COUNTY, JACKSON REPAY USE TAX, CAPE WAITING

Cape Girardeau County and Jackson wasted no time repaying the money from a use tax that was thrown out by the Missouri Supreme Court.

Although governments have three options to repay the money to the state, both the county and Jackson decided a one-time lump sum payment would be most advantageous.

Cape Girardeau hasn't made a final decision on how to repay the money, but city finance director John Richbourg said he is leaning toward a lump-sum payment also. Before making a commitment, Richbourg said he would double check that the one-time payment was the best option for the city.

The other options are to pay the money collected from the use tax over 12 months or for the state to withhold the use tax due from taxes collected for the cities. The latter method likely would be used only by those cities that haven't put use-tax collections aside.

Cape Girardeau County, Cape Girardeau and Jackson have each put the money into escrow accounts, and the accounts have more money in them than each must repay. For all three local governments, resolution of the use-tax issue therefore frees up money in those accounts for other uses.

Cape Girardeau County paid $383,302 and has $366,698 left. Jackson paid $144,671 and has $70,329 left. Cape Girardeau has almost $2 million in its escrow account and will have about $1,257,000 left after it repays $743,000 due.

Cape Girardeau County Auditor Weldon Macke said the $366,698 remaining in escrow likely will be spent on county road improvements. Originally, use-tax proceeds were destined for roads.

Jackson City Clerk Mary Lowry said Jackson doesn't have a specific plan for the $70,329 left in its use-tax escrow account.

Richbourg said Cape Girardeau has placed the remainder of its escrow account into this year's proposed budget for special projects.

The budget hasn't received council approval. "It is not to support the operating budget," he said.

Local governments in Missouri owe a total of $95 million in revenue collected through the use tax from July 1992 to May 1996.

The use tax was imposed on goods companies bought outside Missouri. The tax was intended to make up for sales-tax revenue lost because of out-of-state purchases.

But the Supreme Court threw out the tax in May 1996 because it was being collected locally, then put into one statewide pot with revenue distributed on a pro-rated basis. The judges said that violated the state constitution.

Refunds are supposed to be paid to some 10,000 taxpayers, mostly businesses of varying sizes. Companies seeking a refund of use-tax money paid had to file for the money. Those claims are still being reviewed.

Macke and Lowry said governments that pay early may get some money back.

Not every government set aside use tax-revenues. Many spent the money and now must find a way to repay.

Macke said there is a chance that not all the governing bodies will be able to repay the money. "We're going to be watching that very closely to see if the state allows them not to pay it back," Macke said.