The headline “St. Louis is America’s fastest-shrinking city” should set off alarm bells for St. Louis lawmakers and citizens. It’s true that St. Louis City has struggled to attract and keep residents for some time, but that shouldn’t numb us to the reality of this pressing issue. The city needs to be a more attractive option for businesses and citizens if we want to reverse this trend.
A recent report from business resource AdvisorSmith analyzes population data of cities with more than 250,000 residents. With a compound annual growth rate of −1.1 percent, St. Louis tops the list as the fastest-shrinking city. This means that St. Louis City’s population fell by an average of 1.1 percent each year from 2014 to 2019. That’s a huge difference from the fastest-growing cities; Henderson, Nevada, and Irvine, California, both grew by an average of 3.1 percent each year over the same period.
So why is St. Louis shrinking?
It’s probably a combination of many things. High crime and poor school performance certainly play a part, but there are other problems. Policies that place onerous burdens on businesses and residents can prevent both economic and population growth. The city’s earnings tax means that city residents and workers lose an additional 1 percent of their income to taxes. Numerous special-taxing districts make sales taxes as high as 11.679 percent in some areas of the city. Stringent business regulations make it harder for businesses to operate and hire workers. Does this sound like an attractive place to live, work, or start your business?
Our city continues to make headlines for losing population. If we want to stop this trend and attract residents and businesses to St. Louis, action is needed. Addressing the crime rate and poor schools will be challenging, but other cities such as Indianapolis (with a strong school choice environment, some crime rates trending down, and a growing population) have done so. With respect to taxes and regulatory policy, repeal the earnings tax, cut red tape, and rein in special-taxing districts. With a focused effort on doing the basics well and getting government out of the way of business, St. Louis City might start to grow again.
