Springfield, Missouri's 3/4-cent sales tax is set to expire on March 31, 2025. The tax has been in place for 15 years and generates about $45 million annually.
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 and 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 funding 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. Police officers and firefighters are now enrolled in the state LAGERS retirement plan.
Another five-year renewal of the tax would likely produce far more revenue than is necessary to meet the goal of fully funding the Police-Fire Pension. The City is still obligated, and is committed to, meeting the funding needs of paying out promised benefits, regardless of the existence or not of the sales tax. That contribution is estimated to be $4 million to $6 million a year for roughly the next 10 years.
In addition, if the tax is not replaced, the City’s use tax, which matches the overall sales tax rate, would be reduced. The anticipated impact to the City would be about $5.2 million annually: a $2.6 million loss to the general fund and a $2.6 million loss to the transportation fund.
Mayor Ken McClure appointed a 30-member Citizens' Commission on Community Investment (CCCI), representing a variety of diverse backgrounds, sectors and opinions. In mid-2024, the CCCI recommended a replacement tax with pension system contributions, public safety and projects related to the Forward SGF Comprehensive Plan at the forefront.
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