Mayor to task citizen commission with 3/4-cent sales tax discussion
Talk of replacing the city’s 3/4-cent police-fire pension sales tax with a new tax this year or next has been ongoing at Springfield City Council, though without much consensus. To ensure thecommunity has a voice in the conversation and the process moves along efficiently, the city is creating a new Citizens Commission on Community Investment to research needs and potential uses and craft a recommendation for council.
Since 2009, the 3/4-cent sales tax has directed taxpayer-approved funding to the city’s Police and Fire Pension Fund. It was renewed twice, for additional five-year terms, in 2014 and 2019. The tax is set to expire March 31, 2025.
The tax generates about $45 million annually. According to the most recent actuarial report, as of July 30 the pension system was 90.7% funded, meaning another five-year renewal of the full tax is likely unnecessary. With the tax soon to expire upcoming, city leaders have described a possible replacement as an opportunity to create an additional revenue stream without increasing the overall tax rate for those who shop in the city. The total sales tax within Springfield is 8.1%. If the current 3/4-cent sales tax is replaced, the total sales tax would not change.
Turning to citizens for recommendations
Springfield Mayor Ken McClure announced Wednesday to local media that a resolution creating the 25-people commission will be in front of council at its next meeting, April 8. While the names of the individuals are still being finalized, he said the commission will have representatives from a variety of perspectives and sectors such as business, housing and others.
“There will be differing views as there should be,” McClure said. “Talking through all this, there’s going to be a lot of advocacy, and I’m perfectly fine with that. Let’s hear what people have to say and how best to use this. This is a great opportunity for our community.”
The names of people have been gathered through council members’ feedback and will be available when the agenda for the meeting is published at 5 p.m. on Wednesday, April 3. McClure said the group will consist of 25 members in order to garner enough broad-based input, yet remain functional.
The commission will be charged with discussing whether to bring forth another sales tax, and if so, what amount should it be and what the tax specifically should fund. This last point is where council has had trouble reaching a consensus. Initially, City Manager Jason Gage proposed the tax fund a plethora of programs, from city infrastructure and capital projects to parks and neighborhoods. At the most recent discussion in January, a general consensus was reached for the tax to fund three broad areas — the remaining pension fund obligations, public safety and the Forward SGF Comprehensive Plan. Under the Forward SGF prong of funding, spending on projects related to quality of place and neighborhood initiatives would be covered. The commission will be tasked with fleshing out these three overarching ideas.
McClure said the obligation to the pension fund will continue as long as there are participants and descendants of participants living, regardless of whether a revamped tax is secured or not. This obligation would fall somewhere between $3.5 and $5 million annually.
“That’s a major hit out of our budget,” he said if the recommendation out of the commission were to not put a sales tax on the ballot.
It will be up to the commission to decide to solicit any further community feedback, though McClure said he would expect that to be a part of their process. The city already has completed a series of public input surveys which the Public Information and Civic Engagement Office has contributed to the sales tax discussion.
The commission will be expected to give a recommendation to council by the end of June, giving council roughly seven weeks to consider the recommendation and draft any ballot language, if a tax is recommended to go to voters, ahead of the November election deadline. McClure said the commission will serve the three months in regard to only this issue and disband following their recommendation.
He said the goal is to have a proposal ready for the November ballot deadline so that if a revamped tax is recommended, there would not be a gap between the current tax expiring and a replacement one beginning which would be the case if the question was put on the April 2025 ballot.
Marta Mieze covers local government at the News-Leader. Have feedback, tips or story ideas? Contact her at mmieze@news-leader.com.