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Picayune city sales tax collections rising

The devastation wrought by Hurricane Katrina not only damaged buildings and increased the population, it brought an increase in sales tax to the area.

That increased population, combined with the outlying residents who also shop in Picayune, increased sales taxes collected by the city has by an average of 81 percent since the storm, Picayune Mayor Greg Mitchell said.

City Clerk Linda Caston said that the City of Picayune received $504,877.09 in sales taxes rebates from the state in the month of April. Last year for the same month the city received $283,689.79, according to city records. Sales tax payments from the state come in two months after the month they are collected, Caston said.

Those extra funds will be used for general expenses such as payroll, repairs, purchasing necessary equipment and adding additional personnel, Mitchell said. The true extent of how the additional tax funds collected by the city will be used is still undefined since all city departments are still in the middle of getting their budgets together, Mitchell said.

Although the tax base has increased in comparison to last year, Mitchell said a portion of that extra money will be used to compensate for the shortfalls. Those shortfalls include money spent in the first 72 hours after Hurricane Katrina swept through to get the city operational again. Picayune had to spend money to clean up debris and reopen the city, Mitchell said. While reimbursement is coming from the Federal Emergency Management Agency, only part of it has been sent so far, he said. All these things keep the city from knowing the cash balance those extra taxes provide the city for projects until the end of the fiscal year, Mitchell said. The extra money could be used to build a rainy day fund for the city for any emergency uses, Mitchell said. That money will have to have a purpose, however.

“You don’t budget to make money, you can’t do that,” Mitchell said.

Some of those funds could be used to purchase new vehicles in the various city departments, such as the police or fire departments, or provide additional personnel, Mitchell said. Before any of those decisions are made, the city clerk and city manager need to sit down and work up a budget proposal to present to the city council, the mayor said.

How long the extra sales tax collections are expected to last will depend on how many of the new residents plan to stay, but Mitchell said he is optimistic.

“We expect the city and county to grow,” Mitchell said.

While some of the people who came to Picayune immediately after the storm have gone home to rebuild, Mitchell said he expects those who stay for awhile to stay indefinitely. Before a large number of new people can call this area home, there will need to be more houses in the city and the county, he said. Mitchell said he does want to see the city grow, but at the same time he wants to preserve the way of life that long-time residents have grown accustomed to.

More and more businesses are opening up since the storm hit, providing more and more of that tax base, said Mary McCullough, executive director of the Greater Picayune Chamber of Commerce.

McCullough said that the number and extent of new businesses that have opened recently is hard to nail down since all business permits are lumped together. Unless a list of previous businesses can be found, there is no way to keep tabs on the number of new ones, McCullough said. She does, however, know that the majority of new businesses since the storm are either restaurants, contractors or small retail shops.

Mitchell said the city of Picayune recently signed a contract with a window company to set up shop in the Industrial Park area. The company, Alliance Windows out of Slidell, purchased about six acres of land and expects to spend more than $1 million to build on and develop the land, Mitchell said.

The company will start with about 35 employees and hopes to increase employment to about 100, mostly made up of local residents, within the next five to 10 years, Mitchell said. The company makes storm windows for the coastal area, which reaches from New Orleans to the tip of Florida, he said.

All in all, the city is doing well based on what it went through in the storm, Mitchell said. The population in Picayune is estimated to be between 30,000 to 32,000, based on a survey conducted by Hartman Engineering, the mayor said. A true count will not be conducted until 2010 when the Census comes to town, he said.