This is wonderful news, also known as great news. The proposed route was simply preposterous. Even by Metro’s own overly generous predictions, it was only going to have about 5,000 boardings a day. (That isn’t very many boardings for a billion dollars.) It was bad enough that it generated significant opposition at the East-West Gateway Board of Directors (EWGBOD) project vote, which almost never happens. At the Show-Me Institute, we released a study by Randal O’Toole in 2023 that highlighted why this project was unnecessary and wasteful, and I provided testimony against it before the EWGBOD in early 2024.

The federal government gives away a lot of money for expensive transit projects, so St. Louis invented an expensive transit project to go get that money. Never mind that few people were going to ride it, and that people along this route could be served much more affordably by buses.

But let’s give credit where it is due. The new mayor of St. Louis and Metro deserve credit for making the right decision now. Whether they did it because they realized it was a bad choice all along, or whether they just succumbed to the political reality that the current administration in Washington, D.C., was highly unlikely to fund this project, doesn’t really matter. I am just happy that it is done for, or at least as done for as a project like this can ever be.

Which brings us to the other part of the good news. The city and Metro are redirecting their efforts along this route to consider a bus rapid transit (BRT) route. BRT has worked well in Kansas City (unlike the streetcar) and deserves consideration for this route in St. Louis. I am still amazed, though, at how expensive BRT itself is. (That will be a topic for a future post.)

An affordable (for both taxpayers and riders), changeable, safe, and on-time bus system is what the St. Louis region needs for public transit. We should stop dreaming about getting suburbanites out of their cars and start focusing on serving the needs of people who depend on public transportation. Cancelling the Green Line is the right move in that direction.

The post Green Means Stop appeared first on Show-Me Institute.

David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to discuss: the cancellation of the St. Louis MetroLink Green Line and what bus rapid transit could mean for the city, major changes to the Supplemental Nutrition Assistance Program (SNAP) under the One Big Beautiful Bill, and Missouri’s worsening reading crisis and how other states have improved with reforms like third grade retention.

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Timestamps

00:00 Cancellation of the Green Line Project
08:12 Changes to the SNAP Program
17:18 Reading Retention and Educational Reforms
26:10 Property Tax Reassessments in Platte County

Produced by Show-Me Opportunity

The post MetroLink Line Canceled, SNAP Reform, and Missouri’s Reading Crisis | Roundtable appeared first on Show-Me Institute.

So here is my contribution to the effort. Just tell St. Louis’s Bi-State Development Agency (also known as Metro) “no” on its application for around $700 million in federal funds for the ludicrous Green Line (formerly known as the North-South Line) proposal. Like Nancy Reagan said to Arnold on Diff’rent Strokes, “Just say no.”

The new leadership in the federal Department of Transportation (DOT) has instituted major changes in how the DOT is going to make decisions. This doesn’t look good for the Green Line, as the St. Louis Business Journal wrote about this week. The new DOT guidelines state that, among many other things, the DOT isn’t funding projects for local political purposes or social justice reasons. The new DOT leadership is focused on moving people and goods, and actually moving people is one thing the Green Line isn’t going to do. Metro’s own estimates—which based on history are probably inflated—claim that the Green Line will have only 5,000 boardings (so, about 2,500 people) per day. That is for a billion-dollar project. That’s absurd.

Whether you call it the “Green Line” or the “North-South Route,” I call it an inevitable failure and a huge waste of tax dollars. Even if you support MetroLink, there is no reasonable argument for the Green Line project. The federal government ought to reject this plan and many other similar, though not quite as bad, applications from around the country.

You’re welcome, Elon.

The post Hey Elon, Here Are Some Cost Savings for You in St. Louis . . . appeared first on Show-Me Institute.

The “Green Line” is dependent on approximately $600 million in federal funds; funds I hope it doesn’t get. I suggest that cutting the national debt can start right here. As national politics affects local policy, I am hopeful that upcoming changes to federal policy will be the death of this plan. Indeed, some key voices, including Les Sterman, the past director of the East-West Gateway Council of Government, have recently called for the project to stop.

