This Week with Columbia City Manager Mike Matthes

The 2016 budget is being hammered out between Columbia City Manager Mike Matthes and the Columbia City Council. It’s about a 440-million dollar plan that includes money for essential services, public safety, veterans services and even some new city jobs.

Mike Matthes: We don’t often get to add employees, most of those are in the utilities sections, not many in the general fund. In the general fund, there is seven public safety positions being added.

Joey Parker: When you say “public safety” you’re talking fire and police.

Mike: Fire and police, that’s right.

Joey: Those are the big ones. That’s the thing about the upcoming November 3rd park sales tax renewal. A lot of people say, “We don’t need money for parks. We need money for police and for firefighters.” But that money is earmarked specifically for Parks and Rec, right?

Mike: That’s right. We don’t get the option, if something passes a ballot it’s always worded “shall we use this tax for this purpose?” And it’s always “yes” or “no.” We don’t have the freedom to change our mind and spend it over here instead. It has to be for parks.

Joey: You’re also recommending taking one half of the excess general fund to add for public safety police and fire.

Mike: That’s right. So we have a 20% goal, where everyone should keep an emergency fund. For us that’s about two months of operation. And then we have $10 million in reserve to that. So I’m recommending we take half of that and put it against our pension debt. Sort of like paying down your mortgage ahead of schedule.

Joey: Right. Now, what would you say the biggest problem for the fiscal year 2016 would be for the city?

Mike: The biggest problem we have is the deteriorating sales tax revenue. Online shopping is just eating our lunch. You think about how much we rely on sales tax. Everything we do has a sales tax impact. So parks, roads, trails, police, fire, every service we provide other than electricity and water has some sort of sales tax to it. As more and more transactions happen online and aren’t taxed those don’t support those functions. It’s really an unfair playing field for mom and pop businesses here who do.

Joey: Yeah, but you also understand for a shopper when they want to save money they are going to save money, even the most patriotic Columbians.

Mike: That’s right. And it’s so convenient. Why wouldn’t you shop online?

Joey: Well, there are plenty of great shops around. What is the answer to (the deteriorating sales tax revenue issue).

Mike: Well, I think this Marketplace Fairness Act that has been introduced in the federal level is a start. It just recognizes that we still want people to shop online, but you have to pay the same sales tax you do if you bought the same product down the street. If we do that, it fixes all the tax problems that the cities all over the countries have. And it makes it fair for the businesses.

Joey: A lot of the states have been able to solve this problem. Some municipalities. And do you think that will be able to be done in 2016.

Mike: I hope that can be done. We are going to continue to educate our representatives and others outside Missouri about the effects this has on us.

Joey: Another thing you talk about in your budget plans and remarks, you talk about poverty increasing in Columbia, especially among black residents. Talking about violence and other issues that can “tip the balance against success” as you wrote. You had pointed out that black households make 60 cents on the dollar compared to white households. What can the City of Columbia do about this.

Mike: One of the biggest things we can do and this is proven in a abundance of research, is that there is a big wealth gap. It just sort of keeps poor folks poor. A way to change that, the number one indicator, there is housing cost. If we can do something about affordable housing we can kind of move the needle a little bit. And the other one really is minimum wage. I know that is a big argument right now in the country, but if you just paid what we paid minimum wage in 1968, it would be $10.55 To have the same buying power. If you adjust for inflation it would be $10.55. We pay $7.65 Now. So a same minimum wage family is 30% poorer than what we were in 1968. This is folks that work full time. We’ve got to think about that at some point. And of course the number of jobs in the economy is a huge piece. If we can create more jobs that pay benefits and have a living wage. Manufacturing is always one to think about.

Joey: Mike Matthes, thank you very much for joining us. We hope to have you back soon.

Mike: Thank you.