Cape council considers use tax on April ballot

Voters in Cape Girardeau could be asked to approve a use tax in April that would help fund public safety needs, city officials said Tuesday.

City manager Scott Meyer and several city council members said the issue could come up for discussion at the next council meeting, scheduled for Dec. 21.

Under a state law signed by Gov. Jay Nixon in 2013, local governments are allowed to collect a use tax if it is approved by voters before November 2016.

That law was prompted by a Missouri Supreme Court decision in 2012 that changed the way local counties and municipalities could collect taxes on vehicles.

The court ruled local sales taxes no longer could be levied on out-of-state purchases of motor vehicles, trailers, boats and motors.

The subsequent state law allowed municipalities to resume collecting the taxes but only until November next year, unless approved by voters.

Meyer said two issues could be placed before city voters: the first to retain the current vehicle tax, and the second to approve an overall use tax that would apply to items purchased out of state primarily by businesses.

Several council members, including Mayor Harry Rediger, said any tax measure would need to include a list of specific items to be funded with the tax money.

Rediger said that list has not been finalized, but public safety funding likely would be a key part of any ballot measure.

Meyer said council members he has spoken with individually favor using some of the proposed tax revenue for hiring more police officers.

Purchase of vehicles out of state currently generates about $200,000 annually for Cape Girardeau city government in the form of a sales tax paid by the buyers when they register their vehicles.

Without voter approval, the city would lose that revenue next November, Meyer said.

A proposed use tax would be similar to a sales tax and would apply to all out-of-state purchases, Meyer said. Such a tax could bring in $750,000 annually for the city, he estimated.

But about $333,000 of that revenue annually would be earmarked for the police station project as part of an earlier agreement with Mid-

america Hotels Corp. that would remove use of restaurant and hotel tax money for that project if a use tax is implemented, Meyer noted.

Missouri Municipal League has concluded just passing a use tax might not keep cities from losing the vehicle sales tax without a separate vote, Meyer said, explaining why two tax issues are being considered.

Voters in Cape Girardeau County rejected a proposal for a use tax by the county and the cities of Cape Girardeau and Jackson in April 2014.

In April this year, voters narrowly approved a 1 percent use tax for Cape Girardeau County government to finance new court facilities in Jackson.

On Monday, Jackson city officials discussed the possibility of putting a use-tax measure for that city on the April ballot.

Cape Girardeau Councilman Wayne Bowen said a possible ballot measure should be considered.

"I would be willing to look at it again," he said. "I think public safety is the highest need right now."

Bowen and Councilwoman Loretta Schneider said the council should specify to voters how the tax money would be spent.

Schneider added the city has had a long and successful history of spelling out projects that would be funded with tax measures.

"As long as we have a clear purpose, I think voters will understand," she said.

mbliss@semissourian.com

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