Sales tax declines worry some
Shortfalls in local revenues aren’t causing county and municipal governments to make cuts just yet, but they definitely aren’t putting the option out of mind.
In Troy, Brundidge and Pike County, sales tax numbers for the first two months of the new budget year, which started in October 2008, have followed a state and national trend in dropping.
Though there is still time to make up for these losses, mayors and county officials are at least keeping a watch for December’s sales tax figures to post and hoping for improvements.
“We’re going to have to keep our eye on it and see if it’s going to affect some of the stuff we’re going to do,” said Brundidge Mayor Jimmy Ramage.
In October and November of 2008, Brundidge has seen an almost $3,000 difference in their sales tax collections from the prior year so far.
Ramage said this revenue source makes up some 4 percent of the city’s budget, a budget which funds all the programs, city employee salaries and projects.
In Troy, sales tax revenues have dropped by just more than 3 percent, losing around $50,000 in difference from 2007.
City Clerk Alton Starling said sales taxes have increased year to year for the city since 1997, at least, but they are still hopeful things will turn around.
“I’ve been getting positive feedback from merchants about December sales, so we’ll wait until the end of January before we make any decision,” said Troy Mayor Jimmy Lunsford.
Starling said through traffic from 231 and college student spending are some ways the city may not be hit too hard in terms of sales tax funding.
But still, he and Lunsford said the city will keep close watch and be cautious with spending through hard economic times.
“If it continues on a downward trend, then yes, it certainly will be a concern,” Starling said. “It’s like someone at home getting their pay reduced.”
Lunsford said they will wait for December sales tax figures before the city council decides what, if any, cuts need to be made to the budget already in place.
Ramage also said while he hopes economic situations improve, he isn’t planning any cuts at least until things get worse.
“If things don’t get better, we’ll have to see if we have to make cuts to make ends meet or if revenues are going to come from another place,” Ramage said. “We’ll have to keep a close eye.”
And the county’s sales tax revenues, which include those alloted to local schools, have also seen a drop in some $16,000.
County Administrator Harry Sanders said commissioners have not planned any cutbacks at this time.
“We’re monitoring the budget as we always do to see where we are against actual expenses, and so far we don’t have any plans,” Sanders said. “Everybody is really concerned about how long and how deep this recession will be.”
Sanders said sales tax revenues comprise 14 percent of the county budget.
Each year, all three local governments reported sales tax numbers typically have risen annually.
But, these local entities are not alone in the tax collection decreases.
The Associated Press reported Alabama’s total tax collections, which include sales tax, have decreased 6 percent from the same time last year. That makes a $120 million less collected than this time a year ago.