The upcoming election on Tuesday, April 4 proposes some tax-related issues on the ballot. Proposition U — the “U” meaning “use,” as in “use tax” — will be voted upon in the City of Bolivar and in Polk County.
A tax issue proposed by the Bolivar School District called Liberator 2025 will also be on the ballot as an effort to provide competitive compensation for the purpose of staff retention and recruitment. If the issue is passed, the operating property tax levy will be increased by 25 cents to $3.3151 per one hundred dollars of assessed valuation, generating an additional $547,00 of additional funds for the school district.
Ballot Language: “Shall the City of Bolivar, Missouri impose a local use tax at the same rate as the total local sales tax rate, provided that if the local sales tax rate is reduced or raised by voter approval, the local use tax shall also be reduced or raised by the same action?”
On November 15, 2022, the Board of Aldermen unanimously agreed to include the local use tax issue on the April ballot. The use tax is a tax on the purchase of goods by Missouri residents from out-of-state online vendors. The tax would serve as an additional revenue source for the City of Bolivar.
The use tax applies to the purchase of out-of-state goods; in-state retailers should already be collecting a tax on online sales for the municipality in which they are located.
A use tax was actually proposed on the ballot in 2018, but it failed by 31 votes, with 338 in favor and 369 against. Because of this, Bolivar Mayor Chris Warwick has been speaking to several local organizations and at various meetings in town to educate voters about what the use tax is and the purpose it would serve if passed.
“The use tax isn’t new. It’s been around since 1959. It originally got started due to catalog sales, so when out-of-state vendors would be trying to sell to residents in the state of Missouri, residents weren’t paying taxes of that time on it to their municipalities or the county level or anything of that nature. So the state instituted a use tax. It’s been on the legislation dockets ever since, but it takes a vote at the local level from the citizens to be able to institute it,” Warwick explains.
According to County Clerk Rachel Lightfoot, the state was collecting and distributing a use tax, but in 1996, the use tax was ruled unconstitutional. It was later, made constitutional when the tax statute was reworded to allow each entity to collect and distribute the use tax.
The use tax is not the same as a sales tax; a sales tax applies to purchases made at local retailers in Bolivar and within Missouri. If passed, the local use tax would operate at the same rate as the total local sales tax. Bolivar currently collects at a 2.5% sales tax rate at the retail level.
The idea behind the use tax is to implement the same tax rate on out-of-state purchases as on local purchases, which, as Mayor Warwick explains, levels the playing field between local, brick-and-mortar retailers and online or out-of-state vendors. With a large amount of online transactions taking place, the City loses out on the revenue it could be accumulating if a use tax were implemented.
“The biggest thing is the revenues that are being lost that we would have typically been getting if everybody was shopping in our brick and mortar stores,” Warwick states.
Mayor Warwick says that it is estimated that the City is losing between $95,000 to $100,000 per year in tax funds on the out-of-state online sales.
A use tax would not be applied to products that would also be exempt from a sales tax. Taxpayers will not be double-taxed on purchases, meaning that purchases cannot fall into both sales tax and use tax categories and consumers will not be taxed twice. The use tax would apply to out-of-state purchases where no sales tax would be charged.
For example, the City of Bolivar is not collecting taxes from consumers who purchase goods from Lincoln, Nebraska. If passed, the use tax would collect a tax from consumers, requiring out-of-state sellers to give those tax funds to the state of Missouri to send to the City of Bolivar.
Money generated from the use tax will go directly into the City’s general fund, which will, then, be used to pay for needs in areas like public safety, streets and sidewalks, and parks and recreation, and emergency equipment, based on priority of highest need.
“We’ve seen the cost of those just continually rise. Material cost for sidewalks increases. We had typically budgeted between $10,000 to $20,000 to do repairs. Well, I mean, that’s not getting us nearly as far as it was three years ago, so it’s important that we continue to keep these dollars so that goes a little bit further and helps us to make that happen,” says Warwick.“Same things with payroll. The biggest thing right now is trying to keep up with all the communities around us for staffing. The City struggles with that.”
Due to inflation, certain tools, equipment, and other needs are more expensive now than before, so the City can use the use tax to help navigate through some of the rising costs.
