Should You Pay the Earnings Tax in Wildwood?
At a mayoral candidate forum last week hosted by the St. Louis Business-Journal, the topic of the St. Louis earnings tax came up for discussion. There were several important points made in the talk (as shared in this article in the Business-Journal). Unfortunately, most of the points, (but not all) were erroneous.
Expanding the one percent earnings tax to include St. Louis County was proposed by one of the candidates at the forum. Can the earnings tax be extended to St. Louis County? The short answer is no. Proposition A, passed by voters in 2010, disallows earnings taxes in cities other than St. Louis and Kansas City. So, no, Chesterfield can’t impose an earnings tax even if it wanted to (and I’m pretty sure it doesn’t). State law can always be changed—as Proposition A itself did—but as it is now establishing an earnings tax in St. Louis County is not allowed.
In fairness to the candidate who discussed expanding it, she was aware of that. She discussed making earnings tax expansion a part of the currently stalled Board of Freeholders process (the Board of Freeholders is the entity considering changes to the relationship between the city and county). Could it happen that way? That is possible. If the Board of Freeholders suggested merging St. Louis City and St. Louis County into one unified city, and if voters approved that proposal, then it is possible that the current exemption allowing an earnings tax in the City of St. Louis could be applied to the new, unified city.
Short of a full reunification, could the Board of Freeholders simply choose to enact an earnings tax in St. Louis County as part of any new governmental plan? Again, perhaps. The state constitution states that the new plan:
shall become the organic law of the territory therein defined, and shall take the place of and supersede all laws, charter provisions and ordinances inconsistent therewith relating to said territory.
But a new Board of Freeholders charter won’t be able to just pass any new rule it wants in conflict with statewide rules on local governments. For example, the Board of Freeholders can’t decide that the new region will tax a retail merchant’s inventory or the car of a disabled former POW. There are limits on what can be passed. So would a county earnings tax be allowed in this situation? It would simply depend on how Proposition A is interpreted. The only thing I am comfortable predicting is that litigation would result, and the courts would decide the question.
All of this leaves aside the fact that expanding the earnings tax to St. Louis County is a bad idea in and of itself. More to come on this issue, including a post on the part of the article where I agree with the candidates.