by Mary Rupert
Mayor David Alvey on Thursday sent a letter to Gov. Laura Kelly requesting CARES Act funding for Kansas City, Kansas, and Wyandotte County.
Kansas City, Kansas, and Wyandotte County have yet to receive any direct stimulus money, according to the mayor. Neighboring Johnson County received $116 million directly from the CARES Act, while Sedgwick County, which includes the Wichita area, received $99.6 million.
The state of Kansas received $1.25 billion from the initial federal stimulus funding.
The reason Kansas City, Kansas, and Wyandotte County didn’t receive any direct funding from the initial CARES Act was the way the federal legislation was written, according to Mayor Alvey. The Wyandotte County population was estimated at about 165,400 in 2019, and to be eligible, local governments had to have a population of at least 500,000.
The federal legislation did not take into consideration that Kansas City, Kansas, is in the middle of a larger urban area and is part of a Greater Kansas City population estimated at 2.3 million, however.
The situation is somewhat similar to that of Kansas City, Missouri, which didn’t get any stimulus funding from Jackson County, Missouri, and has requested $54 million in funding from it.
“We are sending a letter to the governor, asking cities and counties be included in the distribution of these funds,” Mayor Alvey said on Friday. “She’s putting together a group that is going to review how that money is distributed. We want to make sure she understands our city and county are suffering and need some support.”
Gov. Laura Kelly announced on Monday at a news conference that a state recovery task force would begin meeting on Tuesday to discuss how funds will be distributed.
Kansas City, Kansas, and Wyandotte County are in better financial shape than some local governments, but they face huge shortfalls from sales taxes from local stores that have been closed.
The Unified Government is looking at between a $36 million and $58 million shortfall in revenues over a two-year period, Mayor Alvey said.
“We do have reserves,” he added. The UG’s reserves are in the $40 million range, but they can’t use them all this year and have to save some of it for next year, according to the mayor. Some of the reserve funds are restricted, and by law can only be spent for certain designated expenses.
In recent UG committee and budget meetings, UG staff members have been presenting financial information as the commission prepares to vote on a budget this summer. UG Commission members recently did an exercise where they ranked the importance of UG programs.
On Monday night, June 1, Kathleen von Achen, UG chief financial officer, told the UG Economic Development and Finance Committee that reserves had been built up to $42.7 million, about 20 percent of the budget expenditures by the end of 2019.
Sales tax, the second largest revenue source for the UG, making up 20 to 25 percent of the revenues, is projected to decline by 20 percent, von Achen said.
She said the UG recently received the report for March sales taxes, which showed there was a lot of stocking up during March, with consumers buying items at stores before the stay-at-home orders.
While the sales tax overall performed consistently, the sales tax that was derived from the STAR bond area at The Legends Outlets dropped 37 percent, she said.
Von Achen said if the COVID-19 revenue impact continues and the UG doesn’t change its budget, they could end with a fund balance of about $9 million.
Commissioner Tom Burroughs, also a state legislator, said that the state reported Tuesday that sales taxes were up half a point more than anticipated. Kansas reported an increase compared to last year, attributed to an increase in online retail sales taxes.
Von Achen said the state’s figures lag usually lag about two months behind; usually, the May reports are for sales taxes collected in March. It is very tempting to be hopeful, and they were planning for the worst while hoping for the best, she said.
The UG also receives the PILOT tax (payment in lieu of taxes) on the Board of Public Utilities’ bills, which is anticipated to be less because many businesses and industries were shut down for the past few months. However, a BPU spokesman last week said they didn’t yet have figures for the amount of revenue losses.
In Washington, D.C., the House of Representatives passed a bill that would provide additional money to local governments. However, the bill stalled in the U.S. Senate.
On May 22, U.S. Sen. Jerry Moran said serious discussion in the Senate on this bill would begin in June. Sen. Moran said there has been some sentiment in the Senate that they are not interested in bailing out states that had mismanaged their funds over a period of time. There has already been funding that has been sent to the states and local governments on COVID-19 costs, such as costs for law enforcement and gear for health care workers. The Senate is expected to address some issues of flexibility of funding for states and local governments. In the future, the federal government may not continue to have all the money it takes to solve all the problems, according to Sen. Moran.
Mayor Alvey said that it makes sense not to provide COVID-19 funding to solve the past mistakes of states that have not taken care of their own finances. “I happen to agree with that, but we still need funding,” he said on Friday.
Last Thursday, a discussion of a federal grant for 100 percent funding of firefighter positions developed into a disagreement between Commissioner Mike Kane and the UG administration over the number of positions. Commissioner Kane advocated for applying for more than 18 positions that the fire chief proposed, since the positions are 100 percent funded. That would be a way to staff the new Piper fire station and keep the Fairfax industrial district fire station open, without the UG spending any of its own funds, according to Commissioner Kane. However, the UG administration said that they didn’t want to do that, because they didn’t think they could sustain the new positions in three years, when the grants would run out.
On Friday, Mayor Alvey said he was not confident that enough funding will be there in three years. “I don’t think anybody can see that far out and see where it will be,” he said.
“We’re going to have a budget workshop again on (June) 11th, and to have proposals brought forward to us, where do we cut expenditures,” Mayor Alvey said on Friday. “And from what I can tell, the commission does not want to raise property taxes, which I agree with, so there are not any new revenues, and we are down a lot of revenue. For us to add any expenditures now in additional expenditures anywhere will mean cuts elsewhere. Like a family budget, if you do not have the money coming in, you can’t put it out.”