Smith says sales tax leveling off

Published 12:00 am Sunday, August 20, 2000

Natchez Mayor F.L. &uot;Hank&uot; Smith said he was misquoted in a Wednesday Democrat article about the city’s financial status. Smith said the article, which attributes him as saying &uot;… the sales tax growth has not leveled off …,&uot; was incorrect. Smith said he was never asked about sales tax figures, and sales tax receipts have leveled off in his opinion.

&uot;(This year’s sales tax receipt figures) may be a few thousand dollars higher, but that’s even to me,&uot; Smith said Friday.

With one month remaining in fiscal year 1999-2000, the sales tax revenues stand at $4,213,299, according to the city’s sales tax records.

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While it is impossible to predict how much money September will bring in, City Clerk Donnie Holloway said, adding this year’s monthly average of $383,027 would bring the grand total to an estimated $4.5 million.

Last fiscal year’s total came to $4,619,714, which includes a $120,778 payment from the state in July 1999 as reimbursement for incorrect reporting by the state over a period of several months or years, City Clerk Donnie Holloway said.

For comparison purposes, subtracting the state’s reimbursement from last year’s total and estimating this year’s total shows an overall 2.1 percent increase in sales tax revenue.

Sales tax revenues are drawn for purchases made locally and, along with ad valorem and property taxes, make up a sizable portion of the city’s budget.

The less sales tax revenue the city receives, the &uot;less we have to work with,&uot; Smith said.

Over the past 12 years, the city’s sales tax revenues have fluctuated. Because the monthly totals vary so greatly, both Holloway and Smith said it is important to look at the yearly totals when measuring growth.

The highest recorded total since fiscal year 1987-88 was last year’s $4.6 million, which includes the state reimbursement.

The largest year-to-year increase in totals came in fiscal year 1992-93 with a 5.9 percent rise over the previous year. After the 1992-93 jump, the sales tax totals increased at a rate of almost 5 percent per year until 1995-96, when it jumped from 4.9 to 5.3 percent.

Falling again in 1996-97 to 2.3 percent, the rate of growth has remained relatively steady, averaging a 2 percent year-to-year growth rate since then. Again, the totals have been adjusted for 1998-99 and the current fiscal year for comparison.

Holloway said Smith could be correct in viewing the growth as leveling off but is &uot;optimistic&uot; himself. &uot;To me over the years it has grown a little,&uot; Holloway said.

&uot;There are some factors out there that could level it out, but I hope not,&uot; he said, mentioning the growth of e-commerce and the uncertain status of the Natchez International Paper plant.

Smith said he blames the leveling on several factors, mainly a drop in population.

&uot;I think that’s going to be proven with the census figures,&uot; he said.

Lack of &uot;decent-paying&uot; jobs as a result of little economic growth has also contributed, Smith said.

So, what to do now?

&uot;What we’ve already done,&uot; Smith said, referring to the reformatting of the Natchez-Adams County Economic Development Authority.

Earlier this week, the Natchez Board of Aldermen and Adams County Board of Supervisors agreed to revamp the authority’s funding and makeup, but Legislative approval is required before the changes can be made law.

Smith said he &uot;hopeful, but not optimistic&uot; that Gov. Ronnie Musgrove will include the city and county’s bill in the special session on economic development this month.

Even if the bill is not included, the search for an EDA executive director should move forward, Smith said. The authority has been without a director since January 1999.

&uot;My opinion has always been that we shouldn’t wait,&uot; Smith said. &uot;I don’t think we can afford to wait.&uot;

Both Smith and Holloway said this summer’s nationwide drop in tourism dollars has affected 1999-2000 sales tax revenues.

Smith said his own business, Hullaballo gift shop, has felt the effects of the summer tourism slump in addition to the more long-term leveling in sales tax revenues.

Holloway said he has no way of determining how much of the city’s sales tax receipts are composed of tourism dollars, but he plans to ask the state tax commission for more detailed figures in the future.