CAPE'S AMBITIOUS CAPITAL PROGRAM BUILDS ON SUCCESSES

An impressive program for Cape Girardeau's capital improvements is outlined in Jay Eastlick's Page One interview with city manager J. Ronald Fischer today. The past five years have seen major improvements in our city's streets, sewers, flood control measures, utilities and other capital improvments. Building on these successes, we're poised for a lot more improvement this year.

Many people who three years ago watched the lengthy and bitter fight over the Lexington arterial project must have wondered what all the noise was about. But anyone who didn't understand this in 1990, when Lexington was just a line on a map, surely had their questions answered this year when the new intersection with Kingshighway was straightened up, signalized and aligned with Mount Auburn Road.

Lexington can now clearly be seen to be one of the most important arterial traffic projects ever completed in this town. Its eastward extension remains one of our highest priorities, as does the linking of that eastward portion with a northward extension of Sprigg Street. Both are important for the logical and orderly growth of Cape Girardeau.

Our $30 million flood control program continues, promising protection to a vital retail and commercial/industrial sector of our city. Sewers have been extended to western sectors that have never had them; annexation is proceeding; bridges are being built; our airport will have a new terminal (and our city a new "gateway"); and an ambitious, city-wide recreation project is about to unfold over the next two years.

Sales tax revenues are showing healthy growth after two years of stagnation. This points to a strengthening position for the city to complete the rest of the ambitious program outlined in today's news article.

In a democracy, some strife and controversy in the accomplishment of so ambitious a program of capital improvement is normal. To a point kept within acceptable bounds of civility it is even healthy and part of the price of progress. But make no mistake about the long-term trend: It is one of progress for our community.

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Taxes are necessary to this kind of progress and to the completion of all public works. Still, we must always be on guard for the point that economists call the point of "diminishing return." The following news article from the Wall Street Journal illustrates the danger of getting taxes so high that tourists and business travelers are driven away and revenue actually falls with higher tax levies.

Ailing New York Tourism

Is Blamed on Room Tax

A new study commissioned by New York's hotel industry claims that the city is losing tourists because of an onerous room tax, enacted to help close the state's budget gap.

The study, conducted by American Economics Group, an independent economists' group, says New York's room tax at 21.25 percent averages $23. 74 a night, several times the average for other major cities. The new tax was passed in June 1990, but the groups calling for its repeal say that it is having the reverse effect desired: it discourages travelers from coming, so hotel occupancy is down and revenue from the tax itself is falling.

"The study confirms what we've been saying right along," said James Marquart, president of New York State Hospitality & Tourism Association, which co-commissioned the study. "The net result is a decrease in tax revenue for state and local government. Legislative support arose for this tax from the misconception that it is easier to fill a $600 million budget gap by taxing tourists and business travelers. But the levy makes New York city the highest-taxed destination in the country."

In releasing the study, the Tourism Association and other groups, including several city councilmen, called for the immediate repeal of the tax.

Wall Street Journal