“SHOW US THE MATH.”
During the past two weeks this has become a frequent refrain from people on various sides of the debate over advocacy group Better Together’s proposal for the City of St. Louis and St. Louis County to merge into a new “Metro City” government. This new government would wrest control of policing, municipal courts and economic development, as well as the taxes and fees supporting those functions, from the county’s 88 municipalities.
One of the core principles behind Better Together’s work is a desire to spend tax dollars more efficiently than the existing patchwork of governments does. When it unveiled its formal proposal on Jan. 28, the organization forecast the Metro City government would have an eventual operating surplus (revenues exceeding expenses) of about $250 million each year.
Better Together promises to release specifics underpinning its calculations – in other words, “the math” – by the end of February.
As it happens, the City of St. Louis and St. Louis County have already done some math of their own on the topic of consolidation, involving tens of millions of dollars, albeit for a different idea that came several years before the Better Together proposal.
In late 2014 an arm of the Missouri General Assembly, after a resolution filed by then-State Sen. Maria Chappelle-Nadal (D-University City), began compiling research on a scenario in which the city would rejoin the county as a regular municipality. The assembly’s Committee on Legislative Research asked the city and county to independently submit calculations of the impact such a move would have on their respective finances.
State records that McPherson obtained last week via a Sunshine Law request show St. Louis County submitted its response on Dec. 5, 2014. The city’s response followed a week later.
The city’s analysis said rejoining the county would have a “potentially significant positive impact.” The savings would have come from combining the city’s “county” functions – such as assessor, recorder of deeds, board of elections, circuit clerk and court functions – with those of St. Louis County. The city added up the costs of those functions, subtracted the revenue they generated and tax money used to support them, and estimated the net costs at $91.3 million annually.
The city noted, however, that “a large portion of these costs are certain to continue regardless of the city’s ‘county’ status,” and it avoided providing a specific estimate of the savings that would occur.
In St. Louis County’s analysis, which considered new revenue from city residents set against the per-capita costs of providing county services to them, officials in Clayton came to a less enthusiastic conclusion. They identified no savings on their side, and estimated a net “loss” to the county each year of $30.7 million.
State officials in the Oversight Division of the legislative research committee, after reviewing these two submissions, did not specify a figure for the overall financial impact. In a February 2015 summary (known as a fiscal note) attached to Chappelle-Nadal’s draft resolution, they said: “Oversight assumes there is a potential in the future for some savings due to the economies of scale between the City of St. Louis and St. Louis County regarding positions of staff and departments being consolidated under one umbrella, but will not reflect that savings at this time.”
Figures don’t lie, but liars do figures
The analyses under consideration four years ago occurred under different leaders in both the city and county and addressed a different scenario – the city re-entering the county – than the far more comprehensive unification proposal Better Together is now promoting. (Chappelle-Nadal’s resolution made little progress in the legislature and never came up for a vote on the floor.)
Yet the 2015 fiscal note, which attracted little attention when it was published, offers a glimpse into the mathematical arguments Better Together and its allies in government could use in their attempts to sell a skeptical public on the merits of their plan.
What’s more, the varying approaches the city and county used, and their widely divergent calculations for revenues and the implied per-capita costs of public services, underscore the subjectivity that comes into play when analysts consider individual data points – and when policymakers then use those analyses to draw broad conclusions.
St. Louis County’s calculations were “a first-blush analysis of (Chappelle-Nadal’s) proposal, based on the way we understood it at the time,” said Garry Earls, former chief operating officer of the county who oversaw the preparation of the county’s response to the state. “There are probably 17 other ways I could think of to calculate this.”
Earls served in the administration of Charlie Dooley, who preceded current County Executive Steve Stenger. Earls is now retired but he said he still provides advice to the County Council on an informal basis.
“There are a lot of details that were left out of the proposal,” Earls told McPherson. “It was not explicit about what elements of city government were to be transferred to the county, nor what revenues.”
Chappelle-Nadal’s resolution, and the fiscal note that accompanied it, are accessible via the Missouri Legislature’s website. McPherson obtained the underlying financial analyses from the city and county via the Sunshine request. All the documents, with relevant images and links, are available via a separate page of McPherson’s website.
Fixes and corrections
McPherson was alerted to the existence of the 2015 fiscal note by a person closely involved in the work of a Better Together task force that spent a year and a half considering various consolidation alternatives before recommending the Metro City plan. McPherson agreed to keep this person anonymous.
