Sales tax revenues in Jefferson County, which for the last few years have been increasing at a pace best called “slow but steady,” are starting to level off.
September payments to the county from the Missouri Department of Revenue indicate that for the year so far, sales tax revenue is up just 0.52 percent over the same period last year.
The state generally distributes sales tax money about five or six weeks after it is collected, so the figures released in early September reflect purchases through mid-July, when the county generally receives a bump in taxes from fireworks sales.
In the past, the county was seeing much larger increases from one year to the next, like a 6.51 percent increase in 2014 and 5.57 percent in 2015.
Sales tax revenue is important to the county because much of its operations are funded through three separate 1/2-cent countywide sales taxes – one for general revenue, another for law enforcement and a third for road and bridge improvement.
The state has paid out $9,581,231 to each fund so far this year.
In January, February and March, the increases over 2018 payments fell into the not-spectacular-but-still steady growth pattern. The first three months, which include most of the Christmas holiday buying season, showed a 5.13 percent increase compared with January through March of 2018.
However, in the six months since then, receipts have leveled off. While there hasn’t been an actual decrease in the sales tax paid to the state, the year-to-date increases have been below 1 percent in all but June (2.48 percent).
July saw a 0.62 percent increase followed by 0.54 percent in August and then the 0.52 percent for September.
County Executive Dennis Gannon said he’s keeping his fingers crossed the year’s total will at least match last year’s take.
In 2018, the county received $12,428,869 in each of the three funds. With three more months to go in 2019 and only $9,581,231 in each fund so far, there’s reason to worry, Gannon said.
With county officials beginning to develop a budget for the next calendar year – Gannon must present a budget to the County Council by Oct. 31 – the virtual slowdown of revenue will be a factor they’ll have to consider.
Gannon said it’s likely the next budget will not allow for any revenue increases.
“I don’t look for any growth in our budget given what we’re seeing in sales taxes for the year,” he said. “The county has always budgeted conservatively but it will have to do even more so in 2020.
“Not only that, but we’ll have to look at our spending the rest of the year. We’ll have to be even more frugal than we always have been. Can we delay doing something or buying something and carry over that money to the next budget? Those are the kinds of questions we’ll need to ask each other.
“This comes at a bad time, when the federal and state governments are asking local governments to do more with less and less. They mandate things and don’t fund them.”
Gannon and other county officials have said they don’t expect the slowdown – and perhaps a future downturn – to reverse itself, with the loss of retail sales to the internet.
“We’ve preached for years to buy local, and that’s important,” he said. “One other reason to buy local is that the small merchant is going to be the one that sponsors a sports team, or buys ads in a high school sports program, or helps to sponsor a trivia night for a high school band. Those boxes on the front porch from Amazon aren’t going to do that.”
Voters in unincorporated areas and all but one of the county’s municipalities (Kimmswick) defeated ballot proposals to institute a sales tax on internet sales in August 2018.
Gannon said he doesn’t see another proposal being put before voters soon.
“We’re hoping the state will do something to allow local governments to recover those sales taxes,” he said. “We’ll see what the state Legislature comes up with next session.”
The state currently collects its sales tax on internet sales, but has left it up to voters in local jurisdictions to decide the matter.
“Something needs to be done, that’s for sure,” he said. “But we have a lot of pressing matters coming up – we may need to ask voters for financing for a new jail and courthouse in the near future – so we’re hoping for some help from Jefferson City with the sales tax.”