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FOR IMMEDIATE RELEASE
Mayor Ken McClure testified this afternoon before the Governor’s Committee on Simple, Fair and Low Taxes in support of the various economic development tools used in Springfield to stimulate employment, incentivize redevelopment of historic properties, leverage private investments and increase affordable housing stock.
The committee held its third town hall meeting 4-6 p.m. today at the Springfield Area Chamber of Commerce.
Gov. Eric Greitens established the 10-member committee shortly after taking office to compare Missouri’s tax credit programs and its tax rates to those of its peer states, assess the economic impact of existing state tax credit programs, assess the possibility of financing cuts to overall state tax rates with cuts to tax credit programs, and recommend comprehensive tax reform legislation to the governor.
Specifically, McClure spoke in support of state historic tax credits, housing tax credits, Streamlined Sales Tax and Missouri Works, which the Missouri Department of Economic Development calls its No. 1 incentive tool for expansion and retention. Missouri Works helps businesses access capital through withholdings or tax credits to embark on facility expansions and create jobs.
Springfield’s successes with historic tax credits include the Heer’s Building redevelopment, which sat vacant for over 20 years before being redeveloped into market-rate apartments and lofts with first-floor office space occupied by Intrinsiq, a high-tech firm that employs over 70 full-time staff with salaries well above the Greene County average wage.
Brick City is another transformational HTC project, which converted a cluster of century-old industrial facilities that once included an icehouse, a boiler building, and various artifacts of the pre-war industrial era into modern offices occupied by marketing and tech firms, and classroom space for the Missouri State University Art & Design program.
“The historic tax credit program has been essential to the growth and success of downtown Springfield. It is an important redevelopment tool that is helping revitalize cities, towns and rural communities across the state of Missouri,” McClure said.
The mayor told the committee that Springfield is highly engaged and supportive of all efforts to improve the housing stock within our City, especially in our most impoverished area, Zone 1.
McClure said many programs are used to incentivize employers to come to Springfield.
“Our community worked for over eight years to convince 3M to expand in Springfield instead of one of their other locations. It wasn’t the only thing that made a difference, but part of our offering to 3M was $5 million of local tax abatement, and $1.6 million in tax credits through Missouri Works. This program is an effective tool for us to win economic development projects. In fact, we’ve used it in the last 18 months to convince not only 3M, but also Kraft Heinz, O’Reilly Auto Parts, SRC Logistics, JRI Industries, Vital Farms, and Asynchrony Labs that Springfield and Missouri were the right decisions instead of taking those jobs and that investment elsewhere,” McClure said.
Streamlined Sales Tax and Internet Sales Tax
McClure wrapped up his testimony by bringing the committee’s attention to the fact that online retailers don’t have to pay sales taxes on sales to Missourians if the retailer has no physical presence in Missouri, putting the state’s brick-and-mortar businesses at risk.
“We are feeling that impact locally,” McClure said. “Retailers are closing – some national chains; some local businesses. Just within the past few months, Staples, MC Sports, and two Kmart stores have closed their brick-and-mortar stores in Springfield. And those jobs have been lost. We strongly suspect these closures are at least partially related to the difficulty brick-and-mortar retailers are experiencing while trying to compete with online retailers.
“What all of this means to the citizens of Springfield is that not everyone is paying their fair share, and that could result in reductions in services such as police, fire, public works, economic development, and our ability to address dangerous buildings and other issues within neighborhoods. These are services that are valued by our citizens.”
McClure presented two options to the committee to address the issue. In the short term, he suggested the adoption of a streamlined sales tax, as 24 other states have done.
Streamlined sales taxes create a voluntary and easy way for remote sellers to calculate and collect the taxes that are due on their products, and it moves the responsibility for use tax collection for remote sales to the retailers instead of the consumer.
Because participation in a streamlined sales tax is voluntary, it’s not a long-term solution, he told the committee.
“The long-term solution is to enact companion federal legislation, known as the Marketplace Fairness Act. In addition to state action, federal action is required to make the collection of state and local sales tax by online retailers mandatory. That’s why we are encouraging our state leaders to join other states by approving the streamlined sales tax provisions,” McClure said. “The City of Springfield does not have authority to implement a streamlined sales tax or the Marketplace Fairness Act. We must rely on our state and federal governments for these actions. Thus, on behalf of Springfield City Council, I am asking the state to take action now.”
The committee is expected to issue its report to the governor in July.
For more information, contact Cora Scott, Director of Public Information & Civic Engagement, at 417-380-3352 or [email protected].