St. Louis County Should Find Budget Cuts Before Hiking Taxes

The economic damage caused by COVID-19 has been catastrophic, and families everywhere are scrambling to tighten their belts and make ends meet. The fallout extends to local governments as well, which is why it was surprising to see the proposed St. Louis County budget for 2021 include no budget cuts. According to a St. Louis Post-Dispatch story on the matter:

St. Louis County Executive Sam Page has proposed an $848.5 million county budget for 2021 that includes $4.3 million in pay raises for county employees, a big funding boost for the police department and no job reductions or cuts to services.

The plan called for pulling back spending just 2% from this year’s budget despite a projected 9.5% shortfall in revenue this year from the coronavirus and an abundance of uncertainty about the county’s ability to recover.

But wait—how is the county going to account for the 9.5 percent shortfall in revenue mentioned in the article? Tax increases, of course:

Page told the council in a four-page letter on Friday that the county needed to “identify additional revenues” to sustain existing programs, including increasing the property tax rate either by a council vote or a ballot initiative.

The county could also see a $10 million annual boost in sales taxes, he wrote, if the state Legislature were to pass legislation allowing the state and its municipalities to begin collecting taxes on sales in the state from out-of-state vendors.

Why raise taxes on citizens already struggling in the midst of an economic calamity instead of looking carefully for cuts? In the Post-Dispatch story, a county official is quoted saying that cuts “generated a whole bunch of bad outcomes. So, ultimately, none of those were accepted.”

It’s possible that some service cuts aren’t feasible and really would harm citizens. But the idea that there’s simply nothing in the budget that can be cut doesn’t pass the smell test. We already know one area where the county misuses gobs of taxpayer money: economic development policy.

One does not need to strain to find examples of the county wasting money in this fashion.

Just a few years ago, in a plan to revitalize part of North County, St. Louis County negotiated a lease for the former Northwest Plaza mall that could cost the county up to $77 million. Serious questions were raised about the negotiation process, which led to ethics hearings. A member of the county council has since called the lease “obscenely long and overpriced,” and the county is now enmeshed in litigation while trying to break the lease.

The county also contributed millions to the farcical, doomed-from-the-start Loop Trolley project, which last December financially imploded after barely a year of operation. And the county regularly subsidizes smaller projects that don’t make headlines. Last year, the county and the City of Hazelwood together spent millions in a scheme to redevelop the decaying St. Louis Outlet Mall. Late last year, St. Louis County doled out more than $4 million to HVAC company Johnstone Supply to help it build a new headquarters in Earth City.

Institute analysts have spent years documenting the problems with these projects, which often lack accountability and oversight, allow government to pick winners and losers, and shift risk from private investors to taxpayers. But most importantly: They simply don’t work, frequently failing to deliver promised benefits.

While those mistakes have already been made and the money already spent, the county is taking the wrong approach here. Why should taxpayers entrust a government that has been a poor steward of their dollars with more money? St. Louis County should work harder and more transparently to find opportunities for budget savings before asking its citizens to pony up additional taxes.