City budget faces revenue challenges amid declining gaming earnings and uncertain growth

The Budget and Public Employees Committee of the St. Louis City Council convened on May 5, 2025, to discuss the city's financial outlook amid early signs of recession and a projected budget increase for the year. Key discussions centered on the challenges of maintaining revenue streams and the implications of declining gaming revenues.

Committee members expressed concern over a 10% decrease in gaming revenue year-to-date, which has dropped significantly from pre-pandemic levels of over $7 million. The reasons for this decline were not fully understood, but it was noted that the city is capturing a smaller share of the market. The potential for increased revenue from newly legalized sports betting was also discussed, though it appears that the state may retain a significant portion of these funds, limiting the city's financial gain.

The committee reviewed the capital improvements plan, which allocates $1.3 million annually to the Board of Public Service and the street division, with each receiving $650,000. This funding is intended to address various city projects, but concerns were raised about the adequacy of these amounts in light of rising costs and the city's ongoing population decline.

A notable point of discussion was the city's reliance on fixed revenue sources that do not adjust with inflation, which has created a gap between revenue growth and the rising costs of city services. The committee acknowledged that while some revenue sources, like the earnings tax, have shown growth, overall revenue is not keeping pace with expenses.

The meeting concluded with a recognition of the complexities involved in budgeting for essential city services, particularly as the city faces a shrinking population and the associated financial pressures. The committee emphasized the need for innovative solutions to ensure adequate funding for critical services moving forward.