Failure of Fragmentation: April 4 Tax Hikes On St. Louis County Ballot

big taxes

Another election is coming up and that means more tax increases on the ballot to prop up fragmentation in St. Louis County. The April 2016, August 2016, and November 2016 ballots included several tax increases and bond issues. The next ballot looks much the same.

Fragmentation and low-productivity auto-oriented development patterns are synergizing in the St. Louis area, driving up the per capita cost of government services, transportation, infrastructure, and utilities. Despite $100Ms in opportunity costs and a soft tax base under our current approach, municipal leaders are thinking inside the box to keep their budgets balanced. There are no mergers or disincorporations on the ballot.

  • Crestwood (Pop. 11,942)- $0.45 per $100 assessed property tax increase.
  • Kirkwood (Pop. 27,596)- Continue a 0.5% capital improvements sales tax
  • Moline Acres (Pop. 2,439)- 0.25% sales tax increase for general revenue.
  • Moline Acres (Pop. 2,439)- 0.5% sales tax increase for local parks and community center operations.
  • Overland (Pop. 16,008)- Increase the property tax rate from $0.12 to $0.24 for residential, from $0.12 to $0.36 for commercial, and from $0.12 to $0.36 for personal property per $100 of assessed valuation solely for the purpose of funding the Retirement Plan for the Police Department.
  • St. Ann (Pop. 12,971)- Increase the property tax rate to $1 per $100 assessed.
  • Webster Groves (Pop. 23,203)- $0.20 per $100 assessed property tax increase to support pensions.
  • Affton Fire Protection District – $0.25 per $100 assessed property tax increase.
  • Fenton Fire Protection District – $0.39 per $100 assessed property tax increase.
  • Metro-North Fire Protection District – $0.40 per $100 assessed property tax increase.
  • St. Louis County and its 89 municipalities – A 0.5% sales tax to fund police and public safety

Crestwood (and St. Ann) used to be a winner in the sales tax chase. The city relied upon shoppers from outside the city to pay sales taxes for decades. Since the Crestwood Mall closed the math doesn’t work anymore. It may never work given its low-productivity spread-out development pattern. The proposition’s verbiage may as well end with “… paying the increased costs associated with fragmentation.”
Proposition Language:
Shall there be a forty-five cent ($.45) increase in tax levy on one hundred dollars valuation for general municipal purposes including paying the increased costs associated with operating a local police department, operating a local fire department, building and facility maintenance, and other city operational needs in the City of Crestwood?

Prop P in St. Louis County would raise the sales tax 0.5% for police and public safety. The original plan was for the tax to apply just to unincorporated St. Louis County, but the Missouri Legislature didn’t pass enabling legislation. It would apply to the entire county and raise $80M per year, $34M of which would go to municipalities distributed on a per capita basis (~$50 per person). This props up fragmentation. It back fills the decline in revenue from court fines and fees since the spotlight was placed upon them after Ferguson and the passage of caps by the Missouri Legislature. Court revenues across the county were down $24M or 45% in 2016 compared to 2014. We should be reducing the number of police departments and municipalities and applying freed-up tax dollars towards public safety and other things more effectively.

We’ve set up a scheme resembling Enron-style accounting where debt and liabilities are hidden in subsidiaries (municipalities). Those liabilities are piling up, and we pretend they will be confined to those municipalities forever. Do we let the system unravel on its own where munis hold on until the bitter end and dump those liabilities onto the county or do we come together before the bill gets even worse?

April 4, 2017 St. Louis County Sample Ballot