Public hearing to address raising Cape County property tax levy

EDITOR'S NOTE: This story has been corrected to clarify the result of the vote taken in 1979 regarding the property tax levy reduction.

A tax that could cost the average Cape Girardeau County property owner between $7 and $30 more this year may not be reduced as county commissioners said they had hoped.

Commissioners on Thursday scheduled a public hearing for Sept. 16 on setting the county's tax rates. Among the property taxes that will be considered is one levied for the first time in September 2012. The tax, according to county officials, basically props up the county's general revenue budget when there is little or no growth seen in sales-tax revenue.

The amount of the tax being levied this year is $0.038 per $100 assessed valuation, and it could rise to $0.0447 with a favorable vote of the county commission.

The main factors affecting the rise are the new total assessed valuation for the county and the amount of sales tax revenue. The year 2013 is an assessment year, meaning property values are reassessed to reflect current values and new and improved properties are added to the county's assessed valuation total. The total assessed valuation of the county is at $1.165 billion this year, up from $1.118 billion in 2012. A rise in assessed valuation can make the property tax rise, because a formula used to figure the property tax levy rate takes into account the total assessed valuation of the county and how much property tax the county could collect on that property.

In addition, Cape Girardeau County voters passed a measure in 1979 that approved a sales tax, while reducing the property tax levy by 50 percent of the sales tax collected. Eventually, county officials eliminated the property tax levy, as it promised voters, as sales tax covered the county's expenses. But when sales tax revenue, as it was again this year, doesn't cover the county's annual revenue budget, the commission may vote to charge a portion of the property taxes to help the shortfall. This year, when the assessed valuation rose in the formula, but the sales tax revenue stayed flat, the rate at which the county could set the property tax levy went up from $0.038 to $0.0447, according to a calculation performed by the state auditor's office. The formula takes care of the county budget in a way that allows the county essentially to collect taxes on a higher-valued assessment total from which it otherwise could not.

Through the end of August, the county had collected $4,398,297 in sales tax revenue so far this year, a rise of 1.18 percent from the same time last year.

The commission derives its authority to enact and change the levy through state statutes.

Before the levy was enacted for last year, county officials said prior county officials at some point had stopped using the sales tax-property tax formula on revenue at some point since 1982, which was the last year it was collected. As county officials looked into the situation, it seemed that since sales tax revenue had always covered the county's budget needs, the annual calculations just sort of "dropped off the radar," said Treasurer Roger Hudson.

"The best we can figure is that they just didn't need it in those other years, because sales tax revenue was always growing," Hudson said.

The county, according to officials, needed to levy more than zero in property taxes beginning in 2009, as the county saw falling or flat sales tax revenue. An estimate from the county in October also showed the need for the levy going back even further -- the county did not collect about $2 million in the years since 2001, when it could have done so, based on the formula. A continually falling unencumbered balance in the budget, separate from $5 million in the county's emergency fund, was the result, commissioners said last year.

The unencumbered balance in 2008 was about $1 million. In 2012, that had fallen to $154,000. Without the property tax levy, it would have dropped to less than $30,000 this year, officials said. The estimated amount raised for the county through the $0.038 levy this year is $425,111. If commissioners approve the $0.0447 levy for the coming year, the county could collect up to $95,000 more for its general revenue budget.

Not everyone, including some property owners in Cape Girardeau County and one member of the commission, former associate commissioner Jay Purcell, agreed with enacting the levy in 2012. They instead called for less spending in the general revenue budget. Purcell was replaced on the commission after he lost a re-election bid in November to Charlie Herbst.

Commissioners approved 2013 general revenue expenditures of $11,545,883 -- slightly higher than the amount the county budgeted in 2012. The unencumbered balance for the year is expected to be about $154,000. Actual spending in 2012 for the county was just more than $10.7 million, which trends with the amounts -- about 10 percent -- typically spent under budget each year.

Another part of the county's revenue picture in 2012 that may have affected the decision to enact the levy for the first time in many years was that the county at the time couldn't collect sales tax on person-to-person and out-of-state sales of vehicles because of a Missouri Supreme Court ruling earlier that year. The estimated annual loss to the county's sales tax revenue was $250,000. The county's ability to collect those taxes has since been reinstated through the passage of a law this summer.

The ceiling for property tax rates set by the state auditor's office is $0.336 per $100 assessed valuation for counties. In 2012, the city of Cape Girardeau charged $0.30 per $100 assessed valuation for property taxes for general revenue; the city of Jackson charged $0.58 per $100 of assessed valuation.

The public hearing on the county property tax levy will begin at 9 a.m. Sept. 16 in the commission's meeting chambers at the county administration building in Jackson. Several other taxes levied by the county that support services for mental health, seniors and developmental disabilities also will be covered in the hearing, though none of those levy amounts is expected to change.

The commission is not expected to vote on the levy until its regular meeting after the public hearing.

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