Raytown doesn’t need to hand over a blank check in the form of a new use tax

On Tuesday, Raytown voters will decide the fate of a new 2.5% sales use tax. This Band-Aid approach of slowly ratcheting up the cost of living with a new sales tax is deeply flawed.

Pro-tax forces have run a campaign of misinformation to persuade voters to buy into this unfair and regressive tax increase. They complain inflation is costing the city tax dollars, particularly in franchise tax fees. That is nonsense.

Franchise taxes in Raytown are paid for by homeowners and businesses when they pay utility bills. These taxes are assessed on how much you pay for electricity, natural gas, telephone service (cell and landline) and cable services. Franchise taxes are tied directly to inflation. If the cost of your service goes up, so does the franchise tax you pay. All sales taxes are tied directly to inflation as well. For instance, the more you spend on groceries, the more the city makes.

The pro-tax people claim the city has had declining revenues. That is simply not true. In fact, in 2019-2020 (at the beginning of the COVID-19 pandemic) the city actually had a banner year. Sales tax revenues have remained robust into 2021. Because of inflation, city tax revenues will continue to rise.

Real estate and personal property tax revenue is on the rise as well. Want proof? Check out the increase of what homes are selling for in the Raytown area. There is a housing shortage. Demand has driven prices up. Higher values means more real estate tax revenue for the city.

Another talking point from the pro-tax people is that this new sales use tax is a tax on internet retailers. That is extremely misleading. If this tax passes, purchases from out-of-state internet sellers would be charged an additional 2.5%. The vendor does not pay the tax. As with all sales taxes, the vendor acts as an agent for the taxing entity. The retailer remits the sales tax collected to the state of Missouri. The state redistributes the tax collected to local governing entities.

An interesting fact about use taxes is that less than half the cities in the state of Missouri collect them. There is also a question of what is fair and equitable for Raytown taxpayers. The sales use tax is a regressive tax. It hurts those most who have the least. It is a financial drain on low and fixed income households as compared to those with higher incomes.

A seatmate of mine on the Raytown Board of Aldermen, Derek Ward, has suggested the city should look at municipal bonds. Municipal bonds would raise more money, more quickly, than levying a sales use tax on Raytowners. Best of all, it would jump-start long overdue improvements to city streets, particularly in our neighborhoods.

What Raytown really needs is more accountability from its elected leaders. The proposed 2.5% sales use tax provides none. All the money collected under this tax would go into the general fund. No earmarks for improving our city’s infrastructure. No money set aside for improvements to neighborhoods.

A municipal bond is different because the money from bonds can only be spent on what the voters are promised. These bonds are valuable because they are enforced by bond covenants that are ironclad. If voters approve the use tax, there is no guarantee where the money will be spent. Therefore, no accountability. It would be accurate to say you are writing a blank check to City Hall. Those blank checks have not worked in the past. Those blank checks would not work now.

Vote no on the 2.5% sales use tax on Nov. 2. Better yet, Vote no and remind your neighbors, friends and family to do the same.