On Wednesday, March 9th, the Local Government Committee of the Missouri House of Representatives held a hearing on House Bill 534. HB534, if adopted, would change the way sales taxes are distributed in St. Louis County. University City staff estimates if that happened University City would lose $2.1 million in annual revenue, at the least.
This is not good.
University City is one of quite a few pool tax cities in St. Louis County - "B" cities. Those that are not pool cities are point-of-sale cities - "A" cities. In point-of-sale or "A" municipalities - usually cities with a larger commercial base - the cities keep most of the sales tax revenue generated within their borders. A portion, though, goes into a St. Louis County tax pool.
In pool or "B" cities, most of the sales taxes generated go into the County pool, along with the monies from the "A" cities. Then, the pool cities receive payments from the tax pool on a per capita basis. The more residents you have, the more money you get from the pool. (Funds from some special locally-approved taxes do stay with the individual cities.)
If HB534 passes, the "A" cities will no longer have to put any of their sales taxes into the St. Louis County pool. So there will be less money in the pool to distribute. And most other "B" cities, will lose money.
University City Mayor Shelley Welsch admit that this tax sharing system does not look fair because the "A" cities lose money to the pool - money they could use to provide for their residents. True enough. But this is one of those "greater good" situations. And she hopes most "A" cities will realize this and not support the passage of HB534.
Mayor Shelley Welsch drafted a letter to the chair of the Local Government Committee that is holding this hearing. Along with the help of Vinita Park Mayor James McGee, Welsch contacted a number of mayors from other "B" cities and asked them to put their names on this letter in opposition to HB534. This letter will be presented at the hearing.
For the benefit of the region, Welsch hopes HB534 does not become law. If it does, University City budget would suffer. |
