The Case Against Proposition U

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Proposition U, which will be on your ballot in August, would impose a use tax on city residents. That means you’ll pay more for anything you order online, and the city will get hundreds of thousands of dollars a year in extra money. The firefighter’s union is putting forth a big dollar campaign to convince you to vote yes. Here’s a few reasons we think you should vote no.

Our city does not have a revenue problem. Contrary to their claims of financial hardship, the city actually has a fund balance of $16.5 million. That’s money in the bank. We had a big surplus last year, in part because of Covid related federal grants, but also because sales tax revenue increased by more than $400,000. Total city revenue for 2022 is $22.4 million, a surplus of $3.8 million over expected spending. The city has presently budgeted for a 2023 deficity of $5.3 million, but that’s not because revenue is dropping – they expect total revenue to increase by nearly $600,000 this year. But they are increasing spending by $9.7 million, an increase of more than 50% over 2022. That isn’t a revenue problem, it’s a spending problem.

Our city has financial management issues. In 2016, we passed a 1/2% economic development sales tax. This fund, which generated $1.2 million in the 2022 budget year, was supposed to be used for economic development improvements to our city. Instead, the city illegally diverted it to general revenue uses. We are fortunate that the state gave us a pass on this, because the penalties for unlawful allocation of these funds would have entirely bankrupted the city. But after frittering this money away for six years – the EDST fund only has a balance of $1.5 million – council now wants other money.

On a smaller level, residents would be wise to consider the recent scandal regarding the outsourcing of nuisance abatement mowing. Last year, the only vendor who got it done was Palmer Residential Services, owned by now council member Mike Palmer. The mayor’s faction on council, upset with Palmer’s victory over their ally Fran Griffin, blocked Palmer from obtaining another contract, although he was the lowest bidder. The sole vendor they approved charged the city as much as $200 an hour for mowing, far in excess of the contract which the city approved. After an analysis by The Ferguson Observer found thousands of dollars in overbilling, the contract was terminated, and the city employee who approved the invoices was fired.

We don’t know how many other financial management problems are draining our city’s resources. But we believe that throwing money into this cesspool is unwise.

Our residents DO have financial problems. Ferguson is not, for the most part, an affluent community. While some few of us are blessed with financial security, a great many are choosing between ramen and rent. The recent surge in the cost of everything from eggs to gasoline has made matters significantly worse. For these residents, another tax, which will take hundreds of thousands of dollars from the pockets of everyone who lives in Ferguson, is yet another hardship. The city shouldn’t be giving itself a 50% spending increase and a big tax hike when its own residents are struggling.

In their misleading campaign literature, the firefighter’s union claims “Prop U is a ZERO increase tax.” But voters are not stupid. Money doesn’t fall out of the sky, it is taken out of our pockets. When a tax that falls only on those who live in Ferguson is expected to generate hundreds of thousands of dollars for the city, that money comes from nowhere but our own personal budgets.

Our public safety departments are well funded. In the 2022 budget, the police and fire departments were allocated $8.2 million, which amounts to 73% of the total personnel spending in the city. Because of hiring shortfalls, the police department is expected to spend $1.4 million under budget. Yet council has raised their budget even more, to more than $5.9 million in 2023.

Starting pay for our police department is now at least $50,880, according to the city’s job posting. The median per capita income in Ferguson is $21,656. A starting police officer makes more than double the salary of the average Ferguson resident, and that’s without overtime, which is available in abundance. Starting pay for St. Louis County Police is $55,390, not a great difference. It’s difficult to argue that we are underpaying our police officers.

As for our fire department, since there were no job postings, we don’t know the current starting salary. What we do know is that our fire department doesn’t have a revolving door, and our chief has indicated in public meetings that we are not losing people due to inadequate pay.

And regardless of campaign claims, Proposition U is not earmarked for public safety. Sales taxes are deposited into general revenue, and can be spent on whatever council wants. We don’t know what promises council has made to the police and fire departments in private, but there is absolutely no guarantee how it will be spent. Campaign promises to the contrary are nothing but political deception.

For these reasons, we urge residents to vote no on Proposition U. When our city has resolved its financial problems, implemented suitable measures for fiscal transparency, demonstrated that the millions of dollars they presently receive are being handled carefully and spent wisely, and shown a seriousness about planning for the future needs of the city, then we are willing to discuss the issue of revenue. Today, a tax hike proposal is nothing but a grab for money by a city which has plenty of money, and has shown itself unable to exercise proper care in spending it. Please join us in voting NO on Proposition U.

Correction: The economic development sales tax is 1/2%, and a previous version of this article indicated it was 1%.