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Posts Tagged ‘Rex Sinquefield’

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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I’m afraid it’s almost inevitable that Missouri voters will approve Proposition A a week from Tuesday.

At its core, Prop A is an insidious scheme designed to appeal to voters’ selfish inclinations at the expense of Kansas City and St. Louis, which make the state the special place that it is.

I’ve often quoted former mayor and now-Congressman Emanuel Cleaver, who used to rally the troops at City Hall by saying, “This isn’t some podunk town along I-70; this is Kansas City!”

But if Kansas City and St. Louis lose their one-percent earnings taxes and falter badly because of it, the podunk element will grow in prominence, and the urban dimension will diminish.   

The podunk element — my apologies to rednecks across the state — is going to vote in full force for Prop A, which would eliminate the prospect of an earnings tax anywhere in the state except Kansas City and St. Louis.

Then, it will come down to this: If Kansas City and St. Louis want to retain their earnings taxes, they will  have to hold renewal local elections every five years. The tax is applied to the net profits of corporations in the two cities and to the wages of individuals who either work or live in those cities. 

What should deeply concern Kansas City residents is that the e-tax generates more than $200 million a year, about 36 percent of the city’s $560 million general fund.

And, by the way, here’s one of the main reasons Mayor Mark Funkhouser should be given his walking papers: Late last year he said he was “open” to the idea of eliminating the earnings tax. He later came to his senses, but the mere fact that he was willing to entertain the notion of eliminating the e-tax shows how far off beam he is.  

On Sunday, The Star had an excellent front-page story — “Whither city services?” — that, I hope, will make Kansas Citians more aware of the nature of the threat posed by elimination of the earnings tax.

The story, written by longtime City Hall reporter Lynn Horsley and intern Seth Putnam, addressed, among other things, a so-called “Doomsday List” of cuts the city might have to make if the earnings tax goes away. 

Included on the list were $58 million from the Police Department and $20 million from trash collection, curbside recycling, bulky-item pickup and leaf and brush services.   

Do you remember, several years ago, when the raging debate about the earnings tax was whether city residents were entitled to free trash bags indefinitely?

I dare say, many people would welcome the return of that debate, instead of the current issue of whether to do away with the tax altogether.

Ironically, it’s outsiders, for the most part, who are agitating for repeal of the earnings tax. 

The chief chef, the man who concocted this nasty stew, is Rex (Down the Drain) Sinquefield, a multi-millionaire who apparently lives in Osage County, near Jefferson City, but has strong ties to St. Louis.

Sinquefield

Sinquefield is president of a non-profit organization called the Show-Me Institute, a conservative and libertarian think tank. On its web site, the institute says that its work “is rooted in the American tradition of free markets and individual liberty.”

The group’s chairman is R. Crosby “Chris” Kemper III, director of the Kansas City Public Library. Kemper and Sinquefield have argued for years that the earnings tax hurts growth and employment.

In a recent KC Star article, political reporter Dave Helling said Sinquefield, who has made himself invisible in this campaign, is a retired businessman whose income “appears to be based on business holdings and dividends, which are not subject to the earnings tax.”

OK, maybe he’s not motivated by self-interest. But he sure is posing a threat to Missouri’s two biggest cities. So far, according to a recent Kansas City Star article, Down the Drain has spent nearly $11 million of his own money to get Prop A on the ballot and fuel the campaign against it.

Cozad

The assistant chef, working for Prop A on our side of the state, is former Missouri Republican chairman (Knock On) Woody Cozad, a lawyer who lives in Platte City. Cozad is a regular panelist on the KCPT program “Ruckus.”

A couple of years ago, describing Republicans, Knock On Woody said, “We don’t like government  in general.”

Down the Drain obviously shares that philosophy, and, so, his and Cozad’s approach with Prop A essentially is, “Let’s put a big hole in the financing of city government so there will be a lot less of it.”   

Strategically, I must admit, Down the Drain has hatched a brilliant plan. By attacking the earnings tax statewide — and pitting rural against urban — he’s given himself an odds-on chance of winning. Why would the vast majority of outstate Missouri voters have a very strong reason to vote “no”?

A big incentive for outstate residents is that not only does it not affect them (as long as they don’t care about the stature of the state’s two biggest cities, anyway),  it would prevent an earnings tax from ever being visited upon them.

For the earnings tax to survive in Kansas City and St. Louis, then, it will come down to local elections next year. Earnings-tax proponents will have the challenging job of trying to convince voters to be unselfish and to think, first and foremost, about what kind of city they want and what kind of municipal services they want.

Two recent letters to the editor in The Star framed the issue very well.

In an Oct. 15 letter, Mack Tilton of Kansas City called Proposition A “a trick,” with the trick being that “if we want to keep the tax we’d be asked to decide again every five years.”

“It would be very hard,” he continued, ” for the city to borrow money or make any long-term plans knowing that a primary source of its income would be challenged every five years.”

In other words, it would be more difficult for the city to commit to big projects like development of the Power & Light District, which has helped resurrect downtown and keep Kansas City on the map as a convention destination. 

Last Thursday, Joel Pelofsky, a former city councilman and former Kansas City school board member, wrote: “The fact that people who do not live in Kansas City but work here and pay the tax is only fair. Many of the city services benefit them, as do cultural and entertainment facilities maintained by tax revenues.

“Nobody likes to pay taxes,” Pelofsky concluded, “but it is a reasonable price to pay for living in a great city.”

If you live in Kansas City and you want to see it continue to grow and prosper, I urge you to vote “no” on Prop A next week. But, more important, be ready to vote “yes” on retention of the e-tax next spring.

You can’t say this about many taxes, but it’s a beautiful thing.

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