Sinquefield Flack Admits City/County Unificaiton Plan Is About Eliminating Earnings Tax

St. Louis Business Journals noted recently that "Republican strategist" Gregg Keller tweeted that he was in favor of the City/County unification plan proposed by right-wing millionare Rex Sinquefield's group Better Together STL because it would get rid of St. Louis's earning tax:

Earnings tax: gutted. City aldermanic system: gutted. Dozens of governmental entities: gutted. Hundreds of millions in annual governmental duplication: gutted. https://t.co/dpUp5TBNCi

— Gregg Keller (@RGreggKeller) December 30, 2018

What they didn't note, however, was that Keller is a member of the board of Rex's original right-wing think tank, the Show Me Institute. So it seems like he might have a pretty good idea of what the real intentions are behind this plan. And, of course, the earnings tax has long been a white whale for Rex, since wrecking the state economy of Kansas ceased to be amusing. And for anyone wondering just how much old Rex values independent thinking in those on his payroll, keep in mind that the muesum he bankrolls recently ran an exhibit titled, literally, "The Sinquefield Effect."

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.

Everything You Wanted to Know About Why You Should Vote NO on Prop A

Vote No On Prop A -

Proposition A Would Damage St. Louis's Credit Rating

A KMOX news report brings up a point today that I've been meaning to make for a while: voting yes on Proposition A, the earnings tax ballot initiative, would damage the credit rating of St. Louis and Kansas City. The initiative, funded almost entirely by billionaire Rex Sinquefield's private fortune (he's spent over $10 million on the race so far) was cleverly crafted. Instead of using ballot language that would allow state voters to directly eliminate the earnings tax in St. Louis and Kansas City, the bill was set up so that it would force a vote on the earnings tax in those cities every five years. That way, Sinquefield and his friends could frame the bill as "Letting Voters Decide." However, this title is misleading, because the bill actually prevents voters from deciding in every city other than St. Louis and Kansas City; those cities would be banned from ever implementing an earnings tax.

Unfortunately, Mayor Slay and some other St. Louis city officials have not been pushing back on the November vote, claiming that the best bet is to wait until a city wide vote in April (and also potentially under the influence of huge donations from Sinquefield to their campaigns). But, as Darlene Green explained to KMOX, the idea that waiting until April is better strategy has a fundamental flaw. St. Louis City's credit rating would likely be damaged even by a yes vote in November, because it would introduce instability in the city's revenue. Here's how Green puts it:

“Prop-A would actually cause our revenues to be unstable,” Green said, “because every five years voters would have to vote it in our out.”

And later:

Unlike Mayor Slay, who describes Proposition-A as a possible future threat, Green says the financial uncertainty that would be caused by Proposition-A passing in November could have an immediate impact on the city’s credit rating.

Standard and Poors recently re-affirmed the city’s A-plus rating, but that rating could be in doubt overnight if Prop-A passes in November, Green said.

“What you’ve got to look at are the buyers of those bonds,” Green said, “Who’s going to buy a bond from a city with unstable revenue? Would you? Would you buy a municipal bond from St. Louis city?”

If the city’s credit rating were lowered to non-investment grade, Green says it could jeopardize several pending public-private partnership projects — including Paul McKee’s northside plan, the Peabody Opera House and the renovation of May Department store downtown.

It's also worth noting that any education of city voters done for November would also carry over to April, so it's especially puzzling that Slay and other city officials have decided to ignore this election. And, of course, if Prop A passed and the earnings tax was repealed in April, the results would be disastrous. Funding for vital city services like the police and fire department would be cut; the tax burden would be shifted to the people who can least afford it.

Vote No on Prop A! Sinquefield won't stop spending money until he runs out or dismantles the public sector, so we might as well stand up to him now!

Show Me Hypocrisy, Part 2

The irony of the Show Me Institute moving to St. Louis City while claiming that the earnings tax drives businesses away from St. Louis City was noted on this blog, in the RFT, on the Platform, on Political Fix, and at urbanSTL. And all after an insightful tweet by Patricia Bynes!

One of the common responses I've seen from the Right on these blog posts is that most of the SMI employees already live in St. Louis so already have to pay the earnings tax. Hence, the argument goes, there's nothing ironic about them moving the business to the city since they already have to pay the same amount of taxes. But actually, it seems to me that this is even more ironic! Check out this quote from the Show Me Institute: "By adopting an earnings tax, a city gives businesses and residents an incentive to locate production outside the city." The original point now just applies to the individuals. If the earnings tax is so horrible, then why would almost all of the employees of the Show Me Institute choose to live in the city? Obviously, because the benefits of living in the city outweigh the small cost of the earnings tax. The Show Me Institute's attempts to demonize the earnings tax is undermined by not only the institution's location, but also by the choices of its employees!