On Nov. 5, 2024, the City of Springfield, on the recommendation of the Citizens Commission on Community Investment, will submit to qualified voters the following question:
Shall the City of Springfield, Missouri, enact a city sales tax at the rate of three-quarters of one percent (3/4-cent), one-quarter for the purpose of funding public safety initiatives, to include funding the remaining obligation of the Springfield Police Officers’ and Firefighters’ Pension and increasing police officer and firefighter pay, with said one-quarter to not sunset, and two-quarters for the purpose of funding projects consistent with the City’s comprehensive plan, to include capital improvements, community and neighborhood initiatives, and park projects, with said two-quarters to sunset after a period of ten years?
(Note: there will be no increase in the current sales tax level if the 3/4-cent sales tax is approved.
Overview
Springfield’s 3/4-cent sales tax is set to expire on March 31, 2025. The tax has been in place for 15 years and generates about $45 million annually.
The 3/4-cent sales tax is currently dedicated solely to funding the City’s Police and Fire Pension Fund. It was first approved by voters in 2009 and has been renewed two times for five-year terms in 2014 and 2019. An earlier community task force deemed the sales tax necessary at a time when the pension system was underfunded by about $200 million.
Revenues from the tax have shrunk that funding gap considerably. As of July 30, 2023, the system held 90.7% of the assets needed to pay accumulated benefits, according to the most recent actuarial valuation report. In addition to the revenue from the sales tax, the city contributes about $5.4 million in general revenue annually to the retirement system. The pension plan funded by the sales tax was closed to new hires in 2006. Police officers and firefighters are now enrolled in the state LAGERS retirement plan.
Another five-year renewal of the tax would likely produce far more revenue than is necessary to meet the goal of fully funding the Police-Fire Pension. The City is still obligated, and is committed to, meeting the funding needs of paying out promised benefits, regardless of the existence or not of the sales tax. That contribution is estimated to be $4 million to $6 million a year for roughly the next 10 years.
In addition, if the tax is not replaced, the City’s use tax, which matches the overall sales tax rate, would be reduced. The anticipated impact to the City would be about $5.2 million annually: a $2.6 million loss to the general fund and a $2.6 million loss to the transportation fund.
Mayor Ken McClure appointed a 30-member Citizens’ Commission on Community Investment (CCCI), representing a variety of diverse backgrounds, sectors and opinions. In mid-2024, the CCCI recommended a replacement tax with pension system contributions, public safety and projects related to the Forward SGF Comprehensive Plan at the forefront.
SPRING Forward
is the framework identified by the CCCI in their recommendation:
Safety
Public Initiatives
Recreation
Investing in the
Next
Generation
To accomplish this framework, the CCCI recommended allocating the current 3/4 cent amount with 1/4 cent to public safety and the remaining 1/2 cent to comprehensive plan initiatives.
The 1/4 cent would produce approximately $15 million a year initially which would cover the required remaining contributions to the Police-Fire Pension system and increase police and fire pay to a level competitive with peer cities. This portion of the tax would have no sunset as it covers police and fire personnel expenses which are an ongoing cost.
The 1/2 cent would produce approximately $30 million a year initially which would allow for investments in neighborhood and community initiatives consistent with the comprehensive plan. This portion would have a 10-year sunset and strong accountability measures recommended by the CCCI including defined project considerations and an ongoing citizens’ advisory committee to provide oversight and project recommendations.
Should voters approve the new 3/4-cent sales tax to replace the expiring Police-Fire Pension Sales Tax, Springfield’s overall sales tax rate will not increase. Shoppers would continue to pay 3/4 cent for every $1 spent.
While the current tax has been successful in addressing past issues with the Police-Fire Pension system it has not allowed for additional needed investments in the future of our community. This proposal would allow for improvements in public safety, quality of place, and economic growth with no increase to the current tax level.
City Council voted unanimously on Aug. 5 to adopt the recommendation of the CCCI and place the replacement sales tax on the November 2024 ballot. If approved, the new tax could take effect on April 1, 2025.
Breakdown
The Citizens’ Commission recommended allocating the current 3/4-cent amount with 1/4 cent to public safety and the remaining 1/2 cent to Forward SGF Comprehensive Plan initiatives.
1/4: No Sunset
The 1/4 cent would produce approximately $15 million a year initially, which would cover the required remaining contributions to the Police-Fire Pension system and increase police and fire pay to a level competitive with peer cities. This portion of the tax would have no sunset as it covers police and fire personnel expenses which are an ongoing cost.
1/2: 10-Year Sunset
The 1/2 cent would produce approximately $30 million a year initially, which would allow for investments in neighborhood and community initiatives consistent with the Forward SGF Comprehensive Plan. This portion would have a 10-year sunset and strong accountability measures recommended by the Citizens’ Commission on Community Investment including defined project considerations and an ongoing citizens’ advisory committee to provide project recommendations.
Should voters approve the new 3/4-cent sales tax to replace the expiring Police-Fire Pension Sales Tax, Springfield’s overall sales tax rate will not increase. Shoppers would continue to pay 3/4-cent for every $1 spent.
Project Examples
While specific improvement projects would be selected based upon public feedback and recommendations by a citizens’ advisory committee, examples of projects identified by Forward SGF include:
- Infrastructure investments intended to promote growth and improve Quality of Place for residents
- Restore SGF program intended to revitalize neighborhoods and promote home ownership
- Springfield’s network of greenway trails (UnGap the Map)Park projects intended to improve outdoor recreation opportunities for residents and attract visitors
- Phased implementation of the Lake Springfield Master Plan improvements
- Completing the Springfield Art Museum Master Plan
- Corridor improvements to highly trafficked gateway routes.
As always, the City will follow the Completed as Promised model for identifying and prioritizing proposed funded projects. This will include public engagement and community awareness about proposed projects every four to five years, in conjunction with an ongoing citizens’ advisory committee to provide project recommendations based on public feedback.