St. Louis’ earnings tax helps pay for city services; Vote ‘YES on Prop E’ to protect union jobs

By TIM ROWDEN

Managing Editor

On April 6, a measure will appear on the ballot asking voters to retain the City of St. Louis earnings tax.

Mayor Lyda Krewson and Collector of Revenue Gregory F.X. Daly on March 1 announced the formation of a new campaign committee, “Yes on Prop E – Earnings Tax STL,” in support of the measure.

The earnings tax is a 1 percent tax paid on compensation and profits earned in the City of St. Louis. It provides funding for important municipal services that save lives and enhance St. Louis neighborhoods, such as fire, EMS, police, parks and recreation and other services.

Thirty-six percent  of the City’s general fund revenue is comprised of earnings tax collections. Without the crucial revenue stream, the City would be forced to dramatically decrease services or increase property and sales taxes.

“Not retaining the earnings tax would be fiscally irresponsible and significantly impact our ability to provide essential services to our constituents,” Mayor Krewson said. “I am going to do everything possible to make sure that doesn’t happen.”

ECONOMIC UNCERTAINTY
“The economic uncertainty created by the COVID-19 pandemic underscores exactly why the earnings tax must continue to be protected,” Collector Daly said. “I look forward to working with Mayor Krewson to educate voters about the benefits of retaining the City’s earnings tax.”

To help get the campaign started, both Krewson and Daly are contributing $25,000 from their existing campaign accounts to the “Yes on Prop E – Earnings Tax STL” campaign.

Missouri law requires that the earnings tax be put up for a renewal vote every five years. The vast majority of City residents have historically supported this important revenue source and understand how critical it is to sufficiently funding City operations. This is the third time City voters have been asked to retain the earnings tax.

WHY THE RETENTION VOTE?
The earnings tax has existed in St. Louis since 1954. St. Louis voters currently have to vote to renew it every five years as a result of retired multi-millionaire and anti-tax advocate Rex Sinquefeld’s  success in passing an initiative requiring residents of St. Louis and Kansas City (which has its own earnings tax) to do so.

“In 2011, over 88 percent voted to retain the earnings tax. In 2016, over 72 of city residents voted to renew the tax. Each time the results were overwhelming because we know it is essential to keeping our city secure. But now we have to vote again because of Rex’s initiative,” said Richard von Glahn, policy director for Missouri Jobs with Justice

PROVIDES FOR GOOD UNION JOBS
“The earnings tax is an equitable 1% tax on income to those working or living in the city,” von Glahn said. “It does not apply to social security, disability or importantly during COVID, unemployment.

The City collected more $175.8 million from the earnings tax in 2020, about a third of the city budget.

“This money provides for good union jobs in the city keeping our parks safe and clean, fixing our streets, and providing emergency services,” von Glahn said. “Without it there would be layoffs of workers and cuts to services. And other taxes like sales or property taxes could be increased to fill the gaps.”