JCRC urges ‘no’ vote on Prop A

By Robert W. Paster and Gail Wechsler

On Nov. 2, Missourians will be asked to vote on Proposition A. This statewide ballot initiative would, if passed, prohibit any state municipality that currently does not have an earnings tax from creating such a tax as a revenue option. It would also require that residents of St. Louis City and Kansas City vote this coming April on whether to keep the 1 percent earnings tax that currently exists in those two cities. If voters in April vote not to continue the earnings tax, it would be eliminated over 10 years and could never be approved again. If voters vote to retain the earnings tax in April, they still would have to take another vote on this same issue every five years.

There are many reasons why the JCRC opposes efforts to eliminate the earnings tax in Missouri’s two largest metropolitan areas. Of major concern is that eliminating the earnings tax would seriously weaken the ability of St. Louis City and Kansas City to provide basic public services. It would threaten funding for services for seniors, including senior nutrition programs, and funding for those with disabilities and those with lower incomes. Basic services such as emergency medical services, homelessness programs and public after school programs would be at risk for loss of funding. The earnings tax makes up 32 percent of St. Louis City’s general fund revenue, about $141 million dollars, and those promoting Prop A offer no good alternatives as to how that loss of revenue can be replaced. In fact, in all likelihood the only way to recoup the lost revenue will be to replace the earnings tax with a sales tax increase and to raise property taxes. To replace the income generated by the earnings tax, St. Louis would have to either more than triple its current local general revenue sales tax or increase property taxes by nearly 400 percent. This would disproportionately impact low-income and fixed income residents of the City.


Some might argue that this is an issue of interest only to residents of St. Louis City. However, there are major negative ramifications should this ballot initiative pass on Nov. 2. Even those who don’t live in the City typically visit to enjoy the museums in Forest Park, a show at the Fox or a ball game at Busch Stadium. Eliminating the earnings tax that supports the City likely will impact that visit in the form of reduced public safety and street/park maintenance and/or increased ticket prices as a means to create the additional revenue lost due to elimination of the earnings tax.

Even for those who rarely enter City boundaries, this ballot initiative should lead to cause for concern. Should St. Louis City residents have to vote every five years on whether to keep the earnings tax, this will necessarily affect the City’s bond rating in a negative way. St. Louis would be seen as a risky investment (who will lend to a city that could potentially lose one third of its revenue every five years?) leading to a real risk that building projects and other job creation efforts in the region will be lost. Ultimately, the fiscal security of the City of St. Louis impacts the entire region.

Many other thriving urban areas, including New York City and Denver, rely on an earnings tax to help generate the revenue needed to keep the entire metropolitan area in good economic health. In a climate in which local budgets are already strapped, now is not the time to risk drastically shrinking the economic base of St. Louis.

JCRC urges a no vote on Proposition A on the Nov. 2 ballot.

Robert W. Paster, an attorney in private practice, is a Vice President on the Board of the JCRC and Chair of JCRC’s Advocacy Committee. Gail Wechsler is JCRC’s Director of Domestic Issues/Social Justice.