STAR bonds fall short of projected goals

Overwhelmingly, the sales tax revenues diverted from state coffers benefit urban areas — and even then not all that successfully.



September 14, 2021 - 9:59 AM

Kansas’s urban areas are the only part of the state that is growing in population; the results from the 2020 Census make that clear. Despite its own self-conception as part of the heartland of America, the Sunflower State is, increasingly, a pretty “citified” place.

This dynamic — a slowly growing and diversifying urban population within a state whose political elites still mostly embrace the values of rural conservatism — can explain a lot. It helps explain the persistence of an inferiority complex in many Kansas cities, with the people of Wichita or Kansas City looking south or east, comparing themselves to cities in other states that aren’t as defined by the counties of red which surround them. It may also help explain the push by these cities and their elected representatives to make use of whatever financing they can to change, innovate, and most of all expand. And this is what leads us to STAR bonds.

Sales Tax and Revenue (STAR) bonds are a strange financial instrument. Only two other states — Illinois and Nevada — have allowed their creation, and even they haven’t made use of this fiscal slight of hand for over a decade. In Kansas, however, urban governments have regularly sought permission to sacrifice the sales tax revenue which ought to go to Kansas’s state and municipal programs in order to raise funds for construction which they imagine will bring major corporate attractions to Kansas. The Prairie Fire Entertainment District in Overland Park, the Sports Forum in Wichita, the Heartland Park Racetrack in Topeka — STAR bonds made them all.

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