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Sales tax data may force cuts to city budget

 

Carmen K. Sisson

 

Columbus sales tax collections continue to lag behind last year's revenue, prompting some to question whether the city will have to amend its Fiscal Year 2012-2013 budget or dip into reserves to make up the difference.  

 

January revenue earned posted at $626,213.89, a decrease of $24,173.58 from January 2012, a 3.7-percent decline. The year-to-date sales tax collections are down by 2.5 percent compared to the same period last year. 

 

February numbers, which have not yet been released, indicate a similar drop, marking the sixth consecutive month in which collections have fallen short of last year, former chief financial officer Mike Bernsen said Wednesday. Bernsen is serving as a consultant for the city as new CFO Milton Rawle gets settled. Bernsen estimates total sales tax revenue, which totals $4,287,494.72 so far, to be nearly $100,000 lower than last year at the halfway mark of the city's fiscal year, which runs from October 1 to Sept. 30.  

 

Comparatively, the worst month so far has been September, which brought in $24,933 less than the previous year. December has been the best month this fiscal year, garnering $859,109.94 but still failing to eclipse the 2011-2012 total of $877,648.84 -- the best month of that year.  

 

The cause is debatable. Last year's figures were pretty high, and the drop could represent a return to normal, Bernsen said. It could also be the local economy lagging behind national trends, with the economic slowdown starting to be felt more deeply.  

 

A change in the industrial landscape may also have something to do with it. Last fiscal year, construction at KiOR was underway, prompting the purchase of massive quantities of raw materials, Bernsen said.  

 

Likewise, retail in Columbus has taken a hit, with a number of downtown storefronts going dark. Main Street Columbus director Barbara Bigelow recently estimated that commercial occupancy downtown is 89 percent, compared with the state average of 83 percent, but retailers across the city will have to boost sales in order to recover the remainder of the fiscal year. 

 

"We budgeted sales tax for 2013 to stay flat," Bernsen said. "Unfortunately, the trend seems to be going downward, so our budget's going to be short. Our businesses need to increase their sales. You're seeing more vacant spaces in the downtown stores than I've seen in a long time. That's scary." 

 

Sales tax returns have been volatile over the past six years, with Fiscal Year 2006-2007 bringing in the highest amount -- $8,849,013.48 -- and the worst year being 2009-2010, which brought in $8,168,836.41. Totals continued to plummet from 2006-2010 before consistently rebounding between 2010-2012. So far, no single month this fiscal year has managed to reach or surpass the 1989 levels.  

 

West Point also struggled, bringing in $150,859.20 in January 2013, compared with $151,936.12 in January 2012.  

 

"We're just keeping an eye on it, but it has not become a problem as of yet," West Point city clerk Lela Jack said Wednesday. "When I saw the numbers come in, I said, 'What happened?' We're not worried about it at this point. Over the years, it has always fluctuated." 

 

Lowndes County fared considerably better in January, bringing in $75,945,461 in sales tax revenue -- more than $2.6 million more than the year-to-date collections from last fiscal year.

 

Carmen K. Sisson is the former news editor at The Dispatch.

 

 

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