These days you cannot drive down a street without seeing a delivery truck dropping a package off on someone’s doorstep. It is easier than ever to buy anything with just a few clicks on your phone or computer. For residents of Independence, you may notice something new when you are making those online purchases in 2020.
Beginning Jan. 1, the city’s use tax went into effect. This tax, approved by the voters in August 2019, applies the same 2.25% local sales tax rate to online purchases just like those we pay in the checkout line at stores in our community. Because of the support of our voters, we now have a dedicated revenue stream to support our Regional Animal Shelter as well as a funding source to hire up to 30 new police officers. Now that the use tax is in place, I want to highlight what this decision will do for our community.
Retailers began collection of the tax on Jan. 1, and the city will receive the first distribution from the Missouri Department of Revenue in April. While we estimate the use tax could generate up to $1.3 million in the first full year, we will have a better idea of what actual totals will be once we receive a few months of returns.
As we prepare for the 2020-21 budget, all of your city departments are looking for further long-term efficiencies. This is a key component of Independence for All as we identify tactics to ensure long-term financial sustainability. The funds collected from the use tax revenue will go a long way in assisting many goals in the strategic plan related to an increased perception of safety and a reduction in crime and disorder. $750,000 in use tax funds will be used to support operations of the city-operated Regional Animal Shelter. The use tax revenues will also support hiring 30 new police officers.
We are excited about the potential this has in our community. We have already seen the impact focused, community policing can have with the Street Crimes Unit and the Gun Squad. Even though it will take several years to hire, train and fully support the 30 additional police officers, our community will begin to see a dramatic shift in our ability to respond to citizen concerns, response times and more.
Last year, we had to cover a multi-million-dollar deficit in our city budget. We did not yet have the use tax in place to help cover our needs. One of the many difficult decisions we made was to reduce public hours at the Regional Animal Shelter. With the use tax now in place, we are hopeful that once fully funded, we will be able to restore and expand services at the shelter, providing the level of staffing and programing our citizens and partners expect for animals in our area.
While it is estimated these funds will not be fully funded before 2039 at current rates, should funds collected from the use tax exceed $3.7 million in the animal shelter and police funds, the remaining money will be directed to the other special sales tax funds already approved by voters. It is also important to note that all funds generated by the use tax will be overseen by two citizen appointed committees – the Animal Welfare Committee and the Public Safety Sales Tax Committee. These committees will receive regular reports from the city’s finance department and are required to update the City Council regularly.
We are all buying more online, and the ease of online shopping only continues to grow. Municipal budgets still heavily depend on sales tax revenue, meaning we must adapt. Our citizens made an important investment in our community’s future in August. This decision will result in more police officers on our streets and better care for animals in our area. We look forward to sharing updates throughout the year about what these funds are able to do for our citizens. Thank you for your support and we look forward to more discussion as we shape the future of our community.