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Readers: St. Louis County Needs To Act Like One, Not Compete Within

May 21, 2014 St. Louis County, STL Region 12 Comments

Nearly half the readers that voted in last week’s non-scietific poll picked the two answers that suggest creating a level playing field, a rising tide lifts all boats view.  By contrast, just under 16% took the ‘I got mine screw everyone else’ approach. Here are the results:

Q: Chesterfield is unhappy with the St. Louis County sales tax sharing system, what’s the solution? (pick 2)

  1. Consolidate all STL County municipalities into one 36 [25%]
  2. All sales tax into pool, distribute by population 32 [22.22%]
  3. Eliminate the sales tax pool, let municipalities sink or swim 23 [15.97%]
  4. Restrict municipal use of TIF financing 22 [15.28%]
  5. 3/4 cent earnings tax so county is less reliant on sales & property taxes 12 [8.33%]
  6. Leave it as is 8 [5.56%]
  7. Other: 7 [4.86%]
    1. Turn 64/40 to blvd
    2. f*ck stl county (edited)
    3. send them to st charles
    4. Simplify the system. The 1% countywide tax gets pooled, the rest doesn’t.
    5. relook at POS & pool cities – times change!
    6. Make it easier for munis to dissolve/merge, but not necessarily into one
    7. Let them go. Might be just the thing to encourage incorporating STL.
  8. Unsure/No Answer 4 [2.78%]

Less than 6% said to leave it as is, which suggests to me St. Louis County needs to have a productive dialog about taxation policy and acting together as a county, not just 90 separate municipalities plus unincorporated areas. Who in St. Louis County could lead such an effort to reach a consensus? Chesterfield Mayor Nation isn’t the right person, he’s already resorted to childish threats of taking his marbles across the river to St. Charles County.

A former elected official from an affluent suburb recently suggested to me that St. Louis County should institute a 0.75% earnings tax to reduce dependance on sales taxes. Get the city to reduce its earnings tax from 1% down to a matching 0.75%, then pool all the earnings tax revenue and distribute by population. This would put St. Louis City & County on a level playing field, where collectively we’d be stronger. Certainly worth examining.

— Steve Patterson

 

Currently there are "12 comments" on this Article:

  1. JZ71 says:

    The other half of this conversation would have to be the planning side. Many tax generators (retail centers, industrial plants, warehouses, etc.) are viewed to be “bad” neighbors, something you wouldn’t want to live next to. It’s disingenuous to be living in Ladue or Warson Woods and expecting to benefit financially from an outlet mall while continuing to say NIMBY when it comes to retail. As for an earnings tax, what would be the impact be on a county resident who worked in the city (or vice versa)? They already pay 1.00% to the city – would they end up paying 1.50% – 1.75% in combined earnings taxes?! Finally, until we get the TIF stupidity under control, we’ll continue to have government trying, poorly, to pick winners and losers – any time you assist / incentivize one enterprise, you’re putting many others, mostly existing tax generators, at a competitive disadvantage. I’m glad to see that some leaders are starting to “get it”, in places like Crestwood and Ellisville. Unfortunately, the insanity continues in Shrewsbury . . . .

     
    • Cities would have less incentive to offer giant TIFs if all the money was pooled. The earnings tax would be paid once, everyone living and/or working either in St. Louis City/County would pay it once. Those who live in Illinois, St. Charles County, Jefferson County, etc but work in St. Louis County, for example, would now pay an earnings tax into the regional pool.

       
      • JZ71 says:

        Or not . . . I have a sneaking suspicion that the earnings tax is a major contributor to encouraging suburban sprawl, including moving jobs to areas without an earnings tax. Plus I doubt that Boeing, Monsanto, Express Scripts and most other county employers are going to jump at the chance to see an earnings tax imposed on their executive paychecks. As for TIF’s, the sales tax money is already pooled to a large degree, and developers are adept at playing on the egos of the elected officials in these podunk municipalities. Pooling isn’t the answer, consolidation / unification is!

         
        • Really? The earnings tax in the city encouraged sprawl jn Wentzville, Festus, etc? Hardly.

          A smaller earnings tax, less than 1%, isn’t going to push all the jobs in St. Louis County to surrounding counties. Clayton will not become empty.

          Consolidate of not, the question is how do we as a region collect revenue and distribute services. We must enter the dialog with an open mind in order to find the best solution(s) for the region.

           
          • Your basing that on the assumption, though, that revenue and services should be distributed regionally. I don’t really agree — that’s what the purpose of individual counties is.

