City may be taking more cuts

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March 15, 2010

Corsicana, state sales tax revenues come up short

By Janet Jacobs Corsicana Daily Sun The Corsicana Daily Sun Mon Mar 15, 2010, 08:02 PM CDT

Corsicana — After a slight increase in the sales tax last month, the City of Corsicana’s sales tax receipts are down again for February 6.09 percent, or down 4.26 percent for the year, although it’s actually better than the state average.

In real numbers, it’s a difference of $23,604 for the month, or nearly $56,000 for the fiscal year thus far, which is October through January.

The losses are went beyond the budget’s projections, according to Connie Standridge, Corsicana city manager. City staffers are considering the impact, and what cuts can be made.

“We’re going to discuss it and the possibility of additional cuts,” she said.

At the top of the list of cuts is a second furlough, or unpaid day off, for city employees. The city did one furlough day on Feb. 15, after sales tax receipts from the state declined. Sales tax receipts were up a fraction last month, reflecting positive sales in December, but are back down again.

“There’s a high probability that we’ll make additional cuts,” Standridge said. “We’re going to evaluate the month-end reports for February, and we’ll be discussing what we can cut. We’ll continue the hiring freeze and other measures we have in place, like (cuts in) travel and training, no overtime, and the other cost-saving changes we’ve made in the budget.”

Corsicana certainly is not alone in its dilemma.

Sales tax collections were down 8.8 percent statewide in February, compared with the same month a year ago.

“After eight straight months of double digit declines, sales tax losses have begun to moderate,” according to Susan Combs, Texas comptroller. “Sales tax revenue continues to be down in major sectors such as retail, oil and gas production and construction. However, there was a slight uptick in the manufacturing sector. We will keep monitoring the revenue, and as we have recently noted we expect further declines in the near term before a return to sales tax revenue growth later this year.”

Statewide, local sales tax allocations are down 6.7 percent compared to March 2009. So far this calendar year, local sales tax allocations are down 8.4 percent compared to the first three months of 2009.

March payments made to local governments represent sales that occurred in January.

Other local cities fared about the same. Greenville, a city that resembles Corsicana in size and revenue patterns, once again had a strong showing of sales taxes up 12 percent compared to last year, and 7.5 percent for the year. Greenville passed liquor sales this past year, so this year’s increases are generally attributed to that new source of revenue.

The size of a city can also skew the sales tax figures, although not always. Beaumont, which is much larger than Corsicana, had a 45 percent decrease last month, and is down 37 percent for the year, a reflection of that city’s reliance on the oil and gas industry and related businesses.

Very small cities can see dramatic changes without huge changes in the actual amount of dollars lost or gained.

Emhouse, for example, is up $2 from the 12 months before. While the percentage increase for the year thus far is 26 percent, the actual amount of money is only $329. Alma, just north of the Navarro County line, had a 60 percent increase from last January to this January. For the fiscal year thus far, which is October through January, the increases add up to $1,700.

“It’s probably the new barbecue place,” said Joyce Reeve, city secretary. “It’s probably the Alma Smokehouse. They get a lot of highway traffic.”

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Janet Jacobs may be reached via e-mail at jacobs@corsicanadailysun.com. Want to "Soundoff" on this story? E-mail: soundoff@corsicanadailysun.com

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