STAR (Sales Tax and Revenue) bonds in Kansas offer several advantages as an economic development tool, particularly for funding large-scale projects like tourist attractions, entertainment districts, or even professional sports stadiums. Here’s a breakdown of the key benefits based on how they’ve been used and promoted in the state:
One major advantage is that they provide upfront financing without directly increasing taxes for residents. The bonds are issued to cover construction costs, and the debt is repaid using sales tax revenue generated by the project itself—think ticket sales, food, merchandise, or shopping in the surrounding area. This means Kansans don’t see a new tax line on their bills unless they choose to spend money at the site. For example, supporters of the program argue that successful projects like the Kansas Speedway or Children’s Mercy Park have paid off their bonds early or on time, boosting local economies without dipping into general state funds.
Another benefit is their potential to attract big investments and create jobs. STAR bonds can lure major developments, like the proposed stadiums for the Kansas City Chiefs or Royals, by covering up to 70% of project costs. This reduces the financial burden on private investors or teams, making Kansas a competitive option compared to other states. The ripple effect includes construction jobs during the build and long-term employment in retail, hospitality, or entertainment once the project’s up and running. Wyandotte County’s transformation with Village West is often cited as proof—turning a struggling area into a bustling hub.
They also give Kansas an edge in economic development. Only a few states use a similar mechanism, so STAR bonds stand out as a unique incentive. Proponents say this has helped draw regional and national visitors, with projects like the Speedway proving the concept by generating enough revenue to offset costs while enhancing the state’s appeal. The flexibility of the program—recently expanded to include sports betting and lottery revenues for repayment—adds to its attractiveness, spreading the risk beyond just sales tax performance.
Finally, there’s the promise of long-term gains. Once the bonds are paid off (typically over 20-30 years), all that sales tax revenue flows back to the state and local governments, potentially funding public services. Advocates argue this creates a self-sustaining model where the initial investment pays dividends down the line, assuming the project succeeds.
Of course, these advantages hinge on the projects delivering as promised—something critics point out hasn’t always happened. But when they work, STAR bonds can turn underdeveloped areas into economic engines without upfront taxpayer pain, making them a bold play for growth in Kansas.
