Kansas City, St. Louis Voters Revisit Earnings Tax | KBIA

Kansas City, St. Louis Voters Revisit Earnings Tax

Apr 4, 2016

Voters in Kansas City and St. Louis will decide Tuesday whether to renew the decades-old earnings tax that voters overwhelmingly embraced five years ago but that again has drawn well-funded opposition.

Credit File Photo / KBIA

The tax requires those who work in the two cities to pay a one percent tax on their pay.

Supporters in both cities say losing the revenue would mean cuts in services including police and fire protection, road upkeep, trash pickup and criminal justice. Opponents say the tax is unfair and drives businesses and workers to the suburbs, and that eliminating it would force the cities to weed out fraud, waste and redundant services.

Only with repeal of the tax would "smarter government with better services" be achieved, said Travis H. Brown, a spokesman for the "Vote No on the E-Tax" campaign largely funded by St. Louis mega-donor Rex Sinquefield.

"We think this is an environment where very important (voter) voices will be heard no matter the outcome. It's up to them to turn out and speak their mind," Brown said.

Voter rejection of the tax would phase it out over a decade by one-tenth of a percent each year. Opponents say that would give cities enough time to find ways to compensate.

Kansas City, where voters in 2011 voted 3-to-1 in favor of keeping the tax, generates $230 million a year — roughly 40 percent of the city budget — from the tax. That tax accounts for $164 million, one-third of the operating budget, in St. Louis, where 88 percent of the voters in 2011 backed the tax.

A rationale behind the tax is that those who work in the cities but don't live in them nevertheless benefit from city services such as police and fire protection, parks and street maintenance.

"It's everything that we need to survive and thrive as a city," St. Louis Mayor Francis Slay told The Associated Press. "Even with the earnings tax, we have unmet needs. Getting rid of it without having a replacement is irresponsible and reckless."

Kansas City Mayor Sly James said losing the earnings tax could force raising sales and property taxes and laying off police and firefighters.

"Doing nothing is not an option," he said. "There is no way to pay for the city services that would be cut without the earnings tax."

Brown dismissed that as bluster.

"If either mayor is not willing to find revenue replacements, we will find a way on their behalf," he said. "We can expect more from our city leadership to deliver."

Kansas City voters approved a half-percent earnings tax in 1963 and agreed to raise it to 1 percent in 1970. St. Louis' 1 percent tax has been in place since 1959.

Missouri voters in 2010 approved a statewide ballot measure that forced St. Louis and Kansas City to hold elections on their earnings taxes, with subsequent public votes every five years. The law also bars other Missouri cities from adopting an earnings tax. The Kansas City manager and a local labor leader sued in hopes of scuttling the law, but the Missouri Supreme Court in 2012 unanimously upheld it.