Sales Tax Collection

Sales tax collections are expected to drop significantly, and that means less money coming into city accounts.

But a statewide stay at home order and the restriction and closing of many businesses for nearly 2 months are hitting city budgets hard..

Sales tax collections are expected to drop significantly, and that means less money coming into city accounts..

Quentin smith speaks with area mayors about how they plan to absorb this blow.

2020 was off to an impressive start for the city of louisville... through february, sales tax collections were sitting at 134 thousand dollars... but then came covid-19.

Mayor will hill says he expects that number to take a dip.... " i go back-and- forth, and there are moments i say that we are probably subject to15 to 20% decrease in our sales tax revenue, which is hey substantial part of our annual revenue.

I'm just pulling the numbers based on looking at where we've been and what our trend have been."

The sales tax makes up roughly 45 percent of the city's annual revenue.

With a much anticipated setback coming, mayor hill says they're now operating on a tighter budget... " we're going to be operating as efficiently as we can, managing all of our expenses.

There may be things that we've needed to do that we may have to put on the back burner, but we need to plan and we need to plan appropriately.

Just because it's budgeted doesn't mean we're going to be able to spend it in this year, will need patience from everyone as we look towards long-term projects and spending."

It's a similar story up the road in starkville.

" we took what we anticipated and what the department of revenue had said was going to be the expected shortfall in sales tax, and we apply that to us.

I think at a minimum we are looking at a $1.3 million revenue loss.

It could quite conceivably go higher than that.

To help absorb the blow.... mayor lynn spruill says they were forced to furlough employees and cut the salaries of all department heads and city officials, including her own, by 20 percent.

Spruill says this is all in an effort to help them make up for the loss in revenue they're anticipating.

" as soon as we get the numbers in from the march numbers, then we will have a better idea of how adequate that response was or if we have to do more and seek more in terms of cuts.

We are kind of waiting on pins and needles to see what the number is going to look like."

The department of revenue is expected to release sales tax collections for the month of march by the end of the week.

Those will be the first numbers showing the direct impact on sales tax due to covid-19.