State Releases July 2010 General Revenue Report
State Budget Director Linda Luebbering announced that July 2010 net general revenue collections declined 4.2 percent compared to July 2009, from $469.1 million last year to $449.3 million this year. July is the first month of Fiscal Year 2011.
GROSS COLLECTIONS BY TAX TYPE
Individual income tax collections•Decreased 0.6 percent from $325.9 million last year to $323.9 million this year.
Sales and use tax collections
•Decreased 9.7 percent from $141.6 million last year to $127.8 million this year.
Corporate income and corporate franchise tax collections
•Increased 14.7 percent from $22.9 million last year to $26.3 million this year.
All other collections
•Increased 41.8 percent from $24.7 million last year to $35.0 million this year.
Refunds
•Increased 38.5 percent from $46.0 million last year to $63.7 million this year.
PROPOSITION A - ST LOUIS AND KANSAS CITY EARNINGS TAXES
OVERVIEW
Proposition A, if approved by Missouri voters on Nov. 2, would trigger local elections in April 2011 in Kansas City and St. Louis at which voters would determine whether to retain the local 1 percent earnings tax each city levies on those who live or work in those cities. If local voters endorse keeping their city's earnings tax, it would come up for renewal every five years. If local voters reject retaining the earnings tax, either in 2011 or at a subsequent renewal election, the tax would be phased out over 10 years and could never be re-imposed.
The measure was placed on the statewide ballot via an initiative petition effort funded by retired billionaire financier Rex Sinquefield of St. Louis, who is philosophically opposed to earnings taxes. As of the July campaign finance disclosure reporting period, Sinquefield had contributed $6.9 million to Let Voters Decide, the campaign committee he established to put Proposition C on the ballot and push for its passage. It is anticipated he will pump substantially more money into the effort by Election Day.
Sinquefield has become a major force in Missouri politics in recent years, donating millions of dollars to candidates and causes he favors. He also founded the Show-Me Institute, a St. Louis-based conservative think-tank that promotes his free-market philosophy.
Kansas City and St. Louis officials fear repealing the earnings taxes would bankrupt their cities as replacing the lost revenue would be difficult, if not impossible. In an attempt to block Proposition A from the ballot, the city attorney for Kansas City has filed a lawsuit claiming that it violates the clear title/single subject requirements for ballot measures and that it is unconstitutional on its merits because it fails to provide a mechanism for the cities to replace the lost revenue should the earnings taxes ultimately be repealed.
Because Missouri courts typically don't consider challenges on the merits of a ballot measure to be ripe for litigation until and unless the measure is approved by Missouri voters, Cole County Circuit Judge Jon Beetem split the case into two parts, with the challenge on the merits delayed until Nov. 12 – 10 days after the election. If voters reject Proposition A, that portion of the case will be rendered moot. Beetem will hear the clear title/single subject arguments on Sept. 17. Based on Missouri Supreme Court precedent, however, it is unlikely the city will prevail on that point.
The official ballot question prepared by the Secretary of State's Office is as follows:
"Shall Missouri law be amended to:
- repeal the authority of certain cities to use earnings taxes to fund their budgets;
- require voters in cities that currently have an earnings tax to approve continuation of such tax at the next general municipal election and at an election held every five years thereafter;
- require any current earnings tax that is not approved by the voters to be phased out over a period of 10 years; and
- prohibit any city from adding a new earnings tax to fund their budget?
EARNINGS TAXES
Under existing state law, only three Missouri cities are authorized to impose earnings taxes – Kansas City, St. Louis and St. Joseph. Although Kansas City and St. Louis each have levied such taxes for about 50 years, St. Joseph has never had an earnings tax. Proposition A would prohibit voters in St. Joseph – or any other Missouri city that doesn't have an earnings tax – from adopting one in the future.The earnings taxes amount to a 1 percent tax on the incomes of those who either live in Kansas City and St. Louis or who work in those cities but reside elsewhere. Critics have long contended that the earnings taxes have contributed to the economic decline of Kansas City and St. Louis by discouraging businesses and residents from remaining or locating in those cities and encouraging them to move to nearby suburbs in order to avoid paying the taxes.