In 2004, MetroLink planners predicted there would be 80,000 boardings per day on MetroLink trains by 2025 in St. Louis, Missouri (that number excludes Illinois users). In the first quarter of 2024, there were about 18,800 actual boardings per weekday for the entire system, including Illinois (page 23 in link). (Ridership goes up slightly in the summer with baseball games, but not that much this summer, for obvious reasons.) We can just admit that MetroLink usage has been substantially less than projected. St. Louis should focus on serving the existing system as best it can instead of doubling down on failure with this latest expansion fantasy.

The “Green Line” plan only projects 5,000 boardings per day, at best. Even if that turned out to be accurate—and history suggests it won’t be—that is a very low number. Serving about 2,500 people per day (one person equals two boardings, on average) for over $1 billion is a terrible use of tax dollars. This project should not move forward.

The post Absurd Light Rail Project Marches Onward appeared first on Show-Me Institute.

Let’s recap the proposal. The Green Line would be a five-mile route up and down Jefferson Avenue in St. Louis that then turns west for a few blocks on Natural Bridge near Fairground Park (which is where the JVL group bases its concerns). The entire plan will cost an estimated $1.1 billion, but the line is only predicted to have 5,000 boardings a day. That’s 5,000 boardings, not 5,000 people—most riders would use it both ways —and even that estimate is overly optimistic.

The demand for public transit along this route up and down Jefferson doesn’t currently justify its own bus route, but supposedly large numbers of people will magically ride MetroLink when the Green Line appears.

Why is Metro trying to build this route? Well, to quote Metro’s CEO, Taulby Roach:

A billion dollars sounds like a lot of money, but . . . 60 percent of that investment comes from the federal government, so why wouldn’t we want to get that money?

So, basically, let’s get the federal funds and spend them. Who cares that there is no demand for this route or that Metro’s own underwhelming projections admit that few people will actually use it? Let’s get some of other people’s money to spend! No wonder we are $35 trillion in debt.

I commend JVL’s neighborhood group for publicly asking tough questions about this project, which it calls the “Metro-Leg To Nowhere.” The pressure to support this boondoggle is strong. It’s great to see people stand up to it.

The post One Neighborhood Group Stands Up to Metro appeared first on Show-Me Institute.

But now we have good news out of St. Louis County regarding transit. County government has rejected all of the various options for MetroLink expansion into St. Louis County. (This is different from the proposed MetroLink expansion in St. Louis City, which unfortunately has been approved locally. The East-West Gateway Council of Governments is currently seeking federal funding for this project, which I hope it won’t get.)

The problem for the various proposals to expand into St. Louis County is that there is no dedicated way to pay for them, at least not yet. The route starts in the city but the expansion primarily serves the county—so is the city or the county going to pay for the first few miles of the expansion? Would the county pay for light rail inside the city? Would the city pay for part of a light rail expansion that mostly “benefits” residents of the county? (Note the use of quotation marks as there is no overall benefit.) Who knows?

This doesn’t mean that light rail expansion in St. Louis County isn’t going to happen, but anything that puts it in doubt is good news in my book.

The other good news in the story is that St. Louis County is now considering bus rapid transit (BRT) as an alternative to MetroLink:

AECOM [the county’s consulting firm] also has been asked to study the use of rapid bus lines, either using new rights-of-way just for buses or designated lanes on existing roads. Those could be deployed instead of MetroLink expansion or in conjunction with it.

BRT has been used in Kansas City with success, and it is something that Metro should consider for St. Louis. BRT moves people effectively at a fraction of the cost of light rail, streetcars, or trolleys. Unfortunately, it seems spending enormous amounts of money is a good thing from Metro’s point of view, no matter how much of it is wasted.

