COUNTY CONSIDERS ROAD FUND TAX OPTIONS

JACKSON -- For the last several years income flowing into Cape Girardeau County's road and bridge budget has not been keeping pace with needed expenses.

To deal with the shortfall, the commission has been allocating interest earned from the county's capital trust account and some general fund money to help cover operating expenses of the department. Major capital expenditures for large equipment such as road graders, the county's share of matching money for major bridges funded through the federal off systems bridge program, and construction of smaller county bridges, have been paid for from the county's capital trust account.

But First District Associate Commissioner Larry Bock, who oversees roads and bridges for the commission, has been discussing an idea of imposing a sales tax in the county to generate additional revenue for roads and bridges. As a part of Bock's plan, the 23-cent property tax levy that generates about $400,000 a year, would be eliminated.

So far the sales tax idea has drawn little interest from Bock's two colleagues on the county commission -- Presiding Commissioner Gene Huckstep and 2nd District Associate Commissioner E.C. Younghouse.

"From what discussions we've had on the commission, I have not heard any positive comments from the other two fellas about a sales tax," said Bock.

"Before we did anything like this I would want the county commission to be in agreement and to talk with the Cape Special Road District officials and business people and see what their feelings are. This is just something I thought of a year ago, but whenever no one seemed to be in a positive mood toward it, I just kind of dropped it."

Bock pointed out that at least a dozen counties in the state fund all or part of their highway departments with sales tax revenue.

Whatever change in funding the county commission came up with would have to be done in cooperation with Cape Special Road District, which also has a 23-cent property tax levy for some roads in and around the city of Cape Girardeau located in its district.

The county's half-cent sales tax for general revenue generates about $3.5 million a year, and so adding a half-cent or even a quarter-cent for roads and bridges would provide significant income.

"If the county wanted to go for a sales tax, we would have to work something out with Cape Special," said Bock. "We would need to work out a way to do away with the property tax for both the county and Cape Special and then distribute the sales tax money."

Huckstep agreed something needs to be done to increase the operating revenue of the county road and bridge budget but does not see passing a sales tax as the appropriate option.

"I am opposed to a sales tax for road and bridge. I think it rightfully belongs on the property tax. It is not fair for people in the two cities to turn around and pay another tax for the farm roads," said Huckstep.

He noted that in the cities of Cape and Jackson, when new roads are built or streets improved, property owners are assessed a portion of the costs. Huckstep said he feels the same approach should be taken in the county.

"Many farmers would like to have a sales tax for road improvements because they are tax exempt from sales tax on implements, vehicles used as farm equipment and many other items that would cost a large amount of sales tax. I just don't think its fair to use the sales tax."

Last August, when the county commission was reviewing its tax rates for 1993 property tax bills, Huckstep proposed increasing the road and bridge property tax from 23 cents to 35 cents per $100 assessed valuation. By law, the county commission has the authority to increase the levy to that amount.

"I am very receptive to raising the property tax to 35 cents on road and bridge because in this day and time, it can't pay its way," said Huckstep.

Bock said a 12-cent hike in the property tax would generate about $170,000 a year for the fund. "That would be great, but the property and business owner would be paying the tax and that does not seem to be fair," observed Bock.

"The sales tax appears to be the fairest route to me."

Younghouse said that given a choice between increasing the property tax levy or enacting a sales tax, he would prefer the property tax route.

"We have discussed this issue at various times, but no one seems to want to make the motion to do it," said Younghouse. "I don't think right now is the time, but one of these days it may come to a decision."

Huckstep said the county commission has been willing to step in and shift money from the capital account to subsidize the road and bridge budget. In the 1994 budget, $425,000 of the $1.766 million budget comes from "borrowed funds," which is from the capital account or general fund. However, since other income could be higher than expected and the entire amount budgeted is not spent, the actual shift of funds to the budget will be less.

Besides the property tax levy, the county road and bridge fund receives revenue from state gas taxes and money paid by out county residents for a road sealing program. In the 1994 budget, the income from those sources is estimated at $713,000.

Huckstep said he believes there will be some increased funding for county roads and bridges this year, because the counties' share of state gas tax money increases from 10 percent to 15 percent on new fuel taxes.

"If maintenance of county roads depended on more money that would be one thing, but with the additional gas tax money we are getting, it should bring income closer to par," said Huckstep.

The projected shortfall for 1994 could come from the county's share of a use tax, which took effect July 1, 1992 but has been held in escrow because of legal challenges. Based on a U.S. Supreme Court ruling last week, it appears likely that Cape County will be able to spend the $376,000 it has escrowed. The tax will bring in about $200,000 a year.

The commission has discussed earmarking use tax collections for the road and bridge fund, an action that combined with additional gas tax money, would substantially reduce the shortfall.

Bock points out that there are a lot of demands on county roads and there is a need for additional funds to further improve roads and bridges and continue a dust control program.

"I just don't see our roads being in a panic situation out there," exclaimed Huckstep. "I believe county roads are in pretty good shape and most of our major bridges have been taken care of. I just don't think we need a huge amount of extra income that would be generated by something like a sales tax ... I am opposed to using a sales tax for routine maintenance."

Added Younghouse: "Our roads and bridges are in pretty fair shape right now. But we do have to stay on top of them to keep them in good shape."

Both Huckstep and Younghouse stress that they have no problem using money in the capital trust account for purchases of major equipment and for bridge replacement.

"I think the need for more funds is an ongoing problem and we are going to have to put up with it the best we can," said Younghouse. "Down the road we are going to have to face facts and raise more money one way or another."

Whatever decision is reached on funding, and whether the sales tax is a viable option, will likely be considered by a future county commission. Two of the three commissioners will be leaving at the end of the year. Both Huckstep and Younghouse are not seeking re-election.

"I think it will all come up again in the future, but I don't think it will come up this year," said Younghouse.