Proposition A's impact on Missouri
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Proposition A's impact on Missouri

Date: October 5, 2010
By: Jamal Andress
State Capitol Bureau

While much of the attention on Proposition A on the November ballot has focused on St. Louis and Kansas City, the earnings tax issue would have a statewide impact on every town and city in the state.
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Wrap: The earnings tax in Kansas City and St. Louis brings in millions of dollars for both cities by taxing 1 percent of the income of those cities residents, regardless where the actually live.

But if Proposition A passes this large part of revenue would not be guaranteed anymore.

The measure would require the two cities to submit the issue to voters every five years.

But another major component of the measure would ban every other city or town in Missouri from every imposing an earnings tax, regardless of local voter wishes.

The chief spokesman for Proposition A is Scott Charton.  He says the statewide impact is not problem because no other city in the state wants one.

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Description: "I don't believe there is any great ground swell for a third layer of income tax in Missouri. We already pay federal income tax. We already pay state income tax. And I don't know, have you picked up on any great demand to pay an additional level of income tax anywhere outside of St. Louis and Kansas City? I haven't."

On the other side, however, Missouri Municipal League Executive Director Dan Ross says this earnings tax is a local issue and should not be handled at the state level.

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Description: "Our position on Proposition A and many other topics is basically to maintain local authority to conduct their own business and make their own decisions. And so we're against proposition A because it doesn't do that."

Beyond the statewide impact, officials from Missouri's two largest cities of St. Louis and Kansas City have warned of dire consequences if they lost their earnings tax revenue.

The assistant to the St. Louis mayor, Jeff Rainford, says the earnings tax makes up 25 percent of their budget.

But Prop A spokesman Charton, says opponents exaggerate how much money the cities will lose.

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Description: "Check the website under our releases, we have a study linked on there that shows that this is only about 15 percent of the budget of Kansas City and St. Louis. They're playing fast and loose with some figures here."

Charton says the percentages in the budget are not the only parts of this issue where the opposition has been dishonest.

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Description: "They're talking out both sides of their mouth. It's the sky is falling and it can never change again or we'll go back and get the legislature to change it. No end to how this is being misrepresented."

If Prop A passes it does not necessarily mean that Kansas City or St. Louis will lose their earnings tax.  Rather it would require that residents will vote on whether to keep it or not every five years, starting next spring.

Rainford says this vote in the spring is where the St. Louis mayor's office has chosen to place their focus.

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Description: "We trust our voters to do the right thing and we feel like as long as they are informed that they will do the right thing and the mayor does plan to spend the time between November and April informing them."

But Missouri Municipal League Executive Director Dan Ross says if either city slips up and gets rid of the tax, their city will suffer a major drop in funding.

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Description: "Millions of dollars of lost revenue that provide all manners of service and products to people in and using those cities."

Prop A campaign groups have been almost exclusively funded by Rex Sinquefield who is a retired investment adviser and free-market activist.

Sinquefield has contributed more than 6 million dollars to the Prop A campaign, but his office declined requests for an interview on the issue.

From the state capital, I'm Jamal Andress.