A group seeking to merge St. Louis and St. Louis County claims a consolidated government would mean billions in savings over a 10-year period.
Better Together released an analysis on Wednesday comparing what St. Louis, St. Louis County, smaller municipalities and fire protection districts spend compared to expenditures after their city-county merger plan goes into effect.
Kyle Juvers, Better Together’s associate director of community studies, said the analysis found that $55 million could be saved in 2023 — which would rise up to $1 billion by 2032.
“All told in the 10-year period, between 2023 and 2032, cost reductions could come down as much as $3.2 billion and have revenues over expenditures of $1.7 billion — which total $4.9 billion in savings to St. Louisans over what is currently being spent in the status-quo structure,” Juvers said.
Better Together’s plan would create a “metro government” responsible for most of the united jurisdiction's services. Juvers said his group calculated the current spending by getting data from city and county budget directors.
Better Together also obtained the most recent financial information from municipalities and fire-protection districts. They then made an assumption that a metro government would achieve 3 percent cost savings through things like consolidation of services, employee attrition and technology upgrades. Better Together's proposal does not alter fire-protection districts, but does create one for the City of St. Louis.
Juvers said the 3 percent cost reduction would outpace the 2 percent rate of inflation, resulting in a net 1 percent reduction in spending on an annual basis.
Additionally, Juvers said that the state should see a revenue boost based on the idea that people would keep more of their money if their property taxes go down and the earnings tax goes away.
“All told over those 10 years there’s $40 million in state revenue that will be generated for Missourians,” Juvers said.
Skepticism over numbers
Some skeptics of Better Together’s proposal questioned why they didn’t get a third party to crunch their financial numbers.
State Rep. Maria Chappelle-Nadal, D-University City, supports the concept of a merger but has been critical of Better Together’s proposal. She noted that when the Board of Freeholders was formed in 1988 to study consolidating St. Louis County’s municipalities, they got accounting firm PricewaterhouseCooper to examine the plan.
“It is vital that there is a third-party entity that has no political interest or any kind of gain whatsoever to do an independent fiscal analysis, because that is where credibility comes in,” Chappelle-Nadal said. “And anyone who has an expertise in analyzing numbers at the municipal or the county level, they are going to take multiple variables and make them part of the calculations of the overall cost of a merger of any sort.”
Juvers said his group consulted with budget officials who have worked in city and county governments. He said the current spending is based off publicly available information.
“So if you’re starting from a baseline of information that is publicly available, and what we have done is put forward the assumptions that we’ve made, it doesn’t take a third party to realize what these numbers are,” he said.
Among other things, Chappelle-Nadal also questioned whether a city-county merger plan could work if the earnings tax goes away. She pointed to how the 1988 plan called for the implementation of an earnings tax in St. Louis County while lowering property taxes.
“It was so valuable to have the input not only from an independent entity, but also have the opinion of multiple public officials who were involved in that process,” said Chappelle-Nadal, referring to the 1988 Board of Freeholders process. “There’s a lot of work that went into the fiscal analysis of the past on this issue.”
Better Together’s proposal would phase out the earnings tax over a 10-year period, with the proceeds going to pay off St. Louis’ existing debt. It would also send a great deal of the sales-tax revenue that’s currently going to municipalities to the metro government.
Juvers said shoppers come from all over the region, and this would spread the sales-tax revenue out for regional services.
Backers of the plan are seeking to get signatures to place the measure on the November 2020 statewide ballot. State Auditor Nicole Galloway’s office will be responsible for calculating the state and local financial impact of the proposal.
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