CITY SALES TAX HERE DROPS FOR THE FIRST TIME

For possibly the first time in the nearly 20 years the city of Cape Girardeau has collected a one-cent sales tax, annual receipts have declined from the previous year.

Assistant City Manager Al Stoverink said Wednesday the checks received for 1991 totaled $4,766,562, a drop of almost 1 percent from 1990.

Sales taxes are collected by the Missouri Department of Revenue and distributed to counties on a monthly basis.

Stoverink noted that the city's rate of increase in sales tax had been declining in recent years, from an increase of 8.22 percent in 1988 to 4.78 percent in 1989 and 4.75 percent last year.

As far as he knows, Stoverink said this is the first time Cape Girardeau has ever received less sales tax in one year than it had in a previous year.

"It came very close in the early 1980s during the recession then prior to the opening of (West Park Mall); it was very flat then but I don't think there was a decrease," said Stoverink.

In the mid 1970s, when inflation was high, sales tax receipts increased about 10-12 percent a year. Receipts also increased at about that same rate in the mid-1980s after the opening of West Park Mall.

"I think what we are seeing now is the impact of the recession in the past year and the fact we hit a plateau in retail trade that was triggered almost a decade ago by the opening of the mall," explained Stoverink.

But Stoverink stressed sales tax figures need to be kept in proper perspective and declared, "The present situation is not a crisis. It causes us to be fiscally conservative and we know that we have a tight budget to operate with."

He added that there are many positive signs in the community that indicate retail sales will likely pick up in the future.

In the last 18 months, 12 new buildings have been constructed around the mall itself, four new businesses are either open or being constructed in the Cape Centre shopping area, and there are several new buildings west of Interstate 55, including a Walmart Super Center that is under construction.

"I think in the last two years we have seen quite a bit of construction in retail facilities and I think we will see some rebound, but right now the recession impact is counteracting that," explained Stoverink. "We are anticipating that we will have a flat sales tax for at least the next year or two, and maybe longer, but we don't expect it to decline significantly. Hopefully, it will at least maintain the current level."

Cape Girardeau's budget is based on a fiscal year that begins July 1, and at the halfway point of that year the city is running 2.25 percent behind the same point last year. In the last fiscal year, the city's overall sales tax growth was 1.4 percent, and in the year prior to that it was 5.62 percent.

Stoverink pointed out that the present budget's revenue projections are based on a sales tax increase of 2 percent.

Sales tax income represents about half of the city's general fund operations. "It is a very significant part of our income, but the other half of general revenues, which is a combination of a number of revenue sources, has picked up some of the slack," noted Stoverink. "So, overall, we are basically right on or very close to our budget projections for this fiscal year."

In the last fiscal year, Stoverink pointed out that the city's sales tax revenue was running behind until large March, April, and June checks put them over the top.

Normal cost increases due to inflation drive the city's costs up 3-4 percent a year, he noted. The city has managed to keep up with the increased costs by reorganizing departments, improving productivity, and raising user fees and charges.

"That combination of factors keeps us on sound financial footing," observed Stoverink.

If revenues declined for an extended period of time, Stoverink said the city would eventually have to look at some new revenue source, but for now he is optimistic things will turn around.

"We hope that as we come out of the recession and see the impact of some of the more recent construction in Cape Girardeau, that this picture will turn around somewhat, although we don't expect to see again in the near future the kind of growth rates we saw in the mid-70s and '80s," observed Stoverink.

"The growth in businesses around the mall and Cape Centre are very positive things that should at least keep us from seeing further decline."

Other factors that should help stimulate Cape Girardeau's economy are construction of the Cape LaCroix/Walker Creek flood control project and the new Mississippi River Bridge and highway.

The flood project will result in expenditures of about $30 million over the next three years and then the bridge project will bring about $70 million in expenditures the following three years.

"Six years of major public construction activity that is in front of us is bound to have a positive impact as well," declared Stoverink.

"Cape has a lot going for it and that allows us to bridge these recessionary periods."