Council muses which sales taxes to keep

Cape Girardeau's mayor said Monday he wants a citywide vote on sales-tax levies in November, but the city council is still trying to work out which taxes they want to see let go and which to keep.

Discussion by the council continues over several portions of sales-tax levies set to expire -- the city would collect less taxes each year if half of a 1-cent restaurant tax and half of a 1/4-cent fire tax ran out.

The restaurant-tax revenue is used for bond payments that helped build the River Campus, which city officials expect will be paid off in early 2014.

The expiring portion of the fire tax pays for recurring public safety needs.

Mayor Harry Rediger and some council members have indicated they would like to see the restaurant tax kept at 1 percent with voter approval to pay for a new police station.

A space-design study for a station is underway; a new station is considered a top priority on the city's list of facility-improvements needs.

Restaurant tax revenue historically has been used for recreational-type projects, including River Campus and Show Me Center. So some councilors are concerned about switching that revenue to public safety.

"I would lean toward trying to keep the fire tax for that," said Councilman Wayne Bowen, who advocates the city look at nixing the restaurant tax instead.

City manager Scott Meyer said revenues from those taxes are comparable -- the restaurant tax produces about $1.3 million each year, and the fire tax produces about $1.2 million.

A reason Rediger and others want to keep the full amount of the restaurant tax through an election is because much of the revenue come from people who live out of town but dine in town. Therefore, the proposal for the new police station is seen as residents getting more, but paying less out of their own pockets.

The fire tax is levied on all purchases made in the city, not just certain receipts.

The council also has the fate of other taxes to consider -- Rediger said he wants to ensure the council makes a good move on what to put before voters because a transportation trust fund tax and a parks and recreation tax will sunset later, and the city wants those to be renewed.

"We want to make sure we are right on the first ones to complement others down the road," he said.

Meyer said city staff will put together a comprehensive picture of the taxes, revenue and possible uses to the council. For the council to get tax questions on the November ballot, it must make a decision before Aug. 5, the county clerk's deadline for submissions.

The council Monday also unanimously approved an ordinance that will allow the city to participate in a back-to-school sales-tax holiday for the first time in several years. The city decided to collect its 2.75 percent sales tax on purchases during the first weekend in August starting in 2009, when revenue took a hit because of a diving economy. Now that things are back on track, the city will waive the tax this year from Aug. 2 through Aug. 4 on purchases of school supplies, computers and clothing.

State and county sales taxes will also be waived during that weekend.

eragan@semissourian.com

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401 Independence St., Cape Girardeau, MO