Sales tax falls year-over-year

April 19, 2017 9:53:00 AM

Alex Holloway - [email protected]


Columbus took a sharp hit to sales tax revenue received from the Mississippi Department of revenue this month, but it may be a return to normal, rather than a cause for alarm. 


The city received $809,954 in revenue this month for taxes collected in February. The total is $346,911 short of last April's record $1.15 million disbursement. 


The city has received $5.67 million in sales tax collections so far this fiscal year. At the same time last year during a run that included five of the highest respective months on record, it had received $6.04 million. 


City Chief Financial Officer Milton Rawle, speaking to the city council Tuesday evening, said it's hard to tell what exactly caused the year-over-year decline. 


"The Department of Revenue -- the mayor (Chief Operations Officer David Armstrong) and I went there when I first got here back in 2013," Rawle said. "They wouldn't give us an explanation and the only thing that's changed is the day, month and the year." 


Rawle noted the decline could be in part due to struggling car sales. 


"The only thing I can come up with is I've spoken with a few insurance agents and I know the car dealerships are having a tough time this year," he said. 


Mayor Robert Smith, speaking to The Dispatch, said the drop in revenue bears monitoring, but isn't cause for alarm. 


"It can be down a couple of months then go back up," Smith said. "We'll look at it, especially with budget coming up in the summer. It's something we're going to watch but we're definitely not going to get alarmed about it yet." 


April 2016's $1.15 million in collections received from MDOR was the highest sales tax month on record for the city. The total was well above the $723,812 the city received in April the previous five years. 


This year's collection is still above average and ahead of the $778,798 the city received in fiscal year 2015, which Rawle said he'll take into account when planning for next fiscal year's budget. 


Ward 6 Councilman Bill Gavin suggested the spike in last year's collections, and the recent run of record collections the city has had, may have been at least partially due to residents getting Tronox/Kerr-McGee settlement money from a lawsuit against the former wood processing facility. 


"This is just my thought, but I think were a lot of people in town that got some sort of check from that lawsuit," Gavin said. "That helped them with some things in their lives and making large purchases like automobiles. That's usually where a lot of our sales tax comes from--automobiles and big-ticket purchases. 


"I attribute a lot of our sales tax spike to that, and once that money leveled off it might have settled back down to normal," he added. 


While the sales tax dropped, April's restaurant tax collections soared nearly $40,000 to $193,040. 


Columbus Lowndes Convention and Visitors Bureau Executive Director Nancy Carpenter said this month's collection is the most the CVB has received in sales tax collections from the city. 


She suggested the jump may have been an adjustment, after restaurant tax collections across the state were down significantly last month.