The Springfield City Council agreed on the rate of a potential payroll tax at its April 6 meeting.
The 0.01% tax would be on both employees and employers. The tax would be implemented no earlier than January 2027, and would generate approximately $2.45 million in the first year, according to city staff.
There would be no increase in tax rate or structural changes to the ordinance in the first three years after implementation.
Springfield Finance Director Nathan Bell said resulting revenues would be allocated to a separate fund, and the city would only use what’s needed to balance the city’s general budget. The rest of the funds would be saved to offset future deficits.
Bell said the payroll tax would allow the city to save funds for postponed projects, like city building maintenance.
“We are struggling just to fund our daily operations, let alone save for anything in the future,” said Bell.
The tax would be up for formal review by the city council after the third year, and that is when potential changes could take place.
The Payroll Tax will be the subject of a public hearing at the April 20 Springfield City Council meeting.
