Double taxation?

Sunday, September 3, 2006

When voters approved an additional half-cent sales tax for roads and the sheriff's department last month, they were encouraged to do so, in part, by a pledge to eliminate all property taxes for roads. The tradeoff, it was suggested, would result in less tax spending by many Cape Girardeau County residents.

But it appears both the county and the Cape Girardeau Special Road District intend to collect the road property taxes again at the end of this year -- revenue that would be spent next year while shoppers start paying the extra county sales tax, which also will generate revenue for roads throughout the year.

Currently, the county road district's tax levy is 0.2361 cents for every $100 of assessed valuation. That tax generates about $793,000 a year. The Cape Girardeau Special Road District's tax levy is 0.2681 and generates approximately $1.4 million a year. The county said that if the sales-tax issue passed, it would eliminate its road tax. And the special road district also said it would drop its tax after the county pledged to make up the lost revenue through the new sales tax.

Merchants will begin collecting the additional sales tax in January. State and local officials say there is a lag of six to eight weeks before the county will actually start receiving that money.

The special road district set its tax levy for 2006 at a hearing last week. The county commission's hearing on the county road tax is set for Sept. 14. Unless the county discontinues its levy or the special road district changes its mind, both levies will appear on county tax bills that will start going to property owners in November. The tax bills are due by Dec. 31, and the revenue from the road taxes would be used for road and bridge projects in 2007. Meanwhile, the county will receive revenue from the road sales tax throughout 2007 as well.

Many voters who supported the county's road sales-tax plan probably thought the road property taxes disappeared when election results showed the proposal had passed. They didn't. And unless some pressure is put on the special road district and the county commission, there will be revenue both from the property taxes and the sales tax for roads next year.

Concerns by county officials that there will be a gap in early 2007 before the extra sales-tax revenue starts rolling in could be offset by higher-than-expected revenue in this year's county sales-tax receipts, or by the healthy reserves the county has built up.

Another matter that needs to be cleared up is the county's agreement with the special road district. Although the special road district agreed to eliminate its property tax as part of the overall sales-tax plan, no intergovernmental contract has been signed officially binding the county to make up the revenue earmarked for the district.

The likelihood that there will be funding available from both the property taxes and the new county sales tax for next year's road projects can either be seen as a boon or as a failure to keep the commitment many voters thought they were supporting.

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