Increased use of BRT could be the transit option St. Louis has been looking for.

The post The Light Rail Line Less Traveled appeared first on Show-Me Institute.

Download a copy of the Fact Sheet 

The proposed St. Louis MetroLink extension, with its staggering $1.1 billion price tag, would be useless and expensive.

Demand for public transit along this proposed new light rail route, spanning 5 miles primarily along Jefferson Avenue, is such that there is currently NO bus route that serves this same route, yet we are to believe a light rail system is sorely needed and will be heavily used.

The projected ridership of 5,000 boardings per day is underwhelming, especially when compared to past forecasts for MetroLink ridership. In 2004, Metro predicted 80,000 daily boardings by 2025 for the Missouri side alone; yet, in 2023, the entire system averaged just 16,700 boardings.

We can look to the Loop Trolley debacle as a cautionary tale. Despite abysmal ridership numbers, St. Louis is stuck funding the trolley due to federal funding stipulations. The exact same thing will happen with this latest MetroLink extension proposal. It will cost over a BILLION dollars, have VERY FEW riders, and we will be forced to operate and fund it for decades. This project isn’t merely wasteful. It is an actively harmful expenditure of federal and local tax dollars.

The post Useless and Expensive: The Proposed St. Louis MetroLink Extension appeared first on Show-Me Institute.

David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to discuss:

– The need to update Missouri’s tax and expenditure limits (the Hancock Amendment)
– The passage of SB 727, the education reform bill, by the Senate
and House
– Metrolink expansion, and more

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Show Links:

Find tickets for the April 30 event in Columbia, MO here. 

Read Elias’ new report here. 

Read Avery’s blog on SB 727 here. 

Read David’s blog on the Metrolink project here. 

Produced by Show-Me Opportunity

The post Missouri Needs a Taxpayer Bill of Rights, SB 727 and Metrolink Expansion appeared first on Show-Me Institute.

These two deserve each other. Let’s examine the usage projections that were used to convince taxpayers to approve funding(and various extensions).

Projected passengers for MidAmerica Airport, back in 1997 when the airport was built? Two million.

Plog Research Inc., one of the consultants for the MidAmerica project, estimates 2 million air passengers will be served by the Downstate airport.

Actual passengers in 2022? 163,000. (And trust me, they celebrated that wildly.)

Projected MetroLink ridership after the construction of the cross-county MetroLink extension? 80,000 daily boardings in Missouri alone by 2025.

Actual daily boardings in Missouri in 2023? 16,700.

Public agencies habitually overstate ridership and understate costs to justify these massive projects of all types. High-speed rail, anyone? 

It is worth noting that the current five-mile MetroLink extension to the airport in Illinois cost $98 million, while the proposed MetroLink extension in St. Louis, which is also five miles long, is estimated to cost $1.1 billion. A billion-dollar difference for the same length of route. To paraphrase Everett Dirksen—himself a son of Illinois—a billion here, a billion there, pretty soon you’re talking real money.

It is great that we can finally connect two massive transportation boondoggles that don’t take anyone for a ride but taxpayers.

The post MidAmerica Airport and MetroLink Deserve Each Other appeared first on Show-Me Institute.

– The stadium tax debate in Kansas City
– The MetroLink expansion plan advances in St. Louis
– How to make it easier to access virtual health care in Missouri, and more

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Produced by Show-Me Opportunity

The post KC Stadium Debate, MetroLink Expansion, and MO Loses the Top Spot appeared first on Show-Me Institute.

The post MetroLink Expansion appeared first on Show-Me Institute.

Read the full study here.

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Produced by Show-Me Opportunity

The post MetroLink Expansions, Airbnb Rules, and $550K Limits appeared first on Show-Me Institute.

Is this plan going to be a positive step forward for the St. Louis area? No, not at all. It will be a wasteful doubling down on a failed strategy to force feed light rail into a metropolitan area that would be far better served by an improved bus system from a transportation, financial, and social perspective.

