ST. LOUIS — A study from the city of St. Louis' development agency is pitching a way to lure thousands of new residents in a bid to reverse decades of population loss: earnings and payroll tax credits.
The St. Louis Development Corp. study, done in conjunction with consultant PGAV and released Wednesday, is called an "economic justice action plan," and seeks to formulate a plan to boost areas of the city with the most need, including places directly north of downtown and those that line Dr. Martin Luther King Boulevard. Other areas already have "some capacity for implementation" of development, including other north side areas, plus Dutchtown, LaSalle Park, the Gate District and Tiffany neighborhoods.
The study notes significant federal dollars available to the city, and suggests that SLDC add various staff members, establish a revolving loan fund and business grants, and put money into an "economic empowerment center," at Sumner High School, to boost the areas.
But some of the study's most notable language involves the tax credit idea. The city, with a population now below 300,000 in a region of 2.8 million people, charges a 1% earnings tax for those working or living in the city, plus a 0.5% payroll tax paid by employers on wages earned in the city.
"(SLDC's) long-term reinvestment strategy plans for thousands of new residents moving to the City by 2030," the study says. "Where are all these new residents going to come from?
"SLDC should encourage people to return to the City by annually granting households a transferable earnings and payroll tax credit that they can use themselves or sell to another individual or business to provide equity for their home purchase," it continues. "This program would likely be utilized by major employers with significant earnings and payroll tax liabilities."
The study goes on to predict that each household granted such credits "should recoup those costs to the City in less than 3-5 years through their own earnings, property and sales tax contributions."
"These households should be encouraged into market-rate housing that is incentivized by SLDC so they generate additional revenue to be used for further development within the area," it says.
The idea would almost certainly require approval by the Board of Aldermen.
Read the rest of the story on the St. Louis Business Journal website.
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