The Saga of Senate Bill 5 How a well-intended, post-Ferguson bill exposed the many fault lines of St. Louis County.

Page four of the U.S. Department of Justice’s March 2015 investigation of Ferguson’s police department reports how an African-American resident “received two citations and a $151 fine, plus fees” for parking her car illegally. Between 2007 and 2010, she was charged seven times with “Failure to Appear” for missing court dates and fine payments, as the court would not accept anything less than payment in full. For each charge the court required new fines and issued an arrest warrant. According to the report, between 2007 and 2014, the woman was “arrested twice, spent six days in jail, and paid $550 from this single instance of illegal parking.” More than seven years later, she is still paying off the fine, though at the time of the report she had already paid $550 and still owed $541.

If Ferguson’s manner of squeezing its residents for payment of violations, or even punishing them with jail time, was news to the U.S. Justice Department, it was a rather old story for some national newspapers.

About a month after Ferguson police officer Darren Wilson shot and killed Michael Brown in 2014, The Washington Post published an article titled “How Municipalities in St Louis County, MO Profit from Poverty,” reporting in detail about how financially bereft municipalities in St. Louis County generate operating revenue through court fines and fees. Vignette after vignette revealed minor offenses turning into punishments—ranging from devastating debt to jail time—that do not fit the original crime, ultimately resulting in loss of employment for minor infractions. Thomas Harvey of the non-profit legal assistance group Arch City Defenders explains, “These are people who make the same mistakes you or I do—speeding, not wearing a seatbelt, forgetting to get your car inspected on time. The difference is that they don’t have the money to pay the fines. Or they have kids, or jobs that don’t allow them to take time off for two or three court appearances. When you can’t pay the fines, you get fined for that, too. And when you can’t get to court, you get an arrest warrant.”

In February 2016, the Department of Justice announced it planned to sue the City of Ferguson after the municipality’s council decided to further amend a plan for constitutional policing that had been in negotiations for more than seven months. At the announcement, Attorney General Loretta Lynch made a statement lambasting the Ferguson police department for consistently violating the Fourth Amendment rights of its citizens, evidenced by records of stops and arrests without probable cause and unnecessary use of force. “These violations were not only egregious—they were routine,” she said. “They were encouraged by the city in the interest of raising revenue. They demonstrated a clear pattern or practice of violations of the Constitution and federal law.” In the official investigation of the Ferguson Police Department, the Department of Justice summed it up: “Partly as a consequence of City and FPD priorities, many officers appear to see some residents, especially those who live in Ferguson’s predominantly African-American neighborhoods, less as constituents to be protected than as potential offenders and sources of revenue. This culture within FPD influences officer activities in all areas of policing, beyond just ticketing.”

Critics point out that SB5 alone cannot repair the larger wounds of St. Louis’s painful history of racial segregation, and also cannot replace municipal revenue that will inevitably be lost. Ironically, the bill will remove the most viable source of revenue in communities where sales tax and property tax are harder to come by, creating a space between intention and result for even further socioeconomic discrimination.

According to Ferguson’s financial statements for the year ended June 30, 2013, the city generated $2.57 million, or 20.17 percent of its $12.75 million general fund through “Fines and Forfeitures.” Financial statements for other, poorer municipalities show a similar trend, several of which are far worse. Missouri’s Mack’s Creek law deems it illegal for any municipality in the state to fund more than 30 percent of its operating revenue through court fines and fees. However, it is poorly enforced. While Ferguson raised just 20 percent of its operating budget this way, several other St. Louis County municipalities in North County went well over the 30 percent limit in 2014. Normandy, Saint Ann, Vinita Terrace, Bella Villa, Edmundson, and Calverton Park all surpassed 30 percent. The U.S. Department of Justice report makes it clear how much damage this inflicts. As President Obama stated after a grand jury decided not to indict Darren Wilson, “We need to recognize this is not just an issue for Ferguson—this is an issue for America. Communities of color aren’t just making these problems up.”

When the ensuing media frenzy thrust Ferguson onto a national stage, Missouri Senator Eric Schmitt, a Republican representing Glendale, was galvanized. “I grew up in North County. My grandfather was from Ferguson. Being a senator and a lawyer, I wanted to be a part of that. I spent time just talking to people. I didn’t have a state senator hat on,” Schmitt said. He began working on a bill soon known as Missouri Senate Bill 5.

The reform bill’s most notable provision is a much stricter cap on the amount of operating revenue any municipality in Missouri can generate through its municipal court: 12.5 percent for municipalities located in St. Louis County, and 20 percent for the rest of the state. Specifications also deem it illegal for residents to be held in jail for more than 24 hours without seeing a judge, and require each municipality to have both an accredited police department and balanced annual budget. “These are very basic standards of what it means to be a city,” says Schmitt.

