Crystal Thomas
The State Journal Register
Two weeks after they shot down a sales tax increase, Springfield aldermen on Tuesday approved a 0.25-percentage-point sales tax increase to help fill a hole in the city budget for the year that begins March 1. The Springfield City Council also passed the city’s budget, 10-1, after making an additional $365,000 in cuts to the mayor’s proposed spending plan.
The vote to raise Springfield’s sales tax rate from 8.5 percent to 8.75 percent was 8-3, with Ward 1 Ald. Chuck Redpath, Ward 2 Ald. Herman Senor and Ward 7 Ald. Joe McMenamin voting “no.”
The tax increase will go into effect July 1 and will raise about $2.8 million this year. The city is trying to get the state legislature to pass a bill that would allow it to start collecting the higher tax earlier. With a full 12 months of the higher tax, the increase will raise $4.3 million.
The city faced an about $11.4 million revenue shortfall. Mayor Jim Langfelder’s proposed budget, which was cut by $3.7 million, depended on aldermen passing a sales and telecommunication tax.
On Feb. 6, aldermen raised the telecommunications tax from 4 percent to 6 percent, and the $800,000 raised with that was dedicated to the city’s public library. However, that same night, they voted 9-1 against the sales tax increase, with most saying they wanted to look harder at making cuts and other possible revenue sources.
Those discussions have taken place over the last two weeks, and aldermen on Tuesday discussed more than a dozen different cuts. Even with the cuts by aldermen and telecommunication tax hike, there was still a gap of about $5.3 million, officials said.
That left several aldermen concluding the sales tax increase was the way forward.
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McMenamin said he voted against the sales tax increase because it is a regressive tax.
“We don’t want to hammer sales tax again because we don’t want to put all of our eggs in the same basket,” McMenamin said. “Sales tax is truly flat to falling right now.”
He added he wanted to see a slowdown in salary increases because too many employees had $100,000 salaries, resulting in high pension costs.
McMenamin was able to find $1 million in savings to the city’s general fund by taking money out of the city’s infrastructure fund to pay for public works’ employees salaries. The infrastructure fund, which has accrued $41 million, already pays for the salaries of three engineers employed by the department.
At McMenamin’s suggestion, aldermen also chose to shift the cost of the city’s municipal band, about $57,000, to the Springfield Convention and Visitors Bureau budget, which is funded through a hotel-motel bed tax. It also chose to use $50,000 of the SCVB’s budget to support Downtown Springfield Inc.
Joe McMenamin for Ward 7 