Another Challenge to Face…Maybe

Hi,

On Wednesday, March 9th, the Local Government Committee of the Missouri House of Representatives held a hearing on House Bill 534.

HB534, if adopted, would change the way sales taxes are distributed in St. Louis County.  University City staff estimates if that happened University City would lose $2.1 million in annual revenue, at the least.

This is not good.

Here’s some background.

As you may or may not know, University City is one of quite a few pool tax cities in St. Louis County – “B” cities.   Those that are not pool cities are point-of-sale cities – “A” cities.

In point-of-sale or “A” municipalities – usually cities with a larger commercial base – the cities keep most of the sales tax revenue generated within their borders.  A portion, though, goes into a St. Louis County tax pool.

In pool or “B” cities, most of the sales taxes generated go into the County pool, along with the monies from the “A” cities.  Then, the pool cities receive payments from the tax pool on a per capita basis.  The more residents you have, the more money you get from the pool.  (Funds from some special locally-approved taxes do stay with the individual cities.)

If HB534 passes, the “A” cities will no longer have to put any of their sales taxes into the St. Louis County pool.  So there will be less money in the pool to distribute.  And we, and most other “B” cities, will lose money.

Not good.

I admit that this tax sharing system does not look fair because the “A” cities lose money to the pool –  money they could use to provide for their residents.   True enough. But this is one of those “greater good” situations.  And I hope most “A” cities will realize this and not support the passage of HB534.

I drafted a letter to the chair of the Local Government Committee that is holding this hearing.  Along with the help of Vinita Park Mayor James McGee, I contacted a number of mayors from other “B” cities and asked them to put their names on this letter in opposition to HB534.  This letter will be presented at the hearing.

For the benefit of the region, I hope HB534 does not become law.  If it does, our budget would suffer. (That’s a real understatement – imagine a $2.1 million dollar hit.)

I have copied my letter below.

Any questions? Let me know.

Mayor Shelley Welsch

——————————————————————

March 9, 2011

Honorable Chuck  Gatschenberger, Chair
Local Government Committee
Missouri House of Representatives
201 West Capitol Avenue, Room 408B
Jefferson City, MO  65101

Dear Chairman Gatschenberger and
Members of the Local Government Committee,

I am writing on behalf of the City of University City and the mayors of the cities noted below.  We are writing to express our opposition to House Bill 534 which is the subject of a hearing by the Local Government Committee today.  We are unable to attend your hearing but ask that as your discuss this bill you consider our grave concerns about the negative effect this bill would have on our communities and all of St. Louis County.

Saint Louis County has benefited over the years from the foresight of previous civic leaders who designed and implemented the system of shared sales tax revenues.   Understanding the challenges we faced as a region with so many municipalities; knowing that all communities were not equally positioned to provide a commercial tax base to fund city services; and realizing that the Saint Louis region as a whole would benefit when residents throughout the community had sufficient services, they came up with this unique system for the shared distribution of sales taxes. This system asks some cities to sacrifice part of their revenue for the greater good, and helps cities which cannot expand their tax bases because of long-term housing patterns, size of the community, and a myriad of other issues.

People from throughout Saint Louis County support commercial enterprises throughout the County, not only in their hometowns.  The ability to provide this on-going economic boost to their neighbors would be greatly impacted by the increased taxes they might have to shoulder if their local communities lose this shared revenue.

Almost 70% of the residents of this region reside in “B” cities that will suffer if this bill is passed.

We respectfully request that you oppose House Bill 534.

Thank you.

Sincerely,

Mayor Shelley Welsch, City of University City
Mayor Tim Pogue, City of Ballwin
Mayor Norman McCourt, City of Black Jack
Mayor Anita Mason, City of Breckenridge Hills
Mayor Jack Agnew, City of Dellwood
Mayor Robert Lowery, City of Florissant
Mayor Richard Magee, City of Glendale
Mayor Benjamin Sutphin, City of Jennings
Mayor Patrick Green, City of Normandy
Mayor Mary Louise Carter, City of Pagedale
Mayor Kenneth Williams, City of Uplands Park
Mayor Robert L. Hensley, City of Velda City
Mayor Earlene Luster, Village of Velda Village Hills
Mayor James McGee, City of Vinita Park
Mayor Gerry Welch, City of Webster Groves
Mayor Linda Whitfield, City of Wellston
Mayor Gail M. Winham, City of Winchester
Mayor Lawrence “Butch”  Besmer, City of Woodson Terrace

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