Of the St. Louis American
Opposition to Proposition S, a proposed City of St. Louis sales tax increase on the Feb. 5 Missouri Primary ballot, is not based on opposition to Mayor Francis G. Slay, say some proposition detractors.
Policy experts, politicians and pastors are in agreement that the tax is regressive and could hurt the city more than it improves it.
While acknowledging the need to hire more police officers and firefighters, and to fund City pensions, U.S. Rep. Wm. Lacy Clay said the tax increase proposal “deserves a resounding no.”
The Rev. Douglas Parham, chair of Concerned Community Clergy for the Betterment of St. Louis, said, “On its face, Proposition S falls on its face. It proposes to put more police officers on the streets, but that is the last thing it is about. It is about funding pensions. It is a hoax.”
David Stokes, a tax policy expert with the Show-Me Institute, said the tax increase “would hurt the city’s business environment.”
Stokes said, “If the tax passes, (city sales tax) will be substantially higher than everywhere else. That will drive people (away).”
Comptroller Darlene Green raised many points against it in a commentary in the American last week.
Green said, “The regressive nature of the sales tax threatens the retailers who have already moved in and taken a chance on the city, as well as those retailers who contemplate (moving to St. Louis).”
At press time, Slay’s official site, mayorslay.com, was silent on the sales tax proposal, which could indicate the Slay Administration’s awareness of the proposal’s unpopularity.
In the 2006 State of the City address, speaking of a sales tax increase, Slay told City legislators, “If there ever were a cause and a moment that needed all of us to stand together, it is ‘this cause’ and ‘right now.’”
In the 2007 State of the City address, Slay said Board of Alderman President Lewis Reed, Alderman Stephen Conway and Alderman Steve Gregali were “working on a plan” to fix the pension shortfall.
Conway and others have been campaigning for the tax increase, saying the City will be forced to cut public safety services if it does not pass. Also in 2006, Slay said he was seeking a sales tax increase “to do more crime fighting,” but all of the proposition’s critics agree that the ballot language does not guarantee that any police or firefighters would be hired – or salaries increased – if it passed.
The City of Kirkwood recently passed Proposition C, a property tax increase designed to generate $2 million “to address critical needs for core services.” Unlike Proposition S, its revenues have dedicated destinations, including $1.16 million to compensating police, firefighters and paramedics and restoring seven emergency services positions.
Proposition S, the proposal on the Feb. 5 ballot in the city, makes no designation as to how much of the sales tax will be directed in any area. All of the increased sales tax revenues, in fact, could be funneled directly into pension plans.
Color of money
Joining in a chorus of opponents, Clay has emerged as the most vocal and biting among elected officials.
“The fire pension fund suffers from the same racial animus that is destroying our faith in the Fire Department and its governance,” Clay said.
According to Clay’s office, just one black person has served on the fire pension board in its history and “he was elected in 1983.”
Clay also challenged police officers’ ongoing effort to escape required city residency.
“Police officers totally ignored the wishes of the taxpayers and voters who pay the bills, and went to the state Legislature to receive permission to move outside of the City of St. Louis,” Clay said.
“And they adamantly oppose all efforts to restore local control over the department.”
Until these concerns are addressed in the police and fire departments, Clay said, “We have no choice but to withhold tax increases.”
Parham said the pension fund should already be funded, “and it is not funded because the (City) has misdirected funds. The City lost a lawsuit saying this, and now it is asking taxpayers – primarily the city’s poorest – to bail it out.”
Real cost
According to opponents, if Proposition S passes, it would cost at least $43.32 more for every $2,000 worth of goods purchased in the city, compared to other municipalities.
Clay said that the City would face a pension shortfall in another five-to-seven years even if this measure passes. He called Proposition S “a Band-Aid.”
Both Clay and Stokes agreed that the pension funding formula is antiquated and must be changed.
“The City should be looking at moving from defined benefit pensions to defined contribution – like a 401(k) for government workers,” Stokes said.
Clay said the current structure “requires the taxpayers to pay 100 percent of the pension with no employee contributions.”
State Rep. Jamilah Nasheed (D-St. Louis) said the tax would come “at a time when we have one foot in a recession.”
“Food, gas and utility rates are steadily rising. We have to stop the bleeding somehow,” Nasheed said.
Other opponents
Tom Sullivan, an anti-tax advocate with the Coalition Against Public Funding for Stadiums, said the City is forced to push the sales tax increase because of subsidies it offered to the St. Louis Cardinals. The coalition has estimated the City will lose about $350 million from removing the 5 percent admissions tax for the Cardinals. The agreement is for 30 years. The team also received about $20 million in property tax abatement from the City.
The Green Party of St. Louis is urging St. Louis voters to reject Proposition S because the City is being audited by state Auditor Susan Montee.
“City voters would be smart to wait until the State audit of City finances is completed before approving any tax hikes,” said Don Fitz, of the Green Party. “It would be a good idea to first know how tax dollars are currently being spent.”
Pull
“This tax increase would hurt the city’s business environment.” – David Stokes, tax policy expert with the Show-Me Institute
Until concerns are addressed in the police and fire departments, Congressman Clay said, “We have no choice but to withhold tax increases.”