According to June 14 report by University of Missouri-St. Louis economic professor William H. Rogers, only 25 of the 150 largest municipalities in the nation have a local earning tax.
Kansas City expects to collect $199.2 from the earnings tax in 2010 for 40 percent of its general fund budget. St. Louis anticipates collecting $141.2 million in earnings tax revenue this year for 32 percent of its general fund budget.
THE REPLACEMENT QUANDRY
Over the years, some Kansas City and St. Louis officials have acknowledged that the earnings tax comes with a downside. However, they maintain there are no realistic alternatives to replace the revenue that earnings taxes generate for city operations.According to an Aug. 25 report by the Missouri Budget Project, a non-partisan budget research group based in St. Louis, Kansas City would have to more than double its local sales tax from 2.375 percent to 5.4 percent to replace the earnings tax, while St. Louis would have to more than triple its sales tax from 1.4 percent to 5.3 percent.
Adding in the statewide sales tax of 4.225 percent, such increases would result in total sales tax rates of 9.625 percent in Kansas City and 9.525 percent in St. Louis. Sales taxes that high potentially could be devastating to the cities' retail businesses.
The other possible means of replacement revenue open to the cities would be to increase property taxes. However, the Budget Project estimates each city would have to increase property taxes by 400 percent to make up the gap.
Also, there is no guarantee that the cities would even be able to raise other taxes to replace the earnings tax revenue since under the Missouri Constitution local voter approval would be required to do so. Having voted to eliminate the earnings tax, it is certainly possible that Kansas City and St. Louis voters might not be inclined to immediately increase other taxes to compensate. And if replacement taxes weren't approved, the cities would be forced to gut most city services, including the police and fire departments.
In a Sept. 8 editorial, the St. Louis Post-Dispatch reported that Sinquefield has acknowledged that the cities would have to replace the revenue lost from eliminating their earnings taxes and further acknowledged that he is offering no ideas for how that would be done.
ARGUMENTS IN SUPPORT OF PROPOSITION A
Earnings taxes have been a key factor in the economic decline of Kansas City and St. Louis over the last half century. They have encouraged countless businesses and residents to relocate to the suburbs, where there are no earnings taxes. They have discouraged new businesses and residents from locating in the state's two largest cities.Repealing the earnings taxes would enable Kansas City and St. Louis to better compete with surrounding communities for jobs and residents.
Repealing the earnings taxes would make Missouri's two largest cities stronger, which will benefit the whole state.
The existing earnings taxes are permanent and never subject to voter review. Voters in Kansas City and St. Louis should have the right to periodically determine whether they want to keep their respective earnings taxes. All that Proposition A would do is give them that right.
If Kansas City and St. Louis voters chose to eliminate their cities' earnings taxes, the taxes will be phased out over 10 years starting in 2012. This long phase-out period will give city officials ample time to adjust their budgets and find replacement revenue.
ARGUMENTS IN OPPOSTION TO PROPOSITION A
The earnings tax may not be an ideal revenue source, but it makes up a sizable portion of the Kansas City and St. Louis municipal budgets. There are no viable alternatives for replacing that revenue and even repeal supporters have failed to offer any.Repealing the earnings taxes would force Kansas City and St. Louis either to increase other taxes to excessively high – and perhaps unrealistic -- levels or to gut government services to point where the cities would be barely able to function.
Throwing Kansas City and St. Louis into financial crisis would create problems that would be felt throughout the metro areas and state. Missouri and the Kansas City and St. Louis metro regions depend on the stability and prosperity of the core cities.
Proposition A is an effort by one retired billionaire to put his economic philosophies into practice without regard to the realities of funding the municipal governments of Kansas City and St. Louis or the consequences on their citizens, the region and the state.
OTHER STATE HAPPENINGS
CARNAHAN DROPS APPEAL ON BALLOT MEASURE
Missouri voters will definitely decided a proposed constitutional amendment that would prohibit the state from enacting a sales tax on the transfer of real estate after Secretary of State Robin Carnahan on Sept. 3 agreed to drop her appeal of a judge's order placing it on the Nov. 2 ballot. Carnahan had refused to certify the measure, Amendment 3, after finding supporters had failed to collect the minimum number of initiative petition signatures needed to place it on the ballot.However, Cole County Circuit Judge Paul Wilson overruled Carnahan. Although he didn't find that Carnahan improperly rejected any signatures, Wilson said the standards for judicial review are lower than those for administrative review, allowing him to count signatures that Carnahan was required to reject. Wilson also said state laws that invalidated otherwise genuine signatures imposed additional requirements on the initiative process not authorized by the Missouri Constitution.