In a forthcoming paper for the Show-Me Institute, Randal O’Toole will discuss how addressing transit issues in St. Louis by expanding MetroLink is a fool’s errand, and an extremely expensive one at that. Metro’s total transit ridership in 2019 was less than it was in 1993, before MetroLink even opened. The pandemic only exacerbated this problem, with fewer jobs and workers in downtown than before. Jobs are spread out throughout the metropolitan area, and buses are well equipped to connect workers to changing jobs, students to new schools, and sports fans to games. (We can admit MetroLink does a good job with the sports teams for some—but that is hardly a justification for expanding the entire wasteful system.)

Metro would better serve our region by spending its tax money on an effective bus system, including bus rapid transit for high-volume areas, instead of expanding a costly, inefficient, and unwieldy fixed-route light-rail system that fails in its primary purpose—serving St. Louis transit users.

The post Costly AND Outdated. Where Do We Sign Up? appeared first on Show-Me Institute.

The proposed route received some tweaks earlier this month, and now is set to run from Natural Bridge Road at Grand Boulevard in north city down Jefferson Avenue past the National Geospatial-Intelligence Agency (NGA) headquarters and the site of the new MLS stadium. This new plan has an estimated price tag of between $600 and $800 million and would be financed primarily through federal funds. However, like the ill-advised KC Streetcar expansion, expanding MetroLink would be a waste.

The first and most obvious problem with the proposal is ridership. The project is touting the ability to connect impoverished areas of North Saint Louis with centers of commerce in places such as downtown and the Central West End. However, project leaders have yet to put out research supporting this claim. Considering that fewer and fewer people are commuting downtown for work, there are reasons to be skeptical of this assertion.

As a longtime Saint Louis sports fan, I understand that MetroLink can be a convenient way to get downtown and avoid the stress and costs of parking. However, building an additional stop and line to service the new MLS stadium is completely unnecessary, considering its proximity to Union Station­­­–it is only 0.2 miles away, or a five-minute walk. Instead of changing lines to access the dedicated stadium stop, soccer fans taking the train downtown would be better off exiting at Union Station and making the short walk over.

As with the KC Streetcar expansion I wrote about in a recent blog post, spending hundreds of millions of dollars on a questionable MetroLink expansion comes at the expense of bus systems.  Saint Louis Metro has been forced to cut lines amid staffing shortages, an issue which is predicted to persist into next year. Metro Bus is the primary means of transportation for roughly 22,000 St. Louis commuters, compared to only 4,000 commuters who primarily use MetroLink.

If St. Louis wishes to use federal money to improve public transit, it should improve the bus system and invest in more efficient types of public transportation, like Bus Rapid Transit (BRT). Unfortunately, policymakers’ tendency to chase shiny objects will likely leave Saint Louis with a defunct trolley, an oversized light rail system, and thousands of unhappy bus riders.

The post Even with an Updated Route, MetroLink Expansion is a Waste appeared first on Show-Me Institute.

Between 2014 and 2019, ridership on St. Louis Metro buses and light-rail trains dropped by nearly 25 percent. Thanks to the pandemic, ridership in recent months has only been half what it was in 2019, and thanks to increased numbers of people working at home it may not ever return to 2019 levels.

This suggests that St. Louis doesn’t need to spend hundreds of millions—or billions—of dollars building new light-rail lines. Yet that is exactly what St. Louis Mayor Tishaura Jones wants to do, not because St. Louis needs it, but because federal funding might become available for it. That federal funding would depend on local matching funds, meaning St. Louis taxpayers would have to pay higher taxes for train rides few of them will take.

St. Louis’s light-rail record is unimpressive. In 2001, Metro opened the 17-mile MetroLink College extension, doubling the total number of miles in the system. Metro carried fewer bus and light-rail riders the year after opening this line than it had carried the year before. The same thing happened when it opened the 3.5-mile Shiloh-Scott extension in 2003. The 8-mile Shrewsbury-Lansdowne MetroLink extension gained some new riders, but all of those riders were lost after the 2008 financial crisis, and most never came back.

