Taxing explanations for residents of Cape

On April 8, Cape Girardeau voters will cast ballots on four tax-and-fee issues that officials say are needed to provide revenue for city government operating needs and to pay for new construction.

The comments below, received from readers and others, attempt to clarify the ballot issues in a question-and-answer format. The answers come from city officials, the Missouri Department of Revenue, area chambers of commerce and the Cape Girardeau County assessor's office.

Q. What are the four ballot issues?

A. The issues are a quarter-cent sales tax, a local-use tax, a storm-water fee and replacement of a 10-cent property tax. The property tax would replace an identical tax, which has been used to pay off Show Me Center bonds and is set to expire in 2004.

Q. What does it take to pass those issues?

A. A simple majority is needed for each ballot issue to pass.

Q. If the tax issues pass, what will it cost residents?

A: Less than $100 per year per household.

Q. How much money would the measures raise?

A. An estimated $4.13 million would be raised annually if all four issues pass. The estimated annual revenue from each tax: $1.95 million from a quarter-cent sales tax, $990,800 from a local use tax; $747,295 from a monthly storm-water fee, and $442,342 from the 10-cent property tax.

Q. How would the money be spent?

A. The money would be spent for various city needs, including building projects, based on a priority list. The priorities, in descending order, are operating expenses, equipment replacement, storm-water projects, replacement of Fire Station No. 3 at a total cost of $1.8 million, expansion and renovation of the police department at a cost of $5 million and replacement of Capaha Pool with construction of a water park at a cost of $6.5 million.

Q. What happens to the spending priorities if only some of the tax issues pass?

A. The city will start with the most crucial items on the priority list, beginning with operating expenses. The one exception is the storm-water fee, which can only be spent for drainage projects and programs. The water park ranks last among the project priorities and won't be built unless all four tax issues pass.

Q. How would the storm-water fee be collected?

A. Through the monthly utility bill.

Q. What is the amount of the storm-water fee?

A. It's based on building footprints, the first-story square footage plus garages and large outbuildings, as well as paved surfaces such as driveways and parking lots. The cost to households will range from $1.75 to $5.25 per month. Non-residential properties will be charged 7.5 cents per 100 square feet of impervious space (building footprint plus paved surfaces) per month. Credit will be given for approved storm-water detention structures that businesses already have funded on their properties. A 22,800-square-foot convenience store, for example, would pay $17.10 a month, city officials estimate.

Q. If I have a storm-water problem not listed on the projects list, will it be addressed?

A. Yes. The first 14 projects are just the ones that will be done first. Some smaller projects are more maintenance issues. Those items will be addressed in the regular operating budget as they come up.

Q. How would the storm-water fee revenue be spent?

A. Nearly $400,000 a year would be spent on major storm drainage projects. The remaining $350,000 a year would replace general fund revenue currently going to the city's storm-water division.

Q. Would the quarter-cent sales tax mean increased revenue for the fire department?

A. Yes. This tax would fund the fire department and free up $1.9 million annually in general fund revenue to be used for various city needs including fire department operations.

Q. Where would the new fire station be built?

A. It would be built on city-owned property on North Sprigg Street north of Blanchard Elementary School. It would replace the small station at 429 Emerald St. and include an emergency operations center.

Q. How do you pay for all the capital projects since only $4.13 million a year would be raised by the new taxes?

A. The police, fire station and water park projects would be financed with revenue bonds that would be retired over 20 years. Storm-water projects would be done as tax money is available.

Q. What is a local-use tax?

A. It is a sales tax on goods or materials that are purchased from out of state and shipped into Missouri.

Q. What is the proposed local-use tax rate?

A. It would equal the total city government sales tax rate. If voters approve the quarter-cent sales tax measure and the local-use tax measure, then the local-use tax rate will be 2.25 cents on the dollar. If the local-use tax passes, but not the quarter-cent sales tax, then the local-use tax rate will be 2 cents on the dollar.

Q. Will I be required to pay a local-use tax if I don't pay a state use tax?

A. No. The tax will apply to those who purchase items from out-of-state companies including purchases through catalogs and Internet sites. The Missouri Department of Revenue will collect the tax as it does other sales taxes. But the tax applies only if those purchases total more than $2,000 a year and are not retail items. The tax largely applies to businesses, not individuals.

Q. If voters approve a permanent 10-cent property tax to replace the one that currently is set to expire in 2004, will the property taxes for city residents increase?

A. The city's tax levy would remain the same, but countywide reassessment of property values this year could result in bigger tax bills.

