Voters throughout the state might wonder why they’re voting on Proposition A in November when it seemingly is a Kansas City / St. Louis issue. One political attorney says it’s very much a statewide issue. Kansas City and St. Louis residents currently pay a 1-percent earnings tax. Those who live outside the cities but earn a paycheck in them also pay the tax.
Attorney Marc Ellinger says that tax amounts to millions of dollars for those two metro areas.
But he says voters statewide will decide whether metro residents can vote to phase out that tax. And he says it is a tax issue that could affect them, no matter where they live in Missouri since there are other areas that have considered imposing earnings taxes, even in some municipalities with as little as 12,000 residents.
Of 150 largest cities in the nation, Ellinger says only 25 have an earnings tax. And he says growing cities do not have earnings taxes. He cites Philadelphia in being progressive and repealing its current tax.
Opponents of repealing the earnings tax include Washington University and the labor lobby.
Kansas City and St. Louis city leaders have argued against repealing the tax, saying, “We are the economic engines of Missouri.” Both cities’ officials say the tax is essential to providing city services.
A Springfield Firefighters Association says the approval of the earnings tax initiative, although Springfield does not have one, would bar the implementation of the tax anywhere in Missouri, which could have ripple effects.
In April, the St. Louis Association of Elected Officials released a statement arguing that ending the earnings tax would mean the end of 39.2 percent of the city’s revenues and begin a large increase in taxes.
Proponents say that number is inflated, pointing to the findings of Economist Dr. William Rogers, who is with the University of Missouri-St. Louis.
His report shows the earnings tax accounts for about 15 percent of the total revenues in each city.
Let Voters Decide, a group backing the measure, says “opponents of Prop A like to claim that the earnings tax provides 30 percent or more of the city revenues. They sometimes qualify this by saying 30 percent of more of the “general fund budget.”
“We believe this is misleading to voters,” since there is a big difference between “a city’s total budget and ‘general fund budget.'”