7 things to know as Springfield looks at replacing 3/4-cent pension sales tax

Over the next few months, Springfield's 3/4-cent sales tax will be a hot topic of discussion. The current tax, which provides funding for city police and firefighter pensions, is set to expire at the end of March 2025 and city leaders have been debating a revamp of the tax to present to voters. With a citizen commission now involved in the discussion, here are some key takeaways.

What's the history of Springfield's 3/4-cent sales tax?

The 3/4-cent sales tax is currently dedicated solely to funding the city's Police and Fire Pension Fund. It was first approved by voters in 2009, after an earlier proposal for a 1-cent sales tax was voted down. It has been renewed two times for 5-year terms in 2014 and 2019. An earlier community task force deemed the sales tax necessary at a time when the pension system was underfunded by about $200 million.

Revenues from the tax have shrunk that gap considerably. As of July 30, 2023, the system held 90.7% of the assets needed to pay accumulated benefits, according to the most recent actuarial valuation report. In addition to the revenue from the sales tax, the city contributes about $5.4 million in general revenue annually to the retirement system. The pension plan funded by the sales tax was closed to new hires in 2006; new police officers and firefighters are enrolled in the state LAGERS retirement plan.

The sales tax brings in roughly $45 million each year. While the goal is to have the system 100% funded, another five-year renewal of the tax would likely produce far more revenue than is necessary to meet that goal. Regardless of the existence of the sales tax, the city is still obligated to meet the funding needs of paying out promised benefits. That contribution is estimated to be $3.5-$6 million a year for roughly ten years.

What has happened so far with the tax?

The idea of replacing the pension sales tax with a different one was first brought up at a Springfield City Council retreat in late September. There, council members could not come to a consensus about presenting the "new" tax to voters, or where that money should go. In his proposal, City Manager Jason Gage suggested the tax revenue could fund a variety of departments and initiatives, from capital improvements and street maintenance to public safety and parks.

At a later meeting in January, a vague consensus began to appear. Council agreed that the question of a 3/4-cent sales tax should be posed to voters. Broad areas of where the funding should go also emerged — with pension system contributions, public safety and projects related to the Forward SGF Comprehensive Plan at the forefront. As far as funding for Forward SGF, spending on projects related to quality of place and neighborhood initiatives would be covered.

Recently, the council established a Citizens’ Commission on Community Investment (CCCI), a 30-member commission tasked with deliberating and bringing forth recommendations regarding a tax to replace the current one.

Should voters approve a new 3/4-cent sales tax to replace the expiring pension tax, Springfield's overall sales tax will not increase.

What happens if a new tax is not approved?

The main concern is losing out on the additional $45 million annually. But there are other consequences if the sales tax sunsets without a replacement.

Among these is a loss of $5.2 million annually from the city's use tax. A use tax matches the overall city sales tax for out-of-state purchases, like those made online from vendors outside of Missouri. Unlike the sales tax dedicated to the pension, the use tax revenue is split evenly between the general fund and the transportation fund. If the 3/4-cent sales tax cease to be a part of the total city sales tax, shoppers will pay 1.375% instead of the current 2.125% in city sales and use tax.

In addition, the city's general fund would have to cover the remaining contributions to the pension fund. Combined with the reduced use tax, Director of Finance David Holtmann said the general fund would take a $5.6-$8.6 million hit, which could necessitate 6-8% cuts to the city's personnel and service expenses that come out of the fund.

What will the commission do and how?

The CCCI is tasked with providing council a recommendation by June 30. This will allow plenty of time for council to consider the recommendation and draft ballot language ahead of the November election, if a tax is recommended.

Through their discussions, the CCCI members will determine whether to ask for a tax, how much the tax should be, when should the tax sunset, when the tax should appear on the ballot, what it should fund and any accountability measures the city should take if a tax is passed.

Cora Scott, the city's chief spokesperson, said it will also be up to the commission to decide whether recommendations are agreed upon through a majority vote or by reaching a consensus.

When will the tax be discussed?

The CCCI will meet every other Tuesday from 9:30-11 a.m. in the fourth-floor conference room in the Busch Municipal Building at 840 Boonville Ave. The next meeting will be on Tuesday, April 30. All meetings are open to the public and livestreamed online. Additional information on any CCCI happenings can be found at www.springfieldmo.gov/CCCI.

How can I share my input?

At meetings, public comment cards are available for the public to leave their feedback. Additionally, anything members of the public wish to share with the commission throughout the process can be emailed to the City Clerk Anita Cotter to acotter@springfieldmo.gov.

The commission will have available to them results from previous community input initiatives, as well as the opportunity to seek additional feedback from the community.

More: Springfield City Council grapples with new 3/4-cent sales tax, inches toward consensus

Who is on the commission?