            There’s active examples, obviously — Prop A, ZMD, casino tax (?) — but that pooling has the capability of hindering economic growth just as much as it has of encouraging it.

             
          • JZ71 says:

            No, the current city earnings tax encouraged sprawl in St. Louis County and movement out of the city. Impose an earnings tax in the county and watch jobs and residents move in greater numbers to Jefferson, Franklin, Warren, Lincoln and St. Charles counties.

            Any discussion of how “we as a region collect revenue and distribute services” will most likely need to start with the assumption of revenue neutrality. Expecting the voters to approve a new tax on top of existing taxes will take some serious persuading. Every voter has their own priorities, and most voters are way more interested in seeing someone, anyone else’s taxes go up than they are in seeing their own taxes go up.

            Given your current financial situation, I can see why you might be enamored with the earnings tax. If disability payments were classified as and taxed as income, you might have a different perspective – higher property or sales taxes have a greater impact on lower-income residents while earnings, income and transfer taxes have a greater impact on higher-income residents. Me? I would never vote to impose a local earnings tax – I work hard for what I earn and I want to keep as much of it as I can!

            We also need to agree on what makes up our “region” if we’re going to have a “regional” discussion. Is it just the city and the county? The adjoining counties in Missouri? The adjoining counties in Illinois? The whole issue of “distributing” services boils down to haves and have nots when it comes to revenue. Much like individual taxpayers, many municipalities want as much “free” money as possible – revenue coming in without services going out. And if you want all the “good” stuff (nice neighborhoods, good schools, great parks, low crime) without any of the “bad” stuff (landfills, heavy industry, big box retail, freight depots, correctional facilities) you deserve to be paying high property taxes and getting marginal services.

             
      • Can’t really agree with your and the “former elected official’s” idea of enacting a County earnings tax and pooling it regionally. Sure, the County can do one, but I don’t see why it should be pooled with anything outside of that county.

        As much as “regionalism” has become the buzzword of the decade, the reality is that St. Louis City and St. Louis County are their own independent governments. Yes, in theory, a pool brings more usable revenue for the City, but it also dilutes the geographic viability of existing tax revenue.

        If Chesterfield wants to secede, that’s their and St. Louis County’s discussion to have. Personally, I’d be very interested to see the outcome. Maybe it then becomes more palatable to replace C’field’s 33 sq. miles and 47,000 residents with STL City’s 66sm and 300k. Or,alternatively, STL County continues to flounder due to the significant sales tax reduction and businesses/residents rubberband back to the City due to a necessarily increased County tax burden. It’s a win-win for the City (in these two scenarios, anyway)!

         
      • JZ71 says:

        You assert that the earnings tax “would be paid once”, but I’m not finding anything where this is specifically being proposed. While reciprocity is many times written into tax legislation, it’s certainly not a given. The current 1% earnings tax makes up 1/3 of the city’s $450M budget. Reducing it to 0.75% would mean a $33M hit to the budget. Exempting non-residents would mean another $50M – $60M hit. Why would the city agree to a unilateral 18%-20% reduction in its budget when it already has real difficulties trying to meet its current obligations?!

         
        • The attorney I talked to, a former elected official in St. Louis County, said the numbers could work, I haven’t done the math. At this point it’s a concept to have the same earnings tax in the city & county, paid once.

           
          • JZ71 says:

            OK, it’s an interesting concept. The challenge then comes in a) selling county voters on the concept, and b) convincing city leaders to accept a 15% – 20% reduction in income as a condition of some sort of merger / reunification. The one big unknown is a) how many county residents currently pay the city’s earnings tax, and b) how many county residents would be subject to new county earnings tax? If 20% fall into group “a” and 80% fall into group “b”, then it looks like a tough sell. If it’s closer to a 50%-50% split, the concept certainly warrants more discussion. Much like city residents, it should be easy to garner support a 25% reduction in any tax if a majority of county residents are currently paying the city tax.

             
          • Let me try this again, with the city joining the County on a 3/4 percent earnings tax the city income would be unchanged, because the city share of the larger pool.

             
          • JZ71 says:

            Huh?! The county’s population is 1,001,444, the city’s population is 318,416, the total is 1,319,860. If the city’s share of a larger pool is based solely on it’s population, it would be entitled to a 22% share. The city currently generates $150M in earnings taxes, the only way its “income would be unchanged” is if the total pool were at least $682M. Like I said, I don’t know what the current percentage of county residents who pay the city tax, but I have serious doubts about anyone’s ability to convince voters to create / impose a tax that would generate at least $532M in “new” revenue, especially one that is directly tied to some sort of “merger”.

             

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