According to The Associated Press, Carnahan agreed to drop her appeal in exchange for Wilson rescinding his original 40-page ruling and replacing it with a one-page directive ordering Amendment 3 on the ballot without offering a rationale. The Missouri Association of Realtors financed the effort to place Amendment 3 on the ballot. Missouri doesn't currently impose a real estate transfer tax nor is there an effort in the General Assembly to do so. The case is Vote Yes to Stop Double Taxation v. Carnahan.
AUDITOR SAYS STATE OVERSIGHT OF TAX CREDITS POOR
State Auditor Susan Montee issued a report on Sept. 8 that cited problems with the Missouri Department of Economic Development's administration of "enterprise zone" tax credit programs for businesses. The report alleged that the department has failed to provide proper oversight of the program and often doesn't verify job creation documentation submitted by credit recipients.The audit also cited examples of the department using inflated information. In one such instance, a company said it would make an $11.4 million investment for a project but the department assumed the company would make a $49.4 million investment – 333 percent more than what the company said. In another, a company said it would make a $5.7 million investment but the department assumed an $87.6 million investment -- 1,438 percent more.
Montee released the audit the same day that Gov. Jay Nixon convened a 25-member commission charged with making recommendations for reforming Missouri's 61 tax credit programs. Tax credits are costing the state roughly $600 million a year in lost revenue. While most of the programs are supposed to create jobs, Nixon has called for eliminating those that don't provide an adequate return to taxpayers. Nixon has asked the commission to finish its work by Thanksgiving.
JUDGE ORDERS REAL ESTATE SALES TAX BAN ON BALLOT
Cole County Circuit Judge Paul Wilson on Aug. 31 ruled that supporters of an initiative petition to put a proposed constitutional amendment before Missouri voters banning taxes on the sale of real estate gathered sufficient signatures to appear on the Nov. 2 ballot. Secretary of State Robin Carnahan rejected the petition, finding the petition fell short of the minimum number of valid signatures in two of the required six congressional districts.Carnahan plans to appeal the decision, but if Wilson's decision is upheld the measure would appear on the ballot as Amendment 3. Missouri doesn't currently impose a sales tax on the transfer of real estate nor is there any effort in the General Assembly to do so.
Carnahan rejected the disputed signatures because of statutes that discount otherwise valid signatures of registered voters if the voter lives in one county but signed a petition sheet designated for another county or if the petition gatherer wasn't properly registered with the state. Wilson did not find that Carnahan improperly invalidated any signatures. To the contrary, he ruled that the legal standards for judicial review of the validity of signatures are lower than the standards the secretary of state must follow, allowing the court to count signatures that Carnahan was required by law to reject.
Should a higher court reject that argument on appeal and find that the court must follow the same standards as the secretary of state, Wilson offered an alternative theory that the laws in question are unconstitutional since they impose additional requirements on the initiative process not specified in the Missouri Constitution and invalidate otherwise genuine signatures of registered voters for factors beyond the control of the voter. The case is Vote Yes to Stop Double Taxation v. Carnahan.
FIVE COMPANIES SEEKING STATE'S FINAL CASINO LICENSE
Five companies have applied with the Missouri Gaming Commission for the license to operate the state's 13th and final casino. The applicants and the cities in which they want to locate are Casino Celebration, St. Louis city; North County Development, Spanish Lake in north St. Louis County; Isle of Capri, Cape Girardeau; Sunway Gaming, Sugar Creek in Jackson County; and Epic Gaming, also in Sugar Creek.There is no firm timetable on when the commission will make a decision. There are currently 12 casinos in Missouri. Voters in 2008 capped the number of licenses at 13 when they passed a ballot measure that primarily was aimed at lifting the state's casino loss limit.
