Worries on taxes, roads air at forum

Congress’ work said key for cities

Saturday, June 21, 2014

Some major issues that cities face -- the continued loss of Internet sales- tax revenue and potential loss of federal highway funds -- are in the hands of Congress, the National League of Cities president said Friday at the Arkansas Municipal League annual conference.

But Chris Coleman, the mayor of St. Paul, Minn., told municipal league conference attendees that he still believed Congress might take appropriate action to help cities, passing the Marketplace Fairness Act and extending funding for highway projects.

The Marketplace Fairness Act, for which Rep. Steve Womack, R-Ark., is the lead sponsor in the U.S. House of Representatives, would require online retailers to include local sales taxes at the time of sale. Brick-and-mortar retailers already must assess the sales tax at the time of the sale. The act would do a number of other things, including requiring states to simplify sales-tax laws to make collection easier.

Coleman and others argue that the inability of municipalities to collect on local taxes through Internet sales has cost businesses whose products might be seen as more expensive and has cost local governments billions of dollars nationwide and millions of dollars in Arkansas.

Arkansas Municipal League Executive Director Don Zimmerman said that the state lost out on an estimated $236 million in 2012 sales tax, about $100 million of which would have ended up in city and county governments.

People who buy goods or services online are supposed to keep track of their purchases and pay them later when they file their income taxes, but they don't do that, Zimmerman said.

"There's little enforcement on that," he said.

Additionally, cities face the potential loss of federal highway funds when the highway trust fund runs dry later this summer, unless Congress acts.

Coleman said that as the mayor of St. Paul, he understood the need for highway funds and projects to maintain communities' safety and economies.

He mentioned that the collapse of the I-35W bridge over the Mississippi River between Minneapolis and St. Paul in 2007 killed 13 people and that its eventual closure affected the flow of traffic and goods into the area.

"Transportation is critical," he said.

In dealing with what Coleman called congressional inaction, he said the National League of Cities has worked with the Education and Interior departments instead to help cities have a voice in education and to help them encourage outdoor activity.

"I love working on the local level, and nothing reinforces that more than when I go to D.C. and see the difficulties there," he said, to laughter.

Zimmerman, who spoke with a reporter after the speech, agreed with Coleman's comments about local government.

"At the local level is where you get things done," he said.

Metro on 06/21/2014