Published: May 10, 2008 06:04 pm            

Sales tax numbers down in May

Prospect for new jobs might boost consumer spending, city officials say

By Kelly Young

kyoung@jacksonvilleprogress.com

It was fun while it lasted, but sales tax allocation figures released by the state comptroller’s office on Friday revealed that Jacksonville’s streak of five consecutive months of sales tax growth has come to an end. May marks the first time in 2008 that the sales tax allocation from the state is smaller than the amount received during the same month last year.

In receiving only $307,234.09 from the state, down from $319,811.05 in May 2007, the city of Jacksonville saw a growth rate of 4.63 percent in April become a May loss of 3.93 percent.

“We are obviously disappointed, but with the plant closures in February, we knew this was coming. We expected some kind of ripple to result from the news that those companies were going to close down, and I believe that is what we are seeing now,” said City Manager Mo Raissi.

Raissi said the growth of the last few months has given the city a cushion, budget-wise, that will allow Jacksonville to better weather a few months of slumping sales. He said he doesn’t expect this month’s setback to require any adjustments to the city budget. For the year to date, Jacksonville is still up 1.87 percent compared to last year.

According to Richard Ball, finance director for the city, the reason that the closures of Alliance Data and Astro Air have a negative impact on the local sales tax numbers is because effected families will purchase less taxable items in times of financial distress, and because many will be forced to leave the Jacksonville market altogether.

“The bare essentials of life are not taxable — groceries are not taxable and neither are utilities — so when people are facing the prospect of not having a job or having to deal with a reduced income, they tend to make-do with what they have and they cut back on unneeded purchases,” Ball said.

Raissi said the city of Jacksonville and the Jacksonville Economic Development Corporation are close to sealing the deal with a undisclosed company which is interested in expanding into Jacksonville to operate its own call center.

“I can’t really give any details, but from what I hear we are getting pretty close to an agreement with a pretty good-sized company to replace Alliance Data,” Raissi said. “The city council is going to meet in executive session at Tuesday’s meeting to discuss it. They are one of four different companies that have been very interested in using that building for a call center, and this particular company is very serious about it.”

The closure of Alliance Data eliminated about 200 full-time and 30 part-time jobs from the Jacksonville workforce, but the business interested in relocating to Jacksonville could potentially bring twice that number of positions to town, Raissi said. He is hopeful that a deal will be ready to be announced by the end of next week.

The comptroller’s next local sales tax allocation will be made on Friday, June 13.

        

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