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Fight for earnings tax repeal stymied… for now

  

JEFFERSON CITY, Mo. – The effort to repeal the earnings tax in St. Louis has encountered two false starts in as many days.

A House measure to repeal the tax from Rep. Kirk Mathews, R-Pacific, failed to get out of the General Laws Committee’s executive session Tuesday due to a lack of available votes, and Sen. Kurt Schaefer brought up his bill on the floor Monday evening and laid it back on the calendar after a few hours of debate.

With seven Republicans on the General Laws Committee, Caleb Jones, R-Columbia, the committee chair, needed six votes to get it onto the calendar for perfection. However, Rep. Kevin Engler, R-Farmington, has said he is not in favor of the legislation as it is written and Rep. Paul Curtman, R-Pacific, was late for the hearing, which was held in the South Gallery just minutes before the House was supposed to come to session.

Engler
Engler

Engler’s opposition to the bill stems from what he sees as an override of local control, which he opposes as a former mayor, and that the bill does not replace the current tax structures in St. Louis and Kansas City with a plan that does not strip them of their revenue.

Rep. Jeremy LaFaver, D-Kansas City, joked before the executive session that the bill, which he dubbed the “Restrict Our Freedom Act of 2016” and was an “anti-local, big government” bill.

The earnings tax has been a source of contention for the past week as measures to repeal it failed in Kansas City and St. Louis, the only two cities in the state that have taxes on income. The conservative billionaire political donor and activist Rex Sinquefield has funnelled millions to fight the earnings tax, and given the reduction in margin since the last vote five years ago, it is fair to say he is making progress.

On the other side of the debate, officials from Kansas City and St. Louis both say the tax makes up anywhere from 30 to 40 percent of their revenue and a removal of the earnings tax would cause drastic cuts to services and first responders in the city.

In the Senate, Schaefer sparred with Sens. Jamilah Nasheed and Joe Keaveny, two St. louis Democrats over his own bill that is limited to St. Louis. He alleged that two-thirds of the population had left St. Louis in the last 50 years because of the one percent tax on income in the city.

“You don’t have to have a tax structure that is anomalous and doesn’t really exist anywhere else in the United States,” Schaefer said.

Other cities like New York, Portland, Detroit, Baltimore and many cities in Ohio have an earnings tax, earned income tax or some other kind of municipal tax on earnings, but the majority of cities in the U.S. do not.

Keaveny disagreed with Schaefer, saying it was not “the purview of the senator from Boone to tell the city of St. Louis how to tax its residents.”

The biggest eruption however came between Nasheed and Schaefer. Nasheed accused Schaefer of “carrying water” for Sinquefield due to a $750,000 donation Sinquefield made to Schaefer’s campaign for attorney general. Schaefer called her to order for her comments.

“That’s the kind of thing that is degenerating debate on this floor,” Schaefer said. “That’s the kind of dialogue that has to stop on this floor.”