Pine Lawn and Des Peres – two cities only 13 miles apart in St. Louis County – couldn’t be more different. But they have one thing in common.
“They both fund their municipal government through dollars that largely come from people outside their cities,” stated the recently released Better Together St. Louis study, which analyzed the St. Louis region’s fragmented structures and systems.
“Some may say one method is superior to the other, but we can all agree that neither is sustainable or fair.”
Des Peres, located near Interstate 270 and Manchester Road, has 8,500 residents who are 94.3 percent white with a median household income of $116,000. Residents pay no municipal property tax, yet their municipal government has police and fire departments and offers its residents premium services, such as a state-of-the-art recreation facility and free trash and leaf collection. West County Mall, situated in Des Peres, collects $12.7 million in sales taxes (fully 60 percent of Des Peres’ total revenue) from the mall and other smaller commercial sites.
Pine Lawn in North County has 3,200 residents, who are 97.7 percent African-American with a median household income of $26,632. Pine Lawn recently had to dissolve its police department due to financial hardships.
“In doing so, it chose an unaccredited agency to police the community because of the higher cost of professional police services from the CALEA-certified St. Louis County Police Department,” the report states. “Pine Lawn has also recently upgraded one of its municipal parks but cannot keep it open regularly due to an inability to have police patrol the area with the needed regularity to guarantee safety.”
The few services Pine Lawn is able to provide its residents are primarily funded through municipal court fines and fees, which totaled $2.4 million in 2014, or 62 percent of its budget.
North County municipalities, such as Pine Lawn, have been highly criticized in the past two years for abusing the municipal courts to fund their cities’ budgets. By comparing this practice to Des Peres, the Better Together St. Louis study brings the problem into perspective. Just as protestors were chanting outside court houses, the report also argues, “The system is broken.” The report indicts the larger problem of St. Louis’ “outdated and obsolete fragmented structure,” which leads some cities to struggle to provide basic services, while others can offer premium services without even collecting property taxes.
For the past two years, Better Together St. Louis studied the impact of the systems of the region, including the 90 independent municipalities within St. Louis County, 43 fire districts, 57 police departments, 81 municipal courts, and the more than 52,000 pages of ordinances that govern 1.3 million citizens.
Dave Leipholtz, Better Together’s director of community-based studies, said the study started out as a fact-finding mission for what it would look like to combine all the governments in the region, as other metropolitan areas have done, including Louisville-Jefferson County and Indianapolis-Marion County.
When regional leaders attempted to have this conversation in the past, they would get stuck on the facts, he said.
“People had hunches, but no one could provide a common source of data,” he said.
Yet, as they started getting information back, he said, “The conversation went from whether we should do something and whether we have a problem to what we should do.”
Better Together’s studies found that all of this government costs over $2.3 billion annually, which is significantly more than cities that have consolidated their governments. St. Louis’ governments cost taxpayers approximately $1,800 per capita compared to just over $1,200 for the same services in Indianapolis-Marion County and an even lower $1,100 per capita in Louisville-Jefferson County.
This “overspend” adds up to over $750 million annually on local government services, according to the report.
“The overspent sum represents huge opportunity costs for the region and is enough to pay for efforts like the CityArchRiver project more than twice over or provide our vibrant start-up community with a best-in-class fiber network,” the report states.
Researchers found that many of the disparities between the services in the region revolve around one thing: detrimental internal competition. And much of this stems from a 1969 law that allowed municipalities to pass their own sales tax. Now St. Louis has one of the highest sales taxes in the nation, and numerous studies find that high sales taxes – compared to property or income taxes – disproportionately affect lower-income residents.
“Because of the prisoner’s dilemma that is created for municipal leaders in the current system (i.e., either chase the sales tax revenue or lose out to the communities that do), the St. Louis region has gone from having no municipal sales tax to gathering 36.7 percent of its annual regional revenue from sales taxes,” the report states.
Fragmentation and inclusion
A key problem with fragmentation is that it’s nearly impossible to establish best practices throughout the region – from everything from business licensing to municipal court practices and police and fire protection, the report states.