Q. If all four tax issues pass, what is the timetable for completing the items on the priority list?

A. City officials hope to complete all the listed construction projects within five years, including 14 major storm drainage projects, a new fire station, an expanded police station and a water park. City officials say it will take months to gear up for these projects should voters approve them next month. Some of the new taxes won't be collected until this fall. In the case of the quarter-cent sales tax, the city won't start getting revenue from it until January, officials say. Initial revenue from the new taxes would go for operating expenses and new equipment. Design work on a new fire station, expanded police station, water park and storm-drainage projects likely would begin in January.

Q. Will the city address storm water problems even if the storm-water fee measure doesn't pass?

A. Yes, as city government can afford it, but that could take many years.

Q. If none of them passes, what will the city council do?

A. The city council will consider reducing basic services, which ultimately could result in personnel cuts. Specific cost-cutting moves haven't been determined.

Q. How much city sales tax revenue has been collected annually since fiscal 1998? How does that compare with total city spending?

A. Cape Girardeau city government received sales-tax revenue of $14.25 million in fiscal 1998, $14.64 million in fiscal 1999, $14.99 million in fiscal 2000, $14.96 million in fiscal 2001 and $15.05 million in fiscal 2002. City government spent $45.89 million in fiscal 1998 on everything from basic operations to capital projects, $40.07 million in fiscal 1999, $67.79 million in fiscal 2000, $47.04 million in fiscal 2001 and $43.88 million in fiscal 2002. Total spending fluctuated greatly depending on capital improvements spending in each year.

Q. How does the property tax rate in Cape Girardeau compare to other area cities?

A. The Cape Girardeau city government tax rate is 47 cents per $100 assessed valuation. Counting all the tax levies for local government including the school district levy, the total property tax rate in Cape Girardeau is $5.23. The total tax rate is $5.48 in Scott City, $5.04 in Perryville, $4.90 in Jackson, $4.86 in Poplar Bluff and $4.79 in the New Madrid County part of Sikeston. The area of Sikeston in Scott County has a property tax rate of $5.05 cents.

Q. Are the proposed taxes permanent?

A. Yes. The city council says it will look at possibly ending some of the taxes if they aren't needed in three to five years. At this point, city officials say it's unlikely the city could ever afford to terminate all of the taxes because much of the money is expected to pay ongoing operating expenses.

Q. If the local economy picks up and sales tax revenue grows, what will happen to the new taxes?

A. If revenue grows enough, the city council may look at a tax reduction. A 1 percent increase in general fund sales tax revenue, for example, generates about $78,000 in added funding. But city officials say the city's future spending needs and its need to build up funding reserves could make reductions difficult even with tax revenue growth.

Q. What will happen to Capaha Pool if the city builds a water park?

A. Capaha Pool is nearly 46 years old and its underground pipes are in poor shape. City officials say the pool won't last much longer. The water park would replace Capaha Pool.

Q. If a water park is built and Capaha Pool closed, will there still be a way to cool off at Capaha Park?

A. Yes. Money -- about $150,000 -- is included in the $6.5 million water park project to develop a water spray pad at Capaha Park. The water park itself would be built elsewhere, likely at Osage Park.

Q. Will the water park pay for itself?

A. City officials say admission fees should generate enough revenue to cover operating costs.

Q. If the taxes pass, how many new jobs will be created and in what areas?

A. City officials aren't sure. There would be some hirings for the police and fire departments, and city maintenance personnel for various departments. A storm-water coordinator also would be hired.

Q. Other than the storm-water fee proposal, the ballot measures aren't tied to specific projects. Why not? And since that is the case, how can the public be certain that the city will spend the tax money as proposed?

A. Much of the money -- $1.33 million annually -- would go to help pay operating expenses. Another $1.52 million a year would go to replace old and deteriorated equipment. As a result, the city council says it couldn't tie specific taxes to specific projects. There is no legal guarantee that the money would be spent as outlined, other than the requirement that the storm-water fee be used for storm drainage expenses. City council members say voters have to trust them to keep their word.

Q. Would some of the proposed funding be spent on pay raises for city employees?

A. Yes. It would go to fund regular merit pay raises. Some of the money also would go to boost pay for positions that would be identified by a professional salary study as being well below comparable salaries in other cities.

Q. Why does the city plan to spend tax dollars to help fund Southeast Missouri State University's proposed River Campus arts school when it has so many other funding needs?

A. The city's $8.9 million share of the River Campus project would come from motel and restaurant taxes, income which can only be used for tourism-related projects. Only the water park project among the city's April ballot projects could qualify for any funding from motel and restaurant taxes. The city currently has no plans to use the tourism money to finance that project. Motel and restaurant tax money funds the Convention and Visitors Bureau and retires bonds for the Show Me Center, Osage Community Centre and the Shawnee Park Sports Complex.