Reinstatement of sales-tax holiday discussed by Cape council

A weekend discount for back-to-school shoppers that hasn't been seen in Cape Girardeau since 2008 could make a return this August if the city council decides to opt into participating in an annual statewide sales tax holiday.

Mayor Harry Rediger first broached the subject April 26 at the council's annual retreat, where he said he would like to see reinstatement of the holiday. The council on Monday directed staff to prepare a new ordinance that, if passed, would rescind a 2009 ordinance allowing the city to cease participation.

The council likely will hold a first vote on the ordinance during its next regular meeting May 20, according to city manager Scott Meyer. Passage of the ordinance by the council would take the amount of sales tax to zero charged on certain purchases of back-to-school items such as clothing, school supplies and computers during the first weekend of August if Cape Girardeau County also waives its 1 percent sales tax.

The county, along with the state, which normally charges a 4.225 percent sales tax, historically has waived the taxes since a law creating the holiday was passed in 2003. The city of Cape Girardeau's sales tax rate is 2.75 percent.

Council members Mark Lanzotti, Trent Summers and John Voss indicated through their comments Monday that they would vote for reinstatement.

"Let's opt in," Voss said immediately after the discussion of the sales tax holiday began during the council's study session.

The city estimates its revenue loss this year if the council decides to allow participation would be between $42,000 and $81,000.

Voss' take on the pending decision is that residents see the city receiving more than $3 million per year in revenue from the operation of Isle Casino Cape Girardeau, therefore it would be unfair not to issue a tax break for the weekend.

"If it was $100,000 per year I would still do it," he said.

The mayor's initial thought also was to push for participation this year, but he said he also is considering the revenue scenario and believes that no matter if the city opts in or stays out, the decision needs to stand for the long term. He is not alone in that line of thinking.

"I agree that it would be more beneficial to stay in if we are in," said Councilwoman Loretta Schneider.

Councilman Wayne Bowen added the financial impact to the city could be hard to predict, and was echoed by Summers with a similar concern, although Summers said he has come to the conclusion he will support the reinstatement of the holiday because there is also the benefit of revenue created by increased activity in the city during the holiday weekend from out-of-town shoppers in addition to the savings for local residents.

Airport grants

During the regular session, the council passed the first reading of ordinances that would accept Missouri Department of Transportation grant money for the design of 10 new T-hangars and for a wildlife hazard assessment to be conducted at the Cape Girardeau Regional Airport. The $36,000 design cost of the hangars will be 95 percent paid for with the grant. The city will pay the remaining 5 percent.

If the city goes through with construction of the hangars and associated taxilanes, more rental space for aircraft city officials say is in demand could be added. They also say new hangars could turn the airport toward becoming more self-sustaining.

The wildlife hazard assessment, at a cost of about $35,000, is mandated by the Federal Aviation Administration. The assessment will also be 95 percent funded with a MoDOT grant and 5 percent funded by the city.

eragan@semissourian.com

388-3627

Pertinent address:

401 Independence St., Cape Girardeau, Mo.