Overall, light rail has failed to boost the region’s transit ridership. In 1993, before the region’s first light-rail line opened, buses carried 40.3 million riders. Since then, Metro has spent around $2.5 billion building 45 miles of light-rail lines. In 2019, buses and light rail together carried 36.1 million riders, 11 percent fewer than before light rail.

Part of the problem is that light rail is functionally obsolete: just about anything light rail can do, buses can do better for far less money. Counting capital costs, Metro spent $12.80 per light-rail rider but only $8.30 per bus rider in 2019.

The current proposal to expand MetroLink with a new north–south corridor line through downtown fails on two key fronts. First, while transit advocates say spending more money on transit helps low-income people, the fact is that most low-income people do not take transit to work. Census Bureau survey data show that only 4.4 percent of St. Louis–area workers who earned less than $25,000 a year took transit to work in 2019. Meanwhile, the sales taxes used to support Metro buses and light rail are highly regressive, meaning the 95.6 percent of low-income people who aren’t dependent on transit are disproportionately paying taxes to support rides they aren’t taking.

Second, cities that have successful rail transit have a high concentration of jobs in a central business district, and St. Louis is not one of those cities. The percentage of regional jobs in downtown St. Louis has been declining for years. It is currently down to about 60,000 employees downtown, very few of whom take light rail to work. Expanding MetroLink on the proposed north–south route will be a very expensive attempt to take people who don’t use light rail for work to jobs in an area where they don’t work.

The places in downtown St. Louis that benefit from MetroLink (the stadiums, convention center, etc.) already have it. The money Metro wisely spent adding and improving stations at Cortex and Barnes Hospital cost a fraction of the amount of a new line and served an area where people of all incomes actually use MetroLink to go to work. (The Barnes/Central West End stop is the busiest stop in the system.)

Meanwhile, while we debate MetroLink’s further expansion, Metro’s bus system is “disintegrating,” says engineer Richard Bose at the pro-transit NextSTL website, because the agency can’t find enough drivers to keep it operating. Jones and other city and regional officials should devote their efforts toward helping Metro run the system it already has rather than trying to expand it. Federal and local funds spent on an effective bus system offer a better solution to address the needs of the people who live in North St. Louis County. Otherwise, people might get the idea that the real purpose of light-rail transit is not to move people, but to move dollars from taxpayers’ pockets into the hands of light-rail contractors.

The post MetroLink Light Rail is MetroWaste appeared first on Show-Me Institute.

The sales tax rate in St. Louis is now one of the highest in the nation, only behind places like Chicago and Seattle. Currently, the base sales tax rate in the City of St. Louis sits at 9.679%. So, when you shop, you’re paying nearly 10% extra in taxes, and when you shop in one of the many areas with overlapping special taxing districts, you’re paying close to 12%. The rate is high relative to other cities, and it is high absolutely—it is pretty darn expensive to spend your own money in the Arch City.

The chart below depicts the base sales tax rate in St. Louis over the past 20 years. Slowly and steadily (and sometimes in quick bursts), it has been on the rise.

Source: Missouri Department of Revenue, Sales/Use Tax Rate Tables

Recent increases are due to special sales taxes for additional public safety funding and expanded economic development initiatives (like the north–south MetroLink expansion, which is unlikely to spur any development).

As I’ve written before, with each increase in the sales tax rate, policymakers will have fewer and fewer chances to go to taxpayers for projects that truly need funding. St. Louis may soon reach a point where the public is simply unwilling to cough up more of its money, however pressing the public need. Some residents and businesses may just call it quits and move elsewhere.

