While there are a whopping six propositions on the April 4 municipal ballot in St. Louis city, two are getting more attention than the others – one relates to MetroLink expansion, and the other to building a soccer stadium.
Proposition 1 is a .5 percent sales-tax increase that is expected to generate $20 million a year. The bulk of that – $12 million – will go towards building an 8-mile MetroLink extension from North City to South City. The extension basically runs from Cherokee Street, up Jefferson Street, through downtown and just beyond the new National Geospatial Agency site. The remaining $8 million would go towards public safety, job training, a youth empowerment fund and neighborhood revitalization.
Propositions 1 and 2 are connected, and the link is a bit confusing. Whenever the sales tax increases, then the city’s “business use tax” – which applies to city businesses that buy goods outside the state – increases by the same percentage.
Hence, Proposition 2 asks voters to take the $4 million projected revenue from the “use tax” increase and help fund a new Major League Soccer $155-million stadium downtown near Union Station. The city’s share in building the stadium is $60 million.
If Prop 1 fails, then Prop 2 automatically tanks as well. If Prop 1 passes and Prop 2 fails, then the $4 million use-tax revenue would go towards another purpose. The use tax currently generates about $30 million a year, and that money goes towards public health, affordable housing, the police and a small portion towards building demolition.
Alderwoman Christine Ingrassia, who represents the 6th Ward, said the $4 million would most likely be divided up among the current budget needs if Prop 2 fails. Ingrassia sponsored the legislation for both Prop 1 and Prop 2. However, neither of these propositions was born from her initiative.
The idea for the sales-tax increase came out of Mayor Francis G. Slay’s office last spring, said Patrick Brown, the mayor’s interim chief of staff.
At that time, the proposition to renew the city’s earnings tax was on the April 2016 ballot, and several city administrators were researching other means to generate revenue if it happened to fail, Brown said. They learned about the half-cent economic sales tax, and that opened their eyes for ways to fund a MetroLink expansion, Brown said.
Word about a proposed sales-tax increase spread quickly, and there was soon “no shortage of people who wanted to attach themselves to how the [use] tax dollars could be utilized,” Brown said. The Major League Soccer proposal to build a stadium “bubbled up as the one that moved forward,” he said.
The North-South MetroLink line is a 17-mile stretch costing about $1.2 billion, said Nahuel Fefer, the mayor’s special assistant. But the sales tax increase is mainly addressing the first phase – a roughly 8-mile stretch which will cost about $700 million.
In terms of financing the new line, Fefer said that the $12 million in tax revenue will allow them to secure about $350 million in bonds.
“With a federal match, that translates to roughly $700 million,” Fefer said. “This would allow us to build a roughly 8-mile line.”
A study expected to be completed in May 2018 will further refine these numbers. If the proposition passes, then the city would be able to apply to the Federal Transit Agency in 2018 for a match and potentially start construction in 2023.
While the new budget coming out the Trump administration could cause funding problems, Brown said that a recent visit with an FTA representative assured them that they had a good proposal and should move forward to request federal funding.
“I think with something like this, it’s completely transformational,” Brown said. “It will be a shot in the arm for the community it touches and the people who rely on its mode of transportation.”
Fefer pointed out that 33 percent of households in North City don’t have access to a car. “People are being cut off from jobs, food and family,” Fefer said.
Aside from the MetroLink, the remaining $8 million in revenue would go towards several other areas. For neighborhood revitalization, the plan is to put the entire $2 million into one neighborhood every year and allow a panel of neighborhood residents to have a strong say in how the money is dispersed. The $1 million Youth Empowerment Fund would go towards recreation and afterschool jobs. Public safety would get $4 million, and $1 million would go to the St. Louis Agency on Training and Employment (SLATE).
If Prop 1 passes, the city’s sales tax rate would go from 8.679 percent up to 9.179 percent. In comparison, Chicago has the highest rate with 10.25 percent, and Seattle sits in sixth place with 9.6 percent, according to the Tax Foundation. In some parts of St. Louis city – like the Starbucks at 2350 South Grand Blvd. – the sales tax would be as high as 11.68 percent because of special-taxing districts.
Opponents say that using sales tax to fund MetroLink is regressive and will put the most financial pressure on poor and lower-middle class families in St. Louis. Some have proposed using other methods, such as a property-tax increase or an income-tax increase, with the first $25-50,000 in earning exempted, to place more burden on the wealthier populous.
Fefer said that the city’s property tax in currently “maxed out” and the city’s earnings tax is too unstable. Because it has to be approved every five years by voters, bonding on that revenue source would be nearly impossible.
City Treasurer Tishaura O. Jones said that Denver recently funded its $2.2 billion transit line using a public-private partnership.
“I don’t think we’ve been creative enough with how we would fund the line should we lose access to federal transit dollars,” Jones said.
Jones supports the North-South extension but opposes Prop 1 because the legislation language is too loose. Currently, it only states that the funds “can” be used for MetroLink, she said.
“There’s no guarantee that the funds raised by the sales tax will be appropriated to MetroLink,” Jones said. “Right now, Prop 1 is tied to Prop 2, and I would rather have – dare I say – a clean bill.”
Many Prop 2 opponents say they are leery of the sales-tax increase being so closely tied to the stadium because it makes Prop 1 seem disingenuous.
“The intention is not to be misleading,” Ingrassia said. “The intention is to let voters decide what they would like to see happen with this money.”
In addition, Prop 1 and Prop 2 have no websites that explain the complicated details of deals for voters to consider. That also causes voters to be nervous about approving something they don’t understand and can’t research. Brown said that he agreed that it was a flaw.
“It’s not okay to have a bunch of stuff on the ballot and not have more information,” Brown said. “We have to do better at communication in order for the voters to be well informed when voting on these important topics.”