In the process of meeting with people, he remembers talking to new police officers who told him, “I didn’t go to the police academy to write tickets all day long.” After drafting and researching for more than a year, the bill was signed into law by Governor Nixon on July 9, 2015.

Schmitt and other of the bill’s supporters saw this as a great victory. To him, its intent was clear: eliminate the problem of punitive courts and protect positive police-civilian relations going forward.

However, the opposition points out that this piece of legislation alone cannot repair the larger wounds of St. Louis’s painful history of racial segregation, and also offers no alternatives to replace municipal revenue that will inevitably be lost. Ironically, the bill will remove the most viable source of revenue in communities where sales tax and property tax revenues are harder to come by. The bill’s good intentions may in fact simply exacerbate the current socioeconomic imbalance that afflicts much of the region..

In essence, the new bill is a stricter version of the 30 percent cap in the current Mack’s Creek law. “A full third of your budget is still ridiculous,” says Schmitt, noting that municipalities had also been exceeding the cap for years, with no evident consequences. The bill fixes that, leaving no room for violations, and includes harsh penalties for municipalities violating any new rules. Any county, city, town or village filing revenues in excess of the 12.5 percent cap will not be allowed to collect sales tax while noncompliant with the law. It also requires an automatic election deciding whether or not the town should disincorporate. “This is something that will get at the root cause of the breakdown in trust between people and their government and people and their courts,” Schmitt said in a May 2015 interview.

Schmitt said he hopes Senate Bill 5 will help restore public trust in the police. “I love North County. My parents live in North County,” he says. “To me, this is about it being a better place for people to live, and not having to worry about a municipal court that is driven by money. That’s not what these courts are meant to be. We don’t want them to be viewed as a way of extracting more and more from people. It leads to mistrust. We’re doing the right thing for the right reasons.”

Toward the end of 2015 twelve mayors of North County municipalities, led by Mayor Patrick Green of Normandy, filed suit against Schmitt’s Senate Bill 5. The mayors representing municipalities with majority African-American populations charged the bill was unconstitutional because of its disparate impact: imposing a stricter percentage cap on St. Louis County municipalities than the rest of the state. Moreover, it provided no alternatives to other sources of revenue because of the law’s new cap requirements. The suit called that loss of revenue “an extraordinary act of overt discrimination,” that, “will wreak havoc and devastation in the St Louis County municipalities’ ability to provide their customary government functions and services … simply stated, SB5 has imposed staggering unconstitutional unfunded mandates on the St. Louis County municipalities.”

Schmitt admits he has struggled with their decision. “If they want to fight reform with taxpayer money, that’s their choice,” he said when asked about the suit. He spoke further about the issue publicly in a July 2015 interview with St. Louis Public Radio, in which he asserted he had no interest in preserving government positions for elected officials, but hoped to create a fair system for all residents.

Mayor Green said Schmitt’s bill does not clearly see the challenges facing North County municipalities. “What I was upset about was that—this is typically what’s done to black communities—you demonize us by saying we’re all the same” Green said. “I’ll put it in the most simplistic way: no one is thinking this through. Everyone is just running down the yellow brick road with these assumptions. I just have been shocked at the lack of leadership, the lack of critical thinking that has come out of this. It is unjust.”

Green has alleged that revenue generated from court fines and fees for Normandy, the municipality he governs, was at 24 percent. However, numbers from Normandy’s 2015 budget worksheet on the city’s own website shows revenues from municipal court at $1.41 million of $4.41 million in total revenues—or 32 percent, roughly a third of the budget and exceeding the legal 30 percent cap in place well before Schmitt’s bill.

Green said the 24 percent figure he cited in the interview comes after the city distributes some of its funds to nonprofits and a local women’s shelter. Regardless of how the funds are being used, it is how they are obtained that galvanizes politicians and the public about the issue.

Reviewing the research, Colin Gordon, professor of American public policy at the University of Iowa, said, “It’s very clear both from the Department of Justice report and city of Ferguson financial reports that this was exactly what they were doing, and [police] were told, either implicitly or explicitly, to raise money this way.”

Gordon points out that if a regulatory arm of government has the incentive to raise its own revenues, revenue generation often trumps what is best for the public good. “For example—you don’t want the fire department to get paid per number of fires. So in that sense, the Senate Bill 5 cap is perfectly sensible, and it’s in keeping with what a lot of other states have done.” Gordon’s book, Mapping Decline, tracks the history of institutional racism in St. Louis and the resultant effects on demographic sorting. “Ferguson didn’t come to this fiscal avenue lightly,” Gordon said. “It was because every other avenue was closed to them.”

Ironically, protecting a fragmented system in which each municipality is responsible for generating its own revenues ensures not all residents have a say in what might happen to them.

