City collects less tax than projected

Published 11:42 pm Monday, February 23, 2009

With sales taxes coming in at less than projected rates, the City of Picayune will have to come up with interesting ideas for balancing the budget.

City Clerk Priscilla Daniel said that so far the city has collected only 43 percent of the projected budget, which was set at about $4.5 million.

While the city appears to be on budget so far, collected sales taxes appear to be on a decline, which might call for amendments to the budget or even expenditure cuts, Daniel said.

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Sales tax collections are sent to the city about three months after they are collected. Daniel said the collections from December, which the city just received this month, were down about $48,000 from the previous year. In 2007, the city collected $464,141.95 in sales tax. In December of 2008, $415,680.95 was collected in sales taxes.

“So that raises a flag for me,” Daniel said. “I’m thinking people are taking the economy serious and they’re not spending like they used to.”

Daniel said she does not have an optimistic outlook on the rest of the fiscal year, which ends in September. The city will need to average about $380,000 each month to make budget and Daniel expects the next four of the last seven months in the fiscal year to be slow.

“I really don’t look for sales tax to make budget this year,” Daniel said.

One of the ways the city is looking to make budget in spite of the slow sales tax collections is by collecting on past fines. Warrants have, and are, being issued for citizens with unpaid fines. Other ways to make budget will be to increase court costs, recommend the council make amendments to the budget and make cuts in expenditures, Daniel said.

“That in itself would generate some revenues. Whether it would be enough, I don’t know,” Daniel said.

Kathy Reeves, sales and marketing representative with Mississippi Power, recently spoke to the council at members’ request to point out some areas where the city could save on electricity bills. Some ideas she had included installing more energy efficient light fixtures, having the Utility Authority pay sewer lift station electricity bills and having the state pay for traffic light electricity.

Picayune is not alone in reporting decreased sales tax collections in this region. Daniel said the only cities in south Mississippi not reporting a decrease in sales tax are the ones where Hurricane Katrina recovery is ongoing, such as Bay St. Louis and Pass Christian.

“We’re not alone in this. What can I say, it’s a sign of the times,” Daniel said.