Russellville tax revenue drops by 9 percent

By Staff
Jonathan Willis
Russellville city council members are divided on what caused sales tax revenue in the city to drop 9.14 percent from January 2009 to January 2010.
City Councilman David Grissom attributes some of the decline to a one-cent increase in sales tax that went into effect in January.
The county commission implemented that increase which will generate revenue for both the county and city school systems. County voters will decide in June whether or not to keep the tax for two more years or to repeal it.
Franklin County received $276,200 in January sales tax compared to $161,504 in January 2009.
County officials had hoped the revenue would have doubled from last year. If that had held true, the county would have received $323,008.
Russellville Councilman Jeff Masterson said that he had checked with officials in other area towns and saw that most sales tax receipts were down.
Council members mentioned high utility costs and other weather-related expenses that may have caused shoppers to stay in a little more this year.
Councilman Gary Cummings, a local business owner, said that most all businesses felt the impact of slower sales.
Masterson said the true effect of the county’s tax increase was positive, however.
University of North Alabama economics professor Dr. Jim Couch said that a study he performed for the city last fall indicated that sales would decline if a tax increase was passed.
The study showed that a proposed doubling of sales tax would not lead to a doubling in revenue.
Cummings argued that although the county sales tax receipts were up, sales were actually down. If shoppers had spent as much as they did in 2009, the receipts would have been up 100 percent.
Taxable sales in the city dropped just over $900,000 from January 2009 to this year.
The city council voted three times last fall on whether or not to increase the city tax by one cent. All three times, the vote deadlocked 3-3.
After the county commission passed the one-cent increase in November, the city council moved forward with a budget that did not include a tax increase.