Saturday, January 24, 2009

More on Springfield's 2009 Legislative Priorities

The Council will be asked to approve Resolution 2009-015 on Monday night, January 26, after hearing from the public.

What the legislative priority list does is establish what the City's lobbyists will be lobbying for at the state and federal level in the upcoming year. Normally, the City likes to have this list approved by the City Council earlier in the fiscal year but this year's legislative priority list hit a road block when the City Council was faced with a very large number of speakers, drawn out by the Park board's submission the City take a position favoring a ban on guns in open park spaces. Another member or two of the City Council didn't like the idea of opposing collective bargaining on the part of the City's employees either. The resolution was tabled and sent back to the Council's Finance and Administration Committee earlier this year, where it was decided to remove the words "collective bargaining" and the gun ban issue. The rest of Council, later, agreed with the omissions and now, it is again on the agenda for approval at the next meeting.

JackeHammer is looking at the 24 page document in an effort to outline a few of the issues held within it.

Yesterday, we looked at Section C.4, today we will look at Section C.5, pertaining to E-Commerce and Other Interstate Sales Activities.

This legislative priority is not a new addition, except for the inclusion of "parks" as a "needed service" of the citizens of Springfield.

Subsection a, paragraph 2 of Section C.5 states:

"The City of Springfield urges Congress to recommend that all sales and use tax on sales of tangible property be treated fairly and equitably whether the sales take place over the counter, by phone, mail order or by Internet. The City urges Congress to enact legislation that redefines nexus to include economic nexus as well as physical nexus so that out-of-state mail order sales and Internet sales are treated the same as sales within the same state. The City supports efforts by the State of Missouri to work with other states in studying the issue."

Continuing to C.5, subsection b, the City gives its argument as to why it feels E-Commerce, phone, mail order and Internet sales should be treated the same as local over the counter sales:

"b. Other Interstate Sales Activities. The loss of local tax revenues to out-of-state companies that do not pay local taxes threatens to undercut the ability of local government to provide needed services to its citizens. When a customer visits a store, services are provided to him/her during the sale and before and after as they travel through the City. The same is true for Internet sales. The customer still uses services of the City while purchasing and before and after at his/her location. These revenues are needed to pay for the infrastructure (roads, streets and easements) upon which these services are delivered. Local merchants are at a competitive disadvantage when out-of-state merchants can avoid collecting and paying taxes. The federal government should exercise its power under the Commerce Clause to protect the local tax base, which is used to provide needed services and protect local merchants from out-of-state merchants who do not pay state and local taxes, so that there is a level playing field."

For more information on the fairness of Internet sales tax and debatable points of consideration, I'd refer readers to this link.

I think support or non-support for the City's lobbying to collect local sales tax on sales generated by phone, mail order or by Internet, might depend on each individual's ideology regarding taxes.

One argument might be that finding new ways to tax consumers works against all consumers because it raises the price on goods. It does strike me, in some ways, that it is a penalty on the consumer. One might ask, "is, as the City has claimed in its argument, the citizen still using services of the City while purchasing something over the Internet and before and after?" Probably not related to any particular purchase, is my thought. Perhaps those citizens continue to use City services prior to and after they have made a phone or Internet purchase but no more than the citizen would be using those services anyway. How does the everyday use of City services change when a purchase is made by phone or over the Internet? It strikes me, the only changes would be: less gasoline usage; less road usage; less red light camera surveillance; and less required, traffic related service. Remember, the purchase is made while the customer is sitting in their home, breathing free air and minding their own business. They aren't driving over city pavement to get to the store and they aren't stopping off at the park for a picnic lunch on their way to or back from the store. Further, citizens are already being taxed by the City on phone calls and are already taxed on cable use.

It isn't my place, or at least I don't intend to make it my place, to tell citizens what should be an issue to them or not. It's each person's decision as to whether their elected City Council representatives should represent them by asking for taxation on mail order, phone or Internet, interstate sales to provide services such as highway infrastructure or City parks (etc.). It's each person's decision as to whether their elected City Council representatives should represent them by striking the City government's legislative priority to find new and creative ways to bring in more money through taxation, particularly for services which the public is already paying taxes. And, I should note, another City argument is the "level playing field" argument on behalf of merchants within the City. It's up to those merchants whether they believe mail order, phone and internet sales signify a loss in sales at a local level. The City's argument does not state whether any of the local Springfield merchants are up in arms about the issue or not.

Everyone has to make decisions every day as to what is more important to them. We do it at home, we do it at the grocery store when weighing whether peanut butter would be a more economical and nutritious purchase than a can of tuna, we do it when weighing whether our time would be better spent in one activity or another activity. Life's all about choices and choices are based, most usually, on our own opinions or ideology about what is important in life and our circumstances from day to day, week to week, month to month, effect our opinions and ideology as we face choices we might not have faced before in our lives.

To me, a factor in all of this discussion about taxing Internet sales (I hope you do refer to that link above for more information about the issue) by making the argument that the taxes are needed for infrastructure and road improvements doesn't take into account gasoline taxes which already exist for road maintenance and taxes already collected on phone and cable services. The City, recently, accepted a settlement from Sprint-Nextel for payment of back taxes and is involved in other litigation to force other telecommunication companies to pay taxes on cell phone usage. The City Manager has promised and the City Council has pledged to put any further telecommunication settlement money into the police and fire pension plan to help bring it to a full funding level as quickly as possible.

The Obama administration is looking at the possibility of raising the federal gas tax and in this article there are claims that a "Federal Gas Tax Would Lead To Myriad Benefits."

I don't know, it just seems like the government is raking in, or trying to rake in, more and more of our money from every direction and, while I don't doubt there might be a myriad of benefits there are other considerations in the debate.

Traffic World On Line recently published an article in which they cited the latest Manufacturing Report on Business from the Institute for Supply Management. The report indicated most manufacturers are decreasing their capacity due to declining activity. The Traffic World article also reported the lowest order activity since mid-2002 for Class 8 trucks, in December 2008. Sales declined 45 percent compared to December 2007. For some interesting highway history, this is a good link.

Another, entirely different issue, unrelated to the sales tax is the City's new inclusion of the "parks" as a "needed service." Are the City's parks "needed services" or are they welcomed luxuries? Will this inclusion set a precedent? Will "parks" now be considered a "core" City service and should they be considered a "core" City service?

I think most people understand the difference between a "necessity" and a "luxury" but maybe the City doesn't, and since they read this blog regularly, maybe I should add those definitions for their benefit:

Necessity: 1: the quality or state of being necessary

Luxury: 3 a: something adding to pleasure or comfort but not absolutely necessary b: an indulgence in something that provides pleasure, satisfaction, or ease.

And again, I think it would depend on an individual's personal ideology whether nice parks are a need or necessity to the residents of a city. I don't think of them as a necessity, myself, at least not like oxygen, clean water, food, and the assurance of having a safe environment to raise families and make a living.

Have fun determining your own opinion about the City's legislative priority to collect taxes on mail order, phone and Internet sales and whether you agree with the definition of parks as a needed service.

There will be an opportunity for the public to address the City Council on this and every other item listed in the City of Springfield's 2009 Legislative Priorities on Monday night at the regularly scheduled City Council meeting. It starts at 7:00 p.m. and will be held in the City Council chambers on the third floor of City Hall.


1 comment:

tom said...

I have to wonder, if Springfield was a more business friendly city if on of these large internet retailers would have located here in Springfield thus Springfield would be gathering in taxes from the warehouse industry plus the employees who would work there.
It make NO sense that we have I-44 running just north of town and yet we haven't a large customer or manufacturing base to take advantage of this central location.