SPRINGFIELD – Springfield City Council unanimously agreed to adopt a .1% payroll tax shared by employers and employees on Monday night. Collection for the tax will begin no sooner than Jan. 1, 2027.
On April 6, the council reached a general agreement on a proposed rate and ordinance direction, so a public hearing and first reading were held during the regular session on April 20. On June 1, the second and final hearing was conducted, and the motion was adopted.
The new tax is projected to generate approximately $2.45 million in the program’s first year. This revenue is intended as an incremental step toward addressing the City’s long-term fiscal imbalance, alongside other fiscal strategies suggested by the Mayor’s Fiscal Stability Task Force.
During the April 6 discussion, City finance director Nate Bell described the payroll tax as a tool.
“We want to attract more businesses, bring more businesses into the community. That’s how we’re going to get more leverage out of this tool,” he said. “Let’s bring businesses in here. Let’s increase payroll. Let’s increase that revenue so that the percentage stays the same, the benefit rises.”
The proposed structure includes a 0.1% payroll tax shared by both employees and employers, applied to gross wages with only legally required exclusions, applicable to employers located within Springfield city limits, and annual reporting to the council and the community. Once adopted, staff will begin implementing the tax, with anticipated collections starting in 2027.
