Treasurer estimates $4.1 million for first year of sales tax

~ He said the figure was given so Cape Girardeau County commissioners would have a fixed number on which to base budget decisions.

Cape Girardeau County's new sales tax should bring in at least $4.1 million during 2007, according to an estimate from Treasurer Roger Hudson.

The tax, approved by voters on Aug. 8, takes effect Jan. 1. During the campaign for the tax, county commissioners estimated that the annual revenue from the tax would be about $6 million.

Hudson's lower figure is partly because of the way sales tax is collected. Retailers send both the local and state portion to the state Department of Revenue, which then sends the local portion to the appropriate jurisdiction, so the county won't see any money until March.

In his unsolicited one-page report, Hudson called his $4.1 million estimate conservative.

County commissioners are working to balance interests who want their promised portion as soon as possible. During commission discussions, speculation about the size and timing of the first payment has gone forward without any official revenue estimates.

Hudson's job is to watch over county bank accounts and keep track of current balances. He said Thursday he produced the revenue estimate because he felt commissioners needed a fixed estimate to make decisions.

Compared to 1980s experience

He compared the first year's revenue from the county's general revenue sales tax in 1980 with payments the following year, and applied those percentages to current revenue.

Sales-tax revenue increases as prices rise, and the period covered by Hudson's analysis had the highest inflation rates recorded in the past 60 years.

Commissioners will be writing a budget for 2007 during the next two months.

Part of the new tax money is earmarked for the Cape Special Road District, which promised to eliminate its property tax in exchange for a share. The road district has been promised about $1.5 million out of the first year's proceeds.

Cape Girardeau County Sheriff John Jordan was also promised a budget increase out of the tax money to give raises and hire new deputies. To do everything he asked voters to fund, Jordan needs about $975,000, Commissioner Jay Purcell said.

That figure is up from the amount originally estimated, $850,000, because some insurance costs had not been included in the original estimate, Purcell said.

And to pave the roads promised in 2007, the county would need about $1.1 million. Adding those together, the county would have a surplus from the first year of about $500,000, according to Hudson's estimate.

Jordan said he's not going to ask the commission to fully fund his estimate in 2007. He wants the raises, which will give his deputies parity with Cape Girardeau police, to take effect Jan. 1.

Jordan wants to hire two new deputies right away, then hire the remaining eight new employees during the final three months of the year.

"There are worries about anticipated revenue not being there," Jordan said. "I am trying to be conservative with it and help the commission in that respect."

Numbers 'pretty good'

Hudson's estimate, Purcell said, is actually lower than the figure he had been using as he anticipates writing the budget for the coming year.

"Roger's numbers are pretty good from what I can tell," Purcell said.

County tax bills will be mailed mailed beginning Nov. 1, and after this year the county will no longer collect a property tax for roads and bridges. Replacing the lost revenue will cost about $1.1 million from the new tax, but Purcell said the county does not need to save that amount in 2007. The costs of running the department will be borne by ongoing revenue beginning in 2008, he said.

"It is our own entity, and we just have to make sure we have the money on a month-to-month basis as expenses occur," Purcell said.

The bottom line for using the money, Purcell said, is that the public sees that all the promises made before the tax vote are kept.

"We made some promises and we are going to keep them, and if we don't, I expect the voters will act accordingly," he said.

rkeller@semissourian.com

335-6611, extension 126