Comments on: Job Sprawl

By: Jon Morgan

Jon Morgan — Fri, 10 Jul 2009 19:13:38 +0000

The biggest thing is the City and County need to merge. But racism will keep it from ever happening. People have been fighting this good fight for decades. The STL region has way too many municipalities. But that’s not going to change either.

The paranoid anti-tax lifestyle isn’t so pronounced elsewhere as it is in MO. Thankfully the Pacific Northwest is noticeably calmer about it.

By: Jimmy Z

Jimmy Z — Thu, 09 Jul 2009 22:40:52 +0000

Government runs on taxes – they pay for the services the government provides and their citizens demand or require. At the local level, there are three major types, property, sales and income taxes. Most people don’t like paying them, although they’re a fact of life, and the bigger the hit, the more the incentive to figure out a way around them. Every year, we hear about people challenging their assessments and worrying about their property tax rates; we hear a lot less about sales taxes, since, even though we pay them every day, we don’t see the annual total. Plus, we have the option of not spending or buying in a lower-tax area (see Illinois drivers filling their gas tanks in Missouri). Since earnings and income taxes are paid annually, they’re not transparent (or translucent), much like property taxes. A business owner living in Ladue, making $500,000 a year can’t do much about his property tax or his sales taxes, but he can easily save himself, personally, $5,000 a year by moving his business “across the line”, into Clayton, Maplewood, Maryland Heights, or any other city that isn’t St. Louis City, plus he saves each of his employees their 1% (unless, of course, they choose to live in the city)!

Yes, some suburban cities can and do have lower property tax rates, and the ones with busy shopping areas or centers have access to significant sales tax revenues, as well. IF, and that’s a big IF, property taxes were replaced STATEWIDE by higher income taxes, this would become a non-issue. But when the city, and only the city, imposes an earnings tax in the region, it does become a big disincentive for doing business, or even living, in the city, especially if you’re making more than average. I agree, “the likelihood that none of this will happen in our lifetimes is why St. Louis is a dying city”. Where we disagree, apparently, is whether it makes more sense for the city to make their earnings tax “go away” or if it makes more sense to make/convince the cities outside St. Louis to impose their own and to, hopefully, reduce their other taxes. Yes, it would be tough to do in the city, but even if, by some miracle, it could happen in the county, I wouldn’t expect to see a direct trade, I’d expect that most governments would simply find new ways to put the new revenues to new uses.

Finally, and way off topic vis a vis transportation, is the whole discussion of which taxes are “fair” and/or progressive and which aren’t. Poor people typically require more in services than they can afford to tax themselves (your 2000% example) and rich people feel it’s unfair to pay more than their “fair” share. One obvious solution is combining the nearly 200 taxing entities in St. Louis County into a lot fewer, say twenty. That would spread the tax burden over a much broader number of people and income levels, and would likely result in increased effeciencies in the delivery of services, as well, similar to the reality in the city, and reduce the never ending pursuit of new shopping centers as sales tax saviors!

By: Jon Morgan

Jon Morgan — Wed, 08 Jul 2009 20:45:28 +0000

Actually, Jimmy, your reasoning is faulty. Since property taxes are based on land and building values, which are much higher in richer areas, those suburbs have much LOWER property tax rates than poor areas like St. Louis and North County. Moving to a rich enclave like Ladue ensures you’ll pay lower taxes–and rarely have to encounter a black person. Poorer jurisdictions keep raising their property taxes to adequately fund their needs, but even when their rates are 2000% higher, they can’t raise enough because they don’t have the land value. That’s why most of what’s funded through property taxes now should be switched to progressive income taxes through the state.

But the likelihood that none of this will happen in our lifetimes is why St. Louis is a dying city.

By: Jimmy Z

Jimmy Z — Wed, 08 Jul 2009 16:28:49 +0000

If the CEO lives in Wildwood (or Ladue or anywhere else), it’s for multiple reasons – better schools, a much lower crime rate, a newer McMansion AND not having to give his 1% to the city. And since he/she lives in a suburb that relies heavily on property taxes to deliver services, he/she gets hit with higher property taxes, as well. It’s not rocket science why he/she probably wants to locate the business closer to home, and away from the city. The argument of “what if” the county imposed an earnings tax is totally irrelevent – there ain’t one now, and there’s absolutely no political will to do so!

By: Jon Morgan

Jon Morgan — Wed, 08 Jul 2009 15:56:10 +0000

People follow jobs really; not the other way around. One of the biggest problems is the total lack of any growth management in the St. Louis region. Unlike Seattle, Portland, or Miami, St. Louis has no urban growth bonudary. Minimal state support for transit doesn’t help either, nor does the lack of efforts to use existing highway space more efficiently through pricing or HOV lanes or ramps–having 10 lanes on I-270 is insane. There’s no sense of land scarcity in STL, no disincentive to buying and developing cheap land in exurbs like Chesterfield or St. Peters. And the very low gas tax means more gas doesn’t cost people much more. Not to mention the statewide anti-tax paranoia which keeps more transit from being built in the first place. And the deep-seated racism of the region which silently underlies so many issues in STL.

By: Steve

Steve — Tue, 07 Jul 2009 21:06:50 +0000

The 1% income tax is not why people moved west in St. Louis. Some think that because of out city/county physical barrier. What if St. Louis County had a 1% income tax? Would everyone then move to St. Charles or Jefferson County? People don’t move because of a 1% tax – besides the vast, VAST majority of people repay that amount of tax and more in property tax! THE EARNING TAX ARGUMENT IS RIDICULOUS AND WRONG.

Anyway, job sprawl is a huge problem. There have been some interesting studies about how corporate headquarters and offices follow their CEOs or boards. Guess what? If your CEO lives in St. Charles County or Wildwood, they’re not going to want the company 45mins away – they’re going to want it at say, Manchester and I-270. Sure, there are plenty of examples where this isn’t true, but there is a good correlation.

By: Jimmy Z

Jimmy Z — Tue, 07 Jul 2009 14:58:43 +0000

Agreed – transit needs density to work effectively, and sprawl typically reduces density. I’m in the camp that the city’s 1% earnings tax is a huge disincentive to many businesses, and is one reason why the St. Louis region continues to sprawl outside the city. Combine that with the negative perceptions about schools, crime and racism in the city, and both the region’s sprawl and Metro’s funding challenges come into clearer focus . . .