Hikes in online shopping caused an estimated $2.5 million loss to Columbia’s sales tax revenues during the 2019 fiscal year, straining the city’s budget, newly appointed city manager John Glascock’s proposed budget for the upcoming fiscal year beginning Oct. 1 shows.

Glascock’s budget, released Friday morning at a City Hall news conference, shows an increase in total expected revenues, to $455.6 million, and total estimated spending of $485 million. The excess of spending over revenues is due to the use of reserve funds held over from previous years.

The city is struggling to retain and attract staff, Glascock said, as turnover has doubled since 2009 to 13.32% and staff with only one to five years experience often leave for higher-paying jobs.

The city is currently around 30% understaffed, with almost 170 vacant full-time positions, including 13 in the police department, 10 for garbage collectors and 31 for equipment operators.

The city is adding only three staff positions in the new budget and the ratio of city employees to city residents, 12.93 per thousand, is lower than before the recession of 2007 to 2009, he said.

The budget will be the subject of public hearings before the Columbia City Council on Aug. 19, Sept. 3 and Sept. 16. A council work session will be held Aug. 26. All meetings are in City Hall.

The biggest factor in turnover is employees' dissatisfaction with pay and the lack of raises, Glascock said. The turnover adds to the city’s costs for training and hiring new staff, he said.

With big budget hits due to decreased sales tax revenue, Glascock suggested implementing a city use tax on online purchases to remedy the city’s inability to pay competitive wages. The increasing number of unfilled jobs has reached a “critical point," he said, causing the city to take longer to respond to resident requests.

Glascock plans to remedy these losses by increasing starting pay for garbage collectors to $17.00 per hour, $16.50 for equipment operators and $33.15 for police sergeants. He also suggests an across-the-board raise of 0.5% to all city workers, an incremental move to midpoint for all city workers based on number of years worked and a $0.50 per hour pay increase for some workers in the street division.

The budget suggests hiring three workers for the new Molly Thomas-Bowden Neighborhood Policing Center, which will open late in the fiscal year, along with two workers for the Parks and Recreation Department. The Neighborhood Policing Center hires will not be police officers, however, despite the 13 open positions.

Glascock suggests an investment of some $1.1 million of general fund reserves to the city’s community policing unit.

The budget reports estimated losses of $1.4 million in transportation sales taxes in FY 2020, and losses of $8.6 million over the past 10 years.

Columbia voters rejected a proposed use tax on out-of-state purchases in 2017, which Mayor Brian Treece attributed to voters misunderstanding what the tax was.

“When you buy at a local store you pay a local tax,” Glascock said. “When you buy on Amazon or online, they don’t normally charge that local tax portion, so we don’t receive that money. It’s like going and buying a book and paying 10 cents for taxes. That 10 cents goes to police and fire and those things. If you buy it online, we don’t get that.”

Amazon started charging online shoppers Missouri sales tax — 4.225% — in 2017, but a local county or city use tax can only be charged with voter approval. Glascock said that things like swimming pools could be cut if the use tax isn’t approved.

“The community would need to tell us what’s important,” Glascock said.

He said he plans to hold “World Cafe” meetings to understand community priorities. These would be meetings in which large groups of community members would break off into smaller groups to discuss issues like the use tax, then present their findings to the larger group afterward.

Glascock said he is considering several tax proposals to increase city revenue, all of which would require council and voter approval.

The ideas include a municipal fuel tax that could finance police services and street work, a sales or property tax for public safety and a property tax for fire services.

No changes to the public transit system were proposed, so the controversial changes introduced with last year’s budget will stay the same.

Glascock’s proposal also features a department-wide spending cut of $4.2 million in the general fund.

The budget also includes the 20% stormwater tax increase and 3% water increase approved by voters during the 2018 fiscal year. The increases will cost consumers an average of $0.82 per month. Last year these rates increased by $3.16.