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Democrats block revamped earnings tax bill in Missouri Senate

State Sen. Kurt Schaefer, R-Columbia.
File photo by Jason Rosenbaum I St. Louis Public Radio

The latest legislation against the 1 percent earnings tax in St. Louis is on hold in the Missouri Senate.

Late Monday, Kurt Schaefer, R-Columbia, unveiled a revamped bill that would NOT phase out the tax, but instead would exempt St. Louis residents from paying on the first $10,000 earned. Also, anyone at or below the federal poverty level would not have to pay the tax at all.

"I get the question all the time: 'Why is it the business of the legislature to interfere with the earnings tax?'" Schaefer said. "Because this legislature created the earnings tax in 1948 ... it is certainly within our purview."

He also cited a Riverfront Times article that listed a number of businesses that are exempt from paying the 1 percent tax.

"Who's not getting any relief on the earnings tax is somebody who is working at McDonald's, a school teacher, a police officer," he said.

An article by Jo Mannies before the recent vote on the issue explained the tax breaks,including a portion of the earnings tax, the city  granted eight companies if they follow through on proposed expansion projects. One of those eight, Ralcorp, already has been terminated because the project that would have qualified for the breaks has been scuttled.

The plans involve rebating part of the earnings tax that the corporations pay for the new jobs, if they follow through with adding additional jobs. The people who fill the new jobs would pay the full earnings tax.

Democrats, including JamilahNasheed of St. Louis, say the new version of Senate Bill 575 would still cripple the city's ability to function.

"I think that you should come up with a better idea," Nasheed said. "If you’re going to take one-third of our city budget ,you should find a way to replace it.  I don't think you should come in our back yard and dictate what it is we do in the city of St. Louis."

A brief but heated argument broke out when Nasheed accused Schaefer of "carrying the water for Rex Sinquefield," who financed an ad campaign opposing the recent renewal of the earnings tax in St. Louis.

Nasheed then offered an amendment that would levy a 1 percent earnings tax on Schaefer's home county of Boone.

Credit Jason Rosenbaum I St. Louis Public Radio

"If it's good for St. Louis, it's good for his district as well," she said.

Schaefer pulled the bill from the Senate floor, however, just as Nasheed and fellow Democrat Joe Keaveny of St. Louis were about to launch a filibuster.  Nasheed's amendment is still pending.

Senate President Pro-tem Ron Richard, R-Joplin, said last week that SB 575 should not be brought up after St. Louis voters overwhelmingly voted to renew the earnings tax.

Follow Marshall Griffin on Twitter:  @MarshallGReport

Marshal was a political reporter for St. Louis Public Radio until 2018.