Business tax compromise crafted by mayor, council member 

A sparring Springfield City Council member and mayor came to a behind-the-scenes agreement for a solution to an issue involving taxation of businesses, and that pact culminated in the two jointly crafting and sponsoring a substitute council bill. 

Councilmember Craig Hosmer and Mayor Jeff Schrag last night brought forth a substitute council bill. The substitute bill replaced one – introduced by Schrag Aug. 25 – that would have suspended enforcement of a requirement for a business’ personal property taxes to be paid as a prerequisite for obtaining an occupational license. That requirement was adopted by council June 23. 

At council’s Aug. 25 meeting, Schrag introduced his ordinance that would suspend enforcement of the new rule and send the already-passed policy to the Plans and Policies Committee for review. Typically, council measures are vetted in committees prior to a vote, and the original taxation bill, proposed by Hosmer, was forwarded to Plans and Policies; however, Hosmer decided it had sat idle too long and exercised his right to pull it from committee and put it before council for the June 23 vote.  

The tally at the June 23 meeting was 6-1 with two members – Brandon Jenson and Monica Horton – abstaining because it was not vetted by committee, and with only Derek Lee voting against it.  

Schrag voted at the time with the majority who were in favor of the bill, but he later told Springfield Business Journal he did so by mistake because he was confused over his notes about the bills being voted upon at the June 23 meeting – something he referred to as a rookie error.  

According to past reporting, Schrag said Aug. 20, “I made a mistake, and I want to own it. My intention was to refer it back to committee – to not let Councilmember Hosmer subvert the committee process.” 

Schrag’s bill to suspend enforcement was to have been voted on last night, but instead, he and Hosmer presented the substitute bill that the two had hashed out together as a compromise. 

The substitute bill allows enforcement of the taxation requirement to continue but still sends the applicable section of city code to Plans and Policies for review. The bill also adds something new: the ability of the city manager to grant temporary variances from the requirement that a business pay its personal property taxes if an applicant can show that the tax presents an exceptional hardship. That authority for the city manager would expire June 30, 2026. 

“I believe this is a reasonable compromise,” Hosmer said. “I think that a bill by council in June by a 6-1 vote should be allowed to stay in place pending council committee action.” 

Although council ended up passing the substitute bill unanimously, prior to the vote, Lee criticized Hosmer for the process that led to the new vote. Hosmer had repeatedly declared that when his legislation is sent to committee, it dies there. 

“There were so just so many things that were said, and I’m just curious, why the change?” Lee asked. “You mentioned that you felt like it was going to committee to die, and I hadn’t heard that from anybody, and you really challenged our staff and the mayor and said that there was – more than imply – that this was a nefarious thing that was happening, and I’m just curious how this compromise happened if all these people were against you. After all those things that were said, all you’re saying now is hey, we have a new one and a compromise. Is it all good now?” 

Hosmer said the new bill eliminates the need to suspend the bill. 

“What I was arguing about was why suspend the bill when it’s already been passed so that it can go back to committee?” Hosmer said. “It makes absolutely no sense, and I think that that was bad public policy.” 

Hosmer began to offer a previous argument, that when 60% of businesses fail to pay their tax bill, they short-change parks, schools, people with development disabilities and more. Lee countered, “You said all that before,” but Hosmer insisted he be allowed to finish answering Lee’s initial question. 

Hosmer said the bill had sat in committee for several months, and under council rules, he was allowed to pull it out for a council vote. 

“The mayor and I discussed this issue, and I think this is a compromise,” he said. “We’re not suspending enforcement; we’re just giving the city manager the ability to allow an interim license while someone is getting their property tax situation resolved.” 

Hosmer added that if the matter sits in committee for a year, he doesn’t care, because the law is still being enforced. 

Lee continued his arguments. 

“So, who told you that it was going to committee to die? Those were the things that you publicly said that have been reported on,” he said. “You treated our staff like hostile witnesses when you questioned them, and now it’s just everything’s good.” 

Lee added that perhaps some staff had worked with Hosmer on the matter, and maybe the problem wasn’t as bad as he presented it. 

Hosmer countered that the problem was that the previously passed bill – now part of city code – would have been suspended for council committee review after its passage. 

