County sales tax revenue down fourth straight month from year ago

Cape Girardeau County's monthly sales-tax revenue is down over last year's numbers for a fourth month in a row -- the first time in at least 13 years, said treasurer Roger Hudson.

As compared to June 2016, this month's total was down 12.5 percent, or $89,828.55.

Hudson said in his 13 years as treasurer, he doesn't remember sales tax revenue falling year to year for even three months in a row.

Year to date, total sales-tax revenue is down 3.62 percent, or $133,604.09, for 2017.

Hudson said the drop might be due in part to what he called the "Amazon effect," where consumers spend more with online retailers, and local sales taxes are not generated.

But other factors are in play as well, he said.

"It could be sales on big-ticket items, like cars, are down from this time last year," Hudson said.

Civic and business leaders in the area have cited a concern local governments are too reliant on sales taxes, because so many people are buying online these days.

But it's too early to tell whether this four-month sample size will become a long-term trend.

Sales-tax revenue tends to be cyclical, he said, and where one month might see a decrease, the next month or two might see an increase, and vice versa.

Budgeting sales-tax revenue is a tricky endeavor, because businesses' timing plays a big role from month to month, as does the timeliness of the reporting by the state.

The four-month decrease is not a steady decline, either, Hudson said.

In March, revenue was down 12.7 percent, or $97,568.90, over March a year ago.

But in April, revenue was down 1 percent, or $5,949.24.

May's decrease was 1.71 percent, or $7,840.30.

Sales-tax revenue for the city of Cape Girardeau is down $107,643 in June, a 10.57 percent drop from June 2016, finance director John Richbourg said.

Cape Girardeau's May sales tax revenue was up 0.4 percent over May 2016.

As to how this four-month drop will affect the county's budget, Hudson said it's too early to tell.

In the 1970s, Hudson said, voters approved a tax levy that would reduce property taxes by 50 percent and, using a formula set up by the state auditor's office, sales-tax revenue would replace property-tax income.

For years, that worked because sales-tax revenue increased steadily throughout the 1980s and '90s, Hudson said.

"In the recession years, from 2008 on, sales tax dropped, and to make the formula work, property tax had to be bumped up," Hudson said.

Historically, sales-tax revenue could be counted on to go up, Hudson said, but since 2008, "we can't count on it," he said.

For 2017, the county's budget did not anticipate any growth in sales-tax revenue, Hudson said.

"We basically budgeted 2017 flat, the same as the year before," he said.

Hudson said if the trend in sales tax continues this year, it would hurt, "but we would survive."

Hudson said if overall sales-tax revenue were down at the end of 2017 instead of flat, as anticipated for the budget, that discrepancy would be recouped with an increase in property tax.

That discrepancy can't be determined until assessment numbers for 2017 come in, Hudson said.

The county sales-tax rate is 1 percent of retail sales in the county.

Hudson also said use-tax revenue is slightly up for June 2017, which suggests the possibility of a shift in revenue streams, but it's too early to be certain.

mniederkorn@semissourian.com

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