JEFFERSON CITY — The top Republican in the Missouri House is teeing up ºüÀêÊÓƵ’ earnings tax as a possible issue in the 2024 election.
House Speaker Dean Plocher, a Des Peres Republican who is running for lieutenant governor, announced the formation of a special committee Monday on the 1% tax charged to people who work in the city.
“As costs rise and more Missourians are facing financial difficulties, it’s more important than ever to look at the data and have a meaningful discussion about these taxes and see just how they are affecting Missourians as well as employment and economic growth in our state,†Plocher said.
While there have been previous attempts to eliminate the decades-old tax, GOP lawmakers have in recent years sought to clarify the law when it comes to people who work remotely outside the city limits.
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Plocher last year led the charge for legislation that created a new process for people to request a refund of the city’s earnings tax for any work they performed remotely during the coronavirus pandemic.
The measure was approved in the House on a partisan 106-47 vote, but the legislation died in the Senate.
According to a nonpartisan fiscal analysis, the proposal would cost the city an estimated $66 million in revenue, resulting in less money for police, fire and other city services.
“A loss of revenue of this magnitude would be a devastating blow to the city’s credit and fiscal condition, and would seriously impair the city’s ability to provide basic city services,†the analysis notes.
Despite annual attacks on the tax by Republicans who control state government, the earnings tax has wide support in the city. In a 2011 referendum, 88% of voters voted to keep the tax in place. In 2016, that number was 72%. In 2021, the tax was supported by 79% of voters.
In all, the tax brought in $206 million in the most recent fiscal year.
“This is critical to the finances of our city,†said Rep. Del Taylor, D-ºüÀêÊÓƵ, when the measure was debated in March.
Heading Plocher’s new committee is Rep. Jim Murphy, a south ºüÀêÊÓƵ County Republican who sponsored the remote work measure last spring.
Also on the panel is Rep. Steve Butz, D-ºüÀêÊÓƵ. Rep. Marlon Anderson, D-ºüÀêÊÓƵ, also is on the nine-member committee.
“The work of this committee will be invaluable as we continue to look at how our citizens are being taxed in this state,†Plocher said.
Plocher isn’t the only Republican on the statewide ballot who has pushed back against the earnings tax.
Sen. Andrew Koenig, R-Manchester, sponsored legislation in 2022 that would have given refunds to remote workers. It faced similar pushback from Democrats.
Koenig, who is term-limited, is now running for state treasurer.
The panel is expected to meet in the months leading up to the start of the legislative session in January in order to have a plan ready for debate in the full House and Senate.
The formation of the committee comes as the city is appealing a case that found in favor of six people who sued over being charged the tax while they were working outside of the city limits.
A spokeswoman for Collector of Revenue Gregory F.X. Daly declined to comment, saying the office is awaiting further details about the parameters of the committee’s work.
ºüÀêÊÓƵ first levied an earnings tax — 0.25%— in 1946. The Board of Aldermen voted 20-8 in favor. The 20 votes for the bill were cast by Republicans, while two Republicans joined the board’s six Democrats in voting against it.