Hannibal officials wary of override of Nixon veto of business tax breaks

Posted: Aug. 6, 2014 11:26 am Updated: Aug. 27, 2014 12:15 pm

Herald-Whig Staff Writer

HANNIBAL, Mo. -- Hannibal city officials already making cuts and reorganizing operations are worried that a September vote in the Missouri Legislature could cast another blow to the city's tight budget.

The Hannibal City Council on Tuesday unanimously adopted a resolution in support of Gov. Jay Nixon's veto of bills that would extend major tax breaks to businesses but reduce state and local revenues by millions.

It's possible Missouri lawmakers will override Nixon's vetoes this fall, and according to Nixon, jeopardize funding for education and public services. The council's resolution also urged state Sen. Brian Munzlinger, R-Williamstown, and state Rep. Lindell Shumake, R-Hannibal, to "refrain from any efforts" to override the vetoes.

City Manager Jeff LaGarce said that if the Legislature does override Nixon's veto, the move could slice up to $826,000 from city revenues.

"I really hope the legislature does not move forward on this," he said. "I don't think a lot of legislators realize the impact this is going to have on cities."

Though the veto session is six weeks away, its potential effects rippled into decisions made by the council Tuesday. The council tabled buying a $455,867 firetruck from Leo M. Ellebracht Co. until after the start of the legislative session to ensure the city will have funds available.

One alderman also expressed concern over the city entering into an agreement with SZC Hotels & Development, citing the override vote and the potential impact on city revenue. Melanie Campbell, along with Gary Zimmer and Stan Smith, presented a proposal to employ two economic development tools to defray the cost of building a Sleep Inn and Suites hotel and part of an access road to the city's proposed business park.

The group suggested creating a community improvement district that would include only the hotel property. It would impose a 1 percent sales tax on the hotel in addition to a 50-cent-per-room tax. The measure would generate $348,500 in revenue over a 15-year period, according to the proposal.

The trio would also like to establish a sales tax rebate program with the city. It would provide a 1.5 percent rebate over a 15-year period, adding up to an estimated $348,500.

First Ward Alderman Kevin Knickerbocker said that with a potential decline in state revenue hanging overhead, the proposal's timing wasn't ideal.

"It makes me uncomfortable to expend money that doesn't have to be at this time," Knickerbocker said.

Zimmer countered that the hotel, scheduled to open next spring, would bring in additional revenue. The council greenlighted drawing up the agreements, but a public hearing is still required.

The Legislature's vote also looms as city officials make a still-unrelated attempt to trim $800,000 from the budget. The city engineer position was eliminated last month, and on Tuesday the council approved a payroll ordinance that's estimated to save about $188,000.

LaGarce said the ordinance renames the city's engineering assistant as public works director and transfers all the former engineer's duties to the new position, except for supervising the streets department and building inspector's office. An extra $8,685 will be added to the engineering assistant's $39,661 salary to reflect the change in responsibility. Though the estimated savings from combining the positions is not included in the ordinance, a memo by LaGarce said beefing up the public works director position in addition to eliminating the engineer could save about $70,000.

The ordinance also calls for hiring two new police officers to reduce overtime. LaGarce said a study revealed that the city spent $255,000 on overtime last year, including pension costs. The two new officers could be hired at $110,000 -- $55,000 each -- to help cover shift shortages that spur overtime, he said.

In addition to those hires, LaGarce's memo said, hiring an "overlay" officer to enforce warrants could generate about $140,000 and fill in some patrol shifts, reducing overtime by a total of $161,175.

After the meeting, LaGarce said it was a "good thing" the city has been cutting spending, but if lawmakers override Nixon's veto, the city "will be no better off."