December 12, 2014
City of Chesterfield files suit against State of Missouri in an effort to reform imbalanced sales tax distribution system.
Earlier today, the City of Chesterfield filed suit in Cole County, against the State of Missouri, challenging the constitutionality of State Statutes that control the distribution of local sales taxes in St. Louis County. This action has been taken, after years of trying to achieve legislative relief from these special laws. The St. Louis County sales tax distribution system is an unconstitutional special law, unique to St. Louis County, which has long served to trap St. Louis County cities in warring groups that divide the region. The system perpetuates a patchwork of municipal and unincorporated areas in St. Louis County that is both inefficient and a hindrance to economic growth and development. The constitutional ban against special laws was established to avoid the exact legislative morass that has hindered efforts to reform local government in St. Louis County.
The current method of distributing sales taxes to cities in St. Louis County is outdated and stifles economic progress for the region. Each year, the methodology, by which sales taxes generated in one area are distributed to other cities, creates an increasingly perverse incentive for cities to limit and even oppose economic development, within their communities. Cities such as Chesterfield and many others contribute substantially more to the “Pool” than they actually receive from the “Pool”, based upon their population. This same circumstance also applies to areas annexed by cities across the region. This unbalanced and outdated formula is why Chesterfield will be seeking relief from the court.
Chesterfield believes that the current job-killing sales tax distribution system has unintentionally created a disincentive for cities, both successful and struggling, in terms of investing and encouraging economic growth. Examples can be found across our County, confirming that our local system of government is broken. Tax policy must support and encourage responsible job creation, not prop up dysfunctional layers of local government.
“Cities that promote and encourage economic development need the tax revenues that are generated from that effort to pay the increased costs that it takes to attract and keep high-quality jobs in our region,” said Chesterfield Mayor Bob Nation. “We look forward to partnering with forward-thinking state, municipal and county leaders to develop a new system of sales tax distribution in St. Louis County, after this unconstitutional special law is struck down by the courts,” added Nation. “We can and must do better as a region.”
For further information, contact Mayor Bob Nation or City Administrator Mike Herring at 636.537.4711.