Mayor - Impact of Cape vote still to come

Tuesday's defeat at the polls of four tax and fee issues means Cape Girardeau city employees won't get pay raises this year. But residents won't see a noticeable drop in services right now although the city won't be able to replace outdated, broken-down equipment, Mayor Jay Knudtson said.

"The sky is not going to fall in," he said.

Knudtson said the city administration may have to look at a hiring freeze if funding becomes too tight. But he said no layoffs are planned.

"People's jobs at this point are not in jeopardy," he said.

The mayor said city employees are depressed about Tuesday's vote.

"My biggest challenge is to keep the morale of city employees up," Knudtson said.

City services will be hurt more over time without increased funding because Cape Girardeau will have to stumble along with inadequate equipment, the mayor said. If the lone operating street sweeper breaks down, the city will be hard pressed to keep the roads clean, Knudtson said.

Deteriorating equipment also could make it harder to clear snow after snowstorms and within the next several years probably will lead to the closing of Capaha Pool, he said.

John Richbourg, city finance director, said the city government can't afford major maintenance problems. "There's just not much room for anything to go wrong," he said Wednesday.

No improvements

Voters overwhelmingly rejected the tax package that would have provided an added $4.1 million annually for general operations, replacement of equipment and various construction projects including storm-drainage improvements, a new fire station, an expanded police station and a new water park.

City officials said the defeat of those issues won't affect existing water, sanitary sewer and trash services, which are funded by user fees.

However, the city depends largely on sales tax revenue. The city's four sales taxes generated more than $15 million in 2002, city finance records show.

City sales tax revenue has fluctuated since January. Overall, the city has seen revenue increase by $69,530 compared to the first four months of last year.

At that rate even for the whole year, it won't be enough to make up for the lack of new taxes, Richbourg said.

The sales tax checks received by the city were up in January and March, but down in February and April, city records show.

The Missouri Department of Revenue collects and distributes sales taxes for the state and local governments, including cities and counties.

"We get the money a month after the state collects it," Richbourg said, which means each check represents sales actually made two months earlier. The March check, for example, reflects Christmas sales, he said.

The city received more than $2 million from the Missouri Department of Revenue in March, the largest single month of sales tax revenue so far this year.

The city levies a total of 2 cents on every dollar to fund general operations, as well as road, sewer and water system improvements. The city sales tax includes a 1-cent general fund sales tax, a half-cent transportation sales tax, a quarter-cent sewer system sales tax and a quarter-cent water system sales tax.

Like the city, Cape Girardeau County government has seen sales tax revenue grow slightly. The county's half-cent sales tax has brought in nearly $1.43 million over the first three months of this year, up $62,195 compared to the same period last year, Auditor David Ludwig said.

The county hasn't received its April check yet. Neither has the city of Jackson.

Through the first three months of this year, the city of Jackson has received $607,444, down $26,422 over the same period in 2002. City clerk Mary Waller said she can't explain the lagging sales tax numbers when both the city of Cape Girardeau and Cape Girardeau County government report a slight increase in tax revenue.

Cape Girardeau's Richbourg said sales tax growth alone won't meet the city's needs.

Every 1 percent growth in revenue from the 1-cent general fund sales tax, for example, will generate only about $78,000 in added income this year, Richbourg said.

The city relies little on real estate and personal property taxes.

Those taxes amount to only 7.8 percent of the city's estimated $15.6 million general fund budget for the coming fiscal year, according to budget documents.

In the proposed general fund budget for fiscal 2004 projects the city will receive $940,918 in real estate tax money, up 2.3 percent, and $281,911 in personal property tax revenue, up 3.7 percent.

Reassessment of property values by the county assessor's office, required every two years under state law, could change those figures. But Jerry Reynolds, county assessor, said he believes the city's figures aren't out of line. Reynolds said, however, that his office hasn't finished making its calculations and probably won't have any figures available until May.

Richbourg said reassessment won't make a big difference in funding city government. "Even that is not going to generate a whole bunch of revenue," he said.

mbliss@semissourian.com

335-6611, extension 123