Local Sales Tax Revenues Continue to Decline

 

From today’s Joplin Globe (emphasis is mine):

Sales tax revenue for the area in March was “pretty bad,” according to one assessment. Joplin, Jasper County and Newton County officials all reported sharp declines.

Some merchants pointed to the unusually cold and snowy weather in January, and said things have since rebounded.

Joplin’s sales tax payment this month from the state was down 21 percent compared with the March payment a year ago. The city received a payment of $930,975 in March, down from $1,184,561 in March 2009.

For the Joplin fiscal year, which began Nov. 1, revenue from the city’s 1-cent sales tax for the general fund has slipped nearly 7 percent, from $4,966,110 this time last year to $4,635,347 this year.

“Obviously I hoped it wouldn’t do that,” said Leslie Jones, Joplin’s finance director. “I’ve done some research, and it seems to be a statewide issue. I’ve talked to people at St. Louis and Springfield, and everyone was down a lot like we were.”

Springfield’s payment in March was about 17 percent lower than the amount it received last March.

The figures are for payments made in March by the Missouri Department of Revenue to taxing entities, and reflect spending that would have taken place at stores two to three months earlier.

Jones said the drop also could be related to rising unemployment rates.

Joplin’s sales tax reports indicate that collections took a 12 percent drop in December, and posted slight gains of about 2 percent or less in November, January and February.

Jones said City Manager Mark Rohr has assigned her to work on ideas for cutting expenses if it becomes necessary.

“We have been saving up money so we can weather this for a while,” she said. “You have to make adjustments before it’s too late. We started that last year by not buying all the capital items that were budgeted unless they would cost us more money if we wait, and cutting travel.

“I think the city manager is waiting on the next report,” before ordering further cuts, Jones said.

“We can weather this right now because we have been wise in the past,” she said. “There are still things we can do. If it gets worse, we’ll have to make adjustments of some kind.”

January weather

Donnie Pearce, store manager at Hobby Lobby in Joplin, predicted a rebound when the April and May checks come in for Joplin.

“February is the best (month) I’ve had since I’ve been down here. March is the same way,” he said. Pearce has been with the store in Joplin for four years.

January sales were pushed down by cold, wet weather more than anything else, Pearce said.

“In January, I was down $80,000 that first week, and it was all because of the weather,” he said. “Mine is completely weather related.”

Jasper County Auditor Richard Webster described the county’s sales tax payment this month as “pretty bad.”

In January, the county’s payment was up by $5,929 from the figure for the same month a year ago, and in February, it was up by $6,171.

“So in the first two months of 2010, we were up $12,100, which overall was a 1.25 percent increase,” he said. “In March, we took a nose dive. We were down $100,000 from a year ago,” making the net change a loss of about $88,000 compared with the total for the first quarter of 2009.

In the first quarter of 2009, the county collected $1,517,422 in revenue from sales tax payments, compared with $1,429,370 for the same quarter this year. That is drop of about 6 percent.

Webster said he also is waiting to see if a trend develops.

“I’m watching the cash flow each month in this office,” he said. “We have a situation where we have a (county) budget in place, and they (the commissioners) have approved that budget. Law does not allow us to lower this budget right now.

“We are operating like we do every year. We’re just hoping we have enough.”

Webster said the downturn could be a post-holiday sales slump or the result of the collection procedure, which takes two to three months to wind from retailer to the state to the local entities.

“The only thing that is troublesome is that I’ve been here (as auditor) seven years, and I’ve never seen a drop that large,” he said.

Newton County officials reported a drop in their sales tax check from the state as well, from $555,000 in March 2009 to $464,000 this month, a decline of $91,000 or more than 16 percent.

Businesses react

Vivian Campbell, owner of Computer and Laptop Express, 2120 S. Main St. in Joplin, wasn’t surprised by the downturn.

“I can agree with that,” she said. “I bet we had a 60 percent drop in sales and service after the holidays.

“I think people are scared, too. They have a little money, but they don’t want to go out and spend it.”

Dewayne Patton, general manager of Northpark Mall, reported that sales in January were “flat,” but February and March numbers were up. The mall does not release specific store numbers.

“It may have to do as much with the weather as anything else,” he said. “For myself, I’ll be perfectly honest, I was getting out less simply because it was so miserable to get out.”

He said he recently surveyed some mall tenants who reported increased sales in recent weeks.

“Everyone was reporting trending up,” Patton said. “This has been a really great month.”

Joplin’s numbers

In addition to the 1-cent sales tax for the general fund, Joplin’s sales tax payments in March were as follows:

n Half-cent public safety tax: $484,500, down from $592,308 a year ago.

n Half-cent transportation tax: $465,487, down from $592,281.

n Quarter-cent parks and stormwater tax: $232,471, down from $296,018.

n Three-eighths-cent capital improvements tax: $348,573, down from $444,099.