Voters in Springfield, Missouri, renew sales tax to support old pension fund
By Josh Altic
In Springfield, Missouri, an old public safety pension fund no longer in use by new hires faced a critical decision by city electors today, who cast votes on Question 1, a ballot measure asking if a 0.75 percent sales tax supporting the fund should be repealed. Although less than 10 percent of registered voters turned out to vote, those who did decided to overwhelmingly support the tax. According to the most recent vote count, over 76 percent voted no on Question 1, renewing the tax for another five years. Going forward, officials have estimated that the tax will provide about $9.7 million per year to the pension fund, money that would have had to come out of the city's general fund if the tax had been repealed. The ballot question is required by law every five years.
Before this tax was implemented, the pension fund was 36 percent funded, with $200 million in unfunded liabilities. This means the fund had only 36 cents in assets for every dollar of obligations. As of 2014, the sales tax has helped to bring the fund up to 67 percent funding. The city website reported that, since the tax was renewed, the pension fund could be 100 percent funded by 2019.
As of March 2014, there were 900 city employees participating in the pension fund system in question. Five hundred had retired and four hundred remained active. No new employees are being added to this pension fund system because, in 2006, the city moved all future new hires to a new pension system called L.A.G.E.R.S, leaving the old pension system to expire.
Those who supported the renewal of the tax, advocating a "no" vote on this measure, asserted that without the tax the city would have had to pull $9.7 million from the city's general fund to provide for pension needs. They argued that this would have required a reduction in essential city services.