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Belton to give more directed use tax a try

By Allen Edmonds

After four previous rejections at the polls, a new group of City Hall leaders are prepared to take a fifth crack at a use tax, only this time with a plan more tightly aimed at giving citizens what they’ve been asking for.

The Belton City Council passed unanimously on first reading Dec. 12 an ordinance calling for a vote on the tax on April 12. Second reading on the ordinance is set for Jan. 9, 2023, giving councilmembers time to collect feedback from citizens and potentially make changes to the overall plan before a final vote.

But for now, City Manager Joe Warren and Mayor Norm Larkey believe they’ve hit on the formula that may resonate.

“If you consider the two things that our citizens have been most vocal about wanting us to address, it’s been sidewalks and utility bills,” Warren told the Council last week.

Of course, there are other needs, “but I feel it’s important to really tighten this down to achieve the most benefit” with the proceeds from a use tax. The tax would be equal to the city’s sales tax on items purchased within the city limits, but would apply to online purchases from entities without a local facility.

City officials believe between $2.6 and $2.7 million in revenue was left on the table in 2022. In 2023, that number is estimated to have grown to $3 million.

In addition to revenue the city is missing out on that is being collected by both the county and the state (which have use taxes), the policy gives a competitive advantage to online retailers who have no local investment.

“Local businesses that choose to invest in our community end up being the losers in our current system,” Warren said.

But citizens, particularly on social media, where much of the battle is fought these days, cite the pain of inflation, rising property taxes and other economic woes as reason to reject out of hand any new tax proposal.

Warren is hoping citizens will take a longer view this time, focusing on the greater good.

In hopes of making the potential long-term benefits of this revenue source more plain, he is proposing directing half the revenues from a use tax towards reducing individual water/sewer bills and half toward maintaining existing sidewalks and constructing new ones where none exist.

Many of Belton’s neighborhoods were constructed quickly during the development of the Richards Gebauer Air Force Base, and as a result, today continue to lack the amenities required in a modern neighborhood – especially sidewalks.

Warren told the council that if each water utility user were to get a rebate based on the 2023 projected use tax revenues, that would have created $1.5 million in rebates.

“That would mean a rebate of at least $144 and as high as $180 for each user (households and businesses),” Warren said.

“Conversely,” he said, “it would take more than $4,430 in online purchases made from sources outside the state of Missouri for a household to pay $144 annually in a local use tax at the 3.25 percent rate. If the rebate reached as high as $180, it would take more than $5,500 in similar online purchases for a household not to come out ahead.”

Meanwhile, he said, if half the revenues from a proposed use tax were combined with widely available federal grant funding, and the city were eligible for a potental 80/20 split (80 percent federal and 20 percent local funding, the city could turn it’s $1.5 million into $7.5 million in sidewalk improvements for one year.

“Through debt financing, the city could attempt to take on $20-$30 million products at a time, bringing more sidewalks to downtown, around schools and in neighborhoods,” Warren said.

He said the water bill rebate could appear monthly on citizens’ water bills, decreasing the bill by whatever 50 percent of the use tax generated divided equally among all the utility users within the Belton city limits.

“Current estimates have that rebate being between $12 and $15 a month,” he said.

Another option would be to issue each user a rebate check every year that the user could either apply to their bill or use as they wish.

At some time in the future, Warren said, “there will likely come a time when online sales surpass sales at local brick-and-mortar establishments. Without the use tax, the City of Belton will have to either ask local taxpayers to approve a sales tax increase or cut services,” he said.

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A potential Ward 3 race between incumbent councilmember Allyson Lawson and past member Lorrie Peek was staved off when Peek withdrew from the race on Friday, leaving Lawson unopposed.


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