Michael Rathbone

Edmundson is a small city in North Saint Louis County. It previously tried to shield its residents from having to pay for government services by issuing traffic tickets and other fines. Now that Senate Bill 5 has become law, towns like Edmundson can no longer rely on the rest of us to foot the bill for them. However, instead of being responsible and ensuring a way to either bring spending in line with revenues or disincorporate the city, it wants to raise its property tax rate.

Here’s the kicker though. It only wants to raise the property tax rate on commercial property, not residents! What’s worse is that Edmundson currently does not levy a property tax on residential property, not one cent.

The “justification” Edmundson uses for this proposal is that “the commercial businesses within the City require a greater level of service than the residential areas” and that “the Board believes that the residents should not be unfairly burdened with the cost of City services provided to the commercial areas.”

I haven’t seen any evidence that it costs more (on a percentage basis) for Edmundson, or any city for that matter, to deliver services to a commercial property compared to a residential property. Even if that were the case, commercial properties already pay more via assessments! That’s right, commercial properties are assessed at 32 percent of their value. Residential property is assessed at 19 percent. That means if a property tax rate of let’s say $1 per $100 in assessed value is levied against two properties (one commercial and one residential) valued at $500,000 a piece, the property tax bill for the commercial property would be $1,600 while the residential property would owe $950.

Apparently, that arrangement isn’t good enough for Edmundson, which seems to have a phobia against having its residents pay for any of the services they receive. This is wrong-headed.

If this is the way cities are going to respond to not being able to rely on ticket revenues to fund government services, they might as well disincorporate. If they don’t, there needs to be a change at the state level so that property tax rates (not assessments) are the same no matter the property type.

It was bad policy for cities to rely so heavily on fines and tickets to fund services. Thankfully, SB 5 fixed that problem. However, this proposal would replace one bad policy with another. I hope it never becomes law.

About the Author

Michael Rathbone
Policy Researcher
Michael Rathbone was a policy researcher at the Show-Me Institute. He is a native of Saint Louis and a 2008 graduate of Saint Louis University, where he earned a bachelor of science degree in biomedical engineering.