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Funding economic development: St. Louis starts weighing in on options

Members of the public and the city's Ways and Means committee listen as Nahuel Fefer, an economic policy assistant to Mayor Francis Slay, answers questions about a proposed sales tax increase on January 11, 2017
Rachel Lippmann | St. Louis Public Radio
Members of the public and the city's Ways and Means committee listen as Nahuel Fefer, an economic policy assistant to Mayor Francis Slay, answers questions about a proposed sales tax increase.

The committee that handles budget issues for the city of St. Louis went to Cherokee Street Wednesday night to hear from members of the public about a proposed half-cent increase in the sales tax to fund economic development. 

Aldermen want to put the measure before voters in April. If approved, the tax would generate an additional $20 million a year.

The two dozen speakers were generally supportive of using some of the sales tax revenue to fund a partial north-south expansion of MetroLink. It's what else is, and isn't, in the bill that caused concern.

What it will fund

Mayor Francis Slay and the bill's sponsor, Alderman Christine Ingrassia, D-6th Ward, want to direct half of the $20 million to finance bonds for the construction of a north-south MetroLink route. That total does not include funds for the operating subsidy.

The remaining $10 million would be split the following way:

  • $2.5 million for neighborhood redevelopment. Distribution would be modeled on the federal Choice Neighborhoods program — one neighborhood or geographic region a year would receive the full $2.5 million. Residents there would then pick the projects to fund. To make sure that less organized neighborhoods aren't left out, the city would also distribute one $500,000 planning grant a year.
  • $2.5 million for workforce development. The money would help the St. Louis Agency on Training and Employment cover gaps in the programs it can offer. Money would also be directed to Promise Scholarships, a less expensive version of the Kalamazoo Promise.
  • $2.5 million for public safety. The revenue would allow the St. Louis Metropolitan Police Department to upgrade its technology and continue to build out its Real Time Crime Center. Though Slay and the police department have lobbied for additional officers for years, state law does not allow revenue from an economic development sales tax to go to salaries.
  • $2.5 million for infrastructure needs, especially on rolling stock. The focus would be on having a revenue stream to replace “smaller” items like trash trucks as needed, rather than waiting for bond issues.
  • The city met some of its capital needs througha $25 million bond issue approved last April.

The spending is all aspirational. Although the proposed ballot language talks about MetroLink and anti-crime infrastructure, the exact amount of revenue directed to each isn't mentioned at all. Most, if not all, of the funds would be subject to the regular budgeting process.

That lack of guarantees bothered a half dozen of the speakers and some of the aldermen in attendance.

"I hope that you preserve all of these different categories," said Stephen Acree, the executive director of Rise STL and a board member at the Community Builders Network of Metro St. Louis. "We need all of these things to make transit expansion work the best."

Activist John Chasnoff also worried about the lack of detail. But he was more distressed by the plan to help fund surveillance cameras and crime center upgrades.

"We're putting a lot of money into a building that might not even be effective," he said.

And Bernard Williams objected to tying money for economic development to cameras, which he said disproportionately affect communities of color — the very communities that stand to benefit the most from other parts of the bill.

Attendees at a January 11, 2017 committee hearing on a proposed tax increase for MetroLink expansion look at renderings of a proposed stop along the line.
Credit Rachel Lippmann | St. Louis Public Radio
Audience members look at the renderings of a proposed MetroLink stop in south St. Louis.

A number of Major League Soccer supporters asked Ingrassia to reconsider her decision not to allow a vote on directing extra use tax revenue to a soccer stadium near Union Station. The use tax is paid by businesses and goes up when the sales tax does.

What's next?

The Ways and Means committee will meet again on Friday to send the sales tax to the full Board of Aldermen. Aldermen will likely take a procedural step, called a second reading, at the full board meeting that same day.

After Friday, the board has one more meeting scheduled — Jan. 20 — before the Jan. 24 deadline to put items on the April ballot. If no one wants to make any changes, they could send the bill to the mayor that day. But if there are any amendments, there would have to be another meeting at least three days later.

Rachel is the justice correspondent at St. Louis Public Radio.