Arrowhead Pride
In an edition of the Arrowhead Pride Premier newsletter from June of 2024 — when politicians on both sides of the state line were trying to convince the Kansas City Chiefs to accept each state’s vision for the team’s facilities — I wrote an explainer on the proposals being put forth by Jackson County, Missouri and Kansas. Now that the Chiefs have accepted the Kansas offer to build a new stadium in Wyandotte County — and a new team facility in Olathe — we thought it might be useful to revisit it.
Even though both states base stadium financing on sales taxes, each state’s proposals could hardly be more different.
In Missouri, Jackson County calls the shots. It currently has a ⅜-cent county sales tax (0.375%) approved in 2006 to fund improvements to both stadiums in the Truman Sports Complex. It expires in 2031. In April, voters rejected another ⅜-cent tax to replace the 2006 tax and run it through 2064. It was expected to bring in $2 billion to pay the lion’s share of modernizing Arrowhead and building a new Royals stadium downtown.
The Kansas plan uses its unique STAR (Sales Tax and Revenue) program. Private investors would purchase so-called “STAR bonds” to help finance up to two new stadiums. The bonds would be repaid by the 6.5% Kansas state sales tax collected at the new facilities (and any developments that rise around them). Under the Kansas legislation passed in June, state alcohol taxes from the stadium districts (and a portion of the state’s yearly lottery revenue) could also be pledged toward repayment of the bonds.
Here’s a real-world example of how the two approaches are different.
Over the weekend, my wife, Terri, and I visited the new Amelia Earhart Hangar Museum at the airport in Atchison, Kansas. $2.4 million of its construction cost came from STAR bonds issued in 2018. While there, we spent $72 on admission, souvenirs and gifts. So we contributed $4.68 to the bonds’ repayment. So far, 30% of the investors’ money has been repaid; the project is on schedule.
But if Earhart had been born in nearby St. Joseph, Missouri, Buchanan County might have imposed a 25-year, ⅜-cent sales tax to help finance the same attraction at Rosecrans Airport. So a St. Joseph household that spent $20,000 on groceries, clothes, furniture and other items each year would have shelled out $75 yearly to finance the museum’s construction — even if they never walked through its doors.
Kansas politicians carry a big advantage: by using STAR bonds to finance the projects, they aren’t giving taxpayer money to billionaires; the money ultimately comes only from people who use the facilities. (This achieves something that has never been possible during the life of the Truman Sports Complex: the facilities would be financed by the Kansas and Missouri residents who use it).
Meanwhile, Missouri lawmakers are doing things the same way...