“If we can’t continue to keep our payroll up to be able to continue to support our local officers and fire department and our public works guys, they’re going to go somewhere else where they can make it better for their families. And so we’ve just got to stay competitive that way,” Warwick states. “Again, $100,00 doesn’t get us very far in that, but it allows us to at least make strides to that. That’s the hardest part in municipal government is trying to make sure that we keep qualified professionals staff working for the City so the residents are getting what they believe they ought to be getting.”
A local use tax has been approved by other municipalities within the state of Missouri, including Pleasant Hope, Morrisville, Springfield, Stockton, Willard, Hermitage, Collins, and Walnut Grove.
“So all we’re asking of people is just to get out and be involved,” Warwick says. “Find out about it. Educate yourself on what it means to have a use tax in the community. It’s important for each citizen to recognize and vote accordingly.”
For more information about Proposition U for the City of Bolivar, contact Bolivar City Hall at 417-326-2489 and get updates on the City of Bolivar, Missouri Facebook page.
Ballot Language: “Shall the County of Polk impose a local use tax at the same rate as the total local sales tax rate, provided that if the local sales tax rate is reduced or raised by voter approval, the local use tax rate shall also be reduced or raised by the same action?”
Similar to the City’s use tax proposal, the Polk County use tax will be implemented on purchases made through out-of-state and online vendors. The use tax rate will mimic the sales tax rate, but consumers will not be double-taxed.
Polk County’s sales tax rate is set at a cent and three-eighths, breaking it down into a half cent for road and bridge, a half cent for law enforcement, and three-eighths for 911.
“If you pass the use tax, it has to be what your current sales tax is, so if a place right here in town, a local business, a brick-and-mortar right here, if they sell the exact same thing as somebody that’s out-of-state sells, this person can buy it online out-of-state and not pay the cent and three-eighths,” says Presiding Commissioner Shannon Hancock. “The person here in town has to charge the sales tax.”
If the use tax is passed, the money will go directly into the county’s general revenue fund.
“What sells me on it is what I just said about the fairness side of it, the evening of the playing field, because the people that are right here in Polk County that have brick-and-mortar are happening to charge the sales tax. The person out-of-state is not. They’re not having to charge a sales tax, so they’re at a little bit of an advantage not having to charge a sales tax. But that person out-of-state is doing nothing for the community,” says Hancock.
The Polk County Commissioners looked at counties of similar size, like Barry and Lawrence counties, where they say that the use tax could accumulate $500,000 or more a year in revenue for the county.
For more information about the Polk County use tax issue, call the Polk County Commission at 417-326-2922.
Ballot Language: “Shall the Bolivar R-1 School District of Polk County, Missouri, be authorized to increase the operating property tax levy to $3.3151 per one hundred dollars of assessed valuation according to the 2023 assessment to fund general operating costs of the District, including increasing compensation for employees in order to attract and retain quality faculty and staff?
If this proposition is approved, the adjusted operating property tax levy of the school district is expected to increase by $0.2500 (cents) from $3.0651 to $3.3151 per hundred dollars of assessed valuation according to the 2023 assessment.”
Dr. Asbill, superintendent of Bolivar Schools, says that the ballot language explains the purpose of the increase, highlighting the stewardship and use of taxpayer dollars within the district.
“This is all about the people that make Bolivar School District operate on a daily basis, so we wanted to make sure we committed to that up front with the ballot language,” Asbill states.
The Bolivar School District’s goal is to have the teacher base pay at $40,000 by 2025.
“In order to do that, we believe that the 25 cents allows us to supplement our budget enough to reach that goal and be able to keep competitive in our recruitment and retainment of faculty and staff,” Asbill explains.
The state of Missouri ranks 49th nationally in teacher base pay. A teacher baseline salary grant program, funded by the state legislature, has been implemented for school districts who have a teacher base salary set at less than $38,000. However, Bolivar Schools have a current base at $38,500 and cannot participate in the state program. Therefore, their competitive advantage is mostly eliminated when neighboring districts are getting a subsidy through this program to make up the difference in order to increase their base pay up to $38,000.
