Dothan sales tax numbers down

City of Dothan Finance Director Angela Palmer sighed as she saw the December sales tax numbers.

For the sixth straight month, collections are down from the year before. It might have been expected except that local officials were hopeful consumers would turn out and buy for Christmas. After all, November collections were almost equal to the previous year’s.

The holidays brought hope, but little else. Collections were down 7.1 percent to $462,000.

“December was really disappointing,” Palmer said. “We are nearly half a million dollars under last year’s sales. That is scary. I expected to at least show a growth from last year.”

District 3 City Commissioner Paul Lee said the city began preparing last fall for the drop in revenues.

“We started slowing things down months ago because we knew it would eventually hit Dothan,” Lee said. “We started cutting some of our expenses months ago.”

But the cuts might be just beginning, as the city manager has already appealed to department heads to find places to cut.

“This may be a long ride,” Lee said. “This is not citywide, statewide or nationwide. This recession is world wide. We are going to have to continue looking at areas to control costs. The new numbers hit us hard because we are heavily dependent on sales tax. We have to be very cautious of our spending.”

He favors the completion of certain intersection and road improvement projects that are already in the works.

Palmer said the finance department will reduce costs by only paying vendors once a week instead of twice weekly, for some. It will save postage, labor, envelopes, and the cost of check printing and it keeps the money in the bank a little longer drawing interest, she said.

Police Chief John Powell said his department will continue to replace vehicles with smaller, more economical cars when appropriate, and he will continue to seek overtime pay for police officers working special events after hours from those groups producing the events so as not to burden the taxpayers with this expense.

“We will have no reduction in staff and we will not cut back on patrol. Anytime we have an economic crisis, crime does not drop off. If anything, it gets worse. We have to be sure we have the resources to operate effectively.”

But resources remain scarce in more than one area. Electric revenues are also down, attributable in part to a mild winter and less use.

“The concern I have, we are $2 million under budget in tax collections and when you compare this year to the same time in 2008, we are $ 1.2 million under actual,” Palmer said.

The growth from the previous fiscal year was a meager 1.35 percent, when you extract the increase that came from the 1 percent sales tax increase. Palmer said it is that increase that has saved the city.

“We would be in a lot worse shape without the 1 percent sales tax,” she said. “Electric revenues are $2 million under budget. When I look at net profit, the city is $2 million under net profit compared to last year.”

Faced with a shortfall, the city is expected to look at both garbage and sewer fees. Travel expenditures could be cut and some department heads might not have city cars. The city has committed to other programs that do not pay for themselves, like the recycling program.