Weed will once again be on the ballot, but this time Springfield voters will determine if the city can impose a 3-percent tax on retail sales of recreational marijuana in the city.
At its May 22 meeting, Springfield City Council voted 9-0 to put the sales tax proposal on the ballot, effectively calling an election on Aug. 8. The revenue from the tax, if approved, would be used by the city government to fund public safety, mental health, housing and substance abuse services.
Public safety and homelessness and housing services were identified as categories that should receive the highest priority in a 2021 American Rescue Plan Act survey conducted by the city.
Additional sales tax to address community priorities
After Missouri voters passed Amendment 3 in November, local governments across the state have sought to implement their own laws and taxes to regulate the newly legal cannabis industry, as permitted by what is now Article XIV of the Missouri Constitution.
While Springfield initially opted to wait to put the adult use tax on the ballot as it passed handily in communities across the state in the April election, the City Council did amend the city code to restrict the consumption of marijuana in certain locations, including in public, in a motor vehicle and on school grounds.
Recreational marijuana is already taxed — the 3 percent tax would be in addition to Springfield’s base sales tax, which is 8.1 percent, and the state’s 6 percent tax, which was authorized in the amendment. Rather than authorizing local governments to implement the additional tax, the amendment gives them the ability to put it on the ballot, and let the voters decide.
The ballot language approved by the City Council reads:
“Shall the City of Springfield, Missouri, impose an additional sales tax of three percent (3 percent) on the retail sale of adult use marijuana with proceeds from such tax to be used for public safety, mental health services, housing, and substance abuse services?”
Guidance on tax stacking
While “local government” has been defined in the amendment as “in the case of an incorporated area, a village, town, or city and, in the case of an unincorporated area, a county,” there has been disagreements over if a county and city could stack that 3 percent tax.
If, for example, the measure was placed on ballots for Springfield and Greene County voters, some argue that would amount to an additional 6 percent tax on recreational marijuana, whereas others defer to the definition of “local government.”
The Missouri Department of Revenue is not providing guidance to local governments on the issue as some expect the issue to be addressed in the courts.
As of now, Greene County has not put the three percent tax on the ballot. If and until it does so, or another ballot measure is put forth by another entity, the City of Springfield will bear the entire cost of the election, which is estimated to be about $250,000.
If the ballot measure is approved on August 8, the city expects to begin collecting the tax in January 2024. If the ballot measure is passed by Springfield voters, recreational marijuana sales would be taxed at roughly 17 percent, including the state and local base sales tax. If stacking is permitted, that number would rise to 20 percent.
Tenant advocates, council members voice support for ballot measure
Only two members of the public spoke during the public hearing of the emergency bill May 22, both in strong favor of the ballot measure and the benefits of the tax revenue for Springfield.
Alice Barber, a leader for the organization Springfield Tenants Unite, said that the funds would enable the city to enact policies that would increase safety and affordability of housing in Springfield.
“With this money, Springfield could do things like improve housing quality and property values by investing in a mandatory rental inspection program and landlord licensing,” Barber said. “Moving from complaint based inspections, to regular checks for health and safety violations and creating a system to regulate landlords like any other business and penalize predatory slumlords would make housing better for everyone and promote public safety.”
Additionally, she suggested the funds could be used to expand affordable housing options and services to help people stay housed, as well as providing legal representation of tenants going through an eviction.
Darlene Steele, also a member of Springfield Tenants Unite, said that “income-based, no-barrier housing” has become the most crucial issue in Springfield, and that the allocation of funds to housing and public safety would help address it.
“I personally am never a fan of punitive sin taxes, and for that reason alone, I expect many will balk at the idea, but this seems to be the only avenue to directly address housing within the general fund and homelessness outside of federal and state dollars,” she said.
Like Barber, Steele urged the City Council to put some of the tax revenue towards “stringent” inspections and “registration with teeth.”
Council members debate where funding would go
Zone 4 Councilmember Matthew Simpson said that the combination of investments in the ballot language are all interconnected and will be “really impactful” for Springfield.
“I think that all of these tie together,” Simpson said. “When we look at investments in these areas, we need to invest in public safety, we need to make sure that we’re investing in the top public priority, but we also have to make sure that we’re investing in these upstream solutions.”
Zone 1 Councilmember Monica Horton, while in support of putting the measure on the ballot, said that public safety ultimately outweighed the other areas listed.
At the City Council’s May 16 meeting where it discussed the sales tax, Zone 3 Councilmember Brandon Jenson stressed the importance of prioritizing housing and homelessness in the form of a minimum allocation. However, the ballot language didn’t specifically put minimums or percentages on any community priority.
Horton suggested the City Council should look at having housing and shelter as a “council priority” when considering future budgets and actions.