The Associated Press April 5, 2011, 11:42PM ET

Voters in St. Louis, KC agree to keep earnings tax

Residents in St. Louis and Kansas City, Mo., overwhelmingly agreed Tuesday to retain their 1 percent earnings taxes, passing on a significant tax cut but keeping a revenue source that provides a huge chunk of the budget in both of Missouri's big cities.

Complete but unofficial results show the St. Louis earnings tax passed with 88 percent of the vote, while Kansas City residents favored the tax by a 3-to-1 margin.

The votes were necessary after a statewide ballot proposition that passed in November required a renewal vote every five years on the earnings taxes in both cities. Proposition A also forbids any other Missouri municipality from adopting an earnings tax.

The tax accounts for $140 million, or about one-third, of the St. Louis budget, and $200 million, about two-fifths, of Kansas City's.

"I was confident that the people of St. Louis would do the right thing for the future of the city if they were armed with the facts," St. Louis Mayor Francis Slay said. "Regardless of what anyone thought of the earnings tax, it would have been irresponsible to get rid of it without a viable alternative to replace it."

There was no organized opposition in St. Louis.

In Kansas City, Mayor-elect Sly James said it was clear the city's residents recognized the importance of the tax.

"It means that this city is going to continue to try and become as efficient as possible, but we're not going to have to do it with one hand tied behind our backs," he said.

City officials said turnout was low, although they did not have an estimate. In St. Louis, turnout was estimated at 10 percent to 12 percent.

Woody Cozad of Freedom PAC, the Kansas City group opposed to the tax, noted that with low voter turnout, a minority of residents decided "to continue with an earnings tax that is driving small businesses out and pushing homeowners away."

Cozad said no one wants to cut police and firefighter jobs, something city officials said was likely if the tax proposal failed.

"The dispute is about whether or not we can find a better way to fund our city," he said.

Voters in both cities seemed to favor the tax out of concern over the possible loss of safety and vital services.

"I voted for it because we need it for the police and fire departments, and plus we need to keep our city clean -- we need it for trash pickup," said Earline Polson, 69, of Kansas City.

In St. Louis, Maria Sapp, a 35-year-old librarian, said, "I voted yes. My daughter will be going to public school and we use public services. We have to pay."

But opponent Mark Cameron, 62, believes Kansas City residents pay too many taxes.

"When you think about it, out of every dollar, 28 percent goes to income tax, and then you go to the grocery store and you have to pay another 7 to 10 percent sales tax, and then there's a gas tax," Cameron said. "I even have to pay tax on water use. ... It's tax, tax, tax. There's a limit to it."

The Save Kansas City Committee spent about $1.1 million on television and radio ads and a door-to-door effort supporting the tax, spokesman Steve Glorioso said. In St. Louis, earnings tax supporters have spent about $650,000, focusing on telephone, mailings and door-to-door efforts aimed at the city's 40,000 households where voters who typically turn out in April live.

Freedom PAC, funded largely by a conservative nonprofit called American Democracy Alliance, raised about $376,000 for anti-tax marketing and ads, spokesman Jason Klindt said.

The two cities are among roughly two dozen around the country with similar earnings taxes, though some cities tax at a much higher rate. The median income in both St. Louis and Kansas City is around $30,000, meaning the typical resident pays about $300 a year for the tax.

People who don't live in the cities but work there also pay the tax, but had no vote in the election.

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Associated Press writers Dana Fields and Maria Sudekum Fisher in Kansas City, Mo., contributed to this report.


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