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By Sam Levin
By Sam Levin
Only one real issue separates the two candidates for St. Louis aldermanic president -- of course, no one is talking about it.
Alderwoman Lyda Krewson(D-28th) sponsored a bill in 2000 that eliminated the 1 percent earnings tax on stock options. Alderman Jim Shrewsbury -- he was then the 16th Ward alderman but later became aldermanic president when Francis Slay left that post to become mayor -- opposed the bill.
It passed, 23-4. Slay backed the bill big-time.
The vote came before Enron, before WorldCom and before the city's budget crisis. In light of the recent string of corporate scandals, the vote might be different today, because giving a tax break to a corporate executive has all the appeal of giving Viagra to a rat in heat.
That image of a sex- and drug-crazed rodent is underscored by some preliminary figures from the city, numbers that show a marked decline in the city's earnings-tax revenue. It's still a bit early to come to a complete conclusion, but consider this:
In the first year with no collections from corporate honchos who cashed in stock options, earnings-tax revenue dropped by about $2.5 million. After years of increases, the city took in $124,455,454 for the fiscal year ending June 30, down from $126,916,358.
The earnings tax represents about a third of the city's income. Krewson and Slay sold the bill by claiming that the tax break would lure dot-com start-ups to the city. The bill passed one year after the city successfully defended a lawsuit by Ralston-Purina that challenged the city earnings tax on stock options. Essentially the board gave the corporations what the judge didn't.
One reason this might be an issue hard to soapbox about is that economic experts often point to six different reasons something happened. Yet one thing is clear: In the last ten years, revenue from the earnings tax has gone up -- sometimes slightly, sometimes significantly, but it's gone up each year. That it dropped in the past fiscal year is highly unusual and leads to the reasonable supposition that the decline is tied to the stock-options exemption.
A further indicator of something amiss is that city payroll taxes were up last year, whereas earnings-tax revenue was down. That would argue that something other than a downturn in employment is causing the decline in earnings-tax revenue.
Much of the blame for this not being a campaign issue falls on Shrewsbury. Cautious to a fault, he probably saw no reason to say "I told you so" because he believes he's going to win on August 6. Why take a chance?
Krewson, a certified public accountant, certainly doesn't want to bring it up because there are early signs her bill has hurt the city and no real sign it has helped. Hundreds of dot-com brainiacs aren't lined up at City Hall with their business plans, saying they're ready to move to St. Louis so they can avoid that dreaded 1 percent tax on their stock options.
When pressed, Krewson paints Shrewsbury as a political animal for not introducing his own bill to eliminate the exemption for stock options. "So that's old-line politics, isn't it? What's up with that?" she says.
Shrewsbury says he was waiting for the numbers to be crunched before going after the exemption.
"It should be repealed," says Shrewsbury. "I predicted all along we would lose substantial revenue, but there was no way of documenting it. Now we have some documentation."
Shrewsbury also has a bill to back, but it's not his. Alderwoman Sharon Tyus (D-20th) has introduced a bill to reinstate the 1 percent earnings tax on stock options. Shrewsbury says he will back Tyus' bill.
Short Cuts has long been a fan of the tenacity and verve of the alderwoman from the 20th Ward -- wherever that 20th Ward may be -- but it's also clear that a candidate running for a citywide office might not run to a photo op with Tyus, who in the past year has used the words "racist" and "Nazi" to describe Slay's tactics.
Leaving behind the earnings-tax problem, the other issues in the campaign revolve more around image and associations and have less substance, if not less importance. There's also a heavy air of political payback against Krewson from African-American politicians because of her testimony supporting U.S. Representative Dick Gephardt over Representative Lacy Clay during the redistricting flap and her marriage to TV reporter Mike Owens, who is perceived by some as being particularly rough on black politicians.
Krewson concedes that Shrewsbury has better name recognition.
"I'm not as well known," Krewson says, "because I haven't run twice citywide and lost."
Shrewsbury does have scar tissue. But thus far, his history doesn't seem to be haunting him. He has lost two elections for comptroller, an infamous one in 1993 to Virvus Jonesand a surprising one to Darlene Green in 1996. Despite his past, he appears to be the favorite going into next month's Democratic primary.
Last week, Shrewsbury won the endorsement of the vote-heavy 23rd Ward, the mayor's home base. Krewson downplayed that, saying her campaign was "never about traditional old-line ward politics. The campaign was always about taking the message directly to the people."
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