Wednesday, April 6, 2011

Is An 87.5% Vote for the E-Tax A Mandate AGAINST the E-Tax??

Yesterday, St. Louis City voters overwhelmingly voted in favor of keeping the 1% Earnings Tax, 88% - 12%. In a rational world, this would be taken as a pretty clear sign that St. Louis residents are in favor of collecting revenue via the earnings tax as opposed to other more regressive methods like a sales tax increase. Of course, as well all know, it's not really a rational world.

Mayor Slay and his inner circle have started beating the drums suggesting that "major changes" need to be made before the next vote on the earnings tax in five years. On Slay's blog, he wrote the following:
In the coming months, we must begin making the changes the economy and the census have been telling us we have to make. Those changes may begin in the city, but they cannot stop there. It is the region that needs to change.

What voters did tonight is critical to that task. They gave us five years to get this done. It would have been infinitely more difficult to bring the region together without a good bond rating or a working parks, streets, or fire department.

We may celebrate what the city’s votes have given us, but we must understand that it is not a blank check and it will not last forever. When this election comes around again in five years, we must be a very different city and region. I do not expect voters to give us another chance.
His Chief of Staff Jeff Rainford express similar sentiments:

Perhaps this is not a big deal, if all they're referring to is simply streamlining services, perhaps even by merging St. Louis City and St. Louis County. However, it sounds like they have much more in mind, and in particular are already planning on how to get rid of the earnings tax 88% of St. Louisans just voted for. Here's Slay's close advisor Richard Callow, in the Post-Dispatch article about the win:
Still, Callow, echoing many public officials, said he didn't think he'd be asked to do the same in five years. "I don't think there's going to be another campaign on this earnings tax," he said.
City officials, he said, have already begun talking about other ways of getting the revenue the tax brings in.
And Mayor Slay made similar comments to the Riverfront Times:
"Today's vote shows that the overwhelming number of St. Louisans thought it was irresponsible to get rid of the earnings tax without a viable way to replace those funds," Slay told Daily RFT. "But does that mean we just forget about the earnings tax after tonight? No. We now have five years to see if we can come up with a better way to tax and fund the city."
To me, it seems bizarre that they're already beating the drums against the earnings tax, considering that the vast majority of residents support it. And, as Callow said to the St. Louis Beacon, it's not like city voters don't understand the significance of the vote:
"City voters are very aware of the earnings tax," said Callow, the man running the Prop E campaign. "They understand how it is spent, they are very worried about the loss of services and about the potential of increasing other taxes to make up for the revenue if the earnings tax is not retained."
If citizens overwhelmingly support the earnings tax, who exactly is Slay looking out for when he pushes changing it?

Interestingly, there was another group that was on-message and ready to start beating the "St. Louis needs massive change in our tax laws" drum immediately after the election. A study released yesterday and paid for by right-wing millionaire Rex Sinquefield, who's donated more than $245,000 to Slay for various campaigns, outlined a "laundry list of unpopular choices" that could be used to replace the earnings tax. It includes such things as increasing the sales tax (which disproportionately punishes people with less income), asking nonprofits to pay more for city services, and forcing city workers to contribute more to their pensions. In other words, it contains a list of things that a right-wing millionaire ideologue might like better than a 1% earnings tax.

I've also found the rhetoric that we need to make these changes "because the census told us so" to be rather strange. It sounds a little like the Shock Doctrine of city politics: all of a sudden we need to push through "free-market" and "business friendly" changes because we had bad census numbers? Does anyone really think that people moved out of the city because they were worried about firefighter pensions being too high? Perhaps some people might move out because of the earnings tax, but is there any trustworthy data to quantify that suggestion? It seems much more likely to me that people moved out of the city because of worries about crime and the school system.

Anyway, if Slay and his group are taking this as an opportunity to streamline government, get rid of waste and corruption, and even merge services with St. Louis County, then I'm all for it. However, if they are going to try to use this to push a false notion that people are opposed to the earnings tax, without any supporting evidence, then I will be extremely skeptical of their intentions. The people spoke out strongly in favor of the earnings tax, and the idea that the past election and census numbers tell us we need to ditch it in favor of regressive measures like an increased sales tax is a complete distortion of reality.

