Columbia residents could pay more in property tax and sewer utility rates

4 weeks 1 day 10 minutes ago Monday, July 16 2018 Jul 16, 2018 Monday, July 16, 2018 7:46:00 PM CDT July 16, 2018 in News
By: David Estrada, KOMU 8 Reporter

COLUMBIA – City council approved two public hearings in August to discuss possible increases to the property tax and sewer rates.

The public hearing on the property tax rate will be on August 6 at 7:00 p.m. in City Hall, and the one regarding the increase in sewer utility rate will be on August 20 at 7:00 p.m. in the same location.

The Property Tax Increase

Ward 2 Council Member Michael Trapp said the increase in property tax would provide a stable and growing source of revenue, which is necessary due to the "critical financial state" of the city.

"The city has the lowest property tax of any city in the state of Missouri that has a police force," he said. "We've been primarily funded by sales tax. In the 1980s we traded away our property tax for an increase in sales tax. Sales tax is not performing because of online purchases, which has left us in a terrible financial position."

Trapp said the increase would be of two cents per 100 dollars of assessed valuation.

Skala said it would not be a "wise political thing to do" for the council to approve that change in property tax.

"The fact that we can increase the property tax is one thing, but should we is another thing entirely, and I don't think we should without running this by a public discussion and having perhaps even a public referendum," he said.

Trapp said a ballot proposal would require more time and money to get done compared to a proposal approved by the council.

"The delay would not allow us to put it in this year’s budget, so we would not be able to budget those funds," he said. "We also would not be receiving them, so we are in a position where we are not going to be able to do significant raises or bring new parts of the city under the normative response time that both Mr. Skala and I enjoy."

Trapp also said the city would have to do layoffs and cutbacks in services if the city does not transition to a more stable source of revenue than sales tax. 

"Sales tax at first wasn’t keeping up with population growth and it wasn't keeping up with inflation," he said, "Now, it's not keeping up with either of those things. It’s not even staying constant in real dollars, it’s in actual decline."

Skala said the council was already analyzing possible changes to property tax but in different terms.

He said the council should include the two cents increase in that already existing proposal rather than discussing it separately.

"We are considering in the long term a property tax increase specifically dedicated to public safety, salaries and so on for police and fire, perhaps some new officers and some new firefighters," he said.

The Increase in Sewer Utility Rates

The city council also gave a green light to a hearing on a one percent increase in sewer utility rates.

Skala said he is "fully on board" with that proposal.

"We agreed on this some time back for connection fees to increase sewer rates so that we could start to pay for the infrastructure that's necessary for new growth capacity," he said. "I think that fits with the equity issues that we have tried to promote in this community in terms of our strategic plan that is those people that are invested in a particular piece of infrastructure ought to pay for the privilege of connecting with that infrastructure."

In 2013, voters approved a revenue bond package that allowed Columbia to borrow money to invest in different projects.

Trapp said the city administration would use the resources from the increase in sewer utility rates to pay back the funds borrowed through the November 2013 bond.  

Trapp said "80% of the sewer ballot went towards remediation of the existing system. So, it's been important projects, we've seen a lot of reductions of our inflow and infiltration."

Most recently, officials approved an increase in sewer utility rates last year, according to Columbia Community Relations Specialist Patricia Weisenselder.

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