The City of Hazelwood has announced that it is cutting back on the services it provides its residents. In related news, Hazelwood had a starring role in my new paper on special laws in Missouri. Is that a coincidence? Well, no, it isn’t.
Hazelwood’s biggest issue is that it is being held at figurative gunpoint by Robertson Fire District, a taxing district here in St. Louis that could qualify as one of the most obscure taxing districts we have. Robertson Fire District probably should not exist. The City of Hazelwood’s municipal fire department should be providing fire protection services to the entire city, but can’t because of a special law in Missouri that limits the ability of cities in St. Louis County that annex unincorporated areas to provide fire services in those areas.
Cities must pay taxes for the fire district to provide the fire services, which they do less efficiently than municipal fire departments. And it is much easier for fireman’s unions to get control of a fire district than a city government (though they can do that, too.). Anyway, Robertson has significantly raised its property tax rate—a rate that the City of Hazelwood, not just the residents within the fire district, must pay. These expensive bills from the high-spending Robertson Fire District are the primary reason Hazelwood is making the cuts mentioned at the start of this piece, and considering filing bankruptcy. From a Post-Dispatch story on the topic:
Median employee pay in the [Robertson] district was $116,066 in 2021, according to district salary records.
In 2021, the city paid Robertson $4.5. million out of a total budget of $30 million, and that does not include the cost to fund the Hazelwood municipal fire department, which covers other parts of the city.
The Robertson contract requires the city pay any fire district tax exceeding 99 cents for each $100 of assessed value. That cost has ballooned over the years, Hazelwood City Manager Matt Zimmerman told the Post-Dispatch in April. [Author’s note: The current rate is $2.41, much higher than $0.99, although the district claims it is going to lower it.]
This story is an example of a special law that is harming Hazelwood, and other cities, too. Cities within St. Louis County that incorporate or annex new areas should be allowed to provide municipal fire services within those areas. Frankly, Chesterfield should be operating its own city fire department; it could save Chesterfield residents a lot of money.
There is another special law, however, where Hazelwood gets the better end of the deal and uses that special authority to stick it to taxpayers. This law relates to hotel taxes. Hotel taxes within St. Louis County are pooled and used to fund tourism promotion, the downtown dome, and a few other things. The tax rate paid on hotel rooms everywhere in St. Louis City and County is 7.25 percent, on top of the normal sales tax rate. But a few cities (four to be precise, most near Lambert Airport) are allowed to have a hotel tax on top of that rate, and the most egregious one is Hazelwood, with a rate of five percent. The combined sales and hotel tax rate in Hazelwood is over 20 percent, and that is unjustifiable. (The other three cities’ extra hotel tax rates are all under one percent.)
In other words, throughout St. Louis City and County hotel taxes of 7.25 percent fund regional items, but a special law allows Hazelwood to charge an extra five percent to just promote Hazelwood. That needs to be changed and excessive hotel taxes need to be disallowed.
Live by the sword, die by the sword. I fully agree that Hazelwood’s primary financial problem is derived from a harmful special law that needs to be removed (the fire district law), but the legislature also needs to address the hotel tax that benefits Hazelwood unfairly.
I look forward to the Mayor of Hazelwood supporting both changes, not just one of them.
