Phelps County joined Rolla and St. James in asking voters to approve a local use tax that has previously been rejected in both August 1996 and April 2016.
History repeated itself in Phelps County in November at the special election on Tuesday. Residents rejected the Phelps County use tax but approved a use tax in Rolla and St. James.
Residents in Rolla will have a local use tax at the same rate as the municipal sales tax rate of 2.25 percent after 56 percent of voters approved the measure endorsed by the Rolla City Council as one means to help the city recover its losses and fund the city’s police and fire departments.
City administration said revenue derived from the city’s sales tax has fallen with the steady rise in people shopping online and subsequent decline in residents shopping in the city’s brick-and-mortar stores.
The loss in purchases traditionally occurring in the community has changed how local businesses operate and how the city operates since the city uses general sales tax revenue to provide for roads and buildings as well as public safety services.
The Rolla City Council declared this to be an urgent matter, and Nov. 5 was the soonest election the city could place a use tax initiative on the ballot. Otherwise, the city would have to wait until the April election.
With the measure approved by voters, the money the city collects from with the use tax will all go to the city’s general fund, and funding public safety is the first priority, Rolla City Administrator John Butz said at Monday’s City Council meeting.
Rolla’s general fund supports the functions of city hall, administration, economic development, finance, community development, engineering, planning, and public safety to the tune of 70 percent of the funds' expenditures, Butz said.
The city’s fiscal reality has led to continued problems recruiting and retaining public safety employees, and now that voters have passed the use tax, the city’s first priority will be to fully fund Rolla’s police and fire departments, Butz said.
“That’s going to start with increased wages, where we are just simply lacking,” Butz said. “And then as those dollars become available, we can begin to address other needs with the administrative functions of the city.”
The City Council doesn’t know how long it will take to fund the city’s public safety needs with money collected from the use tax.
Rolla City Councilor Tiffany Henry said, “I’d be surprised if the use tax generates enough the first year to meet any of the needs the city has.”
Unlike sales tax, which requires a sale at retail in Missouri, use tax is imposed directly upon the person that stores, uses or consumes tangible personal property in Missouri. The use tax applies to purchases made from out-of-state vendors that ship to customers in Rolla.
Currently, Rolla has a shortage of staffing and equipment for the city’s police and fire departments.
The city is at least four officers short, has compensation packages that are significantly uncompetitive and a lack of radios, Rolla Mayor Louis Magdits said.
“There are so many needs out there, that there is going to have to be an effort with staff, with department heads, with the council, to see how that money will be allocated across public safety needs,” Magdits said.
The use tax rate for Missouri is 4.225 percent unless a city or county enacts a local use tax. In St. James, 53 percent of voters passed the use tax measure, and residents will have a local use tax rate of 2.5 percent.
Phelps County’s use tax measure was rejected by 57 percent of voters.