Blue Springs and Independence Look at Use Tax as Means to Keep Local Jobs and Strengthen City Service
CSL tries to be very focused on the labor market, and how it affects workers. As one of the largest workforce development/job placement providers in our area, we have to be tuned in to who is growing, what skills are needed, and much more. Some things that we monitor, in terms of industry trends are:
What sectors are in-demand, and what employers in our area offer those jobs?
What industry-recognized credentials are needed to enter in-demand sectors?
What positions allow for vertical advancement?
What industries can be most easily accessed by job-seekers that lack formal skills or training?
While market conditions have lots to do with labor, there are times when public policy is involved with one or more labor sectors. On April 3, 2018, voters in Independence and Blue Springs are taking a look at the concept of adding a Use Tax in their communities, for the purpose of helping to retain local jobs and strengthen city services. If you are a Blue Springs or Independence voter, I’d encourage you to look into this issue before us.
For better or worse, most local government operations are partially-funded on a consumption model. People in a city buy things, pay a local tax, and the government can fund fire protection, police, roads, sewers, parks, and other activities that make our cities nice places to live. (Most cities also have a personal property tax levy.)
Blue Springs and Independence have enjoyed decades of strong retail sales, buoyed by lots of retail development corridors, and having the luxury of Interstate 70 running through the middle of the cities, bringing all kinds of traffic to buy gas, food, stay at hotels, etc., as people traverse across the United States. With strong retail sales, government had the resources to invest in good city services.
Retail once was only a few mom-and-pop stores, and there were some five-and-dime stores that were a little larger that brought lots of goods to our cities. In the 1970s, 1980s, and 1990s, the concept of indoors malls and big box stores came onto the landscape, and gobbled up small stores as they undercut prices and offered endless variety. In the 2000s, and exploding in the 2010s, internet shopping changed the face of retail forever. People now don’t need to leave their house to get everything they need, and the day won’t be too far away when drones or other delivery devices can, almost on-demand, deliver anything we want.
It would be unfair to call a Use Tax simply an internet sales tax, but that is essentially what it is. Behemoth online retailers like Walmart, Amazon, and Target, in the absence of a Use Tax, can undercut brick and mortar retailers by selling things without sales taxes. Essentially, the internet is one big Duty Free store. A Use Tax would make sure all purchases made in a city are taxed at the same rate, regardless of whether online or in-store.
The Use Tax currently exists under Missouri State Statute, and taxpayers are required to file an addendum to their Missouri State taxes if their Use Tax-eligible purchases exceed $2,000 in a year. The taxes go to the State, but not to the taxpayer’s municipality, unless their municipality has passed a Use Tax. If Blue Springs and Independence voters implement a Use Tax, they will shift the burden of collecting use taxes to the retailer, and the retailer will collect applicable state, county, and local taxes. Local taxes will keep public services like fire and police funded at needed levels.
If online retailers chip away at brick and mortar stores, local jobs go away and they move to cities with Amazon (or other company) fulfillment centers. Most families that CSL helps have employment in some capacity, and many of the families work first or second jobs in food or product retail. If, over the course of the next few decades, local retail establishments shutter in large numbers, it could cut out thousands of jobs in our communities. According to Missouri Economic Research and Information Center, 12.5% of all jobs in Jackson County in 2017, more than 38,000 total, were in retail trades. Retail is good for young people to get their first job, or a pathway into the workforce for adults that can learn a retail industry. Adults can be trained in a matter of days or weeks to work in an entry-level retail capacity.
Voters will need to research and understand the issue, and make the decision they think is best for their community. Here are some helpful links for you to be an informed voter:
Blue Springs City Government Public Information About Use Tax
Independence City Government Public Information About Use Tax
In the interest of full disclosure, I am on the “Level the Field” campaign committee to pass Question 1 (Use Tax) in Independence, and I serve as that campaign’s treasurer. Of course, I am hopeful the issue passes, but I firmly believe in the importance of informing voters, providing them information, and encouraging them to make the decision they believe is best for our communities.
If you have questions about the issue of a Use Tax, don’t hesitate to contact me at cowand@cslcares.org.
