Council declines to stick vehicle sticker measure on ballot

A day after the economic experts reported that the nation has officially been in a recession since late last year, members of the Hannibal City Council were in no mood to raise taxes on the city’s most profitable businesses.
Councilman Jeff Lyng brought before the council Tuesday night what amounted to a pair of proposals that he wanted to go before voters next April. One would have eliminated the city’s vehicle license tax. The other would have adjusted the city’s gross receipts business license fee.
The measure did not survive its first reading. While Lyng gave the bill his support, no other councilman offered theirs and the measure died.
“I told my constituents I would make an effort to do away with city stickers,” said Lyng following the meeting. “I’ll just try something different.”
While Mayor Roy Hark said after the meeting he is no fan of city stickers, this was not the way to go about doing away with them.
“We don’t need to be placing more stress on our businesses, large or small,” he said.
Hark also defended not placing the matter before the voters.
“Elected officials have been selected to do what they feel is best for the city,” he said.
While acknowledging they knew little about Lyng’s proposals, business owner Harold Haycraft, Chamber Director Terry Sampson and Chamber President Rich Hudson all expressed reservations about raising taxes on local businesses, regardless of how profitable they are.
“Why are you targeting employers?” asked Haycraft. “You’re going after the wrong people.”
“I have real concerns this will run some businesses out of town,” said Sampson.
“Raising taxes is the wrong thing to do at this time,” said Hudson.
Defending his proposal, Lyng said it would no longer place the highest rates on the smallest businesses.
Currently, the city’s fee rate for gross receipts merchant licenses ranges from 75 cents to 25 cents per $1,000 in gross receipts. The minimum license fee of 50 cents covers the first $80,000 in gross receipts. The rate goes up to 75 cents for the next $20,000 in gross receipts. It then drops back to 50 cents for the next $500,000. Beyond $600,000 the rate drops to 25 cents.
Citing information received from the city clerk, Lyng said in fiscal year 2007-08 556 businesses were required to pay a gross-receipts-based merchants license. Of those, 107 reported gross income in excess of $600,000. While those 107 businesses would have seen their merchants license fee increase, according to Lyng every business grossing between $100,000 and $600,000 would have received a $5 per year tax reduction.
City stickers generated $51,393 in 2007-08. Lyng estimated the net revenue his proposal would have generated, if approved by voters, at $11,482.