Sales tax will apply to utilities

A sales tax approved by Cape Gir­ardeau County voters in 2006 will be added to residential utility bills beginning Jan. 1.

Revenue from the new road and law enforcement tax has lagged behind the money raised by the county's general revenue sales tax. In time, county officials thought the two would be nearly identical, but when they looked closely, they discovered they had overlooked a law requiring passage of an ordinance to apply it to utility bills.

In the past five months, receipts from the new sales tax has raised $146,000 less than the general revenue tax.

The new tax took effect Jan. 1. Because of the way sales tax is collected, the county didn't receive the first payment from the state until mid-February, and the March payment was $325,000 less than the general revenue tax. The April payment closed the gap, but did not match the general revenue tax. The same thing happened in May.

"What kind of threw us for a loop was when we started heading into May and started seeing the difference," Commissioner Jay Purcell said. "That is what concerned everybody."On Thursday, commissioners approved an ordinance directing the state Department of Revenue to apply the tax to "domestic utilities." That means residential utility customers for water, electricity, natural gas, propane, wood and coal will now pay the one-half percent tax.

"These are dollars that will directly be spent on paving county roads and law enforcement," Purcell said. "The shortfalls will be shortfalls in those two budgets."

The tax, narrowly approved by voters in August 2006, eliminated the property tax to pay for county roads and provided money for pay raises and additional deputies in the Sheriff's Department.

Former county auditor Weldon Macke, a member of the County Road and Bridge Advisory Board, did the research that discovered the county had overlooked the law requiring an ordinance applying the tax to utility payments.

Over a full year, Macke said, the shortfall would have run to about $360,000, enough to pave about three miles of county road.

"I discovered it and said something is wrong," Macke said.

Macke contacted the state Department of Revenue, where he learned about the law requiring the ordinance. "It is just an error that is probably our fault for not looking at what we did in 1980" when the general revenue tax was approved, he said.

Residential utility customers in Missouri pay no state sales tax. But to preserve revenue from utility purchases for local governments, lawmakers in 1979 passed a law allowing cities and counties to extend their sales taxes to utility purchases by ordinance.

The two taxes were sold to voters as being identical and likely to bring in nearly equal amounts of money. That makes the decision to extend the tax now an easy one, Presiding Commissioner Gerald Jones said.

"It was brought to our attention that things were going even," Jones said. "They are both a nickel, they should be the same amount of money."

Since the first payment was received in February, the tax has raised $2.7 million. Of that amount, $970,000 has been turned over to the Cape Special Road District to replace its property tax, $749,000 has been set aside to operate the County Highway Department next year in the absence of the property tax and $441,699 has been set aside for the sheriff's department and road improvements.

The ordinance corrects an oversight, Jones said. "We are not imposing any new tax. We are just including the right language where it is equal."

The road improvement plan is working as intended, officials said. On Monday, Purcell said, commissioners awarded a contract to prepare 3.5 miles of road for paving to the Nip Kelley Construction Co. of Cape Girardeau.

Approximately seven miles of road are ready for chip-and-seal paving and 4.7 miles of asphalt have been laid down this summer, Macke said.

rkeller@semissourian.com

335-6611, extension 126