COUNTY HAS HUGE STAKE IN THE FUTURE OF INTERNET SALES, TAXES

I have been the auditor of Cape Girardeau County since 1969, so I feel I have the background to speak about Cape Girardeau County's finances from that time to the present. I have never been a person to hide my head in the sand when it affects Cape Girardeau County or any of the cities within our borders. I am prejudiced about the people and businesses of Cape Girardeau County, and when I see where I think the people and businesses in Cape Girardeau County are being hurt, I react.

This brings me to the reason for writing and defending a stand I have taken: taxing of Internet and catalog sales of goods that compete with our merchants and that could affect the operation of our county and city governments.

When I entered the office of auditor in 1969, I found that the county needed to borrow the funds to operate the county in March, and then we hoped that enough property tax would be collected in December to pay off the loans for that year. It was a hand-to-mouth operation. We had no money to spend on salary increases or on doing any project that would improve conditions within the county.

In the 1970s, two programs came into being. One was the Law Enforcement Administration Act, which sent money from Washington to help law enforcement. I was privileged to serve on our local disbursement committee. From that, all law agencies in the cities and counties of Southeast Missouri were better able to handle the law-enforcement problems within their jurisdictions. From these funds, the Southeast Missouri Crime Lab was formed. The lab operation was one of the best things that could have happened that benefited law enforcement.

When the funds from Washington dried up, the cities and counties had to pick up the funding of this operation, and we really did not have the funds. But we found a way, because this tool was important to law enforcement.

The next important aid to counties and cities was federal revenue sharing. This was not a popular program with Washington, and we had to continue fighting to keep this program. Through this program cam the Cape County Park development, much needed renovation of buildings and some much needed help to very tight budgets for the county and cities. Out of these funds, the county build the first juvenile home (by state mandate) to house troubled youths rather than mix them with older adults.

Alas, Washington won out, and these funds were cut off. But the services were still needed. So the county found a way to keep the programs going, because they were important to the county.

The emergency ambulance service was also started in the late 1970s, funded by county funds again, because this service was needed.

In the 1980s, counties were allowed to vote on a sales tax, and Cape Girardeau County passed a one-half percent sales tax, using half of the sales-tax revenue to reduce the property tax. By 1982, Cape Girardeau County tool all the property tax for county operations off the books. To this day, the county property-tax rate has been zero. The sales tax and fees now make up the county's budget without a property tax.

Even putting road-and-bridge operations and county operations together, the tax rate is only 20 cents per $100 or assessed valuation. This rate was 85 cents in 1969.

Now comes along another new operation called the Internet. Let me say up front I am fully committed to this new technology. But Washington again is trying to call all the shots, and this time instead of helping, they are trying to hurt the operations of the counties and cities across the United States by attempting to close the door on taxing the products that can be purchased over this system.

The word from Washington is that taxing the products sold over this system will destroy this innovation. That's poppycock. If that is true, then why is so much money being used to advertise the Internet? There is some big, profitable organizations behind this operation.

Now, you say, Why are you fighting it?

I am not fighting the concept. I'm fighting for our people and our merchants so that the playing field of competition is kept level. Let's say, for the sake of argument, that it's the word "tax" that bothers you. So you buy over the Internet and avoid the tax, but where you buy the product will charge you some type of handling or freight charges which are more than the tax, and that goes in their pockets with nothing coming to our counties and cities to keep the programs that have been started in operation, and no new ones can be started because of the lack of funds.

The next thing that happens is the merchant's sales fall off, and in order stay in business, he lays off help. His sales go down, and his sales tax goes down. The counties and cities then must cut services or find another means of funding, which probably will be adding a property tax. So then we as citizens pay more tax another way. "And the dish ran away with the spoon."

I am not trying to paint doom and gloom, because 1999 has been a good year for tax collection. Cape Girardeau County was at a 4.72 percent increase from 1998, which netted us around $200,000 more in dollars. But in order to finance the things that have started and fund new programs, it will take a 3 percent to 4 percent increase in funds each year.

I am really saying: Washington, do not close the door and make another mistake you will later want out of. So don't be like an ostrich and bury your head in the sand. Stand up and fight.

In conclusion, I want to give to give Washington a formula so complicated that only a master mathematician can figure it out. Example: Each state has a number, and does each taxing entity. All the seller would need to do is key in the sale of the purchase and once a month send one check to the state and let the state distribute the funds to the proper agencies within the state. Or we could set one rate for the United States and once a month send a check to each state and let each state apply a formula to divide up the tax to all the taxing agencies. We each would probably receive less than if we were paid in full, but we would receive some funds, and it would give our merchants a level playing ground.

That is why I am for protecting our people and our merchants now before we get a mandate whereby we can never collect from the Internet and catalog sales.

H. Weldon Macke, Cape Girardeau County auditor, is the county's budget officer.