Public safety, city projects would be funded by replacement tax

The city of Springfield is asking voters to approve a three-quarter-cent sales tax in the Nov. 5 general election.

The new tax would replace a three-quarter-cent tax that will sunset on March 31, 2025. First approved in 2009 and renewed in 2014 and 2019, that tax was used exclusively to pay into the city’s Police and Fire Pension Fund.

A portion of the new tax, if approved, would continue to pay into the Police and Fire Pension Fund. Plans call for one-quarter cent to be used for public safety initiatives to include paying the remaining obligation on the pension fund, as well as increasing police officer and firefighter pay.

The remaining two-quarters (or one-half) of a cent would go toward projects that are consistent with the city’s Forward SGF 20-year comprehensive plan, including capital improvements, community and neighborhood initiatives, and park projects.

The ballot measure calls for the portion of the tax – the quarter-cent that funds public safety – to be permanent. The half cent that funds other city projects would be assessed for 10 years.

Tony Kelley, administrative director and consultant for the city’s police and fire retirement system, said the pension fund is 94.8% funded – marking quite a success story from when the tax was first passed by 55% of voters in 2009. Then, the fund was at its low point, $200 million short with only 35.5% funded.

The tax grew in approval in its next two appearances on the ballot, with 76% voter support in 2014 and 78% in 2019.

“We’ve made great strides with the pension sales tax,” Kelley said. “It really has gotten us to where we needed it to be.”

The city transitioned incoming police and fire personnel to a different benefits plan, the state-run Missouri Local Government Employees Retirement System, beginning in 2006. Kelley said workers who were already on the city’s benefits plan continued with it, and some current employees are still paying into it.

Kelley said at the end of the last fiscal year, on June 30, there were about 80 actively working participants in the old police and fire retirement system, with about 780 members overall.

“If the market holds, based on the tax revenue that’s coming in and expected investment returns, by next year’s valuation, we would have approximately a $3 million unfunded liability,” Kelley said. “Right now, it’s sitting at about $37 million.”

Added Kelley, “If everything holds as it should, then we would be back on track for being nearly fully funded next year.”

He added that the goal for returns on the pension’s investment portfolio has been and will remain 6%.

The existing sales tax raises approximately $45 million in annual funding, according to city officials.

Commission recommendation
A 30-member ad hoc committee, the Citizens’ Commission on Community Investment, was formed in March by Mayor Ken McClure to come up with a recommendation on whether the city should replace the expiring tax.

Tom Prater co-chaired the committee with former Springfield City Council member Phyllis Ferguson.

Prater said it’s important to remember that passage of the new three-quarter-cent tax will not increase the sales tax but rather keep it at the current level. And after 10 years, the tax would be reduced, with the possibility of asking voters to renew the sunsetting half-cent portion.

He also noted that if voters do not fund the remainder of the pension fund by approving the tax, its expenses – $3.5 million-$6 million annually – will have to be paid out of the city’s general fund.

Prater said the commission’s goal was to come up with a plan and a ballot question for voters. Two of its biggest priorities, he said, were to meet its pension obligations and to make the city competitive with its salary and benefits packages for police and fire personnel. The specific level of salary increase has not been determined.

“When the committee started working, we were 52 people short in the Police Department, and hiring was slow in the Fire Department,” he said. He added that the Springfield Police Department competes with the Missouri State Highway Patrol and other agencies to find qualified officers.

The decision to devote one-quarter of a cent to public safety was an easy one, Prater said.

“We wanted to use the remainder of this tax to make Springfield a better place to live,” he said.

Prater said he knows of no organized opposition to the tax proposal, but one critique he has heard is the lack of specificity in the Forward SGF projects funding will address.

Ideally, Prater said, the city would perform a year-long study to determine the best use of the tax money. However, the committee had to work quickly.

“I would love to have modeled this on some of our aspirational cities like Oklahoma City or Chattanooga, [Tennessee] – pick certain projects and come back with new ones in 10 years,” he said. “The short time frame really prevented us from doing that. Those cities take a year to come up with the right kinds of projects after gathering citizen input. We didn’t have that kind of ability.”

So the commission set up what Prater referred to as “guidelines and guardrails” – assurances from council that projects will be completed with no debt obligation, and that matching funds will be sought where possible. Additionally, projects should either generate sales tax or other revenue, generate economic growth or improve quality of life in the Queen City.

The commission also asked council to appoint a smaller group, similar to the ad hoc commission, to provide public input on projects that fit the plan and to monitor progress.

The proposed tax met with some pushback from the city’s housing sector, with members joining tenants’ rights organization Springfield Tenants Unite at a July City Council meeting to request that housing be named as a specific priority for use of the tax proceeds. Council declined the request, voting against a proposal by Councilmember Brandon Jenson not to change ballot language but instead to offer definitional clarity in the accompanying ordinance.

A leader of STUN, Alice Barber, warned council that they needed to show renters, who make up the majority of Springfieldians, how the measure would benefit them.

“We are a city of renters; we are a city of poor and working-class people,” said Barber. “We, the poor and working-class renters in Springfield, will be the ones paying the tax. So, it’s up to you to show us that it’s worth it.”

Commission member support
Another member of the Citizens’ Commission on Community Investment was Megan Buchbinder, marketing director for the Springfield Convention & Visitors Bureau Inc. and chair of the Leadership Council for The Network, the Springfield Area Chamber of Commerce organization for professional people under the age of 40.

Buchbinder said the replacement tax strategically addresses two key pillars of the community’s future: public safety and long-term economic growth.

“Public safety has been a top concern for our community, and this creates a strong funding source to ensure those efforts remain at the forefront,” she said via email.

She added that the tax will channel critical resources into quality-of-life projects that enhance the city’s development and ability to grow.

“Investments in improving infrastructure, upgrading public spaces and developing revenue-generating projects will strengthen our local economy,” Buchbinder said. “By prioritizing these things, we create a city where people not only love to live but also one that attracts new residents and visitors, driving sustained growth.”

Buchbinder said that as a tourism professional, she sees the long-term value of the investment the tax would provide.

“The themes and projects presented in Forward SGF ensure that these improvements wouldn’t just be about immediate growth, but about creating a resilient economic foundation that supports sustained community and business success,” she said.

According to past Springfield Business Journal reporting, Forward SGF sets forth 10 key initiatives for the community. Among these are neighborhood revitalization, a community development code update, a growth and annexation plan, and regional planning and partnerships.

Steve Prange, another commission member and senior vice president and director of business development for engineering and consultancy firm Crawford, Murphy & Tilly Inc., said many of the projects resulting from Forward SGF do not have any dedicated funding source.

“I think this tax could help fund a public commitment to some of these transformative projects and potentially serve as a catalyst for additional funding from either the state, federal or private entities,” he said. “As a business owner, I believe many of these projects will help attract and retain talent, create economic development and improve the quality of life for our city residents and workforce.”

Brendan Griesemer, executive director of housing organization Restore SGF, said the tax would come at a good time.

“Springfield is really at a watershed moment in history,” he said via email. “There is great momentum building with a vibrant downtown and C-Street, new state-of-the-art neighborhood schools, numerous civic projects underway and high-speed fiber optics throughout the city.”

Griesemer said the ballot initiative would provide additional resources to enhance public safety while also providing an added benefit to the business community by enhancing quality-of-life projects to retain and attract workforce talent.

“It will allow us to remain competitive with our peer cities in the region,” he said, citing amenities like parks and trails, improvements in transportation, investments in neighborhoods and homeownership, and improved housing quality.

“All of this without a tax increase,” Griesemer said. “This is really a win-win-win for the city, Springfield citizens and the business community.”