politics

OPINION | St. Louis’ Earnings Tax Must be Preserved

St. Louis City has for years relied upon its Earnings Tax revenue for a significant portion of its annual revenues, now comprising of over a third of the city’s expected revenue each year. In 2020, St. Louis raked in just over $191 million, a sum that has quickly grown over the past few years. With the city seeing incredible investment and high paying jobs in the medical, geospatial, and tech sectors at the Cortex, Downtown, and beyond, it has seen a 9.97% increase in revenue over the last two years alone.

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Although there is a real and warranted debate over how the city allocates its funds in relation to equity and incentives, there is no doubt that eliminating the revenue in one swift motion would be disastrous for the city, its growth, and its most vulnerable communities. Gregory Daily, the city’s Collector of Revenue, has been waging a long education campaign on the tax for some time, pointing out the direct impact on city services that residents rely on every day. From parks to streets and lighting, the Earnings Tax impacts every city resident. While many communities might not know their Neighborhood Stabilization Officers by name, these civil servants work incredibly hard to make our communities safer and more economically resilient.

Parks are imperative for public health, while emergency services are critical for maintaining the day-to-day safety of St. Louisans. While I share the views of many in our city that St. Louis, among most U.S. cities, spends too much on policing with too few positive results, police are but one aspect of critical emergency services. Moreover, the City is just now experimenting and investing in community-driven violence reduction through Cure Violence and emergency dispatch that redirects some calls away from police. These measures are not enough, but they are an important start as we strive to prevent horrific tragedies that have predominantly affected communities of color. Even now, we have difficulty adequately funding these new services. While I share the hopes of many that some police funds will be redirected to other innovative and community-driven programs, addressing inequalities becomes many times harder when lower revenues have to be split among the same number of services.

Tax Revenue since FY 2018 – St. Louis City

Perhaps the conversation would be different if opponents of Proposition E, the Earnings Tax, actually presented an alternate funding source for the City. If you’ve been paying attention – they haven’t. There is no plan to replace these funds, and the end result would be a City that has its budget nuked, cratering its budget with little time for the City to prepare. If you felt that St. Louis Streets crews were slower than you’d like already with plowing snowy streets or filling potholes, I expect that their performance would decline much more with significantly less money for employees or vehicle maintenance. For our already cash-strapped fleet of refuse vehicles much in need of service, citizens might expect less consistent trash pickup and more frequently overfilled dumpsters.

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While some might feel this is a deserved consequence for a bureaucracy that has not served everyone adequately, such a drastic and reactionary loss of revenue would do nothing to resolve the City’s shortcomings. Instead, St. Louis would struggle that much more to attract investment, new residents, and to invest critical dollars into its low-income neighborhoods. Tax dollars should go back into our communities, and it would be incredibly difficult to pass individual tax measures for individual programs that would be lost. Others might argue that the Earnings Tax prevents growth, population, and investment. At first glance, that argument is reasonable, but with hundreds of municipalities across the United States levying income taxes, including cities like Kansas City, Cincinnati, Columbus, New York City, Philadelphia, and more, this argument falls flat quickly. In fact, St. Louis’ Earnings Tax tends to not even fall in the higher percentages of income taxes levied in comparable cities.

I urge all St. Louis City residents to Vote YES on Proposition E, to preserve our Earnings Tax, and to preserve our critical city services.

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Featured Image Credit: Tysports

4 comments

  1. How do you feel about countering perspectives that believe the earnings tax is keeping many businesses from investing new ventures in the city and instead opting to open up in county?

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    1. Of course I welcome any countering perspectives, but would defer to my point as written that in many, many other municipalities the Earnings tax does not prevent investment. I would also counter that other social forces might be stronger, whether it’s education for students, racism, or the quality of services themselves. It’s tough to isolate the Earnings Tax as the sole cause but easy to point to many, many other cities where the tax is not a business impediment.

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