Sales tax collections holding up well around the Magnolia State

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Published: October 6,2008

There’s good news regarding retail sales in Mississippi. Sales tax collections for the state’s municipalities for the month of August remained strong. Those are the most recent figures available, and they show increases for four of the state’s key cities and only slight decreases for others.

Jackson, the state’s largest city, continues to dominate sales tax collections with $2,981.265.16 in August 2008. That’s up from the $2,923.223.32 reported for August 2007.

Gulfport is a distant second with $1,850,793.33 for August of this year, a small decrease from 2008’s August figure of $1,928,633.41.

Increases are also reported for Hattiesburg, Meridian, Ridgeland and Tupelo for August of this year compared to the same month last year. Biloxi, Flowood and Southaven had small declines.

‘…looking for discounts and value’

Ross Tucker, vice president of economic development for the Greater Jackson Chamber Partnership, says city leaders and business people are pleased that sales tax collections are holding up in spite of the crisis with the national economy.

“While we’re not as insulated as we once were as a state, we now have national companies that contribute to the state’s economy,” he said. “We have new stores, such as Burlington Coat Factory in the old Gayfer’s location at Metrocenter Mall, opening here. Places like that are doing well because people are looking for discounts and value.”

Although Jackson has increasing competition from surrounding suburban cities with lots of retail outlets, Mississippi’s capital city is able to hang on to its huge share of retail revenue. Ross says that’s because Jackson is the hub of central Mississippi and the state center for government and medical facilities. People working in these two sectors make up the largest employers, representing groups that have not had layoffs.

“Jackson still has the bulk of square footage for retail, including restaurants,” he said. “There’s a lot of shifting going on right now. Business owners might not reach the sales numbers they are wanting but they will continue to hold on. Additionally, August is always good for a back-to-school spike in sales.”

Shooting par

Retail continues to lead the economy in Hattiesburg where sales taxes are on a par with last year.

“We don’t foresee that changing in the rest of this year,” says Ron Tharp, research manager at the Area Development Partnership. “The economy of Hattiesburg is somewhat isolated because a lot of it is concentrated in healthcare and education, and those tend to be very consistent, stable industries. Their employment does not change from quarter to quarter, and they are based solely on the local economy and demand.”

As retail businesses continue their growth along the Highway 98 West corridor in Lamar County, the Hattiesburg city limits have kept up and moved in that direction. Tharp says it’s voluntary annexation because many businesses won’t locate outside the city limits due to higher insurance costs and unavailability of alcohol sales. An example is the New Point Shopping Center that’s about five miles past Turtle Creek Mall and now in the process of annexation.

“Sales tax collections are tremendously important to the city,” Tharp said. “In 2007, those taxes were nearly $22.5 million or double the amount of property taxes. It makes up a substantial revenue steam for the city.”

With a population of 50,000, Hattiesburg has a retail trade area of 300,000. “We’ve got all those people helping maintain and build the infrastructure of the city,” he said. “Certainly Hattiesburg has an atmosphere of growth and being open to new business. Every time we turn around something new is opening out on Highway 98.”

Comeback continuing

Gulfport Mayor Brent Warr doesn’t like that sales tax collections fell somewhat in August but is confident about the city’s retail. “The economy is strong in Gulfport. It’s booming along some transportation routes that have some of the highest usage numbers in the state,” he said. “We have new businesses coming in north of Interstate 10 and on the Pass Road corridor.”

Much of the city’s sales taxes come from retail businesses north of the interstate but Warr says things are happening all over the city with more than 300 new businesses opening since Hurricane Katrina. Sales taxes are slightly more than one-third of Gulfport’s budget.

Vital importance

No one knows the importance of sales taxes to cities better than George Lewis, executive director of the Mississippi Municipal League.

“We hear a lot about it from our members, but things are holding up good for now,” he said. “We have pockets that are doing well in the state. I don’t think we’ve seen any major swings or fluctuations.”

Noting that it’s too early to predict what holiday sales might be like this year due to the unfolding national economic crisis, Lewis said he is hearing lots of concern from cities wrestling with fuel costs.

Contact MBJ contributing writer Lynn Lofton at llofton656@aol.com.

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