October completes year of declining sale tax revenues

October marked 12 months of continuously declining sales and use tax collections in St. Mary Parish due to the area’s ongoing economic troubles. The month’s collections also dropped the most since June, according to the October report.
For the first month of the third quarter, parish sales tax collections totaled $3.28 million in October, an 18.6 percent decrease from the $4.03 million collected in October 2014.
Parish sales tax collections have been down each month compared to the same month of the prior year since November 2014 when total revenues dropped 3.8 percent, or 9.4 percent excluding collections made due to financial audits.
Of October’s collections, $43,763 was collected as a result of audits compared to the $73,932 collected in October 2014.
Hotel sales tax revenues came in at $58,443, down slightly from the $59,263 collected for October 2014.
The cause of the increasingly declining sales tax revenues is “more of the same downturn in the oil industry led economy of St. Mary Parish,” Parish Sales and Use Tax Director Jeffery LaGrange said in an email.
“I think we are starting to see some compounding,” LaGrange said. “Business and government are cutting their budgets and holding off on investment. Individuals are now tightening their belts and cutting unnecessary spending.”
St. Mary Parish Economic Development Director Frank Fink said the parish has seen a decline in jobs recently, too, which is in line with the drop in sales tax revenues.
“From a long-term perspective, I think we’re still going to see the price of oil and natural gas stay pretty low,” Fink said. The price of oil will probably stay in the $50 per barrel range through most of 2016, Fink said.
The region’s economic downturn “has kind of hit the bottom yet there could still be a softness in jobs around the holidays,” particularly in the industrial sector, Fink said.
That projected decline in jobs during the holidays will probably negatively affect sales tax collections, Fink said. However, Fink hopes the Christmas shopping season will give a little boost to sales tax collections, he said.
“It’s not what I would call very optimistic in the short-run. So it’s something we just have to deal with,” Fink said.
Still, Fink is glad the oil and gas industry downturn isn’t as bad as it was in the 1980s, he said.
The third quarter ended with a 15.4 percent dip from sales and use tax collections from the same period of the prior year.
September’s collections were 13.4 percent below September 2014’s sales tax revenues. August collections were 16.8 percent less than August 2014 sales tax collections. July’s sales tax collections were down 15.9 percent from the same month of the previous year.
Second quarter collections decreased 16.6 percent, while first quarter collections dropped 7 percent from the same periods in 2014.
The following occupational licenses were filed in October: city of Morgan City, $20,470; St. Mary Parish, $1,518; city of Patterson, $1,226; city of Franklin, $137; town of Berwick, $50; and town of Baldwin, $25.