Transportation Tax Increase Discussed at Springfield City Council Workshop

The Springfield City Council held a workshop Wednesday discussing upcoming renewals of tax measures that led into a discussion of raising the 1/8th cent transportation tax.

The session was aimed at discussing the renewal of two taxes that will sunset in the next two years: the 3/4 cent tax for the police and fire pension and the 1/8th cent transportation tax.

In the presentation from city staff about the taxes, there were multiple suggestions for the commission to move forward with both taxes. In the suggestion that was recommended by city staff, the police and fire pension would be reduced from 3/4 cent to 3/8 cent, and then the transportation tax would increase from 1/8 to 1/2 cent.

The suggestion by city staff would not raise the overall level of tax (the amount taken from the police/fire pension tax would equal out the raise in the transportation tax), would still allow the police/fire pension to be 100% filled at the end of the renewal period (according to actuarial predictions) and then allow the city to put $16 million more a year into fixing transportation problems in the city.

The rationale of the city staff was that in the recent citizen survey, issues related to infrastructure, roads and traffic were the top two items that citizens wanted to see improve in the city. The shifting of the tax would allow the city to be more proactive in fixing things such as roads within neighborhoods instead of just the major arteries in the city.

If the police/fire pension is renewed at the 3/4 cent rate, the current level, the pension could be fully funded in 2 1/2 to 3 years, at which point the tax would sunset. At a reduction of 1/4, it would be about another year, and at a 3/8 reduction it would be almost the full five years of the renewal.

The 1/8 transportation tax, which would be up for renewal a year later than the police/fire pension tax, can be set up for a renewal at the current rate. Staff recommended to council that the tax be renewed for 20 years similar to the recently renewed 1/4 cent capital improvements tax.

When the Council members entered discussion about the transportation tax, the idea of perhaps asking the voters for a bigger transportation tax even without taking funds away from the police/fire pension plan began to be discussed.

The biggest proponents of the idea were Councilmembers Hosmer and Ollis. Hosmer was the more vocal of the group, suggesting that because residents of the city were so adamant in the recent citizen survey of the need to improve the city’s infrastructure. Hosmer believes that the community would be willing to sacrifice a little more if it meant making a large impact in the problems they saw with the city’s infrastructure.

“We shortchange our constituents if we don’t give them a chance to fix the problems [with infrastructure.],” Hosmer said.

Ollis felt similarly about bringing the issue to the voters about a 1/2 cent transportation tax but for a reason that was on top of the citizen survey calling for repairs to infrastructure; he sees it as an area where Springfield is competitive with other cities in the region for business and talent.

Ollis noted the changes in northwest Arkansas that several council members saw on a recent trip and how they’re investing more in their infrastructure, resulting in a significant boost to the local economy.

“We’re kidding ourselves if we don’t think we’re in competition with other cities in the region,” Ollis said.

If Council were to come forward with a proposal to raise the tax to 1/2 cent, it would end the current 1/8 cent tax early, and replace it with the higher rate. If that were to pass, Springfield would be equal to Columbia on the combined rate for transportation tax and capital improvement tax.

However, there was not total agreement among the members of Council, and that caused pause for Mayor Ken McClure.

While Hosmer, Ollis, Simpson and Lear appeared to be in favor of taking the 1/2 cent issue to voters at the same election as the renewal for the 3/4 cent police/fire pension tax renewal, Councilman Mike Schilling appeared adamant that he wanted nothing on the ballot except for the police/fire pension. One of Schilling’s concerns was that having another tax on the ballot could put citizen approval for the final renewal of the police/fire pension at greater risk.

That risk also appeared to weigh on the mind of Councilwoman Ferguson, who said that her constituents in Zone 1 have enough trouble paying their tax bills where the rates are right now. She said that she’s completely behind the renewal of the police/fire pension tax, and that she might consider a raise of the transportation tax to 1/4 cent rather than 1/2 cent.

Mayor McClure seemed to feel similar to those who supported the 1/2 cent plan, but said that he would not want to move forward without Council being in complete consensus on the measure.

So while Council did not instruct city staff on what to do with the transportation tax, they did ask city staff to poll citizens and get feedback on the possibilities of a higher transportation tax based on the feedback given by citizens to the recent citizens survey.

If Council were to take action to put the transportation tax on the same ballot as the renewal of the police/fire pension, they would have to get something done by August.

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