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Jan. 2 percent restaurant tax numbers drop

March 18, 2012


The first sales tax revenue report for 2012 shows a solid start to the year, but January revenues from Starkville’s 2 percent restaurant tax fell to their lowest levels for the month since January 2006.
Compared with January 2011, sales tax revenues for January 2012 grew 6.64 percent to $420,146.98. January 2011 saw the least revenue of an otherwise record-breaking year, falling 12.21 percent short of January 2010’s revenue. While January 2012 did not return all the way to January 2010’s monthly record revenue of $448,787.31, January 2012 still represents the second-highest revenue for the month on record.
Sales tax revenue may not have dipped in 2012, but restaurant tax revenue did. January 2012’s restaurant tax revenue fell 17.34 percent compared with January 2011. While January 2011 was the highest-revenue January on record at $121,136.09. January 2012’s revenue of $100,132.00 is the lowest January revenue on record since 2006.
The 17.34 percent decline is also the all-time sharpest January decline for restaurant tax revenues on records which date back to 1999. There have been sharper declines in other months, however; for instance, in March 2009, restaurant tax revenues fell 48.82 percent versus March 2008.
Starkville Chief Administrative Officer Lynn Spruill said even sharp declines and increases are usually not important in the long run. When the city creates its annual budget in the summer, she said officials look at the past 1.5 years of sales tax and restaurant tax revenue growth.
“The anomaly of these sharp declines and sharp increases is really not something we can predict and explain,” Spruill said. “If you look at the overall growth, it continues to be steady.”
Spruill said watching the revenue is like watching one’s weight.
“If you watch your weight every day, the numbers drive you crazy,” Spruill said.
2011’s total sales tax revenues grew 2.51 percent versus 2010 revenue, which in turn was 3.66 percent greater than 2009 revenue. Restaurant tax revenue has grown faster, growing 7.14 percent in 2011 and 5 percent in 2010. Spruill said she expects comparable growth in both categories in 2012.
Starkville Mayor Parker Wiseman said he is optimistic about this year’s prospects for both the sales tax and 2 percent restaurant tax.
“The overall sales tax number is a solid figure again consistent with general trends we’ve been seeing of incremental sales tax growth,” Wiseman said. “The 2 percent tax took a dip that’s very similar to the dip the general sales tax took last January, and that’s certainly something we’ll keep an eye on, but given the overall very positive trend we’ve experienced in the 2 percent tax over the last two years, I would anticipate what we’ll see over the next several months ... will probably prove (January 2012) to be an isolated dip. Of course, we won’t know until we have a chance to monitor it for a few months.”

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