Hannibal City Manager Jeff LaGarce says state legislators from this area know how he feels about the potential loss of $826,000 that America’s Hometown would suffer if the General Assembly overrides in September a package of special sales tax breaks vetoed by Missouri Gov. Jay Nixon last week.
Hannibal City Manager Jeff LaGarce says state legislators from this area know how he feels about the potential loss of $826,000 that America’s Hometown would suffer if the General Assembly overrides in September a package of special sales tax breaks vetoed by Missouri Gov. Jay Nixon last week. On Wednesday, LaGarce was busy recruiting other voices willing to share their concerns with lawmakers on that topic.
During Wednesday morning’s meeting of the Northeast Missouri Economic Development Council, LaGarce outlined for members what the ramifications of such a financial hit would mean to the city.
“It would be a major game changer,” he said, explaining that it would likely mean having to lay off 17 city employees. “I’m all for tax relief if you can afford it. This is just really messed up.”
LaGarce said he was scheduled to participate Wednesday in a conference call with the governor’s office and other municipalities regarding the sales tax issue.
The city manager explained that a meeting last week with local state lawmakers was not particularly encouraging, noting one of them acknowledged not realizing the ramifications the legislation would have on local governments when it was passed in the 11th hour of the recent legislative session that wrapped up in May.
While LaGarce conceded that the $826,000 figure of anticipated lost revenue provided by the governor’s office is only a rough estimate, he added that Hannibal “could not afford it” even if the cut was one-third of that amount.
On Tuesday night, the City Council gave second and final approval to a scaled-back city budget for Fiscal Year 2015 after watching a steady decline in sales tax revenue in recent years. LaGarce pointed out that through seeking new ways of operating the city is targeting a savings of around $800,000.
LaGarce indicated he would be sending a letter to each member of the Northeast Missouri Economic Development Council, asking them as “private citizens” to contact state legislators and ask them not to support efforts to override the governor’s veto when the veto session convenes in Jefferson City on Sept. 10. The city manager added that members of other city committees and boards are also being asked to phone or write lawmakers.
LaGarce said that the sales tax cuts approved by the Legislature were very specific, benefiting only select groups. During a visit to Hannibal last week, Nixon reported the bills he vetoed included sales tax exemptions for recreation venues, fast food restaurants, power companies, data storage and processing, used vehicles, supplies and equipment used in electricity generation and commercial laundries.
The loss of sales tax could also mean a cut in funding for K-12 schools (also called the Proposition C sales tax). Nixon also suggested that if the sales tax exemptions are implemented, it could actually push local property taxes higher.