Tax increase keeps city sales tax numbers in black

The recent economic slowdown has affected Dothan’s sales tax collection numbers for April and May, but the 1-cent sales tax increase has kept Dothan in a surplus rather than a deficit.

Through May, the City of Dothan had collected $40,601,842 in sales tax revenue, a 16.91 percent increase over the same period in 2007. However, Finance Director Angela Palmer said when factoring out the additional penny in sales tax approved by the CIty Commission last year, Dothan would be experiencing a 10.65 percent reduction in tax collected.

“Without the (additional) one percent, we would be concerned,” Palmer said.

City manager Mike West mentioned the sales tax numbers during his weekly media briefing Friday.

“Certainly, with gas what it is now, that money people are spending to buy gas has to come from somewhere,” West said.

Palmer said the extra penny per dollar has generated an additional $9.5 million in sales tax thus far in 2008.

Houston County Administrator Bill Dempsey said sales tax collection in Houston County faltered in April, but rebounded in May. Dempsey said April collections were $223,000 below the same time period in 2007, but May collections were $119,000 above collections from a year ago.

Overall for 2008, Dempsey said county collections were still 2.09 percent above the same time period in 2007.