Excelsior Springs, Mo. – A proposed bill in the Missouri Senate to eliminate local sales taxes on groceries has sparked concern among city officials and municipal leaders across the state, particularly in Excelsior Springs. City Manager Molly McGovern warns that if SB 57 is enacted, the loss of revenue would have far-reaching consequences, putting essential services at risk and straining the city’s budget beyond sustainability.
The Proposed Legislation
SB 57, currently under consideration in the Missouri Senate’s Economic and Workforce Development Committee, aims to exempt groceries from municipal sales taxes. While this measure may seem like a relief for consumers, city officials argue that the reality is far more complicated. The bill does not impact the state budget significantly, as Missouri already exempts groceries from state sales taxes. Instead, it disproportionately affects cities that rely heavily on local sales tax revenues to fund critical public services, including police, fire protection, road maintenance, and public facilities.
A $4.2 Million Shortfall for Excelsior Springs
According to McGovern, Excelsior Springs stands to lose an estimated $4.2 million in annual revenue if the bill passes. This funding supports multiple tax funds that sustain critical city functions:
- General Fund ($772,500 loss): The city’s primary funding source for police, fire, and street improvements.
- Public Safety Sales Tax ($386,200 loss): Used exclusively for purchasing police cars, fire trucks, and other emergency response equipment.
- Capital Improvement Sales Tax ($386,200 loss): Supports public building and infrastructure improvements and provides essential matching funds for grants.
- Transportation Sales Tax ($386,200 loss): The city’s primary source of street maintenance funding.
- Community Center Sales Tax ($772,500 loss): Dedicated to debt repayment, with potential cuts of up to 65% in operating expenses.
- Community Improvement Districts (CIDs) ($772,500 loss): Three grocery stores in Excelsior Springs are within CIDs, and the repeal would eliminate pledged revenue for debt service and grant matches.
With the repeal eliminating 31% of all sales tax revenue collected by the city, the impact would be catastrophic for the city’s ability to provide essential services.
How Does This Compare to Kansas?
Proponents of the bill argue that Missouri should follow Kansas’ lead in eliminating grocery sales tax. However, McGovern points out key differences between the two states:
- Kansas exempted only the state sales tax on groceries, allowing cities and counties to continue collecting local sales taxes. Missouri has already exempted groceries from state sales tax, making SB 57 more extreme in its impact.
- Kansas cities operate under “home rule,” meaning they have greater flexibility in taxation. Missouri cities can only levy taxes approved by the state legislature, limiting their ability to replace lost revenue.
- Missouri’s Hancock Amendment restricts cities from increasing property taxes without voter approval. In contrast, Kansas cities can adjust property tax rates and issue debt without voter approval.
Widespread Concern Among Missouri Municipalities
Excelsior Springs is not alone in its concerns over SB 57. Cities across Missouri have raised similar objections, warning of the significant financial strain the bill would impose. According to the City of Manchester, Missouri, municipal sales tax on groceries represents a crucial funding source for essential services. Manchester officials and those in other cities have echoed McGovern’s concerns that the bill would disrupt funding for police, fire protection, and infrastructure projects.
Multiple Bills Targeting Grocery Sales Tax
SB 57 is just one of several proposed bills in this legislative session aimed at reducing or eliminating sales tax on food. If passed, any of these bills could have similar financial consequences for municipalities across Missouri. The proposed bills include:
- HB345: Exempts the retail sale of food from state sales and use tax and phases out local sales and use tax on the retail sale of food over four years. Read more
- HB432: Exempts the retail sale of food from state and local sales and use tax. Read more
- HB872: Exempts the retail sale of food from state sales and use tax. Read more
- HB1107: Modifies the definition of food to authorize a reduced sales tax on the purchase of dietary and nutritional supplements. Read more
Current Missouri Senate Bills:
- SB57: Modifies provisions relating to sales tax exemptions. Read more
- SB659: Authorizes a state and local sales tax exemption for food. Read more
- SB688: Authorizes a state sales tax exemption for food. Read more
- SB734: Authorizes a state sales tax exemption for food. Read more
Each of these bills would reduce or eliminate sales tax revenue from food sales, and local officials warn that the impact would be severe without an alternative funding mechanism in place.
Balancing Immediate Relief with Long-Term Consequences
Supporters of the bill argue that reducing the grocery sales tax is a meaningful way to provide financial relief to families struggling to make ends meet. With inflation continuing to drive up grocery costs, repealing the sales tax could help ease some of the financial strain on households, especially those in low- and middle-income brackets.
However, lawmakers must weigh the short-term benefits against the long-term impact on Missouri communities. While the repeal may provide immediate relief to consumers, it also strips municipalities of essential funding that supports emergency services, infrastructure, and local development. Without a plan to replace lost revenue, cities like Excelsior Springs may face service reductions, layoffs, or tax increases in other areas to compensate for the deficit.
A Call for Action
McGovern and other city officials urge residents to understand the stakes involved and reach out to their legislators to oppose SB 57. The bill is currently in committee, and public feedback will play a crucial role in determining its fate. Excelsior Springs, like many other municipalities in Missouri, depends on local sales tax revenues to sustain the quality of life and essential services that residents rely on daily.
“The unintended consequences of SB 57 would be devastating for Excelsior Springs and cities across Missouri,” McGovern said. “We urge our legislators to recognize the long-term harm this bill would cause and to consider alternatives that do not undermine the ability of local governments to serve their communities.”
Residents who wish to express their concerns can contact Senator Kurtis Gregory and other Senate Economic and Workforce Development Committee members.
If you appreciate the value our local journalism brings to the community, please consider making a recurring contribution to the Excelsior Citizen!
