Springfield Wants to Be Darn Sure Its Sales Tax Rate Doesn’t Ever Go Down

About fifteen years ago, Springfield voters approved a new sales tax to address its substantially underfunded police and fire pension system. (Show-Me Institute analysts wrote a lot about this issue.)

Fast forward to 2024, and that sales tax is up for renewal. However, because the pension system is much better funded now, city leaders don’t want to renew the 3/4 cent sales tax as it is. That would generate more money for the pension than it needs.

So Springfield leaders put a commission together to come up with ways to alter the tax revenue distributions before it goes to voters in November.

A Kinsley Gaffe is when politicians accidentally say something truthful they didn’t mean to. (This is the second such gaffe worth highlighting in Missouri in the past few months.) In this case, the statement is filtered through the media, I admit, but the reporter must have got the gist of it from local leaders:

The tax will sunset at the end of March 2025, hence why the city has been adamant to put a replacement tax on the November ballot to avoid a lapse in the sales tax that local shoppers would feel. (emphasis added)

A lapse that voters would feel? Meaning a tax reduction Springfield residents may actually like? Dear Lord, we certainly can’t have that. If they like the reductions, they may not vote to increase the tax when we want them to, Oh, the humanity.

The new proposal is for voters to keep a 1/4 cent sales tax for public safety—which can still include pension costs—and change the rest of the tax (1/2 cent) to fund “comprehensive plan capital and parks projects and neighborhood and community initiatives.” (More on that issue later.)

Springfield still has a defined-benefit pension plan for its public safety employees. It should have switched to a defined-contribution plan years ago. At least the city, according to the article, closed the old plan to new members several years ago and, presumably, replaced it with a less generous plan for new hires. That’s progress, but a defined-contribution plan for Springfield employees would have been better for the taxpayers and the city. Throwing tax dollars at the pension fund appears to have worked for now, but further change is needed. As former Show-Me Institute Chief Economist Joe Haslag wrote about the Springfield pension situation years ago: “The existing approach got Springfield into this situation. Some reform is needed to avoid the same problems in the future.”