STAR Bonds: Ten Risks Kansas Taxpayers Should Understand

STAR Bonds: Ten Risks Kansas Taxpayers Should Understand Before the Ribbon Cutting

The Chiefs deal is done. But the financing structure that pays for it comes with a set of risks that aren't in the press releases. A plain-language breakdown of what Kansas has actually signed up for — and what happens if the projections miss.

Josh Dambacher Investment Management Lawyer · Spokesman, Republicans Overseas · May 2026 · 5 min read

STAR bonds — Sales Tax and Revenue bonds — are a financing mechanism Kansas has used before. The basic structure is elegant on paper: a district is designated, sales tax generated within that district is captured, and that revenue services the bond debt. If everything goes to plan, bondholders are paid, the district closes, and Kansas ends up with a major piece of infrastructure it wouldn't have otherwise built.

The Chiefs stadium deal is the largest STAR bond application in Kansas history. The numbers involved are large enough, and the political symbolism powerful enough, that the standard risk disclosures have been somewhat lost in the noise. This analysis is an attempt to recover them.

None of the ten risks below are hypothetical. Each describes a mechanism that is real, documented in prior STAR bond experience, and built into the structure of this deal. Taken together, they represent what Kansas has agreed to absorb if the projections that underpin this financing turn out to be wrong — in whole or in part.

#	Risk	What It Means	How It Can Hurt Kansas	Bottom Line
1	Not Really "New" Revenue Risk	Spending may shift from outside the district — or from elsewhere in the metro — into the district. It's moved around, not added.	Diverts existing tax dollars from schools, roads, public safety and other services. Less money for the rest of Kansas.	Bondholders get paid; public services get less.
2	Inflation Risk	Inflation pushes up prices, so sales tax collections rise. But the cost of services (teachers, roads, police, etc.) rises too.	Extra tax revenue from inflation goes to bondholders first. Government still has to pay more for services — may need higher taxes or cuts.	Inflation gains flow to bondholders, not public services.
3	Projections Fall Short / Default Risk	Revenues don't meet projections. Debt payments can't be fully covered.	District may default, extend debt or need restructuring. Creates financial stress and uncertainty for decades.	Default hurts Kansas' credit and costs everyone.
4	"Too Big to Fail" Political Risk	The Chiefs stadium is large, visible, and symbolic. Hard for politicians to allow it to fail.	Pressure to "fix" problems with new taxes, subsidies, district expansion, refinancing or state spending. Taxpayers end up backstopping the deal.	Political pressure can turn a private risk into a public bill.
5	Higher Borrowing Cost for Kansas Risk	A default or near-default signals higher risk. Investors demand higher interest rates.	All future economic development financing costs more. Fewer projects, smaller projects or higher costs for taxpayers.	Kansas pays more to borrow for everything in the future.
6	Technology / Behavioral Obsolescence Risk	Consumer habits, retail, entertainment and sports economics change. 30 years is a long time.	Lower attendance, less retail, fewer hotel stays. Revenues disappoint for decades.	30-year bet on habits that are already changing.
7	Concentration Risk	Heavy reliance on one project, one team, one location, one ecosystem. Not diversified.	If the Chiefs, development or attendance underperform, the whole financing is at risk.	Too many eggs in one basket creates fragility.
8	District Expansion / Mission Creep Risk	If revenues fall short, pressure grows to expand boundaries or extend terms. More taxes get captured.	More of Kansas is diverted to pay debt. The district grows larger and lasts longer than promised.	What starts "small" can grow big and never go away.
9	Opportunity Cost of Capital	Public resources have alternative uses. Every dollar used here can't be used elsewhere.	Fewer resources for biotech, water, infrastructure, workforce, universities and other high-return investments. Lower long-term growth.	Kansas may be investing in the wrong place at the wrong time.
10	Benefits Leak Across State Lines	Much of the benefit can flow to Missouri — workers, suppliers, hotels, airports, corporate offices, etc.	Kansas pays for the bond and infrastructure. Benefits leak across state lines.	Kansas bears the cost; others share the benefits.

Risk

What It Means

How It Can Hurt Kansas

Bottom Line

Not Really "New" Revenue Risk

Spending may shift from outside the district — or from elsewhere in the metro — into the district.
It's moved around, not added.

Diverts existing tax dollars from schools, roads, public safety and other services.
Less money for the rest of Kansas.

Bondholders get paid; public services get less.

Inflation Risk

Inflation pushes up prices, so sales tax collections rise.
But the cost of services (teachers, roads, police, etc.) rises too.

Extra tax revenue from inflation goes to bondholders first.
Government still has to pay more for services — may need higher taxes or cuts.

Inflation gains flow to bondholders, not public services.

Projections Fall Short / Default Risk

Revenues don't meet projections.
Debt payments can't be fully covered.

District may default, extend debt or need restructuring.
Creates financial stress and uncertainty for decades.

Default hurts Kansas' credit and costs everyone.

"Too Big to Fail" Political Risk

The Chiefs stadium is large, visible, and symbolic.
Hard for politicians to allow it to fail.

Pressure to "fix" problems with new taxes, subsidies, district expansion, refinancing or state spending.
Taxpayers end up backstopping the deal.

Political pressure can turn a private risk into a public bill.

Higher Borrowing Cost for Kansas Risk

A default or near-default signals higher risk.
Investors demand higher interest rates.

All future economic development financing costs more.
Fewer projects, smaller projects or higher costs for taxpayers.

Kansas pays more to borrow for everything in the future.

Technology / Behavioral Obsolescence Risk

Consumer habits, retail, entertainment and sports economics change.
30 years is a long time.

Lower attendance, less retail, fewer hotel stays.
Revenues disappoint for decades.

30-year bet on habits that are already changing.

Concentration Risk

Heavy reliance on one project, one team, one location, one ecosystem.
Not diversified.

If the Chiefs, development or attendance underperform, the whole financing is at risk.

Too many eggs in one basket creates fragility.

District Expansion / Mission Creep Risk

If revenues fall short, pressure grows to expand boundaries or extend terms.
More taxes get captured.

More of Kansas is diverted to pay debt.
The district grows larger and lasts longer than promised.

What starts "small" can grow big and never go away.

Opportunity Cost of Capital

Public resources have alternative uses.
Every dollar used here can't be used elsewhere.

Fewer resources for biotech, water, infrastructure, workforce, universities and other high-return investments.
Lower long-term growth.

Kansas may be investing in the wrong place at the wrong time.

Benefits Leak Across State Lines

Much of the benefit can flow to Missouri — workers, suppliers, hotels, airports, corporate offices, etc.

Kansas pays for the bond and infrastructure.
Benefits leak across state lines.

Kansas bears the cost; others share the benefits.

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