Springfield City Council Discusses Transportation Sales Tax

The Springfield City Council took a deep dive during their weekly Council lunch into the transportation sales tax renewal along with the renewal of the police/fire pension tax to determine how they would move forward with renewal of both taxes.

Several Council members raised the issue of what is definition of “100 percent funded” for the police and fire pension after staff mentioned that because the plan is a “closed plan” reaching 100 percent funded might not actually fully fund the plan.

“My understanding of 100 percent is that we had enough money in that fund, with new money coming in, whatever we had, that it would be 100 percent funded and we’d never have to go back to the taxpayers,” Councilman Hosmer said during the discussion.

“I think we have an odd definition of 100 percent,” Hosmer continued. “I think most voters, and again I think I’m as smart or as dumb as most voters in the city of Springfield, I was under the impression that once that hit 100 percent, since we now have a closed system, that that money would pay whatever we had to pay for police and fire.”

City Manager Jason Gage said that was the assumption going into the projections and all the assumptions in the projections.

“I know my crystal ball isn’t that clear,” city manager Jason Gage said in reference to how projections today were being used for the future of the plan. “We don’t know if that plays out but that’s the best information we have today.”

“So you can’t say ‘OK, we’re 100 percent funded, we have the exact amount of money we need for the next 50 years’,” Councilman Lear then said. “We don’t know how long people are going to live, we don’t know who they’re gonna marry, we don’t know how long they’re gonna work, we don’t know our investment.”

“It’s based on actuarial assumptions that are baked in,” Lear said.

Councilmen Simpson, Lear, and Hosmer

The discussion of what defines 100 percent was focused upon to determine when the tax would actually sunset according to the wording of the measure put before voters.

Mayor McClure said that the pension board would get a report from the actuary that the fund is at 100 percent, they would report to City Council, and then Council would put up an ordinance to sunset the tax.

City Manager Gage said that everyone involved wants to fund the plan and eliminate the tax within the next five year renewal, so he suggested removing the option of a 3/8 cent tax which would require a possible renewal in five more years.

Mayor McClure recommended a straight renewal of the 3/4 cent tax for the pension, which he felt is what voters were told to expect to honor the city’s obligations to police and firefighters. He then endorses a 1/8 cent transportation tax renewal for 20 years to allow for longer planning.

Councilman McGull agreed, although he noted he was no fan of taxes, and that “you could fund a small country in Africa on the amount of taxes taken out of” his paycheck. He noted we need to live up to our obligations to the police and firefighters.

Other Councilmembers chimed in stating that the core issue is the commitment to police and fire and not doing something to jeopardize that at the ballot box.

Councilman Schilling proposed making the taxes combined at one cent, with 5/8 to police/fire pension and 3/8 to transportation, but he did not receive support from the other Council members.

In the end, Mayor McClure recommended to staff they put together language for ordinances keeping the rates for the taxes at their current levels, with the transportation tax having a 20-year renewal.

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