City of St. Louis Responds in Support of Critical Earnings Tax

ST. LOUIS -- The Missouri Senate Ways and Means Committee has passed a bill through to the General Assembly to phase out the 1 percent Earnings Tax in St. Louis over a 10 year period. It will now be considered by the full Senate, where it will most likely languish.   

The 1 percent Earnings Tax, established in 1959, is critical to City operations. It is the single largest source of revenue, accounting for nearly 33 percent of the general fund budget, or $164 million. That's more than the entire operating budget of the St. Louis Metropolitan Police Department, the City's largest single budget expense.

Mayor Francis Slay issued the following statement in response to the Committee's vote:

"The Missouri General Assembly considers far more bills than it passes. Many of them are proposed to attract attention to a theoretical cause or an ambitious sponsor. They are not actually meant to pass. I believe that bills aimed at the Earnings Taxes of St. Louis and Kansas City belong in that category.

"The voters of Missouri have already said that they believe the Earnings Taxes levied by the state's largest cities to support their roles as regional economic engines should be reviewed every five years by those cities' residents. Five years ago, super majorities in both cities approved their extension. Voters in St. Louis and Kansas City will consider them again in April.

"Mayor James and I have both testified in Jefferson City that the consequences of losing the revenue from the Earnings Taxes at this time would cripple public safety and economic development in their cities. I am confident those are viewpoints that a majority of state legislators will ultimately support. And those who do not will be able to make their cases to St. Louis and Kansas City voters directly."

Furthermore, the City of St. Louis Board of Aldermen voted 24-0 to approve Board Bill 265, the ordinance that puts before City voters the decision whether to retain the 1 percent Earnings Tax levied on those who live or work in the City.

For perspective, the Earnings Tax generates more than the total general fund budget for the Police Department, which has the largest City operating budget ($152M in FY15), or more than the total of the following:

• Fire Department: $63.8M
• Corrections and Juvenile Detention: $56.3M
• Forestry (trimming, weeds, debris): $7.1M
• Park Maintenance: $7.6M
• Street Maintenance and Repair: $6M
• Street and Alley Lighting: $5.8M
• Equipment Services (vehicle maintenance and repair): $15M

Shall the earnings tax of 1%, imposed by the City ofSt. Louis, be continued for a period of five (5) years commencing January 1 immediately following the date of this election?