Buying into higher taxes

A quarter-cent increase in Cape Girardeau's sales tax will add roughly 25 cents to a $100 purchase, and that's not going to keep any shoppers away, a local economist says.

If voters approve a quarter-cent fire sales tax on June 8, that would raise the total sales tax to $6.975 on a $100 purchase from the current $6.725 rate.

"You probably will not see any noticeable change in the amount of spending," said Bruce Domazlicky, a Southeast Missouri State University economist who directs the university's Center for Economic and Business Research.

Domazlicky said Cape Girardeau sales tax still would be comparable to tax rates in surrounding cities even if voters approve the quarter-cent fire tax. Among five cities in the region, sales taxes are lowest in Jackson at $6.225 on a $100 purchase and highest in the Scott County part of the city of Sikeston at $7.225 on a similarly priced item.

So if the fire sales tax is approved, Cape Girardeau's level would still be less than in Sikeston and Perryville. It would be equal to the sales tax charged in the part of Scott City that is located in Scott County.

Sikeston voters recently passed a 1-cent sales tax measure that, after two quarter-cent sales taxes expire, will bring the total sales taxes charged in that part of Sikeston to $7.725 per $100 purchase in 2006. In the part of Sikeston in New Madrid County, the total sales tax will be $7.225 on a similar purchase in 2006.

Meanwhile, the local economy seems to be on the upswing. Cape Girardeau's local sales tax check was up 18 percent from the April 2003 check received by city hall. The check reflects sales made in February.

The fire sales tax would raise an estimated $2 million a year to provide added funding for the police and fire departments.

If voters approve the tax, shoppers would start seeing it rung up on cash registers starting Oct. 1, said Cape Girardeau city finance director John Richbourg. State law stipulates that the collection of a new sales tax can't start until the second quarter after an election, he said.

Cape Girardeau resident Chris Brost said she is aware of what she pays in city sales tax, but only because her husband operates a business. "I don't think most people have a clue," she said.

Property tax factor

Some Cape Girardeau civic leaders privately worry that voters might come out against a quarter-cent sales tax because they feel property taxes are too high in comparison with those levied in surrounding cities.

But Domazlicky said property tax rates are relatively low compared to those levied in other states and regions.

"Some people just don't like to pay taxes at all," he said.

Cape Girardeau has a higher property tax than those levied in Sikeston, Jackson, Perryville and the Scott County portion of Scott City.

Cape Girardeau's total property tax rate per $100 assessed valuation ranges from nearly $5.06 to nearly $5.14 this year.

The 2003 property tax rate in Cape Girardeau city ranged from nearly $5.16 to nearly $5.24 per $100 assessed valuation depending on the library district. But the Cape Girardeau School District levy of $3.99 makes up most of that amount.

Property owners living in the Cape Girardeau city library district paid 63.87 cents per $100 assessed valuation to help fund city government and the city library. Cape Girardeau city residents living in the Riverside Regional Library District paid 55.54 cents per $100 assessed valuation to fund city government and the regional library.

The city government levy dropped by 10 cents this year because the Show Me Center bonds have been retired, city officials said. The bottom line, Richbourg said, is that the city of Cape Girardeau will receive only 37 cents per $100 assessed valuation from the property tax.

That's lower than the property tax rate for city government in Jackson, Sikeston, Perryville and Scott City.

Richbourg said the problem is that taxpayers don't differentiate between the various property tax levies in their county tax bills.

But Richbourg said the city sales tax "spreads the burden out to providing city services" so that not only those who live in the city but those who visit and shop here pay for city services.

mbliss@semissourian.com

335-6611, extension 123