City Puts Use Tax on Ballot
Measure puts city tax on out-of-state purchases; would boost city revenues
By CATHERINE STORTZ RIPLEY, C-T News Editor
Tuesday, May 13, 2008

Two years after Livingston County voters approved a tax on out-of-state purchases, Chillicothe voters will have the opportunity to approve a similar measure for goods exceeding $2,000 shipped to addresses within the city of Chillicothe. Currently, products shipped from out-of-state to Chillicothe buyers are assessed state and county use taxes, but not a city use taxed. What is being proposed is that a 2.25 percent tax - the same rate for products purchased within the city limits - be placed on goods purchased from out-of-state, shipped into Missouri and used by consumers.

City council members were unanimous in their decision Monday night to place the question on the August primary ballot. They said passage of the measure would put Chillicothe businesses on a level playing field with business out-of-state because the city's sales tax is 2.25 percent for purchases made within the city. The tax would be assessed on products if out-of-state purchases made by individuals or businesses exceed $2,000 in a calendar year. Livingston County voters passed a similar use tax proposal two years ago at the county level. The county's use tax rate is 0.75 percent, which is the same rate as the county's sales tax rate. Livingston County voters residing within the city limits gave the measure a 57 percent approval rating.

If the city proposal is approved in August, conservative estimates project an additional $400,000 being pumped into the city's coffers each year, according to City Administrator Dean Brookshier. Like all city sales taxes collected, the use tax would go for the existing voter-approved areas: 1 percent to the city's general fund, 0.50 percent to the permanent street fund, 0.50 percent to the capital improvements fund, and 0.25 to the city fire department. "The county has been successful with a use tax and we think we are losing a potential source of revenue," Brookshier said in his endorsement of the use tax measure.

Before the council voted on placing the proposal on the ballot, several people were on hand to offer suggestions as to where the money should be spent. The council chambers were filled Monday night with mostly city employees asking council members to commit to improving the salaries and benefits for city employees. Representatives from Greater Chillicothe Visitors Region asked for funding as did representatives from Main Street Chillicothe. Council members approved the measure without making and commitments, but several stated that if approved, the city's employees and city departments would be a funding priority. Brookshier said that the city doesn't know how much the use tax would generate and it would be premature to start earmarking funds before the funds become available. If voters endorse the measure in August, collections could start being made as early as October.

In other business Monday night, the council approved a conditional use permit for Hedrick Medical Center to place mobile units at 100 Central Street. HMC's chief executive officer, Brian Johnston, said the request was being made so that Chillicothe Medical Clinic and Dr. DeCastro could relocate there temporarily while the remodeling work is being done in the doctor's building. Also Monday night, the council heard a request from Crystal Narr, director of Main Street Chillicothe, and from Kris Daniel, a board member, regarding a request for funding for Main Street Chillicothe. They said the city is at risk of losing the program if additional local funding cannot be allocated. Mayor Chuck Haney presided over Monday night's meeting with the full council in attendance. In other business, the council:

• Recognized Don Jackson for his eight years of service on the city's Board of Adjustments. Jackson currently still serves on the city's Planning and Zoning Board;
• Approved the appointment of Dr. Jane Neal to the Hospital Board, replacing Dean Herring, who was retiring off the board after 15 years of service;
• Heard a report from Hedrick Medical Center CEO Brian Johnston regarding facility projects and physician staffing;
• Approved contracts with the rural fire district and the Livingston County Ambulance District;
• Approved the purchase of a topdressing machine for the city-owned golf course. The accepted low bid was from Commercial Turf and Tractor in the amount of $9,750, including a $200 trade-in discount;
• Approved the payment of invoices, $292,522.67, and payroll, $117,143.57;
• Approved a contract agreement with Bucher Willis and Ratliff regarding an airport state block grant.

An executive session, closed to the public, followed by the regular meeting to discuss personnel issues. The council hired Jeremy Stephens as a police officer.