CHICAGO – Kansas City, Missouri's $800 million request is the biggest bond measure on April 4 ballots in Midwestern states, where voters will decide the fate of more than $2 billion of municipal borrowing requests and St. Louis voters cast their decision on whether to subsidize a pro soccer stadium.
Kansas City voters will be asked to authorize $800 million in general obligation borrowing for infrastructure work. If voters approve, the city would tap the authority in annual $40 million increments over 20 years.
The GO authority supported by an increase in property taxes will allow the city to address critical infrastructure improvements of a range of city assets, said finance director Randall Landes. Current spending can't "keep up with the infrastructure deficit that is accruing," Landes said.
The referendum divided into three questions; each requires a 'yes' vote of at least 57.1% of voters for approval.
The first asks for $600 million to repair streets, bridges, sidewalks, and trails with $150 million going to create a sidewalk repair program that eliminates the homeowner assessment.
The second question seeks approval for $150 million to improve flood control to prevent floodwaters from backing up into properties. The third question asks for $50 million to repair public buildings including upgrades to meet standards under the Americans With Disabilities Act.
The owner of a home valued at $140,000 and a car valued at $15,000 would pay on average $8 more annually that would rise to about $160 in year 20.
"This is about streets, roads, bridges, curbs, sidewalks, flood control, ADA compliance on public buildings, animal shelter, etc. That's it. No airport. No streetcar," Mayor Sly James said at a recent town hall meeting. He sought to separate the referendum funding from more controversial projects like the city's streetcar line and a pending proposal to build a new airport terminal.
The city's last major bond referendum was approved in 2004 authorizing $300 million. No tax hikes were required. It was exhausted in 2012.
The bond measures have won the endorsement of labor, the Greater Kansas City Chamber of Commerce, Civic Council of Greater Kansas City, and several neighborhood organizations.
While no group has mounted a major effort to defeat the referendum, it has critics. Freedom Inc., an African-American political club, voted to oppose the bonding because of its reliance on a prolonged property tax increase.
The city has $316 million of outstanding GOs, $1 billion of fixed-rate special obligation bonds, and $127 million of floating-rate special obligation paper. S&P recently affirmed Kansas City's AA GO rating and stable outlook and Moody's Investors Service affirmed the city's Aa2 GO rating and negative outlook.
St. Louis voters will decide whether to raise taxes to fund a light-rail expansion and other projects and to cover the city's contribution for a professional soccer stadium.
The half-cent economic development sales tax measure would raise about $20 million annually with 60% going to fund a light-rail line for the Metrolink system. The funds would allow the city to better compete for federal dollars to help fund the $700 million first phase of a nine-mile extension project.
The remaining revenue raised by the tax would finance neighborhood revitalization projects, city infrastructure work, and workforce development and public safety initiatives.
"This is my number-one priority at this point in my 16 years," Mayor Francis Slay said in signing bills that placed the measures on the ballot. "And it's something I'm hoping to leave to whomever takes my place as mayor of the city of St. Louis. This is a big deal. This is something that will impact our entire city."
A simple majority must approve the measures.
St. Louis voters will also pick a replacement for Slay, who chose not to run for a fifth term.
If the sales tax measure is approved, it would trigger a corresponding half-cent increase in the city's use tax imposed on businesses purchases outside the state. On the ballot, voters would be asked whether the city should use the $4 million in annual revenue that would be raised from the tax to help finance a stadium for a new Major League Soccer franchise as well as for job training and economic development initiatives.
The sales tax must pass in order for the use tax to pass, but for the stadium to be built, voters must approve dedicating the new use tax revenues to helping to fund the stadium, and Major League Soccer must commit to a St. Louis expansion team.
Under a proposed lease agreement with the franchise investors, the city would contribute $60 million toward the nearly $200 million price tag for the multi-use downtown stadium and would not be responsible for any cost overruns. The investor group known as SC STL was one of 12 to apply to MLS Jan. 31 for an expansion team.
MLS Commissioner Don Garber this week warned that St. Louis needs to approve public funding if it wants to win a franchise.
The referendum comes as the city is facing fiscal strains. Moody's Investors Service dropped the city's rating one notch to A3 recently and assigned a negative outlook, warning another could be on the horizon unless the city experiences stronger revenue growth or trims spending.
Fitch Ratings dropped St. Louis' issuer default and Municipal Finance Corp. ratings by three notches in June over negative trends and the application of new criteria in assessing tax-supported debt. Fitch now assigns its A-minus issuer default rating and rates the MCF BBB-plus. It does not assign a direct GO rating.
S&P Global Ratings rates St. Louis GOs A-plus.
A handful of Missouri school districts are asking for bonding authority. The Springfield School District is the largest with a $189 million request that would pave the way for a master facilities plan that carries a $367 million price tag for 40 projects over 12 years. If approved, homeowners face an average $46 million hike in property taxes annually. Another request would be sought in five to six years.
The Rockwood School District is seeking $95.5 million of borrowing authority. It would fund school projects needed to address enrollment growth expected from housing construction underway and would not require a tax rate hike.
In Illinois, 31 school districts, towns, and fire protection, forest preserve, and levee districts are asking voters to approve nearly $700 million in borrowing for maintenance work, upgrades, and new projects, according to Ipreo's election calendar. Wheaton-Warrenville Community School District's CUSD 200's $132.5 million request is the largest of the bunch.
Also in Illinois, school districts in Madison and St. Clair County, east of St. Louis, are asking voters to approve a 1% countywide sales tax. The districts are turning to the tax measure to offset delays in state payments as the state's budget impasse has dragged on for nearly 22 months. Both want to avoid raising property taxes.
In Wisconsin, about 20 districts are seeking nearly $700 million in borrowing authority on ballot measures, according to the Wisconsin Taxpayers Alliance.
The largest request on the April ballot is from the suburban Madison Verona Area School District, which is asking for $181.3 million of authority to finance construction of a new high school and auditorium, and to renovate several existing schools.
Districts are hoping the 2016 trend that saw high approval rates continues. Wisconsin voters signed off on a record $1.35 billion of debt last year, according to a recent study conducted by the alliance. Voter approval rates for borrowing last year was at about 77.1%.
