SALES TAX REVENUES REBOUND IN CAPE

City sales tax revenue is growing at near record rates, revealing a steady recovery from the flat sales of two years ago.

Cape Girardeau's Finance Director John Richbourg said Tuesday that this summer's devastating flood apparently had little effect on sales in Cape Girardeau as tax receipts since July are up 7.3 percent over totals for the same period last year.

Before the most recent revenue reports, sales tax revenue was up more than 9.3 percent over last year.

But in September, the increase was only 3.4 percent, dropping the fiscal year total.

Still, Richbourg said he's encouraged that revenues have continued a steady climb since a local recession in 1991.

"In 1992, sales tax receipts were up about 7.3 percent over the 1991 figures," he said. "We're seeing that this year we're again up more than 7 percent, which shows a steady increase."

Since January, total tax receipts are up $282,186, or about 6.7 percent over the January-to-October figures for 1992. And the 1992 figures at this time were up 5.7 percent over the previous year's totals.

From January through December in 1991, sales tax revenue decreased almost 1 percent from 1990 totals, the first time sales tax revenue actually dipped.

But that figure rebounded in 1992, increasing 6.1 percent to $5.06 million.

This year, revenue already is at $4.5 million, and with December revenue expected to top $600,000 and November receipts usually around $200,000, there could be a significant increase this year.

City Manager J. Ronald Fischer said that means the city can continue to rely on its sales-tax base to provide police and fire protection, improve streets and sewers and complete other capital improvements.

"A growth in sales tax gives us the ability to stay up with inflation," Fischer said. "If you're based on a property tax, it does not respond to inflation as quick as sales tax."

Fischer said that as a regional education, medical and retail hub, Cape Girardeau's population of 35,000 can swell to 90,000 people during the day.

"We have to provide police, fire, repairs to the streets and all the other city services, so when those people come into town, they pay part of that bill," he said.

The city manager said 30-40 percent of the sales tax revenue is generated from people coming into the city. And as that sales-tax base grows, the city's residents bear less of the burden for paying for services.

It also enables the city to respond to unexpected expenses.

"With the flood, the expenses to the city were in excess of $300,000," Fischer said. "With the additional sales tax over what we budget, it gives us the cash to cover that.

"It's important that we carry some additional funds to take care of those rainy days."

When city sales-tax receipts lagged in 1991, the city had to push back a year or two some of its planned capital improvements.

Fischer said a prolonged recession would have meant cutting such projects and, if extended long enough, a cutback in city services.

"That finally gets to a point when you can't quit doing those things, and you have to come up with some other way to get revenue," he said. "Fortunately, we've never experienced that in Cape Girardeau."

Still, Fischer's optimism is guarded due to the sometimes erratic nature of sales receipts.

"We have a small month coming here in November in terms of sales, and December usually has a big check," he said. "But if we don't see an increase, all of a sudden 7 percent growth could be reduced significantly.

"You have your good times, but they can end very quickly when you're counting on sales tax."

As new businesses come into the city and large corporations in particular, sales-tax receipts will grow. But more important, Fischer said, is the growth of the entire tax base.

"A lot of times we think the new, big companies are growing at the expense of the smaller companies," he said. "But what we're seeing is that overall for each of these industries sales are up. In other words, the pie itself is growing. That's what's encouraging."