By Emily Le Coz/NEMS Daily Journal
TUPELO – In a hopeful sign of economic recovery, Tupelo’s sales tax revenues have bested last year’s levels every month so far this fiscal year, which hit its halfway point April 1.
It’s the first six-month string of tax gains since before the recession started in 2007.
“I think this should give the City Council and the citizens some confidence in going ahead and investing some of our funds … into making us a more livable city,” said Mayor Jack Reed Jr. about the positive trend.
Tupelo has earned more than $8.8 million in sales tax collections since the Oct. 1 start of the fiscal year. That’s versus less than $8.3 million during the same period last year and less than $8.4 million for the same period two years ago.
Included in those figures are tourism and water tax revenues, according to the city Finance Department. Barring certain exceptions, state sales tax is 7 percent. Tupelo then imposes a quarter-percent tax on top of that to pay for surface water from the Northeast Mississippi Regional Water Supply District.
It also levies a 2 percent tourism tax for hotel stays and meals purchased at stores and restaurants in the city.
Among those restaurants is Cafe 212, a popular downtown lunch spot whose owners have seen a steady climb in business the past couple of years. As evidence, a nonstop stream of customers lined up Tuesday to get one of the cafe’s signature sandwiches and sides.
“I know right after the financial crisis hit, it was super scary for us because business slowed down and no one was spending money,” said co-owner Jason Hayden as he shredded cheese before the noon rush. “But gradually it seems like people are getting out and spending more. Last year overall was our best year. And this spring has been awesome.”
Tupelo gets 18.5 percent of all tax revenues collected in the city by the state. The money hits its coffers two months after the sales.
Real, personal and motor vehicle tax collections also are ahead this year, with 85 percent of the anticipated payments already in hand, said City Clerk Kim Hanna. That’s up four percentage points from the six-month mark last year.
“If people are paying their taxes at a quicker rate, that means people have the money to pay them and don’t have to wait until the very last minute,” Hanna said. “That’s a good economic indicator.”
City officials anticipate continued financial stability through the rest of the fiscal year, but they’re bracing for at least one previously unexpected shock: Payment to the Public Employees’ Retirement System of Mississippi – PERS – will increase 1.3 percent come July. Another increase will follow in January.
Tupelo pays nearly $2 million annually into the fund now, Hanna said.
But at least “with that extra revenue and sales tax,” Hanna said, “we’ll be able to go in and amend the budget without taking it from the fund balance.”