This article first appeared in the St. Louis Beacon, March 30, 2010 - When St. Louis Countians go to the polls on April 6, they will decide on Proposition A, whether to increase the sales tax by a half-cent to help fund Metro's operations and expansion.
St. Louis County residents already pay two sales taxes that benefit Metro. A half-cent sales tax enacted in the 1970s is split 50-50 between road improvements and public transit. Another quarter-cent tax adopted in the mid-1990s is used primarily to cover the debts of the Cross County MetroLink extension.
But the question many county residents are asking is: "If Proposition A passes, what will it cost me?"
Estimates range from $50 a year a household of 2.7 people by proponents to several hundred dollars per household per year by some opponents.
Since Prop A is a tax increase on the sales of goods and products, what it will cost you depends on how much money you spend, not on what your income is.
Tom Shrout of Citizens for Modern Transit says his group estimates Prop A will cost the average St. Louis household $50 a year.
That calculation is based on the average household income of $60,000 a year, Shrout said. Subtracting costs that are not taxed such as federal, state and local taxes, mortgage or rent, insurance and medical care leaves about $10,000 a year to be spent on taxable sales, he said. The half-cent tax on that amount would be $50, he added.
Adella Jones, representing the Prop A campaign, estimates the tax would cost a household of 2.7 people $1.48 a day.
John Burns, leader of an opposition group called Citizens for Better Transit, said his group figures the existing three-quarters cent tax that benefits Metro costs a family of four $350 a year. If Prop A passes, he estimates that households could pay a total of $650 a year. Burns assumes that a much larger percentage of income than Shrout is spent on taxable sales.
Metro Controller Kathy Klevorn cautioned against trying to calculate the cost of the tax based solely on income. "You can't figure the impact of the tax based on a family's income," she said. "You don't necessarily spend all of your income on sales taxable items."
Klevorn said that one common approach is to divide the revenue brought in by the current half-cent tax by the number of St. Louis County residents to predict what the half-cent increase would cost. Using $73,861,931, the amount the half-cent tax brought in during 2009 and the population of 993,464 listed on St. Louis County's website, the annual cost a person would be $74.35 a person or $1.43 a week, she said.
But Klevorn warns that that's an unrealistic formula because it is based on many assumptions, Klevorn said.
Those assumptions include:
- The accuracy of the population numbers. In fact, the number is based on 10-year-old census figures, she said.
- The assumption that the new tax would bring in roughly the same amount as the original half-cent tax. In fact, with spending off due to the economic downturn, it's unclear how much revenue the new tax would generate, she said.
- The formula also doesn't consider how many individuals are adults and how many are children who would not be spending money. It also doesn't include the considerable taxes paid by businesses, she said.
- Finally, that approach doesn't take into consideration that non-county residents also spend money in the county. Many city residents come to the county to shop "because they don't have anywhere near the opportunities for shopping in the city as they have in the county," Klevorn said. "And, you're going to have people coming from the surrounding counties and probably from all over the state who shop in St. Louis County.
"It's an artificial number but it's the only one we can come up with," Klevorn said. "We're not saying that's that the average person pays. We're saying that this is the only way we can estimate that number.
"It's a real inexact science," she said of trying to determine the cost to each countian. "It's not even a science."
The county has no system in place to determine where the people who pay sales tax live, said Garry Earls, chief operating officer of the county.
With some 10,000 retailers in the county, that would be a major undertaking. "Where we put our attention is into being sure we get a fair distribution from the state," he said.
The state collects sales tax revenue from businesses and then distributes it to the county, the city and other taxing jurisdictions. The taxes are then appropriated and distributed by the county to municipalities and Metro, said Earls.
Most business pay monthly or quarterly depending on their size. A large company like Wal-Mart might pay sales tax every two days, he added.
Kathie Sutin, a freelance writer in St. Louis, writes frequently about transportation.