Note: as I finish writing this, I see that Mayor Slay has a new post on his blog asking "what's next?" He suggests that he is committed to speaking to city residents about what they think should be done about crime, education, tax structures, pensions, and mergers:
Over the spring and coming summer months, I plan to continue the conversations with City voters that began in the successful campaign for passage of Proposition E.
I hope that's right, but we shall see.


  1. When I last spoke to the Mayor at a neighborhood meeting about a month ago, he had mentioned the concept of eventually cutting the earnings tax to a half precent.
    I like the earnings tax, but if other ideas (like charging people not living in St Louis City or County for admission to the Zoo, etc) made enough money the tax could be reduced.

  2. Well stated, Adam!

  3. My letter to the Post Dispatch (via the recent Jobs /w Justice email alert):

    Why I voted for Proposition E

    I voted for the Proposition E in the recent election to retain the St. Louis city earnings tax, since I understand the city has a obligation to provide essential services and infrastructure to its citizens. Likewise, I understand that the city's residents and workers have an obligation in their social contract to cooperatively support the cost of these services and infrastructure.

    I believe that the current 1% earnings tax is a fair way to share this cost evenly, because unlike sales tax, this is a progressive tax which does not unduly burden the city's lower-income residents.

    Furthermore, I remember hearing the city's revenue collector saying in a public meeting late last year that approximately 90 million dollars of the city's yearly earnings tax revenue comes from out-of-town workers, i.e. people who commute to the city to their jobs.

    Since such out-of-town works, who still use St. Louis services and infrastructure in course of their jobs, purchase much fewer goods in town than city residents, I believe that replacing the earnings tax with an increased sale tax, for example, would invariably create a greater tax burden on St. Louis residents. Likewise for increased property tax, trash collection fees, water fees, etc.

    I do not believe these alternatives to the current earnings tax are fair to the residents of St. Louis.

  4. For an examle of incredibly biased "jounalism: see David Nicklaus Earnings tax is tip of broader debate on city's future. PD 04/10/2011

    I will try to write something up later today

  5. their idea of how to reduce the earnings tax will almost certainly IMO include raising fees on various items . Already they have raised the fees for trash pickup. This was before the recycle dumpsters were added, and it wasn't dealt with straightforwardly...we want to add a service. Instead it was about how we already got better trash collection than elsewhere and the cost needed to be better covered. Now, I love the recycle dumpsters, although I was recycling at the dumpsters in the park near where I live, and I like them. But for some reason the city can never just say what it is they want . Instead, they use some convoluted subterfuge to get it. Would voters have protested if the city had said...we want to raise the fees so we can implement recycle dumpsters in the alleys? I don't know. But it burns me up that they can never be straight. Apparently they think they know best and the only way to get what they want is by some circuitous method. Another likely target is trying to privatize city water. I think that (so far) requires voter approval, but in the past attempts to modify the city charters have been voted down , precisely because the end result is perceived (in my view) as the beginning of some kind of subterfuge. And rightly so. I would adamantly oppose privatizing city water, because it means loss of control of a valuable resource (sure to become more valuable in the coming years), and because prices almost always go up when that happens. But its appeal to government officials is that it's a quick way to get an infusion of cash. Long term it's lousy, but short term, it's something they fall for every time. And so forth. Maybe they want to 'streamline' taxes. But I do not for one minute trust them or the Post Dispatch (which mostly parrots the positions of these officials) to make any sane argument for changing anything. Instead, they do it by lying, and wonder why people don't trust them. They sold the Carondelet community center in Carondelet park as a 'community' project, and then had it run by the YMCA with fees similar to Y fees. How do they expect any trust when they do things like that? Did any one get a lot of calls around election time asking if they thought the number of aldermen was too many? Apparently they think the fewer the people representing us, the better.