WebSify
Follow us on
Mail
Print

St. Louis, Kansas City buck anti-tax trend

Source : AP
Last Updated: Sun, Apr 10, 2011 07:20 hrs

The mood across the country has turned decidedly anti-tax, but you wouldn't know it in Missouri's two largest cities.

Local voters overwhelmingly agreed to renew earnings taxes in St. Louis and Kansas City for the next five years, protecting huge chunks of both cities' budgets. Perhaps most surprising was the lopsided support — 88 percent in St. Louis, a 3-to-1 margin in Kansas City — amid strong anti-spending sentiment in much of the country that even has Congress wrangling over a possible government shutdown.

St. Louis and Kansas City are both heavily Democratic cities, more prone to support big government. But even for those who favor smaller government, the stakes in Tuesday's election were simply too high, said Saint Louis University political scientist Ken Warren.

"Voters aren't so oblivious they didn't see what they would do to their city if they voted down the tax," Warren said. "You talk about a shutdown. It is true the knee-jerk reaction is to vote down taxes. But this is an essential tax the city residents cannot afford to vote down."

Each city has a 1 percent earnings tax. In Kansas City, it generates about $200 million annually, roughly 40 percent of the city's budget. The St. Louis tax generates $140 million, or about one-third of the budget.

City officials warned that losing the revenue would likely mean cuts to police and firefighters, and loss of vital services. That sentiment was evident at the polls. One voter, 35-year-old librarian Maria Sapp, said she felt she had no choice.

"My daughter will be going to public school and we use public services," said Sapp, who voted at a St. Louis polling site with her little girl in tow. "We have to pay."

Opponents believed that the earnings taxes, which cost the average resident of both cities about $300 annually, drive away business and residents. They said the property tax revenue that the cities would gain if the taxes didn't exist, combined with more efficient government, would offset the loss.

Critics vowed that Tuesday's vote wouldn't end their effort to kill the tax, and city leaders agreed that they needed to take a hard look at their tax structures and the efficiency of their operations.

"It'll be back on the ballot in five years, if not sooner, and there will be a big change in the atmosphere between now and then," said Woody Cozad, a spokesman for the Kansas City group that opposed the tax, Freedom PAC. He blamed the defeat on low voter turnout.

The taxes will be up for renewal votes every five years thanks to a statewide ballot measure approved in November. Wealthy St. Louis businessman Rex Sinquefield spent $11 million to almost single-handedly finance support of the measure, which also prohibits any other Missouri cities from adopting an earnings tax.

A study released Wednesday by a nonprofit funded by Sinquefield described a variety of new taxes and fees, along with cost savings, that could help St. Louis phase out the tax over a decade.

"This is not a blank check for the future and it will not last forever," St. Louis Mayor Francis Slay said of the tax. "When the election comes around in five years, we really should have a very different city and region because I'm not sure the voters will give us another five years."

Slay said the city should work more with neighboring governments, and could look to consolidate health departments, economic development and other services with St. Louis County.

Kansas City Mayor-elect Sly James, like Slay a Democrat, takes office May 1 and plans to re-establish citizen-led commission that will take a hard look at the city's tax structure and potentially recommend changes. Ironically, it was an earlier version of the commission that first recommended an earnings tax in the 1960s.

"We always have an obligation to make sure our taxes are fair and reasonable," James said.




blog comments powered by Disqus
most popular on facebook
talking point on sify finance