Jefferson sales tax down 7.7% in August

Kenner — Jefferson Parish had a particularly rough month for sales tax revenue in August, which marks a continuation of a downward trend that mirrors the national landscape.

Parish President John Young told the council Wednesday in a meeting in Kenner that sales tax revenues were down about 7.7 percent in August compared with August 2011. According to figures from the Jefferson Parish Sheriff’s Office, about $30 million was collected in August. The year-to-date revenues are down about 2.4 percent compared with last year, Young said. The decrease means the parish’s general fund took a hit of about $2.2 million, he said.

Jefferson Parish saw sharp decreases in vehicle sales and sales at its main retail centers at Lakeside, Oakwood, Elmwood and Manhattan Boulevard, according to Young. For example, revenues were down about 17 percent at the Manhattan Boulevard center and 10 percent at Oakwood. Two of the few bright spots for the parish were increases in hotel and motel taxes along with consumer use taxes, which had 10 percent and 28 percent increases respectively, according to the Sheriff Newell Normand’s figures.

Councilman Ricky Templet wondered if the parish saw a downturn because of Hurricane Isaac creating store closures and requiring evacuations. Councilman Chris Roberts noted that although the storm made landfall at the end of the month, some stores closed for several days prior to landfall to make preparations and allow employees a chance to finalize their evacuation plans.

Young said Isaac may have had an impact on the August numbers, and he expects the long delay in restoring electricity to skew the September figures. However, he said the decrease is mainly due to less robust than usual back-to-school sales, the completion of massive construction projects in the area and the fact that the Deepwater Horizon Oil Spill had a positive impact on sales taxes last year.

“The BP oil spill gave us a spike for a while, but that is gone,” said Young, adding that his focus remains protecting the parish’s bond rating by maintaining a strong general fund. “Hopefully, with the Christmas season approaching, people will open their pocketbooks and spend some money.”

Roberts added that it has been hard for parish officials to predict how sales tax revenue will look because of several unusual events since 2005, including multiple hurricanes and the oil leak. The metropolitan area saw roughly $14.5 billion in spending on construction projects related to recovery from Hurricane Katrina and protection from future events. That influx of money cushioned Louisiana from some of the national economic problems, Young said. The parish should be able to get a better idea of its larger trends moving forward.

“Unfortunately for us, it’s been so hard to predict because going back to 2005 you’ve had so many unique events,” said Roberts, who noted that early indicators are that September will look better than August. “We don’t have a true indication of what a norm is.”

Councilman Paul Johnston said he’s becoming increasingly concerned about the negative impact online sales are having on parish businesses, particularly since it’s so much more difficult to capture sales tax from those sales. Although consumers are supposed to pay sales taxes on online purchases, that rarely happens. Young agreed, noting that the current federal rules penalize bricks-and-mortar companies that have an investment in Jefferson Parish.

“It has a ripple effect across the board,” Young said. “That is something that needs to be looked at absolutely.”

Young is expected to present his 2013 budget to the council next month, and he’s already said that it will not include raises for parish employees as a result of the financial situation. He said it’s possible that after the presidential election in November people will feel more comfortable spending money.

“I think a lot of people may have more economic certainty after the presidential election,” Young said.