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Dec. 24 — A tax report compiled by the Missouri Free Market Research Center concludes that Joplin has a “relatively high” per capita rate among the state’s 20 largest cities.
Most of the revenue is generated from sales taxes, which the Show-Me Institute report says is a volatile source of revenue that is “prone to dramatic changes,” especially in a recession when purchases decrease.
While Joplin is the 13th most populous city studied, it ranked sixth out of the 20 for the highest sales tax collection per capita.
“Voters have a say, and clearly the people of Joplin are choosing a high sales tax rate and a low property tax rate,” said David Stokes, director of the institute. “It’s a voter’s choice, but in the long run it would be healthy to depend more on a more stable property tax.”
That echoes a position City Manager Nick Edwards has twice presented to voters, who were asked last year to approve a property tax first to renovate and expand Memorial Hall and later in a Public Safety Proposition to fund increased salaries for police and firefighters. Both issues failed at the polls.
Regarding the tax report, Edwards said it contains a lot of good data.
“It’s done a lot of work and provides a lot of information to the public about different taxes and how cities are funded,” Edwards said.
“The difficulty comes when you start comparing communities because it’s hard to compare apples to apples with the taxes that citizens pay. You have to start thinking about their specifics, at least here where we are a regional center,” Edwards said. Citizens from other communities also pay this tax. Sales taxes are actually spread over a wider base, so it looks artificially high when compared,” he said.
The City of Joplin sales tax rate is 3.125%. When added to the Missouri sales tax rate of 4.23% and the Jasper County sales tax rate of 1.38%, the total becomes 8.725%. South of 32nd Street where the city is in Newton County and where that county’s sales tax is higher, the total rate is 8.975%.
The city also has six special tax districts where 1 cent of additional sales tax is collected by investors. Those are traffic development areas at 1717 Market Place, where sales tax money pays for street projects and the rate is 8.850%.
In the Community Improvement Districts for rehabilitation projects at Northpark Mall and North Point Mall at 510 Range Line, the aggregate rate is 9.725%.
On the Newton County side, community improvement districts collect a penny for developers to pay for extraordinary costs to build streets and other infrastructure for their properties. That pushes the total tax rate to 9.975%. They are in the Highway 166 District, the Hope Valley District and the 32nd Street Place District.
“I think it’s well established that Joplin is primarily funded through sales tax, and I can’t disagree with any of the numbers they’ve presented, but it gets difficult when you try to compare communities,” Edwards said.
Leslie Haase, the city’s finance director, said the report’s authors acknowledge that in the report. “What I like about this is that it speaks to the services provided.” As I was going through the report, if you look at cities like Florissant, where there are services that are reported, there are no’s marked all over the list.
“What I’ve noticed is that the higher you go on the list, the more services are provided,” Haase said.
The report and Stokes said taxpayers get more services in Joplin than in some cities, such as a fire department rather than a fire district and a subscription fire department. Joplin also has a health department that provides health information, childhood vaccines and immunizations, VIC nutrition services and other programs for women and children.
Although the city does not have water or electricity, it does have a sewage system and has an airport with commercial flights. The report doesn’t give Joplin credit for having a city-supported museum or public transportation services. Stokes said that’s because Joplin’s transit system doesn’t offer as much service as the bus systems in Kansas City and St. Louis.
“Our secondary point for Joplin is the tax abatement numbers,” Stokes said. “We are very much against TIF (tax increment financing) and subsidies.”
The report states that the amount of taxes reduced in 2020, when the data was collected, is equivalent to 0.05% of the total taxes collected that year.
“This is small compared to other cities, but it’s generally not a great practice to give some businesses or individuals tax breaks while others pay their fair share,” the report said.
Haase said in Joplin’s case, the TIFs and tax breaks allowed have paid dividends with a long-term return on investment, along with providing jobs and retail opportunities the city wouldn’t otherwise have.
Stokes said the institute believes it has a broader tax base to keep taxes as low as possible.
But after reviewing Joplin’s audit report and 2020 Comprehensive Annual Financial Statement, “Joplin’s overall financial health is good,” Stokes said.
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