Michael Berg
03/17/11
The St. Louis Earnings Tax
Good for Our Environment - Good for Our Children - Good for
Our Future


A Report by the Sierra Club – Missouri Chapter
Released March 17, 2011
The St. Louis City Earnings Tax and the Environment
1. Overview
2. Earnings Tax Facts
3. Environmental Programs funded by the Earnings Tax
4. The Importance of a Healthy City Center
5. Web Resources for Additional Information
6. Contact
1. Overview
On April 5, 2011, voters in St. Louis, Missouri will vote on whether to retain
the current 1% city earnings tax (or E-Tax). This vote is mandated by
Proposition A, which was passed by voters statewide on November 2, 2010. Since
the earnings tax provides a significant portion of the city budget, this vote
has critical implications for the future of city services in the City of St.
Louis, including police and fire protection. In this report, the Sierra Club
examines how earnings tax funds support environmental programs in particular, as
well as supports a vital urban core. The Sierra Club (Missouri Chapter) is
recommending a “YES” vote on Proposition E, to retain the earnings tax.
2. Earnings Tax Facts
Here are some basic facts to understand about the Earnings Tax:
* The 1% E-Tax is paid both by city residents as well as non-residents who work
in the City of St. Louis.
* The E-Tax is the single largest source of revenue in the city budget,
providing 31% of the General Fund. The Earnings Tax will generate about $137.5
million in fiscal year 2011.
* The E-tax applies to employee gross compensation and business net profits. The
E-Tax does not apply to social security, retirement, pension, worker’s
compensation, unemployment, and disability income.
* The General Fund makes up about 48% of the total City budget.
3. Environmental Programs funded by the Earnings Tax
The City budget funds a variety of environmental programs through its General
Fund. This report will examine three environmentally-oriented expenditure areas
that receive a portion of their funding from the General Fund, and provide
specific examples of what the programs provide.
a. Parks and Recreation
In FY 2011, the General Fund will provide $19.3 million to the Department of
Parks, Recreation, and Forestry, which in turn supports a variety of important
environmental programs, including:
* The Parks Division owns and operates 105 parks, including Forest Park, as well
as O’Fallon, Fairground, and Carondelet Parks. This extensive system of parks
means that city residents have a nearby place to go for hiking, bird watching,
sports fields, and nature study. The Division will receive $9.3 million from the
General Fund in FY 2011. Tower Grove Park, a city-owned park which is governed
by a special Board of Commissioners, will receive $694,000 in General Fund
support.
* The Forestry Division, which receives $7.0 million from the General Fund, is
responsible for 80,000 street trees and another 25,000 trees in city parks. The
Forestry Division plants 3,000 street trees and 1,500 park trees every year.
Trees clean the air, reduce heating and cooling costs by providing shade, and
support local wildlife.
* The Compost Section process 30,000 cubic yards of yard waste, and delivers
9,800 yards of compost to community pick-up sites.
b. Recycling
The General Fund supports both the City’s alley/curbside recycling program as
well as the recycling drop-off centers, through the $16.5 million that the
General Fund provides to the Refuse Division. Recycling programs save money for
the City by reducing landfill costs, benefit the environment by reusing
resources, and create jobs in the recycling sector. Recycled paper saves trees.
Recycled plastic saves oil. Recycled metal reduces the need for mining. (Note
that the new $11 per month fee paid by each household does not actually cover
the cost of trash pick-up and recycling, but it defrays part of the cost. The
new fee is projected to raise $10.8 million/year).
The potential for recycling in the City is high. The Refuse Division collects
approximately 200,000 tons of waste each year. The State of Missouri completed a
Municipal Solid Waste Composition Study in 2007. The City of St. Louis' South
Transfer Station was one of the sampling sites. Based on data collected during
that study, and the City’s years of experience with markets available for
recyclables collected at the drop-off recycling sites, an estimated 41-53% by
volume (38-45% by weight) of the City's waste is readily recyclable.
* The Refuse Division operates 27 drop-off recycling centers scattered
throughout the City, including the drop-off center at 1660 S. Kingshighway (by
I-44).
* In January 2011, St. Louis launched a new “single-stream” alley and curbside
recycling program to recycle many materials including newsprint, aluminum cans,
plastic bottles, phonebooks, steel cans and cardboard. This expanded program
will greatly increase household recycling.
* The Refuse Division also makes monthly collections of car batteries, used
motor oil household appliances, and tires, keeping these hazardous materials out
of landfills.
c. Greening City Government
The Board of Public Service (BPS) is responsible for maintaining city-owned
facilities. General Fund support is helping BPS operate in a more
environmentally friendly way, e.g. funding capital expenditures that reduce the
long-term use of energy and allow the switch to cleaner materials. Examples
include:
* In FY11, BPS will retrofit ozone depleting refrigerant systems, continue to
monitor the latest advances in energy efficient HVAC control systems and expand
the use of variable frequency drives on pump and fan drive motor applications to
minimize costs and maximize efficiency.
* In FY10, BPS’s Housekeeping Services fully implemented Green Seal approved
cleaning chemicals for cleaning city buildings.
* In FY11 BPS’s Electrical Services will retrofit lighting systems to new energy
saving standards.
4. The Importance of a Healthy City Center
One way to look at the impact of the E-Tax is to look at specific programs
funded by the city General Fund. Another perspective is to step back from these
programs, and consider the larger impact of a healthy city center.
When the city is an attractive place to live, with adequate police and fire
protection, efficient public transit, clean air, and amenities like parks and
museums, people are drawn to the city. This in turn reduces urban sprawl. This
factor is critical, since urban sprawl exacts a high environmental cost,
according to the Sierra Club (www.sierraclub.org/sprawl). St. Louis was ranked
the 35th worst metro area for sprawl (out of 83 U.S. metro areas) in the report
“Measuring Sprawl and Its Impact” by Smart Growth America
(www.smartgrowthamerica.org).
- Sprawl increases traffic on our neighborhood streets and highways.
- Sprawl lengthens trips and forces us to drive everywhere. The average American
driver spends 443 hours per year - the equivalent of 55 eight-hour workdays -
behind the wheel. Residents of sprawling communities drive three to four times
as much as those living in compact, well-planned areas. Adding new lanes and
building new roads just makes the problem worse - studies show that increasing
road capacity only leads to more traffic and more sprawl.
- Sprawl pollutes our air and water.
- As sprawl increases our reliance on cars and driving, it makes our air dirtier
and less healthy. Cars, trucks and buses are the biggest source of cancer-
causing air pollution, spewing more than 12 billion pounds of toxic chemicals
each year, or almost 50 pounds per person. Our wetlands - nature's water filters
- are also under attack. Each year more than 100,000 acres of wetlands are
destroyed, in large part to build sprawling new developments. Since wetlands can
remove up to 90 percent of the pollutants in water, wetlands destruction leads
directly to polluted water.
- Sprawl destroys parks, farms, and open space.
- Sprawl destroys more than one million acres of parks, farms and open space
each year. This threatens our productive farmland, and turns our cherished parks
and open spaces into strip malls and freeways.--
5. Web Resources for Additional Information
www.stlouiscity.com - the City of St.
Louis site, which includes information on the City Budget and Departments.
www.sierraclub.org/sprawl –
national Sierra Club site includes information on urban sprawl.
www.citizensforastrongerstlouis.com
– a broad civic coalition that supports retaining the E-tax.
6. Contact
John Hickey - Sierra Club – Missouri Chapter
7164 Manchester, St. Louis, MO 63143
314-644-1011
John.hickey@sierraclub.org