Sales tax receipts slump for Southeast Missouri governments; some sectors of economy weathering recession better than others

A poor showing for retailers in the past two months is showing up in the checks local governments receive for sales taxes.

A mainstay of revenue for cities and counties, sales taxes are more volatile than property taxes. Shoppers put off big purchases when they are worried about the future.

Despite overall lagging sales -- a 4.8 percent decline in same-store May sales at 30 large retailers tracked by Thomson Reuters -- some sectors are weathering the recession better than others. Wal-Mart announced last week it would open 150 new stores and add 22,000 jobs. Locally, Jon Townsend, co-manager of Schnucks, said grocery sales have remained steady.

Local governments received their most recent sales tax payments Monday. For most area jurisdictions, those payments show a sharp drop.

In Bollinger County, the check was 17.4 percent smaller than the one received in June 2008. Revenue was already down, Presiding Commissioner Wayne Johnson said. He's asked all the elected county officials to attend Monday's regular commission meeting to discuss areas to cut.

For the year, Bollinger County's general revenue sales tax receipts are $40,000 short of the $387,967 that had been collected through June 2008.

"We didn't anticipate it increasing, but we didn't really realize that we were going to be down as much as we have been," Johnson said.

Bollinger County has no large retailers, Johnson said. The big contributor to tax revenue is auto sales because car purchases are taxed where the owner lives, not where the vehicle was sold.

While no other government is reporting figures as bad as Bollinger County, none enjoys revenue higher than last year. Cape Girardeau, the biggest government in the region, has been cutting back on spending for months to keep expenses below revenue with a virtual hiring freeze and the elimination of raises for most workers. The new budget for the year that begins July 1 includes other cost-cutting measures to help build operating reserves that have dwindled to less than $100,000.

The new budget also assumes Commander Premier or its successor company will begin making the $14,500-a-month rental payments on its manufacturing hangar at the Cape Girardeau Regional Airport, said John Richbourg, city finance director.

Cape Girardeau's tax receipts for the first 11 months of the current fiscal year are $113,000 below last year at this time. Tax money received since January is 1.33 percent below the same period of 2008.

Those figures aren't bad enough to trigger more drastic action, Richbourg said.

None of the government leaders contacted reported any plans to lay off workers. Some provided raises this year but said they did so after cutting back on other expenses or because they can rely on other income, such as Jackson with its city-owned electric utility.

Jackson's sales tax revenue is only $6,000 less than the $1.03 million collected by this time last year, assistant city administrator Larry Koenig said.

Other governments are generally reporting a decline for the first six months of the year of about 2 percent. That decline is small enough to weather with belt-tightening, Scott County Presiding Commissioner Jamie Burger said.

"We as office holders and the rest of the elected officials are just going to curb our spending to match the shortfall of revenue," he said.

'It is just one month'

Cape Girardeau County's revenue was actually close to last year's figure until the latest payment came in 9.2 percent below last year. "We haven't found any reason to panic on the budget and also we have been rather happy with the revenue stream," Cape Girardeau County Presiding Commissioner Gerald Jones said.

"It is just one month. We will be able to make it."

Making sales during a recession is a challenge. Smaller retail stores have been particularly hard hit. In an April memo to the the city council, Richbourg said 2008 revenue based on sales at the largest 100 retailers was off 1.94 percent, while taxes collected at the remaining retailers declined 3.17 percent.

Specialty retailers must work harder, said John Selby, owner of Stereo One.

"We try to solidify the reasons people should be doing business with Stereo One," he said. "That means emphasizing product knowledge and service."

Discounting wouldn't work for a store like his, he said. "We are really not believable as a place to get a deal. I could run a sale with 90 percent off and people still wouldn't believe they could get it cheaper from us than at Best Buy or Wal-Mart or Sears. We are not trying to be something we are not."

At Schnucks, shoppers are seeking out sale items and store brands, Townsend said. Sales are also being propped up by younger shoppers cutting back on restaurant meals in favor of food prepared at home.

"There is a whole generation of people, people 22 to 33, and eating out was the norm for them," Townsend said. "They are trying to change their lifestyle, and we have captured a lot of that market, as all grocery-type stores have."

rkeller@semissourian.com

388-3642

By the numbers

Local governments rely heavily on sales taxes to pay salaries, fix roads and provide public safety protection. Due to the recession, revenue is down for almost every city and county in the region. The following figures compare general revenue sales taxes for selected cities and counties during the first six months of 2009 with the same period from 2008:

Cape Girardeau

2009: $4.50 million

2008: $4.56 million

Down: 1.33 percent

Jackson

2009: $1.02 million

2008: $1.03 million

Down: 0.58 percent

Cape Girardeau County

2009: $3.17 million

2008: $3.24 million

Down: 2.08 percent

Perry County

2009: $563,898

2008: $576,668

Down: 2.1 percent

Scott County

2009: $795,471

2008: $812,094

Down: 2.04 percent

Bollinger County

2009: $347,510

2008: $387,967

Down: 10.4 percent

Pertinent Addresses:

345 S. Kingshighway, Cape Girardeau, MO

19 S. Kingshighway, Cape Girardeau, MO

204 High St., Marble Hill, MO

131 S. Winchester St., Benton, MO

401 Independence St., Cape Girardeau, MO

1 Barton Square, Jackson, MO

101 Court St., Jackson, MO