Moreover, we should all ask ourselves whether we’re getting the government we’re paying for. When the city has basic infrastructure woes (you should see the road I drive on every day for work), has trouble keeping refuse trucks running, and seems most occupied with giving away subsidies, it is hard to believe St. Louis government is worth nearly 10 cents on the dollar (in addition to the numerous other taxes it levies). 

Policymakers, like the rest of us, could always use extra cash. But there is a point at which we must make do with what we have. St. Louis officials should begin tightening their belts instead of asking for more, just like the average taxpayer must.

The post St. Louis’s Ridiculously High Sales Taxes appeared first on Show-Me Institute.

But who knows what city taxpayers will end up getting for their “investment?”

Taxpayers likely won’t get the 17-mile route they were presented last year. After more than a year of study, it was recently announced that the first phase of expansion will run some 9 miles, roughly from Chippewa St. to the NGA site north of downtown, and will cost $700 million. The project is also totally dependent on federal funding, which is a big if at this point, and will begin operations, best case scenario, in a decade.

It’s also unclear whether the expansion will get St. Louisans out of their cars. While consultants project the line will carry some 9,200 riders a day, my colleague Joe Miller has pointed out that it runs through neighborhoods with relatively low population density—density about a quarter of what’s needed for light-rail to be successful. Also, overall MetroLink ridership is trending downward; not only has it lost 3.9 million annual rides since 2014, but the rail system carries fewer passengers than it did prior to the 2006 Shrewsbury expansion. And crime on and around MetroLink trains has, according to Metro, contributed to an 11% decline in ridership since last year. While I don’t doubt that an expanded system will (at least initially) carry more passengers, experience—and more than 15 years’ worth of data—suggest we shouldn’t get our hopes up.

Source: National Transit Database, Federal Transit Administration

But perhaps the biggest if is the economic renaissance promised by MetroLink officials and proponents. Transit advocates claim that rail spurs economic development, that, once you put the rails in, the traffic generated by riders will induce all sorts of business growth. Unfortunately, this claim just doesn’t hold up. Many MetroLink stations are surrounded by land that’s either (a) already developed (and likely heavily subsidized), or (b) relatively empty. In fact, transit-oriented and adjacent development is so scarce in St. Louis that rail advocates have to cast an incredibly wide net for any evidence of it. For instance, Citizens for Modern Transit, the region’s major transit advocacy group, includes investments on Interstates 64 and 70 and parking garages as development “spurred” by MetroLink. And Metro, which operates MetroLink, seems to think any investment within a half-mile of a rail station is causally linked to the presence of their trains. (Or, all they present is data on development within a half-mile of their stations.) Perhaps this is why consultants are now saying that MetroLink could “spur possibly millions of dollars in economic development….” (my emphasis).

At this point, it’s unclear what, if anything, taxpayers will get in return for hiking up their sales taxes. Although rail proponents may have inexhaustible faith, history and facts suggest taxpayers won’t get much for their investment.

The post What Will the City’s New MetroLink Tax Get Us? appeared first on Show-Me Institute.

Back in April, voters in the City of Saint Louis approved a half-cent “economic development” sales tax hike. The increase, which brings the city’s base sales tax rate to 9.179%, is slated to fund a north–south MetroLink expansion, public safety, workforce development, and other programs. It also makes Saint Louis home to one of the highest sales taxes in the nation. In fact, Saint Louis now has a higher sales tax than New York City and San Francisco.

But policymakers aren’t finished yet.

There are two new sales tax proposals coming down the pipeline. One would raise sales taxes by one-eighth of one percent (0.125%) to help fund infrastructure improvements and conservation efforts at the Saint Louis Zoo, which is already funded with tax dollars. The other would raise the rate by one-half of one percent (0.5%) to bolster public safety spending. If both hikes were approved, the base sales tax rate in the city would be 9.804%, the 6th-highest in the nation. In areas with overlapping special taxing districts (of which there are dozens in the city), the rate would be nearly 12%.

