CITY COUNCIL PONDERS TRANSPORTATION TAX WITH SUNSET; FINANCIAL BENEFITS DISCUSSED DURING RETREAT

The Cape Girardeau City Council is flirting with the possibility of placing before the voters a transportation and capital improvements tax measure to fund infrastructure development.

At a city council retreat held Friday at the Black Forest, north of Cape Girardeau, the city administrative staff demonstrated that a quarter-cent hike in the capital improvements tax and a half-cent transportation tax could generate $92.5 million in 20 years.

But council members indicated they would favor instead a limited transportation tax with a five- to eight-year sunset.

"I'm willing to take the risk and put something before the community," said Councilman Mary Wulfers.

She said an eight-year transportation tax would enable the city to "free up" money in the budget's general fund. That money could then be used to finance a major sewer segregation project in south Cape.

Assistant City Manager Al Stoverink said that a sales tax likely would be the most "saleable," because of the city's role as a regional hub for trade.

As opposed to issuance of revenue bonds, higher fees or property taxes, a sales tax would be paid by visitors as well as Cape Girardeau residents, he said.

The assistant city manager said the dollars saved on interest alone are significant. He also said funds "freed up" from general revenue could be used to reduce the city's property tax levy by 10 cent per $100 of assessed valuation.

"The results that can be achieved in terms of the growth and development of Cape Girardeau are mind-boggling," Stoverink added. "This can have a very huge impact on infrastructure at a very low cost to the individual."

City Manager J. Ronald Fischer said that with a "sunset" on the tax, the city could pare down the tax proposal to include, for example, only major street projects.

"At the end of that five years, or whatever it is, you could ask the voters to extend the tax to do major sewer work, stormwater work or some of the water projects we need," Fischer said.

The city in 1986 and again in 1987 tried, unsuccessfully, to pass a transportation sales tax. But council members indicated Friday they'd be willing to try again.

"I think if we don't ask for too much, we can pass it," said Councilman Melvin Kasten.

Stoverink said a half-cent transportation tax the city now has no transportation tax, unlike the surrounding cities of Perryville, Jackson and Sikeston would generate more than $2.5 million annually.

"Cape Girardeau citizens are missing the boat in terms of their financial capability because they are such a large, regional hub," he added. "Most of the revenue with a sales tax would be paid by people from other communities coming to Cape."

Stoverink said a half-cent capital improvements tax would generate about $1.25 million annually, which would increase to $2.5 million after 1999 the sunset for the current quarter-cent tax that's financing the city's flood control project.

"The combined total of the two would be adding three-quarters of a cent to the sales tax, which would still leave us comparable with other cities around the state," he said. "Cape currently has one of the lowest sales tax rates in Missouri and one of the lowest property tax rates."

Stoverink said the city could put the tax revenue to immediate use. A recently completed 20-year water system master plan identifies $10 million in needed projects. Another $36.5 million in sewer work also is needed over the next 20 years.

Included in that figure, is $12.5 million to separate combined storm water and sanitary sewers in the city's older neighborhoods.

"I'm of the opinion we need to come up with something to tackle this problem," Wulfers said of the combined sewers. "It's been an issue way before I was on the council, and we really need to address this."

Fischer said the problem with combined sewers is common among cities that developed along the Mississippi River prior to the turn of the century. He said cities with the old combined sewers have formed an association that's working to secure federal help to solve the problem.

"How long are we going to wait for federal money?" Wulfers said. "We need to do something."