County may cut property tax levy

Cape Girardeau County commissioners expressed cautious optimism Thursday about the possibility of rolling back a property tax levy enacted last year that was passed to help cover a shrinking unencumbered balance in the general revenue budget.

Since 1982, 2012 was the first year the county had levied the tax. The levy was set at 0.038 of a cent per $100 assessed valuation. Property owners are paying between $7 and $30 more per year as a result of the tax, equaling about $425,000 more in property tax revenue for the county each year.

Sales tax revenue, which affects the amount of property taxes levied by the county, soon could rise as a result of a new law signed last week by Gov. Jay Nixon. The law allows local governments to resume collecting sales taxes on vehicles and other items bought by Missouri residents across state lines. A state Supreme Court ruling in 2012 prevented counties and municipalities from collecting the taxes.

As a result, Cape Girardeau County's estimated loss in sales tax revenue was $250,000, and the property tax was levied, in part, to help make up for the loss to the budget.

Now things appear to be looking up slightly as the tax revenue is expected to return to a more normal level -- just in time for the property tax levy to be reconsidered by the commission.

"I'm anticipating from what I'm hearing that it is going to be reduced some," Associate Commissioner Paul Koeper said of the property tax levy during Thursday's commission meeting.

County officials said last year the levy was needed to help make up for a repeating budget scenario of rising expenses with flat or falling sales tax revenue, the county being reimbursed less from the state for services it is required to provide and for reduced interest payments on accounts held by the county.

In 1979, county voters approved a reduction in property taxes in lieu of a county sales tax. But ballot language allowed for adjusting a property tax levy if additional revenue was required for the county's budget needs. A calculation would be done during an assessment year, and the levy could be raised with a vote of commissioners if budget needs made it necessary, according to the ballot language.

The county, according to officials, began to need the property tax levy before last year, but commissioners chose not to enact it. Estimates by Treasurer Roger Hudson last October showed the county did not collect about $2 million over the course of several years, when it could have, based on the formula used to calculate the amount of property tax revenue needed to cover the county's spending. A continually falling unencumbered balance in the budget, separate from $5 million the county has in an emergency fund, showed the need to levy the tax, commissioners said last year.

The unencumbered balance in 2008 was about $1 million. In 2012, it fell to $154,000, and without the property tax levy would have gone to less than $30,000 this year.

Despite the news that sales tax revenue likely will rise as the law takes effect Aug. 28, the year 2013 again looks to be fairly flat in sales growth. As of this month, the county has collected $4,003,538 in sales tax revenue, a rise of only 1.89 percent from the same time last year.

Presiding Commissioner Clint Tracy also is skeptical about making a decision about the property tax levy based on the new law.

"I don't know that anything has really changed, even though the governor signed the bill," he said.

There still is a chance the sales tax revenue the county receives from out-of-state sales now allowed by the law could again disappear.

Before November 2016, local governments that did not have a voter-approved use tax before the law was passed must give voters an option of repealing the titling sales tax for vehicles bought out of state or from individuals. Use taxes have gone on the ballot in many municipalities and counties throughout the state in an effort to make up for the revenue the governments could not collect because of the Supreme Court ruling. The use taxes are proposed at an equal percentage to the sales taxes collected by the governments. Cape Girardeau County has not asked voters to decide on a use tax during the elections since the ruling, though Bollinger and Perry counties successfully passed use taxes.

The commission plans to discuss possible changes to the property tax levy during meetings in August. State statutes allow the commission to vote to reduce or remove the levy, but only during years not deemed assessment years; 2014 is an assessment year, in which the commission also could vote to raise the levy.

eragan@semissourian.com

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