League of Women Voters votes no on Prop A

The Moberly-Randolph County League of Women Voters, part of the LWVMO, is a non-partisan political organization which encourages informed and active participation in government, works to increase understanding of public policy issues, and influences public policy through education and advocacy. For these reasons, League wants to be sure all voters recognize the serious attack on our state economy and our two major cities. League hopes citizens will become educated about Proposition A and oppose it at the polls on November 2.

It is League’s belief that government should provide those services to its citizens that they can not provide individually, requiring collective support (taxes) for those services. It seems that generally people have an inherent opposition to taxes, never realizing the positive impact that they have on our daily lives. Important services such as public schools, roads, buses, police and fire protection, public health regulations, libraries, and consumer protections are all paid for by tax dollars.

On the November 2nd ballot, Proposition A will ask voters if they wish to vote on eliminating or retaining the earnings tax in St. Louis and Kansas City, without finding a substitute means of paying for the services mentioned above. Although these two cities are the only cities in the state with an earnings tax, the entire state must vote on the issue. The current earnings tax is a one percent tax on salaries, wages, commissions and other compensation, paid by all employed city residents whether they work in the city or elsewhere, and by all non-residents who work in the two cities. The issue would also prohibit any other city from ever adopting an earnings tax, even if they decided at the local level that this would be the best option for them.

The earnings tax makes up about one third of St. Louis’ general revenue budget and close to 40-percent of the Kansas City budget. Can you imagine our two major cities, struggling financially as they are, reducing their budgets by 30 to 40-percent? What are the options to replace the earnings tax? There are no good ones.　

Sales taxes and property taxes are two major taxes that support city budgets. To raise the equivalent revenue from the lost earnings tax would require a huge increase in the sales tax or tripling property taxes– neither a viable solution—and they would put an untenable burden on those least able to pay.

The League believes that ending the earnings tax would be extremely disruptive to St. Louis and Kansas City. Services, infrastructure, and safety would deteriorate and quality of life would be adversely affected. Businesses and developers would likely prefer to locate elsewhere. And, it would affect our whole state as St. Louis and Kansas City are referred to as the “economic engines” of our state.

Why would anyone choose to end the earnings tax when it pays for crucial services and is accepted by the people? The earnings tax adds to the tax mix, complements other taxes, and helps provide financial stability. It combines the ability to pay and benefits received. The tax is difficult to evade, easy to enforce, and broad based–all positive attributes.

Whether one believes in the earnings tax or not, now is not the time to withdraw crucial revenue away from St. Louis and Kansas City. The League of Women Voters believes that it is essential to maintain local control and retain the present revenue source for Missouri’s two largest cities by voting against Proposition A.