Tax laws get more complicated, political

But what those taxes are used for, and where they come from, is changing.

The change of political control from Democrats to Republicans in Jefferson City this year has meant a reluctance to raise income taxes, resulting in an increased dependence on sales tax dollars.

Like the state, Springfield Finance Director Mary Mannix-Decker has said that the city is too reliant on sales tax dollars.

“I think in a perfect world we’d all like to have a more diversified revenue base, but that’s the more perfect world,” she told SBJ in January. “It’s hard to get there. I think it would be to Springfield’s advantage to diversify our revenue sources, and at the same time, I think it’ll be difficult for us to achieve that.”

Sales tax in Springfield is 6.6 percent, up one-eighth percent from where it sat from 1997 through early 2002.

As the population of Springfield has grown, so has the sales tax revenue base (see chart), allowing for funding of several major projects, including Jordan Valley Park and the two Partnership Industrial Centers, as well as repairs and improvements to city roads and facilities.

The growth, however, has not been limited to Springfield proper.

The city has been getting crunched from both directions in recent years; dependence on sales tax grows while Springfield’s sales tax base is affected by the retail growth in outlying communities such as Nixa and Ozark.

Ozark’s sale tax revenues increased more than 20 percent from 2003 to 2004, and Nixa’s sales tax revenues were up almost 4 percent in that time.

Mannix-Decker said the growth in the surrounding towns has had an impact.

“I think Springfield is still the major economic center of the region, but there has been some growth in the outlying areas, mainly in the groceries and the Wal-Marts that are coming up in Republic and Ozark and Nixa,” she said. “People aren’t forced to come to Springfield as often as before for things they need.”

Sales tax is not the only source of tax revenue for the city.

Springfield property tax currently sits at about $4.50 per $100 of assessed valuation. Almost three-quarters of that money goes to fund Springfield R-XII Public Schools.

The total valuation of property in the Springfield city limits was $ 1.76 billion in 2005, according to the Greene County Assessor’s Office, up 65 percent from 1996, the last year for which data was readily available.

Complicated codes

On the state and federal levels, the importance of changes to the tax code is not so much in the taxes themselves but in the average taxpayer’s inability to understand the intricacies of state and federal tax law.

“The tax rules have become much more complex, no question,” said Gary Garwitz, partner at BKD LLP in Springfield. “We see a new tax bill every other year now, and that started in 1981 with the Reagan tax reduction. Sure, the rates in 1980 were a lot higher than they are today, but it’s just a lot more complicated now.”

Garwitz, who has been with BKD since 1981, gave the example of the alternative minimum tax, a tax created essentially to ensure that the very rich would not be able to take so many deductions that they could go tax-free.

“It’s something that’s very complicated and was never meant to pick up a lot of people, but now it applies to more and more taxpayers,” Garwitz said. “It’s one of the things that happens when you make things so complex; when you change one thing it may affect something somewhere else.”

And if the federal taxes aren’t confusing enough, there’s the state tax system, which presents an entirely different set of issues.

“As Congress has changed federal tax laws, the states have had to try to react,” Garwitz said. “Right now there’s quite a disparity among the states about how many have stayed on top of it and how many of them, like Missouri, are kind of behind.”