Editorial

County has reserves to offset budget needs

The city of Cape Girardeau spent a year looking for ways to find enough revenue to cover spending plans. The result: Four proposed tax and fee increases will be on the ballot in April.

Earlier this year, the Cape Girardeau School District considered raising its property-tax levy a little bit to offset its budget squeeze. Instead, the school board and administrators agreed to look for ways to make it through the year without the increase, mainly because voters were told recent voter-approved levies would take care of district needs for a few years.

Now Cape Girardeau County's auditor -- Weldon Macke, who is retiring this week after more than 30 years as the county's chief budget official -- says the budget squeeze that has plagued cities, school districts and states ever since the U.S. economy soured two years ago is affecting the county seriously enough to warrant asking voters for an increase in the county sales tax.

Because of historically strong retail sales in Cape Girardeau County, this county has relied heavily on its half-cent sales tax since it went into effect in 1980. Two years after the tax was approved by a sizable majority of voters, the county eliminated its property tax for general operations. The only county property-tax bill since then has been for roads and bridges.

Under Macke's proposal, the road-and-bridge property tax also would be wiped out, leaving the county entirely dependent on sales-tax revenue and fees.

This year, sales-tax revenue has supplied approximately 40 percent of the county's budget, which includes $9.9 million for the general fund, $2.6 million for roads and bridges and $1 million for capital improvements -- a total of $13.5 million.

But sales-tax revenue this year dipped slightly below collections in 2001 -- the first time revenue from the county sales tax hasn't increased from year to year in its 22-year history. And with weaker-than-expected holiday retail sales, there's a good chance the new budget year for the county will begin with a smaller check in January for sales-tax revenue.

The county's annual budget hearing is Monday morning at the courthouse in Jackson. Macke said Friday he didn't have exact figures for the 2003 budget yet but estimated it would be about the same as 2002's $13.5 million.

By eliminating the road-and-bridge property tax and increasing the county sales tax to 1 percent from 0.5 percent, Macke estimates the county would have an additional $2.5 million to $3 million a year for road construction, the sheriff's department and other county needs.

But $2.5 million to $3 million in additional county revenue would represent a 19 percent to 22 percent increase, a sizable amount for a county that currently has $5 million in invested reserves set aside for an "emergency" that has never been clearly defined by county commissioners.

Unlike cities, school districts and the state of Missouri -- all of which have all but exhausted their reserves -- Cape Girardeau County has the wherewithal to make it through another tight year without increasing taxes. By this time next year, the economy could be far brighter than it is now. And if retail sales improve, so will the county's revenue picture.

Cape Girardeau County taxpayers can consider themselves fortunate to have had the kind of prudent financial management by county officials that produced the $5 million reserve. But they should also expect county officials to either prudently use some of those funds to get by or find ways to cut spending.

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