St. Louis earnings tax likely to headline April election in the city

Jan 13, 2016

A major source of revenue for the city of St. Louis is one step closer to appearing on the city’s April 5 ballot. The Board of Alderman’s Ways and Means Committee approved a measure to renew the city’s 1 percent earnings tax Wednesday.

In 2010, Missouri voters passed a state law requiring cities who charge earnings tax to put renewing the tax to a public vote every five years. After passing with ease in 2011, it’s time for St. Louis voters to weigh in once more.

St. Louis’ budget director, Paul Payne, said the earnings tax is the city’s largest single source of revenue, and the city doesn’t have the authority to increase property and sales tax enough to replace it.

“We’re already dealing with some structural imbalances that we have to address each year. This would just cause this whole thing to founder and seriously impair our ability to provide city services,” Payne said.

Last year St. Louis received more than $160 million from the earnings tax. That’s more than the combined value of the city’s property tax, sales tax and payroll expense tax.

“I would argue this is possibly the most important thing that we’re going to do this spring. The earnings tax represents one-third of our city’s budget,” Alderman Cara Spencer told the committee Wednesday. “I would argue that we would be almost devastated as a city without this.”

Spencer is one of 23 bill sponsors. The city has 28 aldermen.

To be on the April 5 ballot, the earnings tax reauthorization must be approved by the full Board of Aldermen and the mayor by Jan. 26. With two meetings scheduled before the deadline, the board has just enough time to pass the measure.

Ways and Means Committee Chair Stephen Conway adjourned the meeting Wednesday without a discussion of another measure that could join the earnings tax on the April ballot: a $25 million no-tax-increase bond issue to pay for city equipment and repairs.

This measure would be a trimmed version of the $180 million bond issue that failed last August. Unlike that version, the $25 million general obligation bond would not increase taxes.

The bond issue is slated to be discussed Friday morning at 9, just before the full Board of Aldermen meeting.

Conway told St. Louis Public Radio after the meeting that he delayed discussing the bond because he wants a unanimous committee vote.

“Right now we’re debating,” Conway said. “I think by Friday they will have it all worked out.”

I saw one of our city ambulances being towed this week. We have to have this equipment. -- Alderman Conway

The debate appears to be over how much of the $25 million would go toward the needs of the fire department and how much would go toward repairing city buildings.

The bond proposed in August would have given the St. Louis Fire Department $28 million for new fire trucks and other equipment, as well as $12.2 million to repair fire houses and other department buildings.

“There is a real need (for the fire department updates),” Conway said. “I saw one of our city ambulances being towed this week. We have to have this equipment.”

Meanwhile, City Comptroller Darlene Green said there is also a “dire need” to repair city buildings.

“Some of them are falling down,” Green said. “The last several weeks we had to have an emergency repair (of a vestibule of City Hall) and we’re looking at the city garage, which needs emergency repairs.”

“The chief can go back when it’s a proper time to ask the voters to increase their taxes. But this is not the time. This time is so we can ask the voters to vote yes for a no-tax increase $25 million bond issue to help us pay for those most critical needs, those higher priority needs, which does include fire,” Green said.

Conway indicated he'd like to look at ways other than bond issues to fund building repairs. He also urged his fellow aldermen to help get the word out in their wards about the importance of the earnings tax, saying that having several funding issues on the same ballot could encourage people to vote the measure down.

“There’ll be a tendency for the negative people to come out, so we have an obligation to make sure people understand how important this is to their well being, their property values and their safety,” Conway said.

Metropolitan St. Louis Sewer District spokesman Sean Hadley confirmed Wednesday that MSD’s board of trustees will put funding measures on the same April ballot, including a $900 million bond issue.

Follow Camille Phillips on Twitter: @cmpcamille.