Forgiven loan relief for city
Published 7:00 am Saturday, April 5, 2014
What can also be seen along those same highways could be detrimental to the future of that growth, litter.
This week the city of Picayune received news that their Special Community Disaster Loan had been forgiven, which is a load of the city and taxpayer’s minds.
After Hurricane Katrina hit the area in 2005 funds were provided by FEMA to municipalities and counties. Picayune received $3.2 million, of which half was initially forgiven in 2010.
With little to no commerce taking place immediately after the storm, sales tax collections essentially ceased, leaving municipalities with no source of revenue.
When major retailers returned to business, sales tax actually ballooned because Picayune’s Wal-Mart was the only operational major retailer for miles. Shoppers from all over the Gulf Coast spent their money here.
Additionally Home Depot opened early to provide residents with the essential building supplies they would need to perform roof and other repairs.
Sales tax collections from the two major retailers brought in so much revenue that the city hired a few additional people, but both numbers did not last. When sales taxes began to return to normal, staff cuts had to be made to keep the budget balanced.
After other communities regained power, floodwaters receded and reconstruction began, most temporary residents returned to their homes, and subsequently put their hard-earned cash back into their own community.
While there was a boom in sales tax, it was only temporary and did not occur until some time after the storm. It was during the initial downtime the funds FEMA loaned the city came in useful, providing the cushion needed to keep the city’s lights on and personnel paid.
Had the city been required to pay the remaining $1.6 million, officials might have been forced to levy an additional tax to repay the loan.
The good news is the loan was forgiven, and the city can use those funds in other ways.