Here are the 28 people who will serve on the commission, alongside council members Matthew Simpson and Abe McGull who will serve as the council liaisons. None of these members were a part of the original task force that recommended the first 3/4-cent Police-Fire Pension sales tax, nor do any serve or have previously served on the Police-Fire Pension Board.

• Phyllis Ferguson, co-chair: Former Zone 1 City Council member. During her time on the council, the city kicked off a poverty alleviation effort called the Zone Blitz. Ferguson was a major player in the Zone Blitz initiatives as much of her focus centered around revitalization of the northside of town;

• Tom Prater, co-chair: Former City Council member and school board member. He also serves on the steering committee of the United Springfield PAC. He was appointed to serve on the Missouri Board of Education on Friday;

• Logan Aguirre: Publisher of 417 Magazine. She also previously served as chair of the Board of Directors of the Springfield Area Chamber of Commerce;

• Christina Angle: Chief Financial Officer and Vice President of Group Services at the Erlen Group, a group of industrial companies that owns Springfield Underground. She also serves on the chamber board;

• Kevin Ausburn: Chairman and CEO of SMC Packaging Group;

• Alice Barber: A leader with Springfield Tenants Unite, a city-wide tenants' union. Members of the union have spoken at several recent council meetings calling for more investment in safe housing, creation of a rental inspection program and other initiatives;

• Brent Brown: Managing partner at Greenway Development Group, which has built apartments like BoomerTown near the Missouri State University campus, the Galloway Creek development in Galloway and the Greenway Studios apartments near Drury University and Ozarks Technical Community College. Brown ran for City Council in 2021;

• Megan Buchbinder: Marketing director for the Springfield Convention & Visitors Bureau. She is also the chair of The Network Leadership Council and a member of the chamber board. She's also involved in the Springfield Regional Arts Council board;

• Jerome W. Compton: Former City Council member. At the time Compton served on council, the original 3/4-cent sales tax was first passed;

• Teresa Coyan: Chief of Staff and Vice President of Government Relations at CoxHealth;

• Orin Cummings: Pastor at Messiah Lutheran Church. He also serves on the Board of Directors for the Council of Churches of the Ozarks and as a member of the steering committee for United Springfield PAC;

• Chad Davis: President of the Southern Missouri Professional Fire Fighters IAFF Local 152, the local firefighters union;

• Leslie Forrester: Executive Director of the Springfield Regional Arts Council;

• Denise Fredrick: Former Springfield school board member, who served 12 years on the board. She is a retired Springfield teacher and district administrator;

• Brendan Griesemer: Former assistant director of Springfield's Planning and Development department. Griesemer was recently named the executive director of Restore SGF, a local non-profit focused on revitalizing neighborhoods and improving home ownership;

• Bill Hennessey: Vice President of Mission at Mercy;

• Sandra Huston: Neighborhood leader in north Springfield;

• Winter Kinne: President and CEO of the Community Foundation of the Ozarks (CFO). She also serves on the Board of Directors for Philanthropy Missouri and is chair of the Community Blood Center of the Ozarks board;

• Andrew Lear: Former City Council member and liaison to the Police-Fire Pension Board. He retired from FORVIS, formerly BKD LLP, and has previously served as chairman of the chamber board. Lear also now serves on the board of directors for the Springfield Daily Citizen;

• Sid Needham: Prominent member of Springfield's Black community, who is involved in the Park Day Reunion each year. He also served on the Springfield-Greene County Park Board;

• Eric Pauly: Serves on the Springfield Planning & Zoning Commission. He is also a part of Phelps Grove Neighborhood Association;

• Steve Prange: Project manager with Crawford, Murphy and Tilly, the selected consultant on the Lake Springfield project;

• Pete Radecki: Former chair of the city's Neighborhood Advisory Council. Most recently, Radecki served as co-chair on the city's Nuisance Property Work Group's existing ordinances subcommittee;

• Jacob Ruder: Executive Director of the Business Council of the Ozarks;

• Krisi Schell: Executive Vice President of Human Resources at SRC Holdings Corporation. She also serves of the Board of Directors for Burrell Behavioral Health and has served on the Springfield Area Chamber of Commerce board;

• Jeff Schrag: Founder of Mother's Brewing Company. He is a member of Missouri State University's Board of Governors and a former board chair for CFO and the chamber;

• Rusty Worley: Executive Director of the Downtown Springfield Association. He served as the co-chair of the city's Nuisance Property Work Group and is a past chair for the Neighborhood Advisory Council. Now, Worley serves on the Restore SGF Board of Directors;

• Andrew Zinke: Past president of the Springfield Police Officers Association and active police officer.

Marta Mieze covers local government at the News-Leader. Have feedback, tips or story ideas? Contact her at mmieze@news-leader.com.

This article originally appeared on Springfield News-Leader: What to know about Springfield's 3/4 cent sales tax up for renewal