FINAL CHECK SHOWS COUNTY SALES TAX DEFINITELY FLAT

JACKSON - Ever since Cape Girardeau County enacted a half-cent sales tax for general revenue in March of 1980, receipts have increased consistently every year.

Growth was never less than 4 percent, and during three of the years growth was better than 9 percent, including an increase of 11.81 percent in 1986.

But in 1991, Cape County's string of growth snapped. Total collections were just $8,762.38 greater than what was collected in 1990 - an increase of .28 percent.

"It sounds like we were flat, real flat," observed Cape County Auditor H. Weldon Macke. "It indicates the business is just not out there right now."

Presiding Commissioner Gene Huckstep said the flat year was anticipated because the county has been hovering around no growth all year.

"It is certainly not unexpected," said Huckstep. "It appears almost everybody is suffering the same thing."

He pointed out that commissioners in several other counties had indicated their sales tax receipts were down.

Macke suggested county officials might look at the final total in a positive light, based on the woes of other counties. "We can almost look at it on the positive side because we didn't lose," declared the auditor.

Overall for 1991, total collections were $3,067,949.25 and for the final check of the year the total receipts were $365,060.02. The December check has been about the same for the last three years.

Both Macke and Huckstep agree the flat sales tax is a clear indication of tough economic times. They also agree that with sales tax receipts flat, it will be more important than ever to scrutinize the 1992 budget process carefully.

"Sales are just down, I can't see any other reason for this," declared Macke.

Macke attributes the no growth year to the economy and the development and expansion of malls in Paducah, Marion, and Carbondale which are keeping some shoppers from coming to Cape Girardeau.

"I think they are all taking their toll," said Huckstep. "We have enjoyed a pretty good retail business without a great deal of close competition until recently. I think our future here will require us to get more industrial development to create more jobs and create a bigger labor market."

The opening of a Wal-Mart Supercenter in Cape Girardeau next year could help trigger a rebound, Huckstep said, however, he doubts it will have a significant impact without an overall improvement in the economy.

Huckstep said the downturn became evident in 1989 when the county's sales tax growth was just 4.23 percent, compared to 6.45 the year before. In 1990 the growth rate was 4.46 percent.

Because of the expected downturn, Macke said that in the 1991 budget for the first time, the county's revenue projections were based on no sales tax growth. In previous years, a growth rate of 3-4 percent was built into budget projections.

For the 1992 budget, Macke said he plans to recommend to the county commissioners that revenue be based on zero growth. "I don't think we'll have a loss next year; it's bound to pick up somewhere during the year."

But Huckstep said he isn't sure the budget shouldn't include a projected reduction in sales tax as a safeguard. "It might be in our best interests - because I don't see any daylight at the end of the tunnel - to lowering our budget to anticipate 2-3 percent less in income."

Huckstep said the sales tax performance for 1991 reinforces his position on 1992 budget requests that funds are tight and spending will have to be watched closely.

"We are trying to at least keep the status quo on expenses," declared Huckstep. "One year is not going to hurt us, two years may not hurt us; but if this sales tax trend continues for several years, we're going to have some real trouble.

"We just have to control budget requests for next year to see if we can ride this thing out."

Macke added, "It will be a real tight budget next year. And, even if something is in the budget does not mean it will be bought if revenues don't look good."

Further complicating Cape County's financial situation is that interest rates have dropped dramatically.

Through June 30, the county had been receiving a little over 9 percent interest on its funds, primarily money set aside in a capital trust account. But a new depository bid this year reduced the county's interest return by about 3 percent and will cost the county about $150,000 this year. For 1992, Cape County will have a reduction in interest of about $350,000.

"We have a lot of reason to be very cautious in our spending right now," summed up Huckstep. "But we can feel fortunate because there are a lot of counties out there a whole lot worse off than we are."