CON: Sales tax puts undue burden on citizens
Sunday, January 22, 2012
Ed Williams, leader of the Citizens for Fair Tax group, has responded to a list of questions, compiled by the News Tribune, on behalf of the group. Below are Williams’ responses, along with rebuttals from the Transform Jefferson City campaign.
The final question asked of each group was what they would ask the opposing group. Those questions are answered by Gus Wagner, Transform Jefferson City campaign manager.
Q: What is your view on the “Transform Jefferson City” campaign and why?
A: The most obvious indication of the nature of the campaign is that it is designed to have a low turnout to exaggerate the influence of the Jefferson City Area Chamber of Commerce voters. Feb. 7 was chosen because there will be no other question on the ballot and the weather will be unpleasant making a low turnout likely. The entire campaign is intended to sneak an increase by voters before they know it.
Transform Jefferson City rebuttal: The Feb. 7 election date was chosen as the next upcoming election date upon the completion of the Transformation Action Teams and submittal of the question to the City Council. The momentum behind the project — be it volunteers, cost estimates, project selections — were the main drivers in the decision for a Feb. 7 election date.
Q: If passed, how would a new 10-year half-cent sales tax affect the city, residents and those who shop in the area?
A: The increase has to be viewed as a part of the overall sales tax. The sales tax would make Jefferson City sales tax roughly 9 percent. Virtually everything would increase in cost including water, telephone, natural gas, food, automobiles, building materials and many things we do not even consider. Middle and lower income people would be more adversely affected because they pay a higher percentage of their income in sales taxes. Wealthy people such as the proponents of sales taxes would not be affected adversely because it is a smaller percent of their income. Some chamber members in the construction business would benefit greatly.
Transform Jefferson City rebuttal: For every $10 spent in Jefferson City, we will experience a higher cost of 5 cents. The new tax rate, upon a successful election, would be 8.225 percent for more than 90 percent of all purchases we make. The additional 1 percent would only apply to the TDD’s at the eastern Walmart and the Stone Ridge Shopping Center (Kohl’s and others). The choice of a sales tax question was not an easy one to make, and it was well debated. It is the only funding option given to municipalities by the state for economic development projects like this one.
Q: What do you believe is the longterm economic impact of the sales tax, if passed?
A: People would find their money does not have as much buying power as it should for the next 10 years. Citizens may not even realize it. Increasing taxes will cause people to shop on the Internet with no taxes, and Columbia and the Lake with lower taxes.
Transform Jefferson City rebuttal: Jefferson City already loses retail business to neighbors like Columbia and the Lake for a variety of reasons. The sales tax rates in Columbia and the Lake of the Ozarks Area are not the biggest reasons our citizens choose to shop elsewhere. Using the projected $50 million collected over the 10-year life of this sales tax will bring $41 million in direct investment into our community over the next five years.
Q: The Transformation initiative has often focused on attracting and keeping young professionals in the area. Do you believe what is being proposed will achieve that goal? Why or why not?
A: A meeting center might attract some attendees, but not residents. People move to an area where they can earn a living, send their children to good schools and enjoy a good community. Approving the soon-to-be-proposed school tax would do more to attract people to Jefferson City. Increasing the cost of living with a sales tax would not. The restaurants and stores planned for the St. Mary’s building would not attract people to Jefferson City, but would benefit the builders at taxpayers’ expense.
Transform Jefferson City rebuttal: The conference center will bring thousands more visitors to Jefferson City and the local community will use it for many functions as well, the St. Mary’s site will be ripe for private investment, but the $2.7 million in Transformation funds will only go for aiding the programs for LU and other infrastructure redevelopment, not for placing any retail or food establishments. The funds would repurpose the campus for multiple uses. A renovated St. Mary’s would add substantial economic impact and be a perfect public/private partnership.
Q: Why is the Transformation initiative a good or bad concept?
A: It is a bad concept because it produced a proposal that is skewed toward the economic benefit of proponents and paid for by the citizens. The people who fashioned Transformation are out of touch with most Jefferson City residents.