COURTS DECLINE TO BLOCK STRIP CLUB REGULATIONS
Missouri's strippers will have to keep their clothes on – at least for now -- after two courts declined to bar enforcement of a new state law that imposes strict new regulations on strip clubs and other sexually oriented businesses. Lawyers for the adult entertainment industry had sought a temporary hold on enforcement while a lawsuit challenging the constitutionality of the new law remains pending.Cole County Circuit Judge Jon Beetem, who is presiding over the case, rejected the industry's request on Aug. 27 and the law, which bans nudity and alcohol in strip clubs and limits the location and hours of operation of all sexually oriented businesses, took effect the next day as scheduled. The industry appealed to the Missouri Court of Appeals Western District, which on Sept. 1 also declined to put the law on hold.
The case itself, however, has yet to be decided, and the law could still be overturned. The industry claim the law violates constitutional free speech rights and that it wasn't validly enacted because a legislative committee failed to review the financial impact of the measure as required by law.
STATE DNR DIRECTOR RESIGNS FOR GULF OIL SPILL JOB
Missouri Department of Natural Resources Director Mark Templeton resigned on Aug. 30 to become executive director of the Office of the Independent Trustees of the Deepwater Horizon Oil Spill Trust Fund. The fund was established to provide compensation to those economically harmed by the explosion of a BP oil rig in the Gulf of Mexico that resulted in the largest environmental disasters in U.S. history.Nixon named longtime aide Kip Stetzler as acting DNR director and has established a search committee consisting of business and academic leaders to find a permanent replacement.
STATE REVENUE UP A BIT IN AUGUST, STILL DOWN FOR YEAR
Net state general revenue collections ticked slightly upward in August compared to a year ago, but year-to-date collections for the first two months of the 2011 fiscal year remained down. The state collected $594 in August 2010, a 0.8 percent increase from August 2009. However, year-to-date collections for FY 2011 were still down 1.4 percent from FY 2010 to $1.04 billion.NEW MISSOURI LAWS WILL TAKE EFFECT ON AUG. 28
Most of the new state laws that the Missouri General Assembly passed during the 2010 legislative session took effect on Aug. 28. The new laws include tougher penalties for repeat drunken drivers, outlawing a synthetic marijuana substance commonly known as K2, and requiring insurance companies to provide coverage for the treatment and diagnosis of children with autism.Another new law gives the Missouri Ethics Commission the authority to initiate investigations into alleged illegalities by public officials or candidates for office. Under the previous law, the commission could only act after receiving a complaint. That same law also makes laundering campaign funds to obscure the original source of the money a crime and increasing funding disclosure requirements for political campaigns.
EXECUTIONS IN MISSOURI SET TO RESUME ON OCT. 20
After being on hold for more than a year, the Missouri Supreme Court on Aug. 19 took a step toward allowing the state to resume carrying out the death penalty, setting an Oct. 20 execution date for Roderick Nunley, who was convicted in 1994 for his role in the 1989 murder of 15-year-old Ann Harrison of Raytown.Court challenges to Missouri's method of administering lethal injections essentially put a stop to executions in the state for nearly three and a half years, from October 2005 until May 2009. Those challenges were resolved and Missouri executed Dennis Skillicorn on May 20, 2009, for the 1994 murder of Excelsior Springs businessman Richard Drummond.
Two more Missouri inmates were scheduled to be executed later that summer, but the 8th Circuit U.S. Court of Appeals issued a stay in order to review Missouri's lethal injection procedures, and executions in the state have again been on hold ever since. Although that case remains pending, other federal courts have rejected the arguments being made in the Missouri case.
MISSOURIAN' BEETLE BAILEY TO BE FEATURED ON STAMP
The U.S. Postal Service on Aug. 27 was to unveil a new stamp featuring cartoon character Beetle Bailey during a ceremony on the University of Missouri-Columbia campus, The Associated Press reported on Aug. 26. Mort Walker, the creator of the 60-year-old "Beetle Bailey" comic strip, grew up in Kansas City and graduated from the university in 1948.Many of the strip's characters were based on Walker's Mizzou fraternity brothers, and its setting of Camp Swampy was loosely based on his Army service at Camp Crowder near Neosho. A bronze statute of Beetle Bailey stands in front of the Reynolds Alumni Center on the MU Campus. Walker, who turns 87 on Sept. 3, also created the long-running "Hi and Lois" comic strip.
