Metro St. Louis Approves Fiscal 2011 Budget, Making Work Harder to Find

The Metro Board of Commissioners approved the St. Louis regional public transit agency’s Fiscal 2011 operating budget of $232.4 million in late May with the declaration that the spending plan “includes funds to restore transit services that were cut in 2009.” This comes, of course, following the passage of Proposition A by St. Louis County voters in April, which imposed “a countywide sales tax of one-half of one percent for the purpose of providing a source of funds for public transportation purposes.”

A closer look at Metro’s announcement of its Fiscal 2011 budget, however, yields the following admission (emphasis added):

In addition to restoring services eliminated for financial reasons in 2009, [Metro President and CEO Robert J.] Baer said the new sales tax revenue is committed to replacing a $5 million decline in sales tax revenue and replacing the one-time appropriation of $12 million from the state of Missouri in FY 2010. The revenue also will replace millions of dollars in federal capital funds spent on operations in FY 2010, freeing those federal funds to be used partly to acquire more buses for service restoration. The new budget also reflects $6 million in higher costs for fuel, medical costs and utilities, and $4.8 million more to provide additional services under contract with the St. Clair County Transit District in Illinois.

[…] He said that even with plans to hire 120 new drivers, mechanics and supervisors needed to restore service, the agency would operate with approximately 90 fewer employees in 2011 than it did in 2009.

So, what gives? St. Louis County voters approved a sales tax increase — which triggered a coincident sales tax increase in St. Louis City of one quarter of 1 percent — yet the Metro transit agency will provide a diminished level of service in fiscal year 2011, as compared to 2009.

Yes, the Cross County MetroLink Extension undeniably increased operating costs for the agency, but alongside this increase in fixed operating costs, net sales tax disbursements to Metro in constant dollars exhibit the following negative trends:

Net Transportation Sales Tax Disbursements to Metro in Constant (2009) Dollars

Net Proposition M Sales Tax Disbursements to Metro in Constant (2009) Dollars

Now that Proposition A is a reality, Metro will have an additional source of sales tax revenue over and above the two illustrated here. Despite the seemingly strong evidence illustrated above that sales taxes in St. Louis city and St. Louis County are not sustainable funding sources for public transportation, there are other reasons to believe that Metro will continue to face budgetary problems in the future.

The East-West Gateway Council of Governments said in its preliminary presentation on development incentives research dated Jan. 28, 2009, that:

Higher sales tax rates will suppress local sales and drive higher internet sales.

Ironically, raising sales taxes for Metro so that its commuters can “[get] to work” will necessarily reduce retail employment, further compunding the transit system’s revenue problems as fewer persons buy monthly passes.

Proposition A may very well be the clearest illustration of a “job-killing tax increase,” not only for us but for Metro as well.