There is neither a formula to determine the proper sales tax rate, nor a proven sales tax “ceiling,” but policymakers should carefully consider the implications of these proposals and whether there are alternatives to raising taxes.

For instance, if these sales taxes are approved, will voters have an appetite for other, more pressing proposals? That is, will these proposals exhaust Saint Louis’s sales-tax capacity? Also, will the proposed hikes disproportionately affect the poor? Is it fair for the city’s poor to subsidize the zoo for visitors from surrounding counties? Moreover, are sales taxes an appropriate source of funding for public safety? Police and firefighters are essentially security guards for taxpayers’ persons and property, so shouldn’t they be paid from property taxes?

Sales taxes can generate significant revenue and are easy to collect, but that doesn’t mean rates should be hiked every time a public need comes around. Perhaps if officials weren’t so eager to hand out taxpayer dollars for corporate welfare, Saint Louis wouldn’t need such high taxes for basic services. So, before asking taxpayers for more, perhaps city officials can reflect and ask themselves, “Can we do more with what we’ve already got?”

The post Saint Louis, the Sales Tax Monster appeared first on Show-Me Institute.

The Gateway City is now home to the 13th-highest base sales tax rate of all major U.S. cities. Yes, Saint Louis has a higher sales tax rate than New York City (9%), Los Angeles (9%), and San Francisco (8.75%).

With city voters’ approval of Proposition 1—a half-percent sales tax for MetroLink expansion and other “economic development” projects—the base sales tax rate in Saint Louis will rise to 9.179 percent from 8.679 percent. While that might not sound like much, those nickels and dimes add up for families struggling to make ends meet. For instance, if the median city household spends 10 percent of its income on goods in the city, the recent hike amounts to more than $175 in extra taxes annually. Perhaps wealthy denizens of the Central West End can afford that burden, but many in less affluent parts of the city cannot.

Unfortunately, the city’s base sales tax doesn’t even tell the whole story. Saint Louis is littered with dozens of shadowy special taxing districts, such as transportation development districts (TDDs) and community improvement districts (CIDs), that charge sales taxes of their own. TDDs and CIDs can each charge up to a one-percent sales tax. When you stack a TDD and CID on top of one Saint Louis’s base sales tax, you could be paying more than 11 percent in sales tax! Add on the city’s 1.5-percent restaurant tax, and diners in the city will soon be paying more than 12 percent in taxes on their purchases.

Some cities have high sales tax rates to compensate for low property or income taxes. For instance, in certain southern cities, policymakers have decided to fund public services through consumption taxes (e.g., sales taxes) rather than property or income taxes. But Saint Louis doesn’t have low property taxes to compensate for, and it has both an earnings tax and a payroll tax! Sure, the city only collects property taxes on 60% of real property by value, but that’s in part because the city owns tens of thousands of properties and has engaged in decades of generous tax giveaways. None of Saint Louis taxes is low.

Is the additional tax resulting from the passage of Prop 1 at least worth it? Almost certainly not. The North–South MetroLink line it’s slated to fund won’t be built, even in the best-case scenario, for at least a decade. Assuming the route is eventually built though, promises that it will lead to economic revitalization don’t align with past experience. After two decades to work its magic, light rail has utterly failed to keep people and jobs downtown or spur the ever-elusive “transit-oriented development.” In reality, the approval of Prop 1 simply means that those who can least afford the burden of extra taxes will pay for a luxury amenity designed to lure wealthy suburbanites out of their cars.

While there is no sales tax “ceiling,” voters will only put up with so much, and residents and businesses can only afford so much. Before policymakers propose another pie-in-the-sky project, they should consider if the taxpayer piggybank they’ve grown accustomed to raiding will always be there.

The post How Much Can Saint Louis Taxpayers Take? appeared first on Show-Me Institute.

