Sales tax collections up for local governments, especially Jackson

Thursday, July 12, 2012
Randy Eichhorn of Pocahontas buys conduit with Lyla Lathum ringing up the sale Wednesday at Buchheit's in Jackson. The city of Jackson saw an increase of 5.5 percent in sales tax receipts from January to July. (Fred Lynch)

Cape Girardeau County consumers are spending more again this year, with sales tax collections showing a trend of slow but continued growth that seems to be bucking -- if only slightly -- a dismal national economic outlook.

With consumer spending nationally on the decline, sales tax collections are up this year by more than 2 percent in both Cape Girardeau County and the city of Cape Girardeau for the third year in a row, which followed two years of sales tax revenue declines in 2008 and 2009.

The economic highlight can be found in Jackson, which is faring better than either of its governmental counterparts, at least percentagewise, with collections for the first seven months of 2012 hitting 5.5 percent over the same period last year.

City administrator Jim Roach was at a loss Wednesday to account for the difference.

"I just can't explain it," Roach said. "Next month we may lag behind them. It's a mystery, and I wish I had a way of explaining it, because I'd certainly replicate it if I knew what was going on here. It's just a function of our economy being a bit stronger, I guess."

From January to July, Jackson collected $2.14 million in sales taxes, including general sales tax, transportation sales tax and the still relatively new fire sales tax. The general sales tax on purchases reached $1.25 million, up from 2011's $1.19 million over the same period, a jump of 5.2 percent. The transportation sales tax saw a 5.5 percent increase from roughly $559,112 last year to $594,367.

The city's quarter-cent fire protection sales tax, in its first full year, has generated $294,046 for the first seven months of 2012, while collecting $283,450 for the last eight months of 2011.

Roach noted that Jackson has seen no large new retailers and no influx of businesses that would explain the increases.

"We're just going in the right direction, and the numbers seem to be strong," Roach said.

The relative numbers weren't as good for Cape Girardeau and the county, but officials there said growth is good, especially where so many other places are seeing sharp declines and mixed projections for the future.

The county collected $3.9 million in general sales tax and roughly the same amount for Proposition 1 sales tax, which supports the sheriff's department and county roads. Cape Girardeau County Treasurer Roger Hudson said he was disappointed by a 2.11 percent increase over 2011, considering he was expecting something closer to 2.5 percent.

"Of course, we all wanted more," Hudson said. "But I think the economy is still sluggish and unpredictable. I think instead of people buying a lot of stuff regularly, they bought in spurts and maybe that's part of it."

Hudson also suggested the loss of local taxes on vehicles purchased out of state also is no doubt hurting the bottom line. The Missouri Supreme Court ruled earlier this year that some local taxes cannot be levied when the purchase was made in another state. State lawmakers have passed a bill to reverse the ruling and would require Missourians who buy vehicles out of state to be charged both a state tax and a local tax equivalent to that of the Missouri city and county in which they live.

Hudson said state officials told him Cape Girardeau County could expect to see a hit of about a quarter-million dollars a year. Municipalities across the state have urged Gov. Jay Nixon to sign the law, but he has expressed reservations.

"That's got to have some effect," Hudson said.

From January through July, the city of Cape Girardeau collected $15.37 million in general revenue, fire, park and storm-water, sewer, transportation and water sales taxes, an increase of $402,699, or 2.69 percent, over the first seven months last year. The city has a sales tax rate of 2.75 percent, which includes a 1 percent general sales tax, a half-cent transportation sales tax, quarter-cent rates for water and sewer and a half-cent sales tax for parts.

But, unlike the county, the city tracks its sales taxes on a fiscal year that ended June 30. For the fiscal year, sales tax collections were up 4.8 percent, city finance director John Richbourg said.

"This year, we were happy with that number," Richbourg said.

But in the last quarter of the fiscal year that ended last month, Richbourg said the numbers flattened out, declining 0.09 percent over the same quarter last year.

"That's probably reflecting that the economy is starting to slow down nationally," he said. "But up until that time, it was going OK."

Still, the city and county -- unlike Jackson -- have yet to see numbers similar to those before 2008, when the economy went south. Before 2008, local governments saw annual growth in sales tax of about 4 percent.

Economic development officials said the sales tax is hardly predictable and fluctuates greatly. But one other factor, Cape Girardeau Chamber of Commerce president and CEO John Mehner said, is the Internet. Mehner said that as much of 15 percent of retail sales dollars could be disappearing to Internet sales. That number could be even higher, he said, in counties that are occupied by a more highly educated populace.

"Fifteen percent? That's a big hit," Mehner said. "But the good news is we're still trending upward after seeing declines for a couple years. We're hopeful that trend continues."


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