SALES TAX REVENUE REBOUNDS; RISES 5.5 PERCENT IN CAPE GIRARDEAU

After a year-long slump, Cape Girardeau's sales tax receipts appear to be on the rebound and are at a five-year high.

The city this year has collected $4.23 million in sales tax revenue since January, up 5.7 percent from the $4 million collected last year at this time.

In 1991, sales tax figures through October were down 1 percent from the 1990 10-month total the first decline in receipts in five years.

Assistant City Manager Al Stoverink said Tuesday he's hopeful the rising revenue is an indication that economic recovery is at hand.

"So far this year it's running ahead of last year and ahead of our budget, at least through the first quarter of this fiscal year," Stoverink said. "That looks promising."

Because of a relatively low property tax rate, Cape Girardeau relies heavily on sales tax revenue for general operations. Last year was the first time sales tax projections exceeded revenue.

As a result, the city this year budgeted for a modest 2 percent growth in the fund. But revenues so far in the first quarter of the fiscal year are up 5.5 percent over last year.

Stoverink said that should the trend continue and revenues exceed projections this year, excess funds likely will be used in one of three areas: to restore a reserve in the general fund; provide pay raises for city employees something they didn't receive last year; and replace worn equipment.

One budget item that probably won't be significantly affected is capital improvements, such as major street and sewer projects.

"Unless there's some new revenue source, there isn't going to be any great changes in the capital improvements plan," Stoverink said. "It will allow us to continue significant capital improvements that we've already got planned."

The city's Planning and Zoning Commission this month asked that two street improvement projects Hopper and Perryville Roads be added to the city's five-year capital improvements plan. Both projects were moved to an "unfunded needs list" in the plan last year when sales tax receipts began to slump.

But Stoverink said that even if this year's revenue trend continues, the city isn't likely to fund both projects in the five-year plan.

"I would suspect we would at least be able to put one of those projects into the fourth or fifth year of the plan," he said. "But when you look at these kinds of projects even during years when we were able to set aside the city's motor fuels tax for street projects it has still taken us five years to do Lexington.

"Any major project is going to take long-term funding as long as we're trying to fund it through our existing revenue base."

The assistant city manager said that without a city transportation sales tax there's little officials can do to step up major capital improvement plans.

He said such a tax would have very little impact on "individual pocket books," but would go a long way to accomplishing major street and sewer plans the city now is unable to fund.

"That's something the community needs to take a look at, but I don't think there's a lot of support for that right now," Stoverink added. "The schools are looking at ways to increase revenues to meet needs, and we're not looking at proposing anything in the immediately future."

Stoverink said the apparent rebound in sales tax revenue likely is the result of new commercial development in the past year.

"I don't think we're going to see the kind of growth we were seeing four or five years ago, which was when we initiated our major capital improvements program," he said. "I think what we'll see here is a gradual growth."

Stoverink also cautioned that the positive growth trend might not continue. He predicted this year's growth will level late in the fiscal year, which ends June 30, 1993, and probably will keep pace with inflation after that.

"Even if we're fortunate enough to hit 5 or 6 percent this year as opposed to the 2 percent budgeted, the shot in the arm is not enough to get us caught up to where we need to be," he said.

But Stoverink said he's optimistic that Cape Girardeau is showing signs of economic recovery that likely will continue regardless of the results of Tuesday's election.

He said the city has been able to sustain itself through economic cycles that seem to have a greater effect on other regions.

"I think we've got a good thing going here in terms of our growth," Stoverink said. "I think we'll see some new industrial development in the next couple of years, and that will allow us to sustain basically the growth patterns that we've had as far as commercial growth."