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Columbia Missourian

Missouri voters approve earnings tax measure

By The Associated Press
November 3, 2010 | 12:01 a.m. CDT
Proposition A states that an earnings tax a city wishes to impose would have to be approved by voters. Cities that already impose the tax, such as St. Louis and Kansas City, would have to put the tax on the ballot every five years.

ST. LOUIS — Missouri voters on Tuesday approved a measure giving residents of St. Louis and Kansas City the right to decide the fate of earnings taxes.

Proposition A requires voters in the state's two large cities to approve existing earnings taxes every five years. The measure has statewide ramifications by also barring other Missouri cities from imposing their own earnings tax.

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Boone County voters passed the measure by nearly a 2-1 margin, with 66 percent voting for it and 34 percent against it.

St. Louis and Kansas City are the only two cities in the state that have an earnings tax, which is a 1 percent levy on the earnings of people who live or work inside the city.

City leaders have said they might have to cut services if the ballot measure passes and voters later strike down the earnings tax. Kansas City officials say the earnings tax provides more than $200 million annually in city revenue, and city council members don't know how that would be replaced. St. Louis has estimated the tax brings in $140 million annually.

Let Voters Decide, the committee supporting Proposition A, says on its website that the measure was needed because "a third layer of income taxes imposed at the local level hurts working people and employers."

The group also says the tax "gives people and businesses a reason to locate in nearby suburban areas that don't have an earnings tax."

In St. Louis, an interfaith group of ministers and civic leaders launched a campaign against the ballot initiative because it could eliminate 33 percent of the city's general revenue fund, with no plan to replace it.

Archbishop Robert Carlson of the group, Metropolitan Congregations United for St. Louis, said the ballot measure could have a disproportionate effect on the poor.

Proposition A became a rallying cry for conservative candidates who say taxes have become too burdensome for families in the midst of a stagnant economy.