That’s particularly true with establishing equity in the region’s workforce standards – and the Metropolitan St. Louis Sewer District (MSD) is one example of this. Researchers discovered that while both St. Louis city and MSD have strong standards for minority participation on projects, St. Louis County’s government had no standards at all. Minority workforce standards ensure that contractors on sizeable government contracts employ minority and women workers.
When a contractor working with St. Louis County gets additional work with either St. Louis city or MSD, the ideal would be for that contractor to hire the necessary number of additional minority or female workers to meet the participation goals. However, since St. Louis County currently has no minimum standards for minority or female participation, the contractor tends to simply move the already existing minority workers in their company to the projects that require it – not hire more underrepresented workers.
“This diminishes the effectiveness of the existing workforce development standards and undercuts the legitimate goals of other governments to train a workforce that is reflective of its population,” the study states.
This dynamic also plays out in the use of development incentives like TIFs (Tax Increment Financing), the study found. These incentives were initially designed to combat blight and help spur development and growth in areas that were not reasonably anticipated to be developed without adoption of the tax incentive. Yet the criteria have been grossly redefined and led to the proliferation of tax incentives for ordinary development, with TIFs being among the most abused.
“The ultra-competitive pursuit of sales tax dollars in the region has served to undermine the effectiveness of these tools for those communities that experience true economic blight,” the study states. “The result again puts communities that may already have been at a competitive disadvantage even farther behind.”
Fragmentation and health disparities
Better Together found that perhaps the most troubling result of fragmentation is its contribution to great race-based disparities in health outcomes, as documented in the “For the Sake of All” report. This report found that residents of zip codes separated by only a few miles have up to an 18-year difference in life expectancy.
Better Together found that the structure of the public health services in St. Louis city and county play a role in exacerbating disparities in health outcomes. Fragmentation has enabled vastly different funding scenarios for these two public health departments. The St. Louis Department of Health receives approximately 51.5 percent of its funding from grants and contracts, with the remainder coming from the city’s general fund. In contrast, St. Louis County’s department of public health has a dedicated property tax as its primary funding mechanism and only 3.5 percent of its funding comes from grants.
“The reliance on grant and contract funding means that the priorities of the city health department are often dictated by available grant funds rather than the health priorities as determined by the local department,” the study states.
Fragmented cops and courts
The level of police service a citizen receives in the St. Louis region depends entirely upon where one lives or the area in which one is traveling, the study found. There are currently 57 police departments serving St. Louis city and county, with a wide range of policies and practices.
Great disparities exist in the hiring processes and standards across departments, the study found. In the more professional departments, all officer candidates are required to undergo extensive background checks that include drug screenings, credit checks, character references, as well as independent physical and psychological screening before they can be approved for hire. Other departments have no formal written requirement for hiring beyond the minimum licensure mandated by the state or have vague standards such as requiring applicants to be in “good emotional health.”
Better Together cited a finding in the Police Executive Research Forum (PERF) report that it commissioned called the “muni shuffle.” Police officers who are fired or allowed to resign because of disciplinary or performance issues in one department are quickly hired by another department, because it can be less expensive to hire an experienced (albeit compromised) officer than to recruit and train a new officer, the PERF report found.
Following Michael Brown Jr.’s shooting death in August 2014, many protestors also decried the practice and the harm it has caused residents.
“This not only leads to communities with fewer resources having compromised officers, but it breeds mistrust in law enforcement at-large,” the study states.
The study’s findings on the municipal court practices supported the passage of a state law that limited how much St. Louis County courts could raise through court fees and fines. A provision of the law said that county municipal courts could only raise 12.5 percent of their general revenue from traffic fines and fees – versus 20 percent for the rest of the state. However, that provision of the law, known as Senate Bill 5, was struck down in March by a circuit court judge. The new standard statewide is 20 percent, down from the previous statewide 30 percent.
Leipholtz hopes the report spurs conversations about potential system overhauls, with input from all members of the community. Better Together continues to gather input. “We have been getting out into community groups,” Leipholtz, “and we need to continue to do that.”