Transform Jefferson City rebuttal: Citizens from every part of Jefferson City — from every economic demographic and from every age — were participants in open meetings, focus groups, action teams, the steering committee and now the election campaign. Concerns from rich and poor, chamber members and non-members were heard and addressed. The overall response from an overwhelming majority was “we can do better as a community.” The 30 projects on the roadmap list and the continued support we see every day means we are in tune with most residents of Jefferson City.
Q: Do you feel the fivemember economic development tax board (consisting of one appointed by the Jefferson City Public Schools, three appointed by Mayor Eric Struemph and one appointed by the Cole County Commission) is an appropriate governing body for the tax? How would the board provide adequate safeguards or why wouldn’t it?
A: The board is designed to insulate control from the public. The Cole County Commission and city government would appoint people whom they could control, but they would be removed from oversight by the citizens. The state law under which the board is organized, RSMo 67.1305 and 67.1303, would even allow the board to take private property (eminent domain). After they get the money, citizens would have no control. It is the responsibility of elected officials to oversee spending citizen’s money, not a sham board. Spending a large amount of money should be audited and a report of progress given yearly.
Transform Jefferson City rebuttal: The board is but one layer of the decision-making process. Their charge as citizen members will be to administer the implementation, monitor the bidding and manage the projects to ensure their completion within budget. Community input will be included at all phases of the five-year implementation. The elected City Council will have final approval or denial of the decisions of the board. All meetings will be held in public and subject to Sunshine Laws.
Q: Should taxpayers or developers be the driving force behind the projects outlined in the economic development sales tax and why?
A: If the convention center was economically viable, developers would be competing to build it. An article in The Wall Street Journal from Dec. 31 titled “Have We Got a Convention Center to Sell You!” said, “Politicians spend money on fancy white elephants.” Taxpayers should not pay for a money-losing business. Building a facility for Lincoln University is a state responsibility as the graduates will spread to all areas of the state and country. Students will come from a large area and not just Jefferson City.
Transform Jefferson City rebuttal: Conference centers traditionally do not make money themselves, which is why they are built by municipal governments. What does make money are the hotels, restaurants, gas stations and coffee shops from thousands of extra customers walking in their doors on a weekly basis. Again, Transformation builds the infrastructure, and our citizens benefit. Lincoln University will be able to expand to the St. Mary’s campus because of this redevelopment which will lead to increased enrollment for LU. There will be plenty of room left there for additional public and private opportunities.
Q: What questions would you ask those who oppose your view?
Citizens for Fair Tax: Why are sales tax elections always scheduled for when there is limited interest or bad weather such as the county sales tax last August and the vote on Feb. 7?
Transform Jefferson City answer: There are only so many election days on the calendar as allowed by state law. Tax questions, levy questions and other funding questions are generally placed on these non-November election days so that voters may become better informed of the details without the competition of statewide and federal election campaigns.
Citizens for Fair Tax: Why is a regressive sales tax being proposed rather than a property tax that is progressive where people like yourselves would pay your fair share?
Transform Jefferson City answer:
State law prescribes sales tax questions as the only ballot remedy to fund local economic development projects. Property taxes are traditionally tied to funding for public education.
Citizens for Fair Tax:Why is the chamber given $350,000 each year of taxpayers’ money on a no-bid contract that is used to promote sales tax increases?
Transform Jefferson City answer:
The City Council and the County Commission through public votes have contracted with the chamber for years to manage economic development programs and activities. It is exactly the job of the chamber in that role to think strategically and act to make our community a better place. The mission of the chamber is the promotion and building of not just local businesses but local opportunities. People from across the region and the country are looking for a victory on Feb. 7 due to the groundwork laid by the Jefferson City Area Chamber of Commerce.
Citizens for Fair Tax: How would a meeting facility, parking garage or Capitol Avenue beautification bring people to live in Jefferson City?
Transform Jefferson City answer: Not all people who come to visit us, work here or shop here will choose to make Jefferson City their home, but more will after Transformation takes place. These three listed projects are ones that will bring visitors to town, let them have more accessibility and have a better impression of our community. These visitors will spend money, which will create more tax revenue and be invested into the community. The entire list of 30 projects will revitalize the core of our community and give us all the boost Jefferson City needs.