KCUR News
9:55 am
Thu March 31, 2011

Examining the Earnings Tax in St. Louis and Kansas City

Kansas City, Mo; St. Louis, Mo. – On Tuesday, voters in St. Louis and Kansas City will have their first chance to determine the future of their cities' 1 percent earnings taxes, which are imposed on the wages of everyone who lives or works in the cities.

It's on the ballot following statewide approval last November of Proposition A.

The lead-up to the vote has been very different in the two cities.

Today, we have two reports.

KWMU's Maria Altman will look at how quiet the campaign has been in St. Louis.

But first, Maria Carter of KCUR reports that things have been much more heated in Kansas City.

Kansas City

City leaders were almost unanimous in speaking out against a measure forcing a vote on the earnings tax.

It passed narrowly in Kansas City, but now those same leaders have more than just their own vocal support, they've got cash--more than a million dollars and almost three times as much as their opponents.

That money has allowed the supporters, called Save Kansas City, to run ads like this:

"Without the e-tax more than 1,000 police officers, fire fighters, and paramedics would be laid off. Lives are at stake. The future of our city is at risk. Vote yes to keep Kansas City alive. Vote yes to keep the e-tax."

Hallmark, Commerce Bank, and Black and Veatch are just a few of the heavy hitters backing Save Kansas City's campaign.

The group opposing the e-tax is a political action committee called Freedom PAC. But it's not so clear who's paying for their campaign.

Two non-profits, the American Democracy Alliance and the Adam Smith Foundation, have given a total of $375,000. That's all but $1,000 of Freedom PAC's donations.

The non-profits aren't required to say who's giving to them.

Save Kansas City spokesman Dan Cofran says that should raise suspicions.

"Citizens expect openness in their government," Cofran said. "And when someone complies with the bare minimum and is obviously trying to hide who they are that creates distrust. How can you trust them if they won't tell you who they are?"

Woody Cozad is a spokesman for Freedom PAC.

He says everything they're doing is legal, and more importantly donors are avoiding retribution from City Hall.

"I'm a personal example," Cozad said. "I had a lobbying contract with the board of police commissioners. They refused to renew it because of my support for repeal of the earnings tax."

The police and other city departments would take a hit if the earnings tax is repealed.

The e-tax generates about $200 million a year for Kansas City. That money helps pay for everything from police officers to plowing the streets after a snow storm.

The police board told the Kansas City Star that Cozad's work against the earnings tax didn't fit with the department's priorities.

St. Louis

The 1 percent earnings tax brings in $140 million, or a third of the city of St. Louis' budget.

Yet unlike in Kansas City, officials here did not actively campaign last fall against Proposition A, the ballot question on whether the tax should be put to a retention vote.

Last fall Mayor Francis Slay repeatedly said it would be better "to keep the powder dry."

"In my view is that the better approach is to muster all the resources we can for a yes vote in April, that is to keep the earnings tax," Slay said.

That strategy appears to have worked.

Ahead of this April's election Citizens for a Stronger St. Louis, the group campaigning for Proposition E has raised $600,000.

Since 68 percent of St. Louis voters said no to Prop A last fall, the expectation is that most voters here will vote yes next Tuesday to keep the tax.

The mayor's chief of staff, Jeff Rainford, says it's just a matter of getting them to the polls.

"And you convince people to vote by knocking on their door, making phone calls and direct voter contact," Rainford said. "You don't do it through radio commercials or TV commercials."

Blue and yellow "Vote for Prop E!" yard signs are popping up and residents are getting glossy pamphlets in the mail.

But, so far, there's been no visible opposition in St. Louis, even from Rex Sinquefield, the billionaire who poured millions in support of Prop A last fall.

Show Me Institute policy analyst David Stokes explains the likely reason why.

"I think the fact that the vote actually passed in Kansas City last November means that supporters of removing the earnings tax are focusing more of their efforts on Kansas City than St. Louis right now," Stokes said.

The Show Me Institute is largely funded by Sinquefield.

Stokes did write an op-ed piece that appeared in the St. Louis Post-Dispatch on why the city would be healthier without the tax.

But the analyst is realistic about this April's election.

He says the earnings tax will likely be retained in St. Louis, and the debate will continue here until it's put to a vote again in five years.