The Jefferson City Council will discuss a potential utility tax increase Monday to a rate that has not changed in more than 30 years.
At the Budget Committee meeting Monday, staff presented several possibilities for increasing the city's gross receipts utility tax, which had been requested by the council.
The city's gross receipts utility tax is capped at 7 percent, meaning to increase the rate any higher would require a public vote. Finance Director Bill Betts said the telephone tax has remained at 7 percent over the years, but the gas and electric taxes were lowered to 6.55 percent in 1982 and to 5.65 percent in 1984. The rates have not been changed since.
Increasing the rate to 7 percent is estimated to bring in roughly $1.1 million in new revenue and likely would affect commercial businesses far more than residents. Betts said the increase for residents would cost less than $3 more per month based on a utility bill of $200.
Increasing the rate to 6 percent is estimated to raise $294,000 in new revenue, while increasing it to 6.5 percent would raise $714,000 in new revenue.
Council members did not state Monday whether they were in favor or opposed to any increase, but emphasized the importance of finding funds to address a growing list of capital replacement and building maintenance needs as long-range financial projections show falling revenues.
"I don't know how we can responsibly not at least discuss that tax," said 3rd Ward Councilman Bob Scrivner. "We can't just keep kicking the can down the road in terms of replacing equipment because some day we'll have to pay the piper."
Second Ward Councilman Rick Mihalevich said the discussion of whether to increase the tax should move forward, specifying that if an increase were to be approved, the funds should go directly toward capital replacement, a sentiment Scrivner echoed.
Scrivner said, if the council approved an increase, it should not go to fund normal operations of the city, including personnel costs. He also said the council should try to show the public the work that's been done in the last few years to cut expenses and keep costs down.
"We've done everything we know how to do," Scrivner said. "And we've still come up short and we're still unable to fund the replacement of equipment ... We've got an ever-growing liability there."
Fourth Ward Councilman Carlos Graham said he's in favor of having the discussion and hearing from the public on the issue, but he also noted that the increase to residents, no matter how small, could be a big issue for some people who would struggle to afford it.
He also said the council should keep in mind the campaign for the renewal of the city's half-cent capital improvements sales tax will be happening within the year.
"For me, timing is everything," Graham said.
A public hearing on the gross receipts utility tax, as well as the 2016 budget and the property tax levy, will be held at 6 p.m. Monday at City Hall, as part of the regular City Council meeting.
The City Council will hold a public hearing on the gross receipts utility tax rate at 6 p.m. Monday at City Hall. Council members are looking for public input from both residents and business on a potential utility tax increase.