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Archive for Thursday, October 28, 2004

City’s sales tax collections show growth again

October 28, 2004

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A two-year trend of lethargic sales tax collections for the city appears to be over, according to new numbers released by city officials Wednesday.

Through the first 10 months of the year, the city's sales tax collections are up 5.4 percent from a year ago, said Ed Mullins, the city's director of finance. That's well above the 1.5 percent growth rate the city posted in 2003 and the approximately 1 percent decline the numbers totaled in 2002.

"We're showing growth again, and that's obviously good," Mullins said. "We should easily exceed our budget."

Through October, the city has received $15.79 million, up from $14.98 million during the same period last year. City officials have budgeted to receive $17.5 million in sales taxes for the entire year.

The turnaround in sales tax collections runs counter to previous projections made by city officials. Mullins' staff had budgeted for about a 3 percent decline in sales tax revenues. Mullins said when the budget projections were made in the spring of 2003, the situation looked bleaker.

"Back then the sales tax didn't look too good," Mullins said. "We were still in a recession, and it was tough to predict when a turnaround was going to happen."

Retailers said there was evidence that shoppers had become more willing to spend. Joe Flannery, president of downtown Lawrence's Weaver's Department Store, said the first half of the year was very strong.

But he said there was some weakening in the third quarter.

"I think energy prices had something to do with that, especially gasoline," Flannery said. "I think that is now in the back of everybody's mind. They're seeing it come out of their pocket every week. You hate to see those $30 or $40 fill ups at the gas station."

The city's most recent numbers showed signs of a late-year slowdown. The sales tax disbursements the city received from the state in both September and October were both down, although by only about 1 percent, from a year ago. Because of a lag in reporting, the disbursements reflected sales made mainly in the July through September period.

Flannery, though, said he was still optimistic that the upcoming retail shopping season would be strong, as long as energy prices stabilized and didn't rise much above current levels.

"I think it will still be a decent fourth quarter," Flannery said. "We think it could be as good as last year."

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