Missouri News

Palmyra City Council clears way for sales tax issue in April election

By Herald-Whig
Posted: Nov. 17, 2017 9:40 am

PALMYRA, Mo. -- The Palmyra City Council on Thursday agreed to ask voters to increase the local sales tax by a half-cent in the April 3 municipal election.

However, council members expect some confusion by voters because of the way the ballot language will be worded.

"To the average person reading this -- with no backstory -- it just looks insane," said Nathan Miller, a 2nd Ward council member.

Miller said the way the council had to seek a half-cent increase is "inherently confusing" because two separate tax issues will appear on the ballot calling for different things.

One of the tax issues asks voters to create a new quarter-cent sales tax for "transportation" to pay for various street improvements needed in Palmyra.

The other tax issue calls for imposing a new half-cent sales tax for "capital improvements." However, the city would simultaneously eliminate an existing quarter-cent sales tax used for capital improvements. If approved, the new half-cent tax would be earmarked to pay for costly improvements to the city's stormwater drainage system.

In effect, the city's overall sale tax rate would rise by a total of a half-cent, but Miller fears this might not be readily clear to voters. He said the city will have to carry out an educational campaign before the spring election to explain why the city is approaching the sale tax issue this way and what it will accomplish.

"Without doing it, I think we're setting ourselves up to fail," he said.

The council directed City Attorney Chase Hickman to review the law on what city officials can and can't do to educate the public without promoting the tax issue one way or the other -- something that's prohibited under the state's ethics rules.

Mayor Loren Graham said city officials should be able to attend meetings of local organizations to explain the tax issues and answer questions.

"But we can't put an ad in the paper and say, ‘Vote for this,' " he said.

Ken Sheputis, 1st Ward council member, said he would like to see the city conduct a public forum to share information about the tax proposals "and explain the reasons for it."

Council members think a sales tax increase would be a good way to finance some badly needed repairs to the city's stormwater drainage system, which has been plagued with problems for years. One engineering estimate indicated that the repairs could as much as $2.6 million.

A half-cent increase in the sales tax would generate about $210,000 a year, which could then be used to pay for the work a little at a time or to make annual payments on a bond issue that would finance all the work at once.

A regional half-cent sales tax that was used to expand U.S. 36 to a four-lane road came off the tax rolls in August -- three years ahead of schedule. If Palmyra were to impose its own half-cent sales tax increase, then the city's rate would simply go back to where it was before the rate dropped in August.

The council also passed a resolution clearing the way for the election of three council members in the April 3 elections -- one from each ward. The two-year terms of Jeff Merkel in the 1st Ward, Andrew Salsman in the 2nd and Josh Smith in the 3rd are expiring.

Prospective candidates can file nominating petitions from Dec. 12 through Jan. 16 in the city clerk's office at City Hall.

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