Missouri Sen. Kurt Schaefer wants to get rid of the earnings tax; his employer, Lathrop & Gage, doesn’t quite agree

Kurt Schaefer, a Republican state senator from Columbia, wants to do away with the earnings tax in Kansas City and St. Louis.

First it was because of his annoyance caused by both cities trying to increase minimum wage beyond the state level. Then he transformed his argument into a question over whether the earnings tax is constitutional. 

Schaefer introduced a bill before the Missouri General Assembly session started that would eliminate the tax all at once in 2017. For Kansas City’s budget, which relies heavily on the $230 million the tax collects each year from city residents and employees, Schaefer’s bill amounted to a crisis scenario. It would be bad enough, city officials said, if voters opted not to renew the tax and phase it out over 10 years when it came up for a vote April 5. Stripping it away in one fell swoop would shove Kansas City’s budget off the Broadway Bridge into the murkiest depths of the Missouri River.

Eventually, Schaefer’s bill got neutered, and the threat to Kansas City, at least from a legislative front, passed.

When Schaefer’s not roaming the halls of the state capitol in Jefferson City, he’s working as a partner for law firm Lathrop & Gage’s Columbia office. Lathrop & Gage is one of Kansas City’s oldest corporate law firms. Its offices are sprawled out all over the country, but it’s safe to say the firm is based in Kansas City.

Lathrop & Gage doesn’t see the earnings tax question the same way Schaefer does. The firm late last week cut a $10,000 check to Progress KC, the campaign committee supporting the campaign to renew the earnings tax. Presumably the partners and associates with offices in its Crown Center-area office building would like to drive to work on roads that are somewhat smooth and patrolled by police officers.

Progress KC is doing well, financially. In its quarterly report filed with the Missouri Ethics Commission, it listed $400,000 in contributions for this election cycle, including $323,750 raised in the last three months alone.

Since then, the cash has continued to flow in. Not included in that January report is $395,000 worth of high-dollar contributions to Progress KC. Those include:

• Polsinelli, law firm – $10,000
• Kansas City Southern, railroad company – $25,000
• Husch Blackwell, law firm – $20,000
• Hallmark, greeting card company – $25,000
• Tom McDonnell, retired DST Systems CEO – $15,000
• Shook Hardy & Bacon, law firm – $25,000
• JE Dunn, construction company – $25,000
• Heavy Constructors Association, trade organization – $25,000
• Dickinson Financial Corporation, bank holding company – $10,000
• Lathrop & Gage, law firm – $10,000
• Mariner Holdings, financial services – $25,000
• HNTB, architecture and engineering firm – $15,000
• Lockton Companies, insurance firm – $20,000
• Stinson Leonard Street, law firm – $7,500
• Kansas City Power & Light, electric utility – $25,000
• Burns & McDonnell, engineering firm – $50,000
• John Sherman, former CEO of Inergy – $25,000
• William Gautreaux, president of natural resources company Crestwood Midstream Partners – $10,000
• Pinnacle Entertainment, Las Vegas-based owner of Ameristar Casino – $7,500
• Hunt Midwest, real estate firm – $10,000
• Kansas City Chiefs – $10,000

The local companies and executives are building a war chest, perhaps in anticipation of a high-spending opposition campaign. On February 18, an opposition committee called Vote No On the E-Tax was formally established, too soon to have filed any financial reports yet. But when it does, it’ll be interesting to see who donates to the opposition campaign. There’s one guy who likes to write checks for these kinds of things, checks in amounts much larger than any of the ones you see above.