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

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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

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  • Thomas Steitz

    Are you aware that it has been 31 years since Fenton Fire Protection District went to the voters for a tax increase. I find that extremely rare and fiscally responsible. It’s not fair to them that you include them in your article. Taxes cannot stay the same for ever.

    • Adam

      I think you’re missing the point, which is that the per capita cost of services is higher for everyone–including Fenton residents–due to fragmentation.

    • rgbose

      The questions to consider for a place like the Fenton Fire Protection District is why the development that’s occurred there isn’t enough to fund the district at the current tax rate. Is the district going to provide enhanced service or is this to maintain current service levels (the ballot language indicates it’s just to tread water)? Is the development pattern there not productive enough to cover the long term costs to provide the services and infrastructure serving it?

    • kjohnson04

      And that’s commendable. The question is, whether the Fenton FPD needs to either review its viability as a standalone department, or whether it needs to merge with another (or several districts) and reduce it’s cost to taxpayers, or create cooperative agreements with neighboring departments to reduce it’s costs.

  • Tim E

    Great post. Would be nice as a starting point that all County muni’s under 10,000 people need to be either annexed or dis incorporated. Love how one political party supports less government, which I agree with when it comes to consolidation in metro areas, but real change doesn’t get pushed at very local level.
    Does Moline Acres really need to have a separate community center and its own parks department. Can understand for a farm/rural community with the next town 20 miles down the highway and nothing in between.

  • RJ

    Thank you Mr. Bose very well said too bad not enough people read this valuable information. This fragmented mess just keeps perpetuating itself and we need to make it stop!

    • Tim E

      The other sad part is every taxing entity tries to get these measure on primary ballots. I have come to conclusion even as a voter who participates on primary voting day that tax and bond measures should not be allowed on primary ballots. It would get more voters involved as well as give voter full slate of tax measures that they might or might not incur. My two cents worth

    • rgbose

      You’re welcome. Notice that the sample ballot is 67 pages long? Crazy