Cape council gives initial OK to use-tax ballot

Placement of a use tax question on the April 8 ballot received first-round approval from the Cape Girardeau city council Friday, but the council wants more time to look at a related proposal to lower property taxes.

Friday's special meeting at city hall was held so the council will have time to vote at a later meeting whether to put the use tax question on the ballot. The ordinance must be approved before the Jan. 28 certification deadline to get it on the April ballot. The council unanimously approved the ordinance except for Councilman Trent Summers, who was absent at the start of the meeting but later voiced his support.

The council is considering asking voters to approve a use tax after a signal of support for it from the Cape Girardeau Area Chamber of Commerce. If the ballot question passes, a use tax equal to the city's general sales tax -- 2.75 percent -- would be charged by the city on items such as cars and boats that are bought out of state. Supporters of a use tax say it is needed to help "level the playing field" for businesses.

A Missouri Supreme Court ruling in 2012 stopped governments from charging local taxes on out-of-state purchases without voter approval, which caused some to lose revenue. Collection of taxes in that situation has been reinstated by a state law enacted in July, but it requires that governments without use taxes must hold an election and have voters pass the tax before November 2016 to continue collections.

Because the city has several votes on renewal of sales taxes for transportation and other uses in the next two years, city officials are trying to forge a strategy for success at the ballot box.

The proposal to cut city property taxes by 10 percent if the use tax passes is one way Councilman Wayne Bowen sees to build support for a use tax. Several council members, including Mayor Harry Rediger, have voiced support for lowering taxes with the passage of a use tax -- though all but Bowen agreed Friday the matter needs more discussion and involvement of city staff before a decision is made. Bowen began pitching the idea to lower property taxes after the Dec. 13 decision by the chamber to support a use tax on the ballot.

Councilman John Voss made a motion to postpone the first vote on the property tax reduction. Councilwoman Loretta Schneider seconded the motion.

Councilmembers weren't opposed to lowering the property tax, several indicated during the discussion after the motion.

"I will support the postponement as well only for the purpose of continuing this line of dialogue," said Councilman Mark Lanzotti, and added the ordinance that would need to pass to lower the property tax with a new use tax is not as time-sensitive.

City attorney Eric Cunningham said the council could pass a proposal for the property tax as late as the late March and the reduction would still be triggered if voters approve a use tax.

Figures provided to the Southeast Missourian on Friday by city manager Scott Meyer showed the 10 percent property-tax reduction would mean a savings of about $6.83 for a person who owns a home with a $100,000 actual

value.

For the city, the 10 percent reduction would mean a drop of about $160,000 annually in general revenue.

eragan@semissourian.com

388-3627

Pertinent address:

401 Independence St., Cape Girardeau, MO