Ferguson tax hike fails, raising concerns about reform costs

FERGUSON, Mo. (AP) - Ferguson voters on Tuesday approved one tax increase meant to shore up its finances but rejected another, creating uncertainty about whether the Missouri town where 18-year-old Michael Brown died in a police shooting will be able to afford changes required in a settlement with the U.S. Department of Justice.

Voters in the St. Louis suburb approved a half-cent sales tax increase for economic development, according to complete, unofficial results. The tax passed with 69 percent of the vote.

But a separate property tax increase failed, though it received 57 percent approval. That measure required two-thirds majority.

The tax increases were meant to help ease Ferguson's growing financial burden. The city has a $2.9 million budget deficit, and leaders have said changes mandated in the Justice Department agreement will cost an estimated $2.3 million over three years.

Ferguson is already planning across-the-board pay cuts of 3 percent for all employees. Now, Mayor James Knowles III said, the City Council will have to re-evaluate the financial situation and the impact failure of the property tax measure will have on the Justice Department consent decree.

"There are cuts on the horizon," Knowles said in an interview with The Associated Press after the results were in. "We're not sure what they are exactly. We'll have to weigh how that measures up to our commitments as part of the consent decree."

Knowles said one option would be to put the property tax measure on the ballot again in August.

"The council as a whole will have to make those decisions," he said. "I don't think it's prudent right now to say this puts anything in jeopardy, but certainly we still have a significant shortfall."

As part of the DOJ agreement, Ferguson must hire a monitor; implement diversity training for police; purchase software and hire staff to analyze records on arrests, use of force and other police matters; and outfit all officers and jail workers with body cameras.

Brown, who was black and unarmed, was shot during a street confrontation with white Ferguson officer Darren Wilson on Aug. 9, 2014. A grand jury and the Justice Department cleared Wilson in the shooting that was a catalyst in the national Black Lives Matter movement, and he resigned from the police force in November 2014.

The shooting also led to a Justice Department investigation of Ferguson police and court practices. A critical report in March 2015 prompted the resignations of the city manager, police chief and municipal judge.

The City Council last month agreed to the settlement after first rejecting it a month earlier. The Justice Department filed suit a day after the rejection, but dropped the suit after the council reconsidered.

Much of Ferguson's deficit is due to fallout from the shooting, such as sales tax declines, skyrocketing legal costs and the loss of hundreds of thousands of dollars in court fines and fees from reforms already in place.

Knowles said last week that failure of both tax measures would force the city to lay off around a dozen members of the police force, six firefighters, and close one of the two fire stations. It is uncertain if those cuts will be necessary after the split vote.

If police jobs are eliminated, Knowles said it would be hard to imagine that the city could implement the type of community policing required by the Justice Department settlement, and pay for the other changes.

In a letter to Ferguson leaders last month, Justice Department Civil Rights Division leader Vanita Gupta said "it is not uncommon for financial or staffing challenges to arise" when implementing Justice Department agreements. But she wrote that the Justice Department is "committed to working with jurisdictions to overcome those challenges."