Sales tax revenue increased slightly in 2010

Monday, December 20, 2010

Sales tax revenue and retail sales are up slightly for Southeast Missouri in 2010, a welcome change to the downtrodden national economy -- but there's still a ways to go toward economic recovery.

Cape Girardeau County retail sales tax collections were at $3,200,284 for the first six months of 2010 -- that's a 1.4 percent improvement over last year's $3,155,939, but still lower than the $3,334,115 seen in 2007. Scott County sales tax collections were at $956,431 in 2007, dropped 11.5 percent to $846,612 in 2008, fell another 3.9 percent in 2009 and rose 4 percent this year to $846,877 -- still over $100,000 behind the 2007 rates.

"It looks as if there is improvement in the retail sector in Southeast Missouri, but we are still generally behind the numbers from 2007, so there is some catching up to do yet," says Dr. Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University, who made the calculations. In his analysis of the first six months of the year from 2007 to 2010 in Cape Girardeau, Butler, St. Francois and Scott counties, and their major cities, Cape Girardeau, Poplar Bluff, Farmington and Sikeston, Mo., Domazlicky noted a pattern of declines from 2008 and 2009, with recovery in 2010.

"Only Butler County and Poplar Bluff have retail sales tax collections in the first six months of 2010 that exceed the same period in 2007, though not by a lot," says Domazlicky.

Both the City of Jackson and the City of Cape Girardeau have seen a 1.4 percent increase in sales taxes received from January through November 2010, compared to the same time last year, according to city data. General sales tax collected by Cape Girardeau County increased by 2 percent during the same time. Through November, Cape Girardeau County received $5.6 million in general sales taxes and $3.3 million in Proposition 1 sales taxes, which go to fund law enforcement and road projects. The City of Cape Girardeau has received $21.7 million in sales taxes, including special use taxes for transportation, sewer, water, fire protection, parks and stormwater.

The City of Jackson has received $2.7 million in general fund and transportation sales taxes. Jackson shoppers will start paying a new quarter-cent fire protection sales tax in April 2011. The tax, approved by voters in November, will fund operations at a proposed second fire station, as well as the city's current one. Jackson's new tax rate will be 6.750. Cape Girardeau's current sales tax rate is 7.975 percent and the tax rate in unincorporated areas of the county is 5.225 percent.

Though the rate increases are small in Southeast Missouri, the area is still faring better than the rest of the state. In October, state budget director Linda Luebbering reported that Missouri's state sales tax collections were behind by 2 percent from last year. Domazlicky expects some growth for the local and state economy, but doesn't foresee a fast economic recovery.

"I think continued improvement is likely, but it will remain slow given the still-high rates of unemployment in the region," he says. "If the tax compromise goes through with the one-year cut in Social Security taxes, I think we will start to see an acceleration in the improvement in the economy."

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