Council gives final OK to tax package on April ballot

Cape Girardeau voters will be asked on April 8 to approve four taxes in what city government officials hope will take the city "to the next level."

The city council gave final approval Monday night to put a four-tax package on a ballot, a strategy developed by the Citizens Finance Task Force in hopes that four separate taxes would spread the burden over a broader range of people instead of a specific group.

Though some of the taxes and fees are earmarked for specific departments or projects, the purpose of the package is to free up money for the general revenue fund. This will give the city more financial flexibility, but the city has promised it will use the revenue to pay for a specific list of priorities that begins with operating expenses and ends with a family aquatic center.

"Cape Girardeau is running just fine," said Mayor Jay Knudtson. "We've made some tough decisions, but we're not in a crisis situation. We're acting in a proactive way. Now, if the economy continues the way it's going, we'll be forced with making a reduction in city services. Is that a crisis? It depends on how important those services are to the individuals."

City manager Michael Miller said in order to maintain services at the level they are now, a revenue increase is needed. But, he said, the proposal will not address everything the city wants to do.

"It won't be utopia," he said. "We won't be able to raise the city salaries like they ought to be, but it will allow us to maintain the city services for the residents, which is the most important thing."

$1.5 million from sales tax

The biggest revenue-producer on the tax package is a quarter-cent sales tax which will be earmarked for the fire department. The city expects this tax to generate about $1.5 million the first year, freeing up that much money in the general revenue fund. The fire department's budget for the current fiscal year is $3.15 million, meaning the fire department will continue to be supplemented by money from the general revenue fund.

Also on the ballot will be a use tax. A use tax would charge a 2 percent sales tax -- the same as the current city sales tax -- on all out-of-state purchases of more than $2,000 made within the city. This will tax catalog and Internet orders and will be enforced by the state. The city expects to receive about $1 million per year with the use tax.

The use tax, already collected by more than 80 municipalities in the state, is flexible and will increase or decrease with the city's sales tax. So if voters approve both the use tax and the sales tax increase, the use tax will rise to 2.25 percent.

The city will also ask voters to virtually extend a 10-cent property tax which is currently being used to pay off Show Me Center bonds. This measure will add $425,000 to the general revenue fund for the first year. The ballot language will say this is a new tax, but it will not begin until the old property tax expires in 2004.

Voters will also be asked to decide on a stormwater utility fee. This would be based on the square feet of a building's footprint, which is the ground-level area of a structure. The monthly for residents would be $1.75 for up to 1,200 square feet; $3.50 for 1,201 to 2,250 square feet; and $5.25 for more than 2,251 square feet. Commercial property owners will pay 7.5 cents per 100 square feet. The fees will be collected through the monthly utility bill.

The stormwater utility fee will generate approximately $730,000 per year, $350,000 of which will go toward 14 prioritized stormwater improvement projects. Most of the rest, $336,000, will go toward operation costs, freeing up general revenue fund money, and $43,000 will go toward the salary for a new stormwater coordinator.

Operating costs first

So what will all of this tax money -- about $4 million a year -- go for?

The city has a set its priorities in what it hopes to pay for if all four taxes are passed. If only some pass, the city will pay for what it can, starting with the top of the list.

It begins with operating costs. A sluggish economy and flat sales tax rate has left the city spending more than it has taken in during the last three years, forcing it to use reserves. Much of the money will go toward catching up with inflation, which has risen faster than sales tax revenue has increased. The city plans to spend about $250,000 per year on new public safety and maintenance positions which have not yet been identified; $50,000 on matching grant money for the airport; and $250,000 on minimal wage adjustments for positions identified by a professional study. The city has not yet performed an independent study of municipal employees' salaries. It has done in-house surveys on salary comparisons.

About $2.26 million in the first year will go toward equipment. Over the last several years, the city has cut back on equipment replacement to balance its budget, and many city employees are frustrated about working with equipment that is outdated or often breaks down. However, the amount of money spent on equipment decreases; by the fifth year, only $1.06 million will go toward equipment replacement.

Next on the list is stormwater projects. There are 14 projects which could be completed over 10 years at a cost of $3.55 million.

The projects, in order, are Ranchito Street improvements, Peach Tree Street improvements, Arena Creek Relief Channel, the Howell Street low-water crossing, the Grandview and Carolina Drainage area, the Melrose drainage area, Themis Street improvements, Aquamsi Street drainage project, Margaret and Janet drainage area, Cape Rock Road at Scivally Park, the Kingsway and Kingsbury drainage area, the detention basin flood monitor, the Cape La Croix bank stabilization and the Shawnee Park/Arena Park bank stabilization.

New fire station

Finally, there is the list of big projects, all of which will be paid for out of the general revenue fund. The first major project to be tackled would be the replacement of the outdated Fire Station No. 3, which would include the city's emergency operations center and cost $1.83 million.

The city would also build an addition to the city's police station, which is currently overcrowded with closets turned into offices. The police station improvements would cost $4.96 million.

And the last on the list, but the most controversial item in the entire proposal, is the water park, a $6.53 million facility that city leaders hope would bring visitors and more tax dollars to the city. It is the only item on the list that the city does not see as a necessity, but an economic tool.

bmiller@semissourian.com

335-6611, extension 127