Dr. Patrick Rishe of Washington University in Saint Louis argues the current MLS stadium deal is one of the best he’s ever seen, as it includes numerous safeguards for the city and taxpayers and doesn’t use sales taxes to fund construction. Moreover, only 39% of stadium costs will be paid for by the public, compared to the usual 65% to 70%. Therefore, it’s a good public investment—and it certainly isn’t “corporate welfare.”

While his premises are true, the conclusions Dr. Rishe draws are not.

• Rishe states that this deal protects taxpayers in ways previous stadium deals did not. For instance, the ownership group must pay for cost overruns from construction, and the team has to stay in Saint Louis for 30 years (if the MLS doesn’t fold before then). These are reasonable provisions, but they don’t have anything to do with whether a stadium will grow the economy or redevelop downtown. The contractual safeguards simply manage the city’s risk; they don’t guarantee any of the glitz and glam proponents are promising. The stipulation that taxpayers won’t cover cost overruns doesn’t mean the benefits used on to justify the public expense, like economic growth, will be realized.
• Rishe points out that use taxes, which are paid by businesses, will go toward funding the stadium—not sales taxes paid by all city residents. Supposedly, it follows that residents won’t pay for the stadium unless they own a business or buy tickets. But while sales taxes won’t go directly to the stadium, city residents must increase their sales tax rate to get the stadium. That’s because use tax revenue can only be diverted to the stadium if voters first approve a sales tax hike for the MetroLink expansion. So while your sales taxes won’t pay for the stadium, you have to pay extra sales taxes for the stadium.
• If 39% is a breathtakingly low public contribution for a private venture, I’m in the wrong business. Cities across the country have been scammed by sports teams for decades, and the fact that other cities have agreed to worse deals than this one is hardly reason to celebrate. If $60 million is such a negligible contribution, why doesn’t the ownership team simply pay it themselves? Only cash-addicted millionaires would look at an offer to pay 61% of the cost for their own pleasure-dome as a selling point. (As for the $150 million expansion fee the ownership group is coughing up, recall that when the MLS announced the fee would be $50 million less than originally announced, stadium boosters didn’t reduce their ask for public assistance.)
• Rishe contends that giving away $60 million in handouts isn’t corporate welfare because MLS teams don’t turn a good profit. First, the profitability of an enterprise doesn’t bear on whether or not its receipt of subsidies counts as welfare. And second, if the teams currently in the league aren’t turning a profit, what does that say about the long-term prospects of a franchise in Saint Louis? We already have one stadium without a team downtown—do we want to risk adding another?

Joe Reagan, head of the Saint Louis Chamber of Commerce, notes (along with others) that the ownership group will invest $5 million over 20 years in youth sports programs. Moreover, an economic analysis shows the stadium will generate $77.9 million in taxes for the city over the next 30 years. Mr. Reagan presents these factors as evidence that the stadium deal is worthwhile. But here too some perspective is in order:

• The ownership group’s commitment to youth sports is commendable, but this is still a $5 million commitment in the context of a $60 million subsidy.
• The analysis stadium boosters rely on makes rosy assumptions and must (at the very least) be taken with a grain of salt. For instance, it assumes every man, woman, and child will spend roughly $50 on tickets, concessions, and food each time they attend a game, and that spending will increase faster than inflation for 30 years.
• More importantly, most of the economic activity at the hypothetical stadium won’t be “new,” but simply redirected from elsewhere in the city and region. This isn’t money that people were planning to keep hidden under the mattress—much if not most of it would be spent on other entertainment options if there were no soccer games to attend. And let’s not forget the $60 million that businesses are losing because of the use tax. But even assuming proponents’ analysis is correct, the stadium would only bring the city an average of $2.4 million annually—less than a quarter of a percent of the city’s $1 billion annual budget!

The history of stadium deals in Saint Louis and across the country shows these projects fail to make good on the promises made by their promoters. If sports stadiums were such lucrative investments, private investors would be flocking to Saint Louis to get their cut. Despite its supposed virtues, the facts and history indicate that the MLS deal is a bad one for taxpayers. 

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