VOTERS WILL DECIDE FATE OF USE TAX

JACKSON -- A 1.5 percent use tax will go before voters Aug. 6.

Aldermen agreed Monday night to put the measure on the ballot. The proposed use tax, equal to the city's sales tax, would replace a portion of a statewide tax struck down earlier this year by the Missouri Supreme Court.

Last month, Gov. Mel Carnahan signed into law legislation allowing municipal governments to seek voter approval for the use tax.

The use tax must be equal to the local entity's sales tax, and if the sales tax increases or decreases, the use tax must change accordingly.

"Apparently that's going to be a pretty popular thing do here in August," Mayor Paul Sander said. "We'll be joining a lot of other cities that will have it on their ballots."

Cape Girardeau County and city officials have already approved use tax measures for their communities for the August election.

The county is proposing a half-cent use tax, while voters in the city of Cape Girardeau will be asked to approve a 1.75-cent tax.

The use tax won't affect many people, Sander said.

"It'll be mostly on mail-order catalogue sales. It won't hurt our local business people, and it'll generate some revenue for the communities," he said.

Sander also pointed out that the tax was already in place until March, when the Missouri Supreme Court ruled that the 1.5 percent portion of the tax allocated for local governments was unconstitutional.

"It's not a new tax," he said. "If it was, I certainly would not be endorsing it."

The city will also join in efforts to fight the state's order that local governments must repay use tax revenues collected under the old tax with 12 percent interest, Sander said.

"We will not stand by idly on that either, paying interest on the funds that were escrowed in good faith," he said. "We don't mind at all to pay our fair share, but this 12 percent interest is ridiculous."

Several municipal and county governments have expressed interest in banding together to fight the state's decision.

At this point, an injunction will probably be sought to prevent the state from withholding sales tax revenues from local governments to make up the funding paid out in use tax revenues, according to Prosecuting Attorney Morley Swingle, who is representing Cape Girardeau County's interests in the controversy. County officials have already indicated they plan to fight the state's decision.

The city of Jackson set aside the approximately $215,000 it collected in use-tax revenues, according to city administrator Steve Wilson.

Wilson said he will attend an informational meeting on the use tax and any possible litigation related to it Tuesday. The Missouri Municipal League was sponsoring the meeting to bring city officials from throughout Southeast Missouri up to speed on the controversy.

Statewide, approximately $200 million in use tax revenue was collected, and about $30 million is being sought in refunds from businesses and individuals who had to pay the tax.