Sales tax growth slow for area cities, state
by Patrick McCreless
Aug 04, 2013 | 3118 views |  0 comments | 58 58 recommendations | email to a friend | print
Sales tax money has grown slowly so far this year for area cities, a trend in keeping with the state and a sign the economy is still sluggish.

Anniston, Oxford and Jacksonville reported relatively slow gains in tax revenue for the first nine months of their fiscal years, compared to the same period last year. Meanwhile, the state has reported similar tax gains, a concern for area retailers and an indication consumers are still wary about spending, economic experts say.

Oxford, Calhoun County's retail hub, collected approximately $19.08 million in sales tax revenue during the first nine months of its fiscal year — about a 1 percent increase from the same period last year. City fiscal years typically begin in October and end in September.

"The last couple of years it’s been about a 1 percent increase," said Alton Craft, Oxford’s finance director. "I expect that trend to continue the remainder of the fiscal year."

Craft said that before the recession hit in 2007, the city averaged a solid 2 percent in sales tax growth each year. He noted that the city could expect considerably more sales tax revenue next year, however, once it’s had more time to collect from the Publix Super Market, which opened in February.

Anniston reported more than $15.9 million in tax revenue for the first nine months of its fiscal year, more than the approximately $14 million it collected during the same period last year. Some of the increase is due to a 1-cent sales tax increase the city passed last year. However, the boost in revenue has not been as much as expected, said Danny McCullars, Anniston finance director.

"It is concerning when revenue projections fall short, although this is the first full year projected with the new rate," McCullars said. "I am going to reserve judgement on the effect of the sales tax increase until the end of the fiscal year."

McCullars said he and the Anniston City Council are working on a 2014 budget that projects significant cost decreases to better stretch the city's tax revenue.

Oxford’s and Anniston's sales tax revenue gains match those of the state. Alabama collected about $1.52 billion in sales taxes during the first nine months of the year, a 0.9 percent increase from the same period last year. That’s according to an economic report from the Alabama Center for Business and Economic Research released Tuesday that says the weak growth signals that consumers are still cautious about spending.

Ahmad Ijaz, associate director of economic forecasting for the Center for Business and Economic Research, said there are several reasons why consumers are reluctant to open their wallets.

"The job market is still pretty sluggish," Ijaz said. "Another reason is the type of jobs being added ... mainly either temporary or low-wage jobs."

The report shows the Anniston-Oxford metro area lost about 300 jobs in the previous nine months.

Jared Simmons, finance director for Jacksonville, said that like Anniston, his city had higher gains in sales tax revenue due to a 1-cent tax increase passed in November. Simmons said the city has collected about $5.07 million so far this fiscal year, about 4.5 percent higher than the approximately $4.85 million it collected the same time last year.

Factoring out the 1-cent sales tax, however, revenue for the city is up only around 1 percent compared to last year, Simmons said.

"We're still definitely on the upswing, which is a good thing," Simmons said.

Nancy King Dennis, director of public relations for the Alabama Retail Association, said sales tax gains this year have not been great, but they are reaching pre-recession levels. For instance, Alabama retail sales in April were the best since April 2008, Dennis said.

"We're getting back to pre-recession levels, we're just not growing as fast," Dennis said. "It's a concern, we'd like it to be better, but the amount of money being spent is a good amount of money."

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.
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