After record run, sales tax revenue drop in St. James

Sales tax collections in St. James Parish are in the midst of a periodic lull after hitting an all-time record in fiscal 2012-13 of more than $25 million due to the construction of the first phase of Nucor Corp.’s steel complex near Convent, the school system’s top finance official said Tuesday

But Jim Mitchell, the system’s administrative director of business operations, told the School Board Finance Committee that collections are expected to pick up for the system of 3,800 students.

“The question obviously for our financial vitality is can we define when that robustness will return. Again it’s due to industrial activity,” he said.

In next-door Ascension Parish, where similar industrial growth has fueled a boom in sales tax collections, the parish government and that parish’s School Board have reported or expect to see similar dips in collections off recent all-time highs.

In St. James, Nucor’s first phase cost $750 million to build and began operations late last year. The company has proposed four more phases for a total capital investment of $3.4 billion. The company has not made an announcement about its future plans, but Gov. Bobby Jindal, who championed major tax incentives to lure the integrated steel complex, has said the company will make a decision by the end of 2015.

Mitchell said the school system tried to budget conservatively and planned for a drop in sales taxes this fiscal year, from $25 million to $23 million. But collections dropped further than expected and are closer to $19.2 million. Mitchell is projecting essentially flat collections in fiscal 2014-15 at $20 million.

Under the final $60.5 million general fund budget this fiscal year, the board plans to pull an extra $2 million from its general fund surplus, dropping it from $30.2 million to $21.8 million, according a budget memo.

Even with the sales tax drop, collections are still up $6 million on an annual basis over those from 2008, and property tax collections continue to rise unabated.

The full board deferred action on the $56.9 million general fund budget for fiscal 2014-15 until a meeting June 24, but approved next year’s salary scale for its 600 employees.

Superintendent Alonzo “Lonnie” Luce told the Finance Committee earlier on Tuesday before the full board voted that the salary schedule builds in 2 percent across-the-board pay increases.

The scale also has pay steps for years of experience, offering another roughly 1 percent pay increase for each annual step.