Ed Rhode, a spokesman for Better Together, said in a statement: “While the fiscal note shows the potential for $60 million savings from consolidating the city and county’s county functions based on that specific proposal, it was only one of many data points Better Together reviewed as part of its research and analysis. Better Together will be releasing its analysis of the savings made possible by the task force’s recommendations in the coming weeks.”
One option the task force examined after its formation in 2017 called for the city to re-enter the county as its 89th municipality – the same scenario identified in Chappelle-Nadal’s resolution. Eventually, however, the Better Together officials decided that a more radical solution was needed in order to address the region’s fragmentation, revamp taxes and spending, and help St. Louis compete against peer regions.
One point that’s evident in the underlying analyses from the city and county is the massive spending by both governments on courts and public safety. These are two of Better Together’s prime targets for cost savings.
The city’s figures show that in fiscal year 2014 it spent $37 million on “corrections” (operating the Justice Center and the Medium Security Institution, better known as the City Workhouse), and a further $16 million on probation and juvenile detention. These were the biggest individual contributors to the $125.5 million total cost (before offsetting revenues) of the city’s “county” functions. The city recoups a small portion of its costs via reimbursements from the state.
The city and the county offered very different figures for the “county-level” revenues that the city receives from taxes and fees. The city provided real figures which showed its county offices generated just over $34 million in 2014.
But the county (which based its calculations on 2011 data) had to estimate. It came up with a much higher figure, $58 million, for new revenue from city taxpayers. The county arrived at its estimate by adding up county-level property taxes and smaller revenue streams such as state reimbursements for prisoners held in local jails.
Who’s more efficient?
Another discrepancy is the implied per-capita cost differential between the city and county in terms of providing services. The county’s calculations showed that it spent $278 million (before offsetting revenues) in 2011 to provide “county-level” services such as courts, jails, and arterial road maintenance; each of these services was provided to all county residents, regardless of whether or not they lived in an incorporated municipality. Based on the county’s 1 million residents in the 2010 Census, that works out to a cost of $278 per resident.
As for city officials, they said the city’s total costs (before offsetting revenues) for its “county” offices were $125.5 million. That works out to about $393 per city resident.
It’s important to note these are only implied figures, and they were not contained in the 2015 fiscal note. Chappelle-Nadal’s resolution didn’t specify which services the city would give up and which ones it would retain if it rejoined the county, and comparisons are hampered by factors such as different spending patterns in the city versus the county on major items like justice systems.
State records show that while she was in the Missouri Senate, Chappelle-Nadal filed resolutions each year from 2011 to 2016 that would have allowed residents of St. Louis city and county to vote on whether the city should rejoin the county as a municipality. The consolidation plan would have been prepared by a Board of Freeholders. Only during the 2015 session was her legislation scheduled for a hearing, however. That move triggered the Committee on Legislative Research’s preparation of the fiscal note.
Chappelle-Nadal, who is now a representative in the Missouri House, could not be reached for comment. At the time she filed her first resolution on city-county consolidation in 2011, she told the St. Louis Post-Dispatch that it was “part of a regional conversation” and that “it’s all about reducing our overall costs.”
The county submitted its analysis for the state’s fiscal note just a few weeks before Stenger took office on Jan. 1, 2015. Stenger had defeated Dooley the previous August in the Democratic primary.
Under Better Together’s proposal, Stenger would serve as the first Metro Mayor after the new government takes power in 2023. During a transition period in 2021-22 he would share power with St. Louis City Mayor Lyda Krewson.
Krewson succeeded the previous mayor, Francis Slay, in 2017. She and Stenger are both strong backers of Better Together’s proposal, which the organization wants to place on a statewide ballot in November 2020.
“There’s a lot of academic research that’s looked at city-county consolidations. In most cases, the projected savings do not materialize for a variety of reasons,” said Mark Tranel, director emeritus at the University of Missouri-St. Louis.
Tranel’s past research for UM-St. Louis’s Public Policy Research Center has challenged Better Together’s own research which says consolidated governments are more efficient at providing public services.
Editor’s note: The underlying analyses from the city and county can be found here.
I do see the benefit of combing City with county. But I am not sure of the long time effect. It’s hard to read.
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