SIKESTON — The year 2020 has not been kind to many businesses or people’s finances. Fortunately, the City of Sikeston doesn’t fall into that category.
Despite the coronavirus pandemic that has impacted all walks of life, including a month-long shutdown, the City of Sikeston has remained financially strong.
“We have not seen the drop in sales taxes that many people expected,” said Sikeston City Manager Jon Douglass. “In fact, sales tax collection are up significantly.”
According to Douglass, calendar year to date, sales tax collections are up 6.6% over the same time period last year and up 9.7% compared to the last three years average.
He added that other major revenue sources such as property taxes are stable and not usually affected significantly by temporary economic downturns.
One of the big helps to the city’s finances is the use tax that was passed in November 2019 and went into effect in January. The use tax is assessed on purchases from out-of-state vendors, including online, where sales taxes are not already collected.
Douglass said that through the first seven months of collection, the use tax has brought in about $443,000.
“That is higher than the Missouri Municipal League projected based on previous years’ taxable sales, so it appears that both our in-store sales, and our online sales, are up significantly,” Douglass said. “Only time will tell whether the use tax will continue to come in at that rate, or if online sales are artificially high due to the pandemic.”
The city’s budget for this year was conservative, but the revenues have been strong so no budget adjustments have been needed.
“To date, the pandemic has not seemed to affect the City’s finances negatively, which I hope means that it hasn’t affected the local economy too negatively,” Douglass said. “I know there are individuals and businesses who have been impacted, and I feel for them.”
Douglass said overall he doesn’t think Sikeston has seen as many job losses as regions where shutdowns have lasted longer.
“Our economy is not overly dependent on industries adversely affected by the pandemic, such as tourism or higher education. I think our experience of strong sales and use tax collections may illustrate the power of buying locally,” Douglass said.
While there is no data available, Douglass said it appears that more people seem to be shopping more locally and online.
“With stay-at-home orders, canceled activities and other restrictions in other towns, I think people are shopping more here in Sikeston,” Douglass said. “That’s good for local businesses, the people they employ and the public services that are paid for by local sales taxes.”