Financial report warns Cape Girardeau officials

By TJ GREANEY

Southeast Missourian

Cape Girardeau's financial house appears to be in order, but the city may still be too reliant on sales-tax revenue, according to a recent report.

Finance director John Richbourg submitted his quarterly revenue and expense summaries to council members at Monday's city council meeting.

The city's total general fund revenue for the fiscal year ending in June was $18.7 million or approximately 0.1 percent greater than the previous year.

Of that total, $8.4 million or 45 percent of the revenue comes from sales taxes. That compares to only 7 percent from property tax.

Council members have expressed anxiety at this high percentage both at the council meeting and at the annual retreat in April.

Richbourg says it's something he's keeping close watch on.

"These rates of growth, if they continue, will make it difficult to fund future operations," he said during Monday night's study session.

The rates need to "go a couple of percentage points above inflation to support operations moving forward. We're basically growing right at inflation," he said.

Growth reported

Sales-tax revenue grew by 4.1 percent last year. This compares favorably to recent years when tax revenue grew by 1.6 percent, 3.5 percent and 1.73 percent. Inflation is approximately 3.5 percent according to the federal Consumer Price Index; the same figure is used by city officials.

Cape Girardeau residents currently pay 36 cents per $100 of assessed valuation in property tax. This contrasts with Jackson, where residents pay 99 cents per $100 of assessed valuation.

Some on the council have discussed the necessity of increasing the property tax in Cape Girardeau.

"I don't know how serious council is or when that might happen, but we need sales tax to be a good performer because we're so heavily dependent on it," Richbourg said Tuesday.

Mayor Jay Knudtson said he believes the property-tax issue will have to be resolved, but he doesn't know when.

"We will reach a point where people will say 'no mas' as it pertains to sales taxes. We will reach a saturation point where it will be counterproductive to increase the sales tax any more," he said.

"There may be a time when the disproportionate reliance on sales versus property tax need to be visited. Now whether that happens under my watch or not I do not know."

Knudtson added that he continues to be optimistic about Cape Girardeau's economic health and points to its high bond rating as a positive indicator.

tgreaney@semissourian.com

335-6611, extension 245