‘It’s a huge hit’ City officials sound alarm on possible repeal of the tax on groceries

City officials in various St. Louis County municipalities are sounding the alarm that they will see a major loss of revenue if the Missouri Legislature repeals
Published: Mar. 13, 2023 at 10:40 PM CDT
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ST. LOUIS COUNTY, Mo. (KMOV) - City officials in various St. Louis County municipalities are sounding the alarm that they will see a major loss of revenue if the Missouri Legislature repeals a tax on food.

At least one bill that exempts taxes on groceries has gotten out of a Senate committee, and another bill repealing taxes on firearms could include a food tax exemption.

“I don’t know anybody that really likes to pay taxes,” said Molley McCombs.

After paying for her groceries, McCombs states the obvious, that taxes aren’t enjoyable to pay for anybody and she wouldn’t mind seeing the grocery tax go away.

“I feel we pay a lot of taxes on groceries, and with inflation, I feel like it cuts into a lot of people’s budgets,” said McCombs.

Currently, Missouri is the minority in the United States, as the state is just one of 13 states that charge taxes on groceries at all.

“It’s easy for somebody in Jefferson City to cut city taxes when it doesn’t affect the state budget,” said Doug Harms, City Administrator for Des Peres.

Des Peres is a city with several large grocery stores in it, including a Schnucks, Dierbergs and a Sam’s Club.

Harms said the grocery tax gives the city anywhere from $2.5 to $3 million a year. That’s about 25% of the general fund, which pays for roads, police, fire and other basic city services.

He didn’t want to say specifically he’d have to cuts to the police and fire but alluded that the city would have to make cuts somewhere.

“Follow the logic and if you have to cut 25% out of a $12 million budget, then logically some of that is going to have to come out of police and fire, or you find another way to fund those services,” said Harms.

Maplewood’s City Manager Michael Reese was starker in a memo to the mayor and city council.

“We would likely have to lay off 10 police personnel, eight fire personnel,” said Reese.

Reese mentioned that the city would also have to lay off other city employees, cut road and sidewalk projects and default on payments to their Tax Increment Financing Bonds.

Plus, he said those cuts to public safety would put the city in a dire position.

“Our ability to provide police and fire services would be so poor that it would endanger residents and businesses,” said Reese.

The only other way a city could add revenue is to begin charging or to raise property taxes, something that Harms said wouldn’t make up the difference for Des Peres.

“Not only would we have to get the voters to approve it, but it would only go so far and it still wouldn’t be enough,” said Harms.

That’s not a trade that some Des Peres residents want to make, including Dan McGraw, who was putting his groceries in his car when he spoke with News 4.

“I’d rather have the grocery tax. I do enough personal property taxes,” said Harms.

Other cities would take major hits as well, including Chesterfield and Creve Coeur. City administrators for both cities told News 4 that over 10% of their revenue is tied to the grocery sales tax.

Both men said cuts would have to be made if this law went into place.

“It’s going to hit everybody, it’s a huge hit, and it’s an overnight hit,” said Harms.

St. Louis City would lose $17 million annually, according to one of the bill’s fiscal notes.

Pat Kelly, executive director for the League of Municipalities, said some cities in Missouri could be in jeopardy of bankruptcy if the bill passes. That would be due to future payments that need future revenue to cover the cost.

The bill also drops the one percent state tax on food that goes to education. The estimated loss to public schools is over $154 million in 2025.

This isn’t the only legislative bill that would repeal taxes. One bill includes a tax exemption for diapers, feminine hygiene products and firearms.