theadanews.com - Ada, Oklahoma

Local News

July 26, 2013

City’s sales tax numbers take a hit in May; was it part of a trend, or a fluke?

(Continued)

Ada —

Doolen said it was too early to tell whether May’s lower sales tax collections were a fluke or a sign of a larger trend, but she noted that sales tax revenues have been unstable since at least 2008. She said if the numbers indicate a longer trend, the city could be forced to cut back on services.

 

Seeking reasons

May’s sales tax numbers represented a slight decline rather than a dramatic drop in collections, said Joe Hill, vice president of the Ada Jobs Foundation. Still, Jobs Foundation officials are studying the numbers and trying to decide whether they represent a blip or the start of a more worrisome trend.

Hill said he compared Ada’s numbers with figures from Ardmore, Durant and McAlester, and all three cities reported lower sales tax collections in May 2013 compared to May 2012. He added that Durant’s figures for May 2013 were close to their numbers from the year before.

Ardmore’s sales tax collections dropped from $1.6 million in May 2012 to $1.5 million in May of this year, and McAlester’s fell from $1.25 million to $1.12 million, Hill said.

He said Jobs Foundation officials are always concerned whenever Ada’s sales tax revenues drop, and they are looking at possible reasons for May’s lower numbers. He speculated that a combination of factors — higher unemployment numbers, a weak national economy and rising gas prices — could be responsible.

“We’re maybe not seeing as many people that want to drive into Ada for groceries and things,” he said. “They may be reducing the number of trips.”

He said worries about the federal health care reform law may have prompted consumers to cut back on their spending.

Gem Jewelers owner Diane Criswell said her store has seen less foot traffic this year than it did in May 2012, and so have other downtown merchants. She did not have specific numbers, however.

Criswell said the city’s sales tax numbers for May highlighted the importance of patronizing local merchants whenever possible.

“I think it’s something to certainly be aware of and try to stress to people — how important sales tax is and to shop locally,” she said. “Because that was a pretty big drop.”

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