Webster Groves council discusses sales-tax, TDD and property-tax options to shore up city finances

Webster Groves — The City Council on Tuesday opened a months-long conversation about how to close a projected budget gap, hearing detailed briefings on four revenue options and asking staff for follow-up analysis and outside economic‑development advice.

Attorneys and finance staff described how an economic development sales tax (a half‑cent sales tax dedicated to projects that spur long‑term investment), a Transportation Development District (TDD), an increase in the fire‑protection sales tax (from 0.25¢ to 0.5¢) and a narrowly targeted property‑tax increase would work under Missouri law and what each option could raise for the city.

The council’s immediate direction: gather more policy analysis and stakeholder input and schedule a July work session to consider cross‑cutting impacts and timing. Council members agreed not to move forward with an August ballot push and signaled reluctance to hold an expensive standalone November election.

Why it matters

City staff said routine revenue growth has trailed expense growth for years. In the city’s projection cited in the briefing, average annual revenue growth over many years is about 3.02% while expense growth is about 3.7%. Under that trend the city could face materially larger shortfalls later this decade unless it changes course.

What council heard

Shannon Creighton, an attorney who advised the council on statutory rules, said an economic development sales tax would face additional administrative steps not required for ordinary sales taxes: the city must prepare an “economic development sales tax plan,” form a five‑member advisory board (three city appointees plus representatives chosen by the school district and the county), hold a public hearing and publish annual reports. Creighton said an economic development half‑cent could raise roughly $1.46 million a year and that at least 20% of proceeds must go to long‑term economic development projects (land acquisition, infrastructure, grant matches) while the remainder may be used to attract people, businesses or investment.

Transportation development districts, Creighton said, are separate political subdivisions created by petition and court filing; they can fund transportation‑related improvements and can impose sales taxes or assessments. A large, citywide TDD requires a circuit‑court process, public notice and a vote of qualified voters in the district.

City finance staff provided local projections. Gregory (city staff) told the council the city’s median home value produces roughly $4,849 in property taxes today; only about 9.2% of a typical homeowner’s tax bill currently goes to the city. Staff estimated a property‑tax ballot measure to restore Webster Groves’ municipal levy to a previously higher level would add about $203 a year to the median homeowner’s bill and materially increase municipal property‑tax revenue to help operations.

The council also considered a fire‑protection sales tax increase. Staff estimated a quarter‑cent increase (to a half‑cent) could add about $730,000 annually and would be restricted to fire‑operations costs.

Council response and next steps

Council members repeatedly asked for two follow‑ups: a policy‑oriented briefing from an economic‑development practitioner (to explain how these tools perform in practice and whether combinations of them are complementary) and more outreach planning about how voters would be informed. Mayor Laura Arnold asked staff to pursue a July work session to continue the discussion and directed staff to seek Greater St. Louis economic‑development expertise.

Council members also raised practical concerns about timing, costs and fairness: sales taxes rely on consumer behavior and can be volatile; property‑tax measures change a homeowner’s recurring bill and require clear voter education; TDDs and CIDs can be useful for targeted projects but involve a lengthy legal process. Several council members said any ballot question should clearly state what residents would get in return for higher taxes.

What the council did not do

No formal vote was taken on any of the revenue options. Council members agreed to gather more information and discuss options at a July work session before deciding whether to place proposals before voters.

Ending note

Council members said they want a balanced package of options, not a single quick fix, and requested staff return with comparative analysis, anticipated voter‑education materials and recommendations for next steps and timelines.