Events bolster sales tax revenue, but is funding source sufficient?

Hardly a weekend passes in Columbia without some burst of activity—even in the dead of winter, when events such as the True/False Film Festival take place—and that’s a pretty good thing.

The list of happenings this month included the Roots ‘N Blues ‘N BBQ Festival, the Tour of Missouri Bicycle Race, Columbia’s Heritage Festival, Twilight Festivals and numerous University of Missouri athletic events, including the first home football game.

Almost simultaneously—and, some might argue, rather crassly—comes the discussion and tally of the financial “take” these events are responsible for producing, ranging from sales tax collections to accounts of restaurant and hotel/motel occupancy or even how many servings of beer have been consumed.

Less publicized and rarely inquired about are the administrative costs incurred by various government agencies, measured in overtime pay, extra forces deployed and other incidental expenses.

Oh, how we worship these sales taxes—and thank goodness we have them! Going back only 70 years or so, sales taxes have funded the majority of city and county undertakings in Missouri, exclusive of operating the public schools. Daily, we pray that sales tax revenues will adhere to schedule as the means to fund our magnificent way of life in this splendid little island of peace here in the Midlands.

We’ve become so dependent on these regressive consumption taxes that when there’s a cash-flow “burp” and the taxes don’t rise according to plan, it’s time for an appraisal of the taxation mechanism with respect to how city and county operations should be funded. While the current sluggish increase in sales tax revenue has not yet reached the crisis stage, there hasn’t been much leadership and innovation when it comes to boldly considering how to reform Missouri’s crazy-quilt range of taxes.

The stack of sales taxes piled upon one another varies according to where one lives. Beginning with the base state rate, cities and counties stack more taxes, often at fractionally odd percentages, often timed for only a few years and often tied to specific “sunset” provisions. But these shining orbs of taxation rarely really disappear because it seems there’s always another duty waiting in the wings to replace them.

Over the years, this stack of piled-upon sales taxes may add as much as 9 cents for each dollar spent, while city and county officials gnaw nervously on two matters. The first is how voters would feel if they dared ask for any more, piercing, say, the 10 percent barrier. The second challenge is the Internet and how to collect sales taxes from those transactions. Huge problem: It’s the current inability of all government taxing bodies to collect sales taxes from the Internet that’s one of the reasons revenues overall are down.

Receipts from sales taxes will rise and fall because economic activity fluctuates from good times to bad and vice-versa. There is much to be nervous about economically as this is written, but my call goes out for two matters that should change in Missouri when it comes to taxes—one of them, however, being acknowledged with reluctance.

First, every Internet transaction needs to be taxed because it is only fair to do so. With every Internet transaction solidly recorded and retrievable via computer, I don’t see what the hassle would be for any relevant taxing body to get what it was entitled to collect.

Second, given the seasonal, often irregular, cash flow derived from sales taxes, even if government agencies finally tap the Internet’s golden eggs, I propose—reluctantly—that Missouri’s ridiculously low property taxes should be adjusted upward. While making such an outlandish suggestion in the milieu of the Hancock Amendments is rather laughable, shouldn’t we at least be prepping ourselves for the day when Missouri might have to get serious about raising property taxes?

While feasting on that, on a closing and really positive note, our community and the region as a whole have come a long way, especially after the recent civic excitement about two truly memorable big events that recently packed the crowds into downtown Columbia. Besides, it’s only a tiny fraction of us party-poopers who really ever worry about taxes. The rest of us were having a good time, and that’s why we like it here—splendid, magnificent and all that.