Missouri Auditor Nicole Galloway declined Tuesday to jump into the growing fight between St. Louis County municipalities and the pro-merger advocacy group Better Together, releasing a fiscal note that called the proposal’s overall savings “unknown” before restating the claims of both sides.
At the same time, the 120 pages of letters from affected government agencies, attached to Galloway’s note, show not only disagreements over the dollar impact, but also widespread confusion on the details of the plan.
“In terms of whether anybody understands it at this point, I don’t think anybody does,” said Mark Tranel, director emeritus of the Public Policy Research Center at the University of Missouri-St. Louis. “This highlights the challenges that would ultimately be faced once this kind of language would become part of the constitution.”
Better Together nevertheless declared victory.
“The state auditor’s fiscal note confirmed what our studies have already proven,” said Better Together spokesman Ed Rhode. “The St. Louis region is massively overspending on duplicative government services, and the Better Together consolidation plan will save taxpayers billions. We look forward to educating taxpayers on this issue over the next 20 months.”
Rhode did not explain the statement and would not make anyone at Better Together available for an interview.
Better Together announced in late January its plan to gather at least 160,199 signatures and place on the November 2020 statewide ballot a measure to merge St. Louis and St. Louis County. That same day, it filed proposed constitutional amendment wording with the secretary of state.
The initiative, if passed by Missouri voters, would combine under one metro city the police departments, court systems, roadways, regional planning and zoning, and economic development arms of the city, county and 88 county municipalities. County municipalities would become new political subdivisions, called “municipal districts,” with power over some services, such as parks and trash collection, but with otherwise severely restricted authority.
Two weeks ago, Better Together released its own analysis of the savings that could come from such a consolidation. The group’s Associate Director Kyle Juvers explained that he added up the budgets for nearly all regional governments, reduced them by 3 percent a year for 10 years, added 2 percent for inflation, and compared that to revenues that dip as Better Together cuts property taxes and phases out St. Louis earnings and payroll taxes.
Juvers’ analysis showed the merged city’s annual budget could run a surplus — which he added to the reduction in spending and estimated the new government could save $55 million in year one of operations and more than $1 billion in year 10.
Critics scoffed at the analysis, arguing that a real estimate would identify not just how much would be cut, but what, specifically. Multiple studies, they said, have shown that mergers don’t necessarily produce savings.
At the same time, St. Louis County municipalities from Crestwood to Bellefontaine Neighbors sent to Galloway’s office analyses of the merger’s anticipated impact on their operations.
If Better Together passed, several of the municipalities said, they would face budget deficits, tax hikes and even municipal insolvency.
“The Better Together Plan will financially devastate our City and our residents,” wrote Webster Groves finance director Joan Jadali.
The most detailed analysis sent to Galloway came from the state’s Division of Budget and Planning. The division went through Better Together’s amendment section by section and repeatedly called the plan “unclear.”
The amendment, for instance, proposes a cut in St. Louis County property taxes. But Budget and Planning couldn’t figure out how that would work:
“It is unclear whether this reduction would occur once or every year until the property tax in St. Louis County was abolished,” the analysis said. “B&P cannot determine whether the property tax reduction would begin January 1, 2021, January 1, 2022, or January 1, 2023. B&P notes that abolishing the property tax for St. Louis County could have a significant negative impact on the revenues available for the newly created metropolitan city.”
St. Louis County, however, didn’t see a problem.
“We find financial projections associated with the proposal — in particular, projections pertaining to overall local government savings — to be reasonable and prudent,” said the county analysis, the only rosy account of Better Together’s proposal other than its own.
“While detailed financial analysis would be dependent upon future decisions to be made by the new Metropolitan City government, we believe a fair and valid presumption is that economies of scale would be realized through the consolidation of municipal service providers and other municipal government functions.”
County Executive Steve Stenger is a vocal supporter of Better Together.