Editorial

Local sales-tax revenue is holding its own

Tuesday, March 19, 2002

Some economists say the U.S. recession that probably began in early 2001 also probably ended before the end of the year, making it one of the shortest downturns in recent history -- if, indeed, the economy is showing as much strength as anticipated.

That's been the problem with the economic stall that ended a decade of solid growth. Most economists weren't willing to say there was a recession until months after it began. Now many of those same economists are hesitant to say the economy is fully rebounding. They may not be in a position to say for sure for another couple of months.

The economic fluttering is likely good news overall. For most Americans, the biggest hit came in the stock markets, which nose-dived last year. Not too many years ago, such a market decline would have affected a limited number of American investors. But, thanks to 401(k) accounts and other pension plans that took advantage of the furious growth in stocks, millions of Americans saw the values of their investment portfolios fade away. Suddenly, a large number of American workers, many of them novice investors, encountered various degrees of panic.

The terrorist attacks in September also had a devastating, but short-term, effect on stock investments. By all rights, the confidence of American workers and consumers should have been knocked for a loop.

Yes, there have been some devastating blows as the result of the past year's economy, but a good many indicators show the damage wasn't as severe as it could have been.

Around the nation, state legislatures are struggling to balance budgets. This makes it sound like the bottom has fallen out of the flow of tax revenue. That's not the case, however, in most states. The real problem is the pace at which spending by state government has grown over the last decade. When revenue growth slows, spending has to ease up as well, and most legislators and bureaucrats simply aren't prepared to go easy on spending even as revenue continues to creep up.

Locally, one of the best economic barometers is sales-tax revenue. The latest figures show retail sales are about equal to last year.

The city of Cape Girardeau has seen modest declines in sales-tax checks for the past three months. Those checks represent sales that occurred late in 2001. Jackson, Mo., has seen increases in sales-tax revenue. And Cape Girardeau County had a slight drop for the three months but an increase in the March check.

These sales-tax figures, along with a continued low unemployment rate in the county, indicate this area's economy is holding its own. And the data that show this part of the country isn't rebounding as quickly as the nation as a whole appear to be fairly accurate. But the prospects remain good.

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