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City goes to ballot for sales taxes

Springfield seeks renewals for transportation and police-fire pension issues

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The Nov. 5 election ballot in Springfield is short, but officials say the two issues on it could have long-term effects to maintain the current level of some city services.

Both issues are renewal proposals with no increase to the city’s current sales tax rate of 8.1%. Springfield residents are being asked to decide if the city’s one-eighth-cent transportation sales tax should continue and to determine the fate of the city’s existing three-quarter-cent police-fire pension sales tax.

Transportation sales tax
City officials are seeking a 20-year sunset for the transportation sales tax, first approved by voters in 1996. It was renewed most recently in 2016, with nearly 86% approval, and has generated $102 million since inception.

If approved, it would be the second time this year voters extended a city sales tax sunset to 20 years. In April, voters approved the renewal of a quarter-cent capital improvement sales tax, which recently generated around $10 million annually, and previously had a three-year sunset.

Identical to the capital improvement tax issue, the transportation sales tax’s proposed sunset was made at the request of City Council, said Martin Gugel, associate director of Springfield Public Works. City staff members are seeking longer planning windows for transportation jobs.

“In the shorter cycle, we have to split up the project phases,” he said, referring to design and construction. “We can’t fully commit to completing all phases of the project during one cycle.”

If approved, Gugel said the tax is estimated to generate roughly $22 million over the next four years.

Previous projects funded by the tax include intersection improvements at Glenstone Avenue and Primrose Street, and Battlefield Road and the U.S. Highway 65 interchange.

Under the current proposal, six transportation projects are on tap for the first four years of the cycle. Gugel said a combination of city department and public input, prior public or partner agency commitments, and geographic distribution all factor into the priority of the projects. Part of the public input stemmed from 1,686 survey responses by citizens this summer. Gugel said he was pleased with the response, noting the number might be the threshold city officials use for future surveys.

The public was asked to identify their top five projects, and Gugel said those selections were balanced with engineering variables, such as crash rates, infrastructure condition and traffic capacity.

The proposed projects carry a price tag of $10 million, led by $4.5 million in intersection improvements at Campbell Avenue and Walnut Lawn Street and $2.8 million for new sidewalks and intersections along Central Street. The remaining $12 million expected is earmarked for other improvements, ranging from street resurfacing to bridge repair and replacement.

“There’s not really a priority of what comes out of the gate first,” Gugel said of the proposed projects.

Police-fire pension sales tax
The election ballot’s second issue, a police-fire pension sales tax, initially was approved by voters in 2009 and renewed in 2014.

A second renewal likely would allow the city’s plan to reach 100% funded status in 2023, said Janell Manley, administrative director for the Springfield Police Officers’ & Firefighters’ Retirement System Board of Trustees. The full funding is if all assumptions are met, she added, which includes the fund’s current 6.5% investment return.

The sales tax currently generates more than $32 million annually, with city officials anticipating around $33 million per year for the next five years. If approved, the tax would continue until 2024 or becomes 100% funded, whichever occurs first.

Springfield Fire Chief David Pennington said the pension plan started in 1946 to provide for disabled and retired city police officers and firefighters. By 2008, the plan’s funded ratio dropped to 35.5% and was $200 million underfunded, leading the city to take the tax issue to the voters.

In early 2009, residents narrowly voted down a 1-cent pension tax. A task force was formed, resulting in recommendation of a three-quarter-cent proposal appearing before voters later that year, according to Springfield Business Journal archives.

“When this tax was approved by council and taken to voters, it was determined to be closed to new members,” Pennington said of the pension fund, adding the tax is the only new revenue contributing to the plan.

As of June 30, the total assets of the fund’s plan were at $471 million, with a funded ratio of 80%, according to city officials. Reaching 100% is needed to pay long-term liabilities, Pennington said.

Without the pension sales tax revenue, he said the city’s general revenue budget would take a $9 million hit.

“We’d have to make some pretty hard decisions in the budget to balance it out,” Pennington said.

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