Sales Tax Slump Concerns Augusta Commissioners

Sales Tax Slump Concerns Augusta Commissioners (Image 1)

It could be what's store for Augusta…sales taxes that don't add up.

“It's appropriate for us to be asking hard questions of our Finance Director and our Administrator and getting plans in place in the event the revenue doesn't come back,” says Commissioner Donnie Smith, a member of the city Finance Committee.

Sales tax collections for the first two months of this year are running more than $330,000 behind the same time last year.

“We're three months in and obviously the trend hasn't been good at this point. It is early to get overly concerned, we still have a lot of things that are moving parts,” says City Administrator Fred Russell.

Sales taxes go to special projects like convention centers and courthouses, but one of the pennies goes to offset property taxes and beef up the General Fund.

These sales taxes help pay for general services of the city, parks, and police and if revenue isn't what is expected, these budgets feel the strain.

“I think in the second quarter, we're going to be facing that. We'll bring it back up and see what necessary cuts we would have to make. As far as cuts, I would say let's cut everybody's budget one or two percent,” says Finance Committee Chairman Wayne Guilfoyle.

Powering some of this sales tax decline could be a new state law that allows manufacturers  to not pay sales taxes on the energy they buy.

Commissioners could have voted to keep a two percent tax on that energy, but earlier this year…decided not to.

“I think that is something we will look at again. I mean, obviously their concern was it would impact on our industry. My concern now is that it impacts on our land owners and our property owners,” says Russell, who recommended a one percent excise tax on industry in his budget proposal last fall.

“That is an option. I would prefer that option to try and balance the budget as opposed to doing it on the back of the taxpayers and the property owners in Richmond County,” says Donnie Smith.

If the current rates stay the rest of the year, Augusta stands to take a $2 million budget hit. But, things could change, a good March and the rest of the spring would ease concerns over sales tax collections.

The March numbers are due next week.

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