the shortfall would be more than $202 million.

As of now, the Kansas City Police Department is not included in those cuts. And the Kansas City Fire Department is expecting a smaller reduction than the 4.5% for other agencies.

But Finance Director Tammy Queen said in the memo that staff needs direction on whether the city wants to cut public safety spending so that it can be included in legislation the Finance, Governance and Public Safety Committee is expected to discuss Wednesday.

“Without full participation by Public Safety, the cuts for (fiscal year) 2021-22 will be dramatic and will significantly impact service levels,” Queen said.

In a statement, Mayor Quinton Lucas said that “like many households” Kansas City’s budget is facing devastating effects from COVID-19.

“We will be faced with many tough decisions over the weeks and months ahead,” Lucas said, “but protecting the people who work for our city and delivering the core services our citizens demand remains my priority. I’ll continue to stand up for our workers and the public as we make difficult budget decisions.”

Councilwoman Katheryn Shields, 4th District at-large, who chairs the finance committee, said she was not surprised by the news City Hall may need to slash budgets further. This spring, when officials first began studying the possible impacts of COVID-19 on the city’s budget, Shields said she feared they were too optimistic.

“I guess my colleagues will either join with me to do something about it or we will continue to keep our heads in the sand,” Shields said.

Much of the financial distress comes from a drop off in earnings tax collections. When City Council members passed their budget earlier this year, they expected to collect more than $292 million. But now, officials project only about $277 million.

Earnings taxes make up about 25% of the city’s general revenues.

The Kansas City Police Department has begun discussions about cutting its budget. Deputy Chief Karen True told the board of police commissioners in June that a 4.5% — or $10.6 million — cut to the police department would mean losing 212 uniformed and civilian positions. She said 89 of those were vacant.

The Finance Department memo suggests making that cut to save money in this budget year. It also suggests cutting the fire budget by the full 4.5%, furloughing all non-public safety employees for one week and expanding the city’s hiring freeze.

In the next budget year, which begins May 1, the Finance Department suggested raising water and sewer rates, freezing pay raises and capturing the use taxes generated by the city’s fire sales tax. It was not immediately clear how severe the hike in water and sewer rates might be.

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©2020 The Kansas City Star (Kansas City, Mo.)

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