Cape County sales tax revenue flat with only slight increase over last year

Cape Girardeau County Treasurer Roger Hudson says the good news is the county’s sales tax revenue hasn’t decreased from where it was this time last year.

The bad news, though, is it hasn’t increased either. In fact, it’s almost exactly where it was a year ago.

Hudson provides updated tax revenue data to the Cape Girardeau County Commission every month and reported October’s numbers at Thursday’s meeting of the commissioners.

So far this year, Cape Girardeau County has received $6,223,878.32 from it’s half-cent sales tax, just $287.87 more than it had received by this time last year when the tax had generated $6,223.590.45. That’s an increase of 0.005%.

Last year, the county’s sale tax revenue was $7,356,605, 0.09% lower than 2017’s sales tax total of $7,363,023. It is the county’s single largest source of revenue.

“Sales tax is flat and will not increase because of out-of-state sales, including internet sales,” Hudson said, adding even though tax revenue is about the same as it was last year, “our costs are going up a lot more than that.”

Cape Girardeau County has had a half-cent sales tax since 1979, but in recent years, sales tax revenue has not kept up with the rate of inflation.

“When the sales tax was passed, they anticipated a 3.5% increase in tax revenue every year,” Hudson said. “Back then, the sales tax was coming in at a 9% increase (over the previous year) and some years it was an 11% increase during the mall opening and other retail expansions.”

In recent years, though, local retail receipts have plateaued.

“Our retail outlets aren’t getting bigger, they’re getting smaller and fewer,” he said. “And since 2008, our sales tax revenue is only up something like 1.6%.”

Some of that increase can be attributed to inflation.

“Inflation may make the cost of goods go up, which, in turn, increases sales tax, but that’s all we’re seeing,” the county treasurer noted. “The cities of Jackson and Cape Girardeau are in the same situation, although they’re not getting any use tax.”

Cape Girardeau County voters approved a use tax in April 2015 by a narrow margin — six votes. The tax is collected on items bought elsewhere and brought or shipped into the state, such as online purchases. Revenue generated from the use tax is applied to various county capital improvement projects such as the new courthouse now under construction in Jackson.

In 2018, the use tax generated $1,238,000. But so far this year, receipts for the use tax are running about 0.2% behind last year’s pace.

Hudson said until additional use tax is generated, the only way to increase sales tax revenue is to grow the county’s population.

“For Cape County, it would take a major event such as a new industry moving here,” he said. “We would have to have population growth to increase our sales tax, because you can’t increase your sales tax by adding another restaurant. People only have so much disposable income to spend, so you don’t need to add stores, you need to add people.”

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