ENERGIZE MISSOURI REBATE PROGRAM ENDS OCTOBER 10
The opportunity for Missouri consumers to receive appliance rebates under the Energize Missouri Appliance Rebate Program will be ending soon.
Beginning Sept. 10, a limited quantity of rebates for gas furnaces, gas storage water heaters, clothes washers and dishwashers will be available to reserve only through participating retailers and installation contractors that have signed up to participate in the program. Rebates will be provided on a first-come,
first-served basis for 30 days.
Participating retailers and installation contractors will help qualified residents reserve a rebate when a qualified appliance is purchased. Retailers and contractors provide purchasers with a rebate application form that contains a unique reservation number. Missouri residents then claim rebate funds by mailing the form along with their proof of purchase and recycling.
Of the original $5.6 million in funds for the Energize Missouri Appliance Rebate Program, less than $225,000 remains available to consumers. More than 30,000 rebates have been claimed since the program began April 19.
Appliances bearing the ENERGY STAR label are designed to use 10 to 50 percent less energy than standard appliances, resulting in ongoing utility cost savings for the consumer.
Rebate amounts for each remaining qualifying appliance include the following:
| Appliance Categories | Rebate Amount |
|---|---|
| Space Heating: Gas Furnaces |
$250 |
| Water Heaters: Gas Storage Water Heaters |
$150 |
| Clothes Washers: Clothes Washers |
$125 |
| Dishwashers: Dishwashers (tabletop models not included) |
$125 |
Additional information about the Energize Missouri Appliance Rebate Program is available online at MissouriApplianceRebate.com.
Basic Eligibility Requirements
Consumers qualify for a rebate when they meet all of the following conditions:- Must be a resident of Missouri and 18 years of age or older.
- Must own the property where the appliances will be installed, with the exception of clothes washers. Renters are eligible for clothes washer rebates.
- Limited to one appliance per appliance category per address up to a total rebate of $1,300.
- Purchased appliance must be ENERGY STAR rated and qualified.
- Must reserve the rebate and mail it along with all required support documentation within 60 days of making the reservation.
In addition to the Energize Missouri appliance rebates, consumers may also find additional savings or rebates available through their local utility company. Missourians who wish to contact local utilities to explore the availability of utility-based rebates or incentives from their electric or gas utility providers can visit the department's list of providers at: dnr.mo.gov/pubs/pub2396.pdf
Funding for the Energize Missouri Appliance Rebate Program, with its $5.6 million in funding, is part of a larger $300 million federal program aimed at energy conservation, energy efficiency and economic recovery funded through the American Recovery and Reinvestment Act of 2009.
For more information about the Energize Missouri Appliance Rebate Program, residents or consumers may visit the Web at www.MissouriApplianceRebate.com or by calling toll-free 877-541-4848.
REPRESENTATIVE CHRIS CARTER WITH YOUTH AT WALBRIDGE BASKETBALL AND TALENT SHOW
REPRESENTATIVE CHRIS CARTER AND NAOMI WEST WITH YOUTH AT TASTE OF BADEN, AUGUST 21
REPRESENTATIVE CARTER AND OWNERS OF YOURS MARKET
WARD MEETINGS
2nd Ward Meeting
4th Thursday of Month, 7:00 p.m. to 8:00 p.m.
Charlotte's Banquet Hall, 8707 Riverview Drive
3rd Ward Town Hall
4th Tuesday of month, 6:30 p.m. to 8:00 p.m.
Clay Elementary School, 3820 N. 14th Street
Northside Neighborhood Action Association
First Saturday of Month, 10:30 a.m. - 12:00 p.m.
1525 Orchid
21st Ward Meeting
4th Thursday of month, 6:00 p.m. to 8:00 p.m.
Wesley House, 4507 Lee Avenue
27th Ward Meeting
3rd Saturday of month, 10:30 a.m. to 12:00 p.m.
Greater Pentacostal, 6080 W. Florissant
6th District Police Mtg.
4th Monday of month, 7:00 pm. to 8:00 p.m.
Police Station, 4014 N. Union
Urban League Meetings
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