Neosho City Council will decide tonight on tax issue

Following two public hearings, the Neosho City Council will vote tonight on whether or not to impose a property tax in Neosho.

The special session begins at 6 p.m. at the Neosho City Hall council chambers, 203 E. Spring St.

The highest levy that the council could legally set this year is .4225 cents per $100 of assessed valuation. The tax would be levied on real property only. In dollar terms, the owner of a $100,000 home would pay about $80 a year in city property taxes if the levy is imposed at the tax ceiling.

The first hearing tonight is on whether or not the current property tax rate of zero should be raised above that amount. A vote will then be taken by the council.

A second public hearing will immediately follow concerning the actual tax rate to be assessed this upcoming fiscal year. The council will then vote on that issue as well. If it is approved, another vote, on final reading, will then be taken under emergency measure as the council only has until Sept. 1 to set a property tax levy or wait another year.

Anyone wishing to speak at either of the public hearings is asked to sign up on the provided sheet prior to the start of tonight's meeting.

Neosho has not collected a city property tax since 1997, when the sitting city council at that time effectively set the levy at zero.

Several city residents have stated publicly and privately over the past few months that the voters were promised by the 1997 city council that the property tax would be “repealed” in exchange for passage of a 3/8 cent sales tax for parks and stormwater. Although that arrangement is not printed anywhere on that particular ballot, the dedicated sales tax was approved and the council did away with the city property tax.

However, the Missouri Attorney General’s office recently held in an opinion letter to the State Auditor that the past council did not have the authority to actually repeal the property tax, since cities are already authorized by the Missouri Constitution to set a tax levy. In effect, the opinion read, Neosho has always had the authority to set a property tax — it has simply chosen not to since 1997.

Neosho Mayor Richard Davidson said Wednesday that if the voters were told in 1997 that the property tax would be repealed forever, it was “incorrect.”

“The property tax that we’re going to consider is a tax that we are empowered to impose and one that cannot be repealed by a vote of the council,” Davidson said.

Neosho has gone 13 years without collecting a property tax of any amount. But if the city ever needed one it’s now, according to Davidson. Earlier this month, city voters shot down a $1 ad valorem tax on real and personal property that would have bailed out the city’s depleted general revenue fund, which at the time was facing a shortfall of more than a million dollars.

One week later, 20 police and firemen were laid off. Most chose to leave immediately.

But Davidson said if the 42-cent tax is approved by council, at least some of those emergency service positions might be re-filled.

“It will give us the opportunity to put additional revenues in the budget, which could be used to re-employ police and fire positions that were laid off earlier this month and could increase the overall safety and security of the City of Neosho in general,” Davidson said.

Immediate needs aside, Davidson said a property tax is a “necessary supplement” to any city’s unpredictable sales tax income, which is what Neosho has mostly relied upon to financially sustain itself over the last 13 years.

“A property tax, when utilized appropriately, can be a buffer to diminish the ebbs and tides, the increases and decreases, we see in a sales tax due to changes in economic times from year to year,” he said. “I think it’s important for the City of Neosho in the long run to have a blended revenue stream of both sales tax and property tax — not necessarily as a means to put more money into the city’s hands to spend, but to better stabilize the availability of revenues from year to year as the city plans its budget.”

Asked if he thought the citizens of Neosho could afford to pay a city property tax during the present economic downturn, Davidson said he realized that some people are struggling financially right now, but that “the bigger and broader question” was how much of a hit are the citizens willing to accept in terms of police and fire protection.

“In my opinion, for the size of our city, the City of Neosho needs to be able to maintain a fire and police force at a level higher than we have today,” Davidson said. “I would hope that any property tax to maintain that force would have a minimal impact on those who have to pay it."