Kansas City Faces $1.6 Billion Shortfall, Earning a “D” Grade

Kansas City’s financial condition worsened in fiscal year 2023, with the city facing a $1.6 billion shortfall. This equates to a Taxpayer Burden™ of $8,800, earning Kansas City a “D” grade and classifying it as a “Sinkhole City” in Truth in Accounting’s latest report.

Despite reporting an operating surplus, Kansas City’s financial health declined due to rising unfunded pension liabilities. Two of the city’s three pension systems experienced financial strain due to unrealized investment losses and actuarial adjustments, such as revised salary growth projections and updated mortality rates. These changes increased long-term pension costs, putting pressure on the city’s budget.
The city did benefit economically from hosting the NFL Draft, which generated a $164.3 million economic impact—$108.8 million in direct spending and $55.5 million in indirect contributions. This event boosted local businesses, tourism, and jobs, but Kansas City must balance economic growth with responsible financial planning to ensure long-term fiscal stability.
Key findings from the report include:

• Kansas City had $2.4 billion available to pay $4 billion in bills.
• The city’s financial shortfall amounted to $1.6 billion, leaving each taxpayer with an $8,800 burden.
• The NFL Draft provided a temporary economic boost, but rising pension liabilities continue to strain city finances.

Managing pension liabilities and balancing expenses with sustainable revenue sources will be critical for Kansas City’s financial future.

For those interested in a deeper dive into Kansas City’s finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.