“That is not how we’ve done things in the past,” he said. “When there’s a requirement that businesses pay their personal property tax in the city of Springfield, why do we treat them differently than we treat other citizens?” 

Lee said all of the ideas he has proposed have been sent to committee. He argued it was false that Hosmer was treated differently than everybody else. 

“Our rules give us the ability to go ahead and pull a bill out of committee if it hasn’t been heard, and that’s the only argument I had,” Hosmer said. 

Lee continued to press for an acknowledgment from Hosmer that his words and actions were inappropriate. 

“So, I just want to be clear – no retraction of any of the things you said? All that stuff is still …?,” Lee said, trailing off. “OK.” 

“Still accurate,” Hosmer said. 

Councilmember Bruce Adib-Yazdi said some questions remain about how the ordinance will be enforced. 

He noted that many businesses may not know about the requirement that they pay their personal property taxes as a prerequisite for obtaining an occupational license since no single office has the responsibility for communicating that message to them. 

“When you go get a business license, the city doesn’t tell you to go to the assessor’s office and go fill out some forms,” Adib-Yazdi said. 

Business owners should be given instructions on the steps they should follow, he added. 

The tax requirement remains in effect following the council vote. 

Chimney Rock plat 
Council had first reading of a bill to accept the dedication of public streets and easements in the proposed Chimney Rock subdivision, generally located at 3040 S. Arcadia Ave. in the Galloway Village neighborhood. 

A newly revised proposed plat for the subdivision lowers the number of single-family residences in the development to 29 from 40. The plat removes a connection between Arcadia Avenue and a road proposed to be constructed, Carson Avenue, and it also includes a turnaround road referred to by staff as a hammerhead. That road design is a modified capital-T shape with one side of the T’s crossbar having a broader curve to allow access for emergency vehicles. 

Some neighborhood residents expressed objections to the road design. 

Sonja Shaw spoke up to say that the new plat is an improvement because of its decreased density, but she is concerned about the new public street, Carson Avenue. She described the hammerhead as a blind curve, and she noted the geography is not suitable to handle the volume the neighborhood would offer. She also expressed concern about line of sight not being sufficient for drivers and called the design a significant safety hazard. 

Tammy Fulk called the hammerhead a violation of a previously approved conditional use permit agreement with the neighborhood. 

The city is involved in a lawsuit over the proposed development, which a resident attempted through the petition process to bring to city residents for a vote. City Clerk Anita Cotter rejected the petition on the grounds that the plat action is administrative in nature and therefore not subject to the referendum process. Dan Clark, the resident who attempted to submit the petition, subsequently sued Cotter, and that case was paused by Judge Joshua Christensen Aug. 25 pending council action on the revised plat. 

The revised plat was unanimously approved by the city’s Planning & Zoning Commission Aug. 14 and is recommended by staff. 

A council vote is scheduled Sept. 22. 

City Utilities rates 
Council heard the first reading of bills to approve the fiscal 2026 budget for City Utilities of Springfield and to schedule an increase in electric rates for residential customers. CU’s 2026 fiscal year starts Oct. 1, the ordinance states. 

Both measures were first introduced to council at a joint meeting of the two bodies on Aug. 14. 

Electric rate increase for residential customers would amount to 3% starting in April 2027 and 3.6% starting in April 2028. The impact on commercial and industrial customers would vary by rate class, usage and load factor. 

The proposed budget for CU anticipates operating revenue of $588 million in 2026, compared with a projected $551 million in 2025 and actual $522 million in 2024. 

Jenson used the opportunity of the budget presentation to query CU leadership about possible changes to the transit system, as CU operates the city’s bus system. 

He asked Board of Public Utilities Chair Louise Knauer if she would agree that CU provides the best possible transit system possible within CU’s resource-constrained environment. 

Replied Knauer, “As you all know, the utility runs the transit system for the city of Springfield at an operating deficit, but I think we provide as strong system as possible that we can within the constraints that we’re under.” 

Jenson said he agrees that CU does the best possible job it can with a well-run system within a city that is geographically large and has a high transit need. 

“I do think that it’s important that we recognize that that can be true while also recognizing that we are not meeting the needs of our community,” he said. 

Council is scheduled to vote on the CU budget and proposed rate increase on Sept. 22.