Parish sales tax down again, but oil prices starting to rise

Parish sales and use taxes declined for the 16th straight month in February, but there may be a glimmer of hope with oil prices beginning to rise.
February’s St. Mary Parish Sales Tax collections totaled $2.48 million, down 13.4 percent from the $2.87 million collected in February 2015, according to the latest parish sales and use tax report. The parish didn’t collect any money in February as a result of financial audits. In February 2015, officials collected $5,057 from audits.
Hotel sales taxes brought in $42,256 during February, a 14.6 percent drop from $49,467 collected in February 2015.
February continued the 16-month streak of declining parish sales and use tax revenues compared to the same month of the prior year. The decreasing sales taxes have coincided with the downturn in the oil and gas industry.
Parish Economic Development Director Frank Fink said oil prices have risen from $26 per barrel to $37 per barrel within two weeks, but that uptick in prices hasn’t shown up yet in the rig count.
Fink expects the area’s economic climate to begin to gradually get better, and there may be more substantial improvement by the summer of 2017, he said.
He is “somewhat optimistic” about where oil prices are heading. Oil prices will probably reach $45 per barrel by 2016’s third quarter, which should allow the demand for oil to “catch up” to the supply, he said.
Oil royalty taxes should then increase, and once business starts getting back to normal, the economic turnaround will show up in parish sales tax collections, Fink said.
However, the additional one-cent state sales tax that the Legislature is considering could potentially hurt sales revenue and, in turn, parish sales tax collections.
Officials collected $58,468 for Morgan City’s road royalty sales tax in February, bringing the year-to-date total collected for roadwork to $189,809.
January’s parish sales tax collections showed the smallest monthly decrease since March 2015. The parish collected a total of $4.21 million in sales and use taxes during January, an 11.2 percent decrease from the $4.75 million collected in January 2015.
January collections of December activity included occasional, monthly, quarterly, semi-annual and annual filers, which might explain some of that increase, Parish Sales and Use Tax Director Jeff LaGrange said in February. Additionally, the parish collected a “substantial one-time use tax remittance” in January.
In November 2015, parish sales tax collections decreased 31.6 percent from November 2014, the sharpest drop in the 15-month streak of declining revenues.
The following occupational licenses were filed in February: St. Mary Parish, $317,817; City of Morgan City, $293,690; City of Franklin, $93,930; Town of Berwick, $51,208; City of Patterson, $41,055; and Town of Baldwin, $12,864.