Council crafts compromise on business tax bill

Derek Lee: Goal was to get colleague to soften his stance, but that didn't happen.

Craig Hosmer: Substitute bill allowing enforcement of tax a reasonable compromise.

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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 on Sept. 8 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 and is now part of the city’s code of ordinances.

At council’s previous meeting on Aug. 25, 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.

Schrag’s bill to suspend enforcement was to have been voted on Sept. 8, but instead, 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.”

Members debate
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.

He questioned Hosmer’s contention, repeated on several occasions, that his bills go to committee to die. That’s not true, Lee said.

“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,” Lee said. “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 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 now sits in committee for a year, he doesn’t care, because the law is still being enforced. His problem, he said, was with the idea that the previously passed bill would have been suspended during council committee review even though it was passed by a council vote.

“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 pressed for an acknowledgment from Hosmer that his words and actions regarding the committee process 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 said business owners should be given instructions on the steps they must follow to pay their tax and get their occupational license.

Wrong message
In an interview after the meeting, Lee said his goal in speaking up was to get Hosmer to admit his statement that things get sent to committee to die is simply untrue.

“We say these things, and what message does that send to people?” Lee said. “It sends the message that council members are against each other, plotting to kill bills that are good bills for political reasons. That’s the message I believe he wanted out in the community, and it wasn’t a true message.”

Lee said he was surprised by the substitute bill, which he learned about shortly before the meeting.

“To me, it came out of nowhere,” he said.

Lee said the council is diverse and often members disagree, but they work very well together.

“That doesn’t get communicated in the press,” he said. “Things like this, which in my opinion are very small things, get blown up in a way that we lose track of the fact that most things go very smoothly. I wish we had more of that message, because that’s what I see.”

Lee said he likes Hosmer, and they have a cordial relationship both in and out of meetings.

“On this issue, I wanted to see him soften a little bit,” he said. “I didn’t get that, but that’s OK.”