Jackson's economic insulation

While many cities across the state, including some in Southeast Missouri, are swimming against a financial current, Jackson is comfortably floating along in its own economic fishbowl.

Just 10 miles away from the county seat in the region's retail epicenter, the city of Cape Girardeau will ask voters in April to approve a tax package. Cape Girardeau officials' main concern? Basic operations. Sales tax revenue has not come in as expected, and the city is fighting just to keep up with inflation.

A few miles further south, Scott City asked for a sales tax increase last August. Some city buildings leak badly, officials say, and the swimming pool needs a new filtration system.

And then there's the state legislature, which is scrambling to come up with $350 million just to make ends meet for the current budget.

"What I hear is sales taxes have been flat," said Richard Sheets, a Missouri Municipal League official. "Cities aren't receiving the dollars they're anticipating. From the Columbias and the larger cities, people just aren't shopping like they used to."

All systems go

Meanwhile, in Jackson there's no sign of cutting services or asking for new or higher taxes. There is no sign of a slowdown.

Sales tax revenue grew by 4.2 percent in 2002. The city brought in $1.75 million from its 1 percent general sales tax and another $850,000 from its 1/2 percent transportation sales tax.

The total sales tax revenue has increased from $1.7 million in 1997 to $2.6 million in 2002. That's an extra $600,000 above inflation.

As far as the increase in commerce, city administrator Jim Roach is the first to admit that the city government hasn't played a big part.

But the city government has had an impact on what Roach said is the main driving force behind Jackson's strong economy: residential growth.

Roach said the city has made a concerted effort to make it easy for developers and builders to do business.In the face of fast-paced growth, city officials have made an effort not to overburden developers with new regulations, he said. They have also made changes in subdivision codes to offer builders more flexibility, which ultimately lowers some construction costs.Jackson officials are proud that the city has grown faster than any city in the region. The 2000 census showed a population of 11,947, up 29 percent from the 9,256 count 10 years prior. Jackson's increase in population in the 1990s is almost double the population of Marble Hill.

"The population increase probably has a lot to do with it," said Dr. Bruce Domazlicky, an economics professor with Southeast Missouri State University. "There seems to be a trend where the population is moving in their direction, and that's helping them prosper. Retail sales are driven by two things -- population and income."

In 2002, Jackson saw 81 new single-family residences and seven new apartment buildings or duplexes built. All told, that's close to $12 million in residential construction in Jackson last year.

Roach and other city officials say the No. 1 reason people have moved to Jackson in the last 10 years is because of the school system.

"In addition to that, it's relatively safe here," he said. "We have those Midwestern values with a sense of Southern influence and hospitality."

Matt Notbohm moved to the region recently to take a job at Southeast Missouri State University.

"I chose Jackson because I view it as a safe area, the people are nice here and because of the booming business climate," Notbohm said.

Paying in sales

Increased population is not the only reason why Jackson is dodging the recession's grip. In 1990, sales tax totals were $1.09 million. That's about $118 sales tax dollars per resident, or $163 in inflation-adjusted dollars. In 2002, the average was $217 per resident. Jackson has experienced this per-capita financial growth despite never raising its sales tax rate.

The residential and commercial growth in Jackson appears to be connected.

More people are moving to Jackson, but there are more and bigger places to shop in Jackson too.

Two big players in Jackson's sales tax revenue increases and its economic stability are the Wal-Mart Supercenter, which was built in 1998, and Buchheit, a large hardware and home improvement store built in 1999.

"That Wal-Mart and Buchheit sure gave us a shot in the arm," said Kerry Hoffman, a Jackson alderman. "Those are great businesses for us."

Tax dollars paid by individual businesses are not public information, according to officials with the state Department of Revenue.

Tom Williams, a Wal-Mart spokesman, said the company does not release financial information on individual stores. He said the company paid $335 million in sales taxes statewide and added "the Jackson store is doing very well."

Several attempts to reach officials at Buchheit were unsuccessful Thursday and Friday.

Dragging down Cape

Even Cape Girardeau has seen an impact of the two stores. Officials in Cape Girardeau point to those two stores and other franchise retail stores in other nearby cities as one of the reasons for their sluggish economy, which began showing signs of a slowdown several years ago. They say fewer people are driving to Cape Girardeau to shop because commerce is growing in smaller towns.

Roach said he doesn't see the commercial development in northeast Jackson as stealing dollars from Cape Girardeau. He views it as keeping Jackson's tax revenue in Jackson.

Kim Baker, a Jackson resident, says she shops more in Jackson now than she used to.

"Just for convenience and to support the local economy, basically," she said. "I buy my groceries, lumber and house supplies here." She added she still buys many items in Cape Girardeau, especially clothes.

All the extra tax money coming from the pockets of Baker and hundreds more like her have been going toward a number of city projects.

The city is constantly expanding its infrastructure. Sewer and water mains, as well as streets have to be extended to the areas of town where growth is occurring.

The city will begin a huge transportation improvement plan within the next several months, the result of an in-depth transportation study by a St. Louis engineering firm that took more than a year to complete. The improvements will begin with construction to the Shawnee intersection near East Jackson Boulevard.

City administrator Roach said the municipality has been conservative with the extra revenue. He said the city has made it a point to provide its residents with necessary services and has not added unnecessary programs that perpetually lose a lot of money. Jackson may not have a lot of frills, Roach said, but it's not asking for more taxes, either.

Jackson Chamber of Commerce president Ken Parrett points to leadership, volunteerism and the business climate as why the economy in Jackson remains strong.

"Jackson has made improvements when they were needed and didn't try to be a do-all, be-all, be-everything for everybody," he said. "And most of the people who shop here are repeat customers. It's customer-service oriented."

Another vital ingredient in the progress of the city and its ability to fund projects is the city-owned electric plant, which adds roughly $1 million to the general fund every year.

"Our main source of revenue is our utilities," he said. "We own our own electric plant, we operate it and it has afforded enough surplus to keep things going."

All things considered, the combination is the working formula for Jackson's economy and government.

"Our people are well-equipped, fairly paid and have good benefits," he said. "But nothing is gold-plated."

bmiller@semissourian.com

243-6635