Although Ferguson was not involved with the lawsuit, Mayor James Knowles III has opined that the ultimate intention of the bill is to dissolve municipalities in North County. When asked why Ferguson has not joined the lawsuit, newly elected councilman Wesley Bell said, “I’m going to guess it’s solely because we have enough going on to get our own house in order. It hasn’t even been discussed. We’ve been dealing with the Department of Justice and our own courts.”

While there is little evidence that Senate Bill 5 is actually part of a conspiracy aimed at annihilating North County it is likely that the stricter cap will in time impact mostly poor, African-American municipalities in North County.

“There are some positives. There are some progressive ideas [in Senate Bill 5], and there are some things that were not well thought out. The [discrepancy in the cap] is very detrimental to poor cities, which tend to be African-American cities,” Bell said. He also made the point that a smaller cap will not eradicate all problems, and will not by itself ensure quality policing. “When you look at a city that’s small, that doesn’t have a lot of revenue but has a lot of crime, you’re going to have more stops. You can talk to residents in areas like that and generally they want that protection. They want to feel secure.”

If a municipality has been generating 40 percent to 60 percent of its general operating revenue through court fines and fees, disincorporation becomes a likely consequence under Senate Bill 5’s 12.5 percent cap, while wealthy municipalities remain intact and unaffected.

“I’m not saying it came from a nefarious place. I’m saying it’s the result,” Bell continues. “Most people aren’t poor in our country because of court systems. We’re talking socioeconomic issues that have little to do with courts. We can’t stop there. I would like to see SB5 go deeper.”

While Gordon supports lowering the cap from 30 percent to 12.5 percent across the state, he also agrees it does not address the root problem. “I think [SB5] is a scramble by the state to correct the national embarrassment of police running around as tax collectors. It’s not specifically targeting [North County]. That’s not the motive behind it. It’ll have that effect because it’s closing off their one source of viable revenue,” Gordon said.

Several mayors in support of the lawsuit, including Green and Viola Murphy of Cool Valley, have also objected that they were not consulted by Schmitt about the bill. Bell also supports this point. “People who are invested in those communities should have a say in what happens to them. There are a lot of people who should have had some input that didn’t.” Ironically, however, protecting a fragmented system in which each municipality is responsible for generating its own revenues ensures not all residents have a say in what might happen to them.

Clarissa Hayward, associate professor of political scientist at Washington University in St. Louis, elaborates on this point. “The massively fragmented system of municipal government that we have in St. Louis metro area necessarily creates winners and losers,” she said. The very nature of metropolitan fragmentation trumps the democratic ideal that those affected should have a say. Hayward points to the trajectory of St. Louis’s public transit system, Metrolink, for an example. Metrolink travels east to west, does not stop at the wealthy municipality of Ladue, and heads abruptly south.

“Ladue had veto power over whether or not it extended,” Hayward said. “We have all these local governments, and all of these locally elected political officials get to make decisions that affect people all over the metro area.” This system, which the mayors of North County continue to fight for, ensures wealthy white municipalities continue to cash in on a system that creates isolated areas of wealth, and lack thereof, which affects the region in negative ways. Political power extends and is intensified only into areas and municipalities where political power already exists. As the old saying goes, the rich get richer and the poor get children.

Municipal zoning can compound these divisions, sometimes achieving the effects of segregation. While Ladue is not the only municipality with strict zoning laws, as of 2015, its Zoning Ordinance forbids “multiple-family dwellings and condominiums” to be built within its city limits, and allows only single-family units on large lots for residential use. As a result, poorer residents of the county are filtered out.

“If, for example, you have a wealthy municipality that engages in exclusionary zoning, it means all kinds of people who might like to live there can’t,” says Hayward. “If you have a municipality like Ladue that says, ‘No, Metrolink can’t travel through our municipality,’ then people who need to get from where they can afford to live to their jobs can’t travel through there.”

The current system of municipalities in St. Louis County was originally built through redlining and restrictive covenants, common tools used to achieve institutionalized racism. The concept of zoning has also long been tied to achieving racial segregation, without explicitly acknowledging it, to avoid issues of legality. According to a report by Richard Rothstein of the Economic Policy Institute, after racially-motivated zoning ordinances were deemed unconstitutional by the Supreme Court in 1917, St. Louis and other cities developed zoning strategies to maintain racial and socioeconomic divides.

Restrictive covenants based on race, which disallowed black residents from purchasing deeds on homes in white communities, were outlawed by the landmark Supreme Court case Shelley v. Kraemer in 1948, which began in St. Louis on Labadie Avenue. However, since there has not been any substantial legislation or restructuring in order to amend the suburban configuration it left behind, the skeleton of racist planning policies is still with us. It is no secret that St. Louis County is still structured in such a way that causes citizens to be sorted largely according to race and socioeconomic background. Nor is it an accident.

