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NewsFebruary 26, 1995

A combination of Cape Girardeau's growing role as a regional center, ongoing commercial development and a strong economy are bringing bountiful sales tax returns to the county and the cities of Cape Girardeau and Jackson. Sales taxes make up a large part of the budgets of the three governmental bodies and have provided an opportunity to keep property taxes down...

A combination of Cape Girardeau's growing role as a regional center, ongoing commercial development and a strong economy are bringing bountiful sales tax returns to the county and the cities of Cape Girardeau and Jackson.

Sales taxes make up a large part of the budgets of the three governmental bodies and have provided an opportunity to keep property taxes down.

Cape Girardeau County Auditor H. Weldon Macke, who has closely monitored the county's half-cent sales tax that has been collected since 1980, said he believes the kind of development now under way in Cape County will expand its regional role. And, if that regional role continues to grow, sales tax revenues will also continue to rise.

Cape Girardeau Chamber of Commerce President John Mehner agreed.

"The more development that we have, the more people we get who come to Cape," said Mehner. "It just solidifies our position as a regional hub. So we draw the people, and when you draw the people you continue to get tax dollars," said Mehner.

The sales tax has become increasingly important to local governments over the past 15 to 20 years. One advantage to the sales tax is that people who don't own property in Cape Girardeau pay a sales tax and that spreads the tax burden.

There is concern about the sales tax because it is considered regressive, hitting lower-income people the hardest. Also, if the tax becomes too high it could discourage shopping.

Cape Girardeau County and Cape Girardeau have enjoyed average growth rates of 5-8 percent over the years. Some years it has been more; some years less.

Larry Koenig, administrative assistant to the city administrator in Jackson, said sales tax has grown consistently there most years.

In 1994, Jackson's 1-cent sales tax increased 8.2 percent to a total of $961,600. A half-cent transportation sales tax brought in $454,000.

In 1994, Cape Girardeau County's half-cent sales tax for general revenue raised $3,819,343, an increase of 10.7 percent.

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Cape Girardeau's 1-cent sales tax grew at a rate of 11.4 percent over 1993, reaching a total of $5,981,939. Receipts from the county's quarter-cent sales tax for a flood control project grew at about the same rate to a total of $1,495,307.

Growth for Cape Girardeau and the county in 1993 was a little over 7 percent.

The sales tax is the sole tax component of the general operations budget of Cape County, but it just a part of the general budgets of Cape Girardeau and Jackson. Besides the sales tax, Cape Girardeau has a property tax levy of 32 cents per $100 assessed valuation for general revenue and a total rate of 47 cents. Jackson has a general revenue levy of 65 cents and a total rate of 92 cents.

Because employment is good and the county's regional services are diverse, prospects for future sales tax growth in the county are bright.

But Cape Girardeau City Manager J. Ronald Fischer and Macke both warned that the sales tax is still subject to large fluctuations, even though Cape County has all the components necessary to have a thriving sales tax base.

"It's an excellent tax, but you have to be very cautious with it," said Fischer.

In the budget process, revenue projections from the sales tax are always projected conservatively.

In 1991 there was virtually no growth in the sales tax over 1990, which forced Cape Girardeau to go through a reorganization and restructuring plan to cut costs without reducing services and programs.

Jackson City Administrator Steve Wilson said "essential services are funded by the sales tax."

In this year's budget, Jackson has been able to move some part-time employees to full time to help improve services. Sales tax revenue also will help pay for the move to a new building for city offices and help fund an elevated water tank to improve water service.

But even with good sales tax growth, Wilson and Fischer agreed that there never is enough revenue to meet all needs. Even a strong sales tax base doesn't provide the kind of revenue necessary for major infrastructure improvements to keep the two cities growing.

Said Fischer: "Cape Girardeau is very financially sound as far as taking care of today's needs. But even with this sales tax growth we have, it does not generate enough additional income to address our long-term infrastructure and capital equipment needs. But it certainly enables us to meet our basic needs."

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