Consideration of a potential tax measure — to replace Springfield’s expiring ¾-cent pension sales tax — began in earnest on Tuesday, April 16 at the first meeting of the newly formed Citizens’ Commission on Community Investment.
Springfield city government staff outlined the rules, responsibilities and scope of the 30-member commission in a crowded conference room on the fourth floor of the Busch Municipal Building.
The City Council established the commission on April 8, charging the delegation — led by former council members Phyllis Ferguson and Tom Prater — to consider the “highest and best uses for local sales tax capacity” following the expiration of pension sales tax, and provide a final report and recommendation by June 30, giving council members about seven weeks to consider whether to put a possible tax measure on the November ballot.
The commission’s deliberations will be guided by the general consensus reached by the City Council in January — the need to continue meeting obligations to the city’s police and firefighters’ pension system, invest in public safety initiatives and fund the projects and recommendations of Springfield’s comprehensive plan, Forward SGF.
In all, the commission will consider whether the city should ask for a tax, at what level, for how long, and what short-term and long-term projects and initiatives it would fund.
Tuesday’s meeting featured little discussion among the commission, which was short a few members, but laid the groundwork for the next two and a half months.
Mayor Ken McClure summarized the task of the commission and commended the participation of its members, and City Clerk Anita Cotter provided an overview of the Sunshine Law, which the commission is subject to follow. Then, city staff detailed the history of the pension fund, takeaways from a 2023 public engagement campaign and the role of “quality of place” in Forward SGF.
Background of the pension system
Established in 1946 and closed to new hires in 2006, Springfield’s Police Officers’ and Firefighters’ Retirement System was in dire straits in 2009, $200 million short and about 35.5% funded.
After initially rejecting a 1-cent tax, Springfield voters later approved a ¾-cent pension sales tax solely dedicated to the retirement system, and renewed the tax for two additional five-year terms in 2014 and 2019.
Set to expire on March 31, 2025, the tax — which generates about $45 million a year — has helped bankroll the pension fund, which supports an ever-decreasing number of beneficiaries since the city began enrolling police officers and firefighters in the Local Area Government Employees Retirement System.
However, obligations remain in order to fully fund the pension, though 100% is a moving target as remaining members retire and markets — and the investments of the pension fund — fluctuate.
General Fund could take a hit without new sales tax
City Finance Director David Holtmann said he doesn’t know the “magic answer,” but suggested that hitting as much as 110-115% funding would be a responsible goal for the community. In order to at least reach 100%, the city will need to pay $3.5 million to $6 million a year for a decade, Holtmann estimated.
Following the expiration of the ¾-cent pension sales tax and without a new revenue source, the city would have to meet those obligations through the General Fund, the city’s main operating fund. In addition, the city could lose as much as $5.2 million in use tax revenues, which are split between the General Fund and Transportation Fund. Springfield’s use tax imposes the city tax rate of 2.125% — which includes the ¾-cent pension sales tax — on out-of-state sales.
“The cost of doing nothing” could impact the General Fund by $5.6 million to $8.6 million annually, in addition to a $2.6 million annual loss to the Transportation Fund.
“Our general fund, looking forward into fiscal [year] ‘25, is $110 million. So we're looking at 6-8% that we would have to cut off the top,” Holtmann said. “It would be widespread. ... These would be people and services that we provide to the city from the general fund.”
Quality of place key component of city projects
Though he focused more on the opportunities of a new sales tax, and less on “the cost of doing nothing,” Tim Rosenbury, the city’s director of quality of place initiatives, warned that a lack of public investment could “promote” disinvestment in the private sector.
Rosenbury outlined various city projects and plans that incorporate the concept of quality of place, the “north star” of Forward SGF, and emphasized the need to create “the kind of community that people want to live” in order to attract employers and remote workers. Some of those projects, namely the planned renovations for the Springfield Art Museum and Renew Jordan Creek, face significant funding shortfalls.
Beautifying practical, necessary investments can leverage private investment and become a source of civic pride, Rosenbury said.
“Springfield has emerged as a vital core community with thriving suburbs, and we can no longer play like we're just another county seat,” Rosenbury said. “We are a major job attraction and an economic engine for southwest Missouri.”
Many of the recommendations of Forward SGF, which was adopted in 2022, were reflected in community surveys conducted last year by the city’s Public Information Office. Cora Scott, director of Public Information and Civic Engagement, summarized the results of the surveys, which engaged thousands of participants.
Respondents supported more emphasis on quality of police protection, improved traffic flow, maintenance of city streets and infrastructure and enforcement of city codes. Scott noted that city staff would be able to gather more public input if requested by the commission.
Commission meetings are video recorded and can be watched at cityview.springfieldmo.gov. Additional information of the goings-on of the commission will be posted on the city’s website.