“Ferguson didn’t come to this fiscal avenue lightly,” said Colin Gordon, professor of American public policy at the University of Iowa. “It was because every other avenue was closed to them.”

Areas of accumulated wealth and poverty continue to cause problems well into the 21st century, and the provisions laid out in Senate Bill 5 do not address this imbalance. The current municipal system of 90 municipalities (along with 10 unincorporated areas) in St. Louis County punishes those that cannot generate operating revenue in ways that are economically viable, such as property or sales tax. According to financial statements from 2014, the wealthy, predominantly white municipalities of Ladue, Clayton, Chesterfield, Brentwood, and Webster Groves generated 3.89 percent, 3.09 percent, 6.34 percent, 4 percent, and 6.76 percent, respectively, of their annual municipal budgets through court fines and fees.

As a result, towns hardest hit by Senate Bill 5 will be those whose residents do not have wealth accumulated in real-estate or other assets. “So Ladue is swimming in property tax, and Ferguson can’t keep the lights on,” Gordon said. “The North County mayors are digging their heels because, however fair and sensible the cap is, the fact is that this is where they get their money and they don’t see any other options. It’s the same reason Ferguson didn’t immediately agree with the Department of Justice settlement. I think the only way Senate Bill 5 and the Department of Justice negotiation would work is if there was some commitment to share revenues from a state or local level.”

Mayor Knowles of Ferguson has been constantly faced with how to handle the fact that his municipality will not provide the right to municipal services and maintenance to residents if it costs too much. It is the perfect example of Scylla and Charybdis. Or a perfect example of how structural poverty perpetuates itself. Good policing costs money. Wealthier municipalities have resources and police forces far superior to their less affluent counterparts, which tend to have more crime and need better policing.

“[Senate Bill 5] is a way of saying, ‘Well, we’ve done something.’ But it doesn’t fix the problem,” Hayward said. “Ferguson, like a lot of these municipalities in North County, is on the receiving end of an enormous structural and economic problem. And the way that Ferguson went about trying to address that problem was horrible. It was exploitative of poor people, and it was horrible in all the ways that the Department of Justice report makes clear. So for that reason, preventing them from continuing to do that makes a certain amount of sense, but it doesn’t address the underlying problem. Which is that Ferguson needs to get the money that it needs to run.”

For Ferguson and other municipalities to succeed along with the rest of the St. Louis County, there must be change that levels the playing field. “I think you can throw really ethical people into the same situation, and something’s gotta give,” says Hayward. “It’s not like there’s a magical way to come up with money. It’s not to excuse them. But if you have a terrible situation, you could also have people making really bad decisions about how to navigate that terrible situation. And then you could stop them from making those terrible decisions, but you still have the situation.”

Mechanisms for wealth-redistribution have already been implemented with success in other cities. One example is Maryland’s Montgomery County, where a Moderately Priced Dwelling Unit Ordinance requires that affordable housing be integrated throughout developments of 50 or more units. This would result in Section 8 housing interspersed throughout a municipal or county region, rather than concentrated and isolated into small pockets.

Implemented in Missouri, lawmakers could develop a state-level policy mandating that any municipality with the authority to zone or alter taxes to also foster affordable housing. Neither Clayton nor Ladue—two of St. Louis County’s wealthiest municipalities—offer Section 8 or other affordable housing.

Minneapolis-St. Paul has a tax-sharing arrangement in which each area chips in a percentage-based portion of their taxes to a regional reserve, which is then re-distributed throughout the region. Gordon notes that the St. Louis County sewer system shows an example of what shared resources could look like. “No one is going to pretend it would be most efficient to have the sewer lines start and stop at every municipality. We would need to extend that reasoning to other things. Schools, for example.” He also notes that there is nothing inherently wrong with having lots of municipalities. What often matters is also the rules they play by. “If they have to share their tax revenues, their schools share the same money, there are fancy buildings next to apartment buildings, then it doesn’t really matter.” St. Louis County already implements a similar strategy for sales tax, with Pool Cities and Point of Sale cities, but the results have not been dramatic enough to address the problem.

In late March 2016, Jefferson City Judge Jon Beetem struck down Senate Bill 5’s 12.5 percent cap in St. Louis County and 20 percent for the rest of the state. Judge Beetem also deemed other requirements of the bill, such as written use-of-force policies for St. Louis County police departments, unconstitutional because they were unfunded.

At Schmitt’s urging, Missouri Attorney General Chris Koster will appeal the ruling. In what seems to have become a secondary concern, the negative effects of maintaining concentrated pockets of municipal wealth based on property tax revenue, amid others that rely on fines, citations and other fees to stay afloat, carry on in the midst of what looks to be a protracted battle.

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