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Joplin council hears sales, use and marijuana tax update as members press to free use-tax dollars
Summary
Finance staff reported January sales tax was down 6.65% year-over-year while use tax rose 6.4% for the month; council members questioned why use-tax receipts remain assigned to restricted buckets rather than moved to the general fund, and staff said changing allocations is a council policy decision.
Leslie Dieter, finance director, told the Joplin City Council at an informal meeting that January sales tax collections (which reflect November activity) were down 6.65% compared with the same month last year and roughly flat (-0.45%) for the first three months of the year, while use tax for January was up 6.4% and is up about 4.2% year-to-date.
Dieter said marijuana tax receipts showed month-to-month timing differences and that earlier spikes reflected remittances across December and January. "So for the year, we're up 4.2%," Dieter said of use tax, and she cautioned that timing and prior policy changes such as Wayfair have altered growth patterns.
Council member Jackson asked why the county appears able to use marijuana tax revenue for general operations and pay increases while the city still assigns use-tax receipts to specific capital and program buckets. "What are they doing differently than we are that's allowing them to have that flexibility from that tax revenue?" Jackson asked.
Dieter replied the county is currently facing a legal challenge over collection and that the city places marijuana tax into the general fund to cover operations, pay increases and equipment replacement. On the broader question of reserving use-tax receipts for specific categories, Dieter said the city told voters how the funds would be spent when the tax passed and that past communications and action plans established the spending buckets.
Jackson pressed the point that the ballot language did not expressly require separating use-tax receipts into many categories, citing guidance from the Missouri Supreme Court that referred to use taxes as use taxes. "I'm just curious why are restricting ourselves when the greatest need has been that the general fund," Jackson said, arguing the council should consider reallocating funds.
Other council members and staff responded that reallocating where money goes in the city's budget would be a council policy decision. "If you want to make that change, then I think that's just something for council discussion and council vote," one council member said.
Why it matters: the allocation of use-tax and marijuana-tax receipts affects what the city can spend on everyday operations, pay increases and capital purchases. Dieter warned that, as presented, the city is projecting operating losses in coming years unless one-time balances are used to balance the budget.
The council did not take a vote on reallocation. City staff said they will provide additional information, and the matter was left for future council discussion.