As Asbill says, “What Bolivar has is unique to Bolivar.” Yet, the school district finds itself competing against other school districts due to teacher pay and the neighboring schools’ four-day school weeks.
“We are losing our competitive advantage when it comes to attracting and retaining the faculty and staff that we believe really want to work here at Bolivar,” Asbill says.
Bolivar School does, however, offer a Career Ladder program through the state, which allows students to have more learning opportunities outside the instructional day. Opportunities may include activities like after-school tutoring, reading club, or chess club. Through the Career Ladder program, teachers are compensated for their time educating students outside a typical school day. Roughly 240 Bolivar School District teachers participate in the Career Ladder program, which costs about $225,000 locally.
The additional funding through the Liberator 2025 issue will help attract and retain teachers, food service workers, custodians, paraprofessionals, and other school staff.
Asbill explains that after addressing the needs of the school personnel, the district will have the opportunity to address brick-and-mortar needs next year. These needs include improvements to Liberator Park (an athletic facility located near Bolivar High School), HVAC and electrical upgrades, and more.
“Liberator 2025 is really part of a strategic plan of saying here’s where we’re at and here’s where we we want to be, and allowing us a plan to get there, but that plan does focus on our people first and then it focuses on the brick-and-mortar next,” Asbill says.
Seventy-two cents of every dollar the school district spends is invested in the 400 individuals that comprise Bolivar School staff and faculty.
The school is not sales tax-based; it is based on assessed valuation, and the 25 cent increase will provide the district with an additional $547,000.
“When we look at that 25 cents, remember that that’s spread out over all of our patrons, and so that amount collectively comes in and generates this kind of money. But for us to be able to give our teachers a $500 base increase and our classified staff a 25 cent per hour increase, that costs us about $607,000,” Asbill states. “And so we’re not asking to offset all of that. We’re asking to supplement. We’re asking to be able to accommodate a portion of this goal that we have over the next couple of years, and that 25 cents allows us to do that.”
Asbill says that Bolivar Schools has tried to ensure that it is a “leader in Polk County” in regard to teachers’ salaries. However, due to some changes within neighboring districts, some schools are getting more competitive with their base teacher salaries.
In comparison to other school districts, Bolivar has more students and a lower operating levy than Pleasant Hope, Halfway, Marion C. Early, and Fair Play.
“For us, we’re trying to demonstrate that with a 25 cent [increase], that puts us in a different competitive bracket. It still puts us a little behind some of our larger partners that we look at but it represents what we believe is the Polk County view, the taxpayer view, of being fiscally conservative but also knowing that there has to be an investment in the school district for us to be competitive and stay on track with what people expect us to be,” Asbill says.
Other schools like Lebanon, Willard, Nevada, Branson, Carthage, and Neosho have a larger teacher base than Bolivar, so Asbill explains that in the coming years, it is the Bolivar School District’s mission to try to minimize that gap in pay between the Bolivar and other school districts.
Currently, about 65% Bolivar Schools staff are categorized as certified employees, meaning primarily teachers and counselors. There’s only about a 10% turnover rate in the certified group, noting that the main reasons for leaving the school district are typically due to retirement or relocation.
Classified employees include workers in food service, custodial services, maintenance, paraprofessionals, and secretaries. In the classified group, there’s about a 30-45% turnover rate. Asbill says that there is a labor market trend that the district is trying to adjust to while working off of taxpayer funds.
Although some residents may not have kids in the school system, Asbill notes that some of the economic vitality of the community is based on the success of the school district.
“When the school is successful, when we see enrollment growth, when we see the value of having teachers and custodians in seeing a competitive wage, they buy houses, they buy cars, they are investing in the economy. The next piece is by doing that we see additional services – fire, police, roads – all of that is a very interesting environment. So the school is an economic driver in the health of every community,” he says. “We believe that this is an investment in not only the success of Bolivar School District but the success of the Bolivar community and because all of that is so connected in the economic health of our area.”
For more information or to submit a question, visit the Bolivar Schools’ website at https://www.bolivarschools.org/o/bolivar/page/proposition-liberator-2025.