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Chesterfield looks forward to changes that would end what it
calls an outdated and inequitable sales tax sharing system in St.
Louis County, a city statement said today.
The St. Louis County Municipal League has organized a task force
on local sales taxes. The statement said the city expects the group
"to find a solution to the problems caused by an outdated
distribution scheme."
The task force appears balanced between representatives of
point-of-sale and municipalities in a pool. Point-of-sale
municipalities generally have shopping centers and other businesses
that generate significant sales tax revenue. They keep sales tax
revenue generated within their boundaries less an amount they share
with a pool of all other municipalities and the county's
unincorporated area. The sharing affects a one-cent countywide
sales tax and a one-fourth cent local option sales tax.
Officials hope the task force would broker an agreement among
municipalities that they could give to the Legislature. Lawmakers
set the rules for the current sharing system.
Chesterfield is in the pool because it incorporated after the
1977 system started. It loses more than half the sales tax money
collected in the city to other members of the pool, the statement
said. Last year, the city generated $11.4 million in revenue from
the one-cent countywide sales tax -- keeping $5.4 million and
providing $6 million to the pool.
The city is losing "more and more of the revenue necessary to
fund the services we provide," Mayor Bruce Geiger said in the
statement.
"Many cities in St. Louis County do not benefit directly form
the economic development they generate, while other cities benefit
without adding to or improving the overall fiscal health of the
county," the statement said.
Geiger added, "Chesterfield has become a regional economic
generator, providing jobs to thousands of residents throughout our
region and serving a growing population of those who shop or pass
through our community daily."
In 1977, lawmakers established the system of point-of-sale and pool
municipalities and voters approved it. The Legislature changed the
system to its current form in 1993. The late County Executive
George "Buzz" Westfall in late 1992 proposed that point-of-sale
cities share money with pool ones and the two types of cities
compromised on the current plan.
Under the system, point-of-sale sales cities give revenue to the
pool depending how much more money they receive for each resident
than pool cities. In an unusual move, the sharing formula is
logarithmic rather than arithmatic.
Municipalities got an option to add a one-fourth cent sales tax
which is shared on a less severe basis. Later, lawmakers set a
sharing system for a capital improvement sales tax that is
different than the countywide local one.
The one-cent tax generated nearly $140.9 million last year.
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