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Posts Tagged ‘E-tax’

Very interesting, this E-tax situation. Not just the Kansas City situation but the combination of Kansas City and St. Louis.

Quite a contrast, actually. In both cities, voters overwhelmingly approved retention of the one-percent tax on salaries and business profits. But that’s where the similarities end.

Consider:

— In Kansas City, the opposition, led by eastern Missouri billionaire Rex Sinquefield spent about $600,000 trying to defeat the tax. In St. Louis, there was no organized opposition.

— In Kansas City, all indications are that it will be “business as usual” at City Hall and that a serious, extensive review of city taxes and finances is not likely to occur. In St. Louis, however, it appears that it’s almost a foregone conclusion that the E-tax will be eliminated before the next retention election, which would take place in five years.

So what’s the deal?

Well, it seems clear to me that, in St. Louis, Sinquefield and Mayor Francis Slay, a friend of Sinquefield, made a deal.

Here’s how the conversation that led to that gentleman’s agreement likely went…

Rex — “Uh, Francis, you know you’ve got to get rid of that E-tax; it’s killing job and business growth.”

Francis — “Yes, Rex, I realize that. But we can’t chop it off all at once, you know. How about this: If you don’t contest it on April 5, I promise you that we’ll get rid of it before it comes up for retention in five years, and we’ll come up with ways to replace the revenue.”

Rex — “You got it.”

How could such a clear-cut deal take place in one city, while, at the other end of the state the battle will be re-engaged every five years for the foreseeable future?

It’s the difference between a strong mayor form of government (St. Louis) and a council-manager form of government in Kansas City.

Slay can make that deal without having to worry about being undermined by the Board of Aldermen. In Kansas City, however, the mayor can’t promise anything, unless he’s got the signatures of six other council members, giving him a 7-6 majority, including himself.

Slay

To see the difference in the E-tax intentions of leaders in the two cities, one had only to read Slay’s comments in today’s St. Louis Post-Dispatch and Mayor-elect Sly James’ comments in The Kansas City Star.

James: “What a great victory. We now have confirmation that we’re going to have the earnings tax that we need so much.”

Slay: “What we saw here was a step, an important step toward what I believe to be a necessary and inevitable change in the way the city delivers services and the way the region is governed.”

The Post-Dispatch story went on to say that city officials already had begun talking about other ways of getting the revenue that the E-tax generates. “I don’t think there’s going to be another campaign on this earnings tax” in five years, Richard Callow, pro-earnings-tax campaign manager was quoted as saying.

That about says it all, doesn’t it? The wheels are in motion in St. Louis, and the E-tax is going away.

Now, if Kansas City leaders are paying attention, that should set off all kinds of alarms.

Two reasons:

1) The E-tax undoubtedly is hurting business and job growth in Kansas City. We’re already getting poached to death by the Kansas side, and now, with many Missouri-side suburbs growing, they, too, will pick up the cherry-picking pace.

2) After St. Louis gets rid of its E-tax, it will start competing more stoutly for businesses that are looking to relocate to Missouri. And when it lays out its package of incentives, it can say, “If you come to St. Louis, you won’t have to worry about an earnings tax, but if you go to Kansas City, you’ll be hit for one percent of your profits.”

Ouch!

Let me make this clear: I was not only for the E-tax, I was on the Save Kansas City Committee steering committee and made two presentations on behalf of the tax. At both appearances, however, I advocated for a thorough review of Kansas City finances.

And while I like the idea of forcing the “sundowners” — those who leave the city after work each day — to help pay for the amenities and facilities that bolster the urban core, I think this newfound focus on the E-tax is fostering a lot of unnecessary resentment among the sundowners.

You remember, don’t you, E-tax proponent Dan Cofran’s now-famous quote to a woman who was frustrated because she had to pay the tax even though she didn’t live in Kansas City? “Then, don’t work here,” he said.

Ouch…again.

The reply didn’t hurt the tax’s chances of passage at all, but it didn’t help relations between those of us who live in Kansas City and those who don’t. We shouldn’t allow the E-tax to drive the wedge even farther between us and them.

So, let’s see what we can do about getting rid of that E-tax, OK, Sly? OK, council members?

The last thing we want, other than that wedge being driven deeper, is the sight of St. Louis steaming by us as we cling to a tax that only about 20 percent of the largest cities in the U.S. are holding on to.

Sinquefield

Also, this looks like a case where the big dog, Sinquefield, isn’t going away. He’ll be back in five years — assuming he’s still alive — and he and his minions will dump several hundred thousand more dollars into that campaign, and he’ll make our business community shell out another $1 million or so to try to beat him.

To me, he looks an awful lot like Local 42 of the International Association of Fire Fighters: He won’t quit until he gets what he wants.

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