While Hattiesburg officials are in the midst of laying off employees after finding out that March’s sales tax was approximately $325,000 less than same period last year, the City of Petal finds itself in a much different situation: the Friendly City’s sales tax is actually up by about $20,000 over last year.
Petal Mayor Hal Marx said he was informed by the Mississippi Department of Revenue that March’s sales tax would be in the neighborhood of $260,000, which is up from last year’s figure of $240,000.
“We were actually pleasantly surprised by that,” he said. “I think the reason why we may have seen the increase, and Hattiesburg has seen a decrease, is because they’re more affected by USM not being open – not having students being there and spending money – than we are.
“They also have much more retail than we have, so they have more things that were shut down as opposed to us. Our big draws here are obviously Walmart and Lowe’s, and they have not been shut down, although they have been limited on how many people can go in at one time. They’ve been busy, and you can drive by the parking lots and see they’re busy with a lot of people shopping.”
In fact, officials from Lowe’s have told Marx that the store has recently seen some of its best numbers since opening in Petal.
“I would attribute that to people being at home, trying to find things to do while they’re in quarantine, so they do projects and need supplies for home repair and things like that,” Marx said. “Some people got their stimulus check, and may have decided to invest in fix-up projects around the house, or new appliances.
“So I think that’s probably why we’ve seen an increase, and Hattiesburg has seen a decrease.”
Mayor Toby Barker announced the workforce reduction in late April after discovering an approximate 16 percent shortfall in the sales tax figures. Although as little as a month before, there had been no plans for layoffs, Barker said officials now anticipate a 30 or 32 percent shortfall for the month of April.
Officials expect the reduction to cover some of the revenue shortfalls, but sales tax revenues will continue to be lower than last year’s totals.
“You have to do what you’ve got to do to make your numbers balance,” Marx said. “I’m sure Mayor Barker doesn’t want to have to lay off anyone – I don’t think any manager or mayor or anybody has to lay off employees.
“Unfortunately, there comes a time where if your revenue does take an unexpected drop, you’ve got to be able to cut costs, and I’m sure that Hattiesburg is like we are – much of their cost is tied up in personnel. So when you have a huge drop and you have to make cuts, there’s not much else you can cut other than some personnel.”
Marx said Petal is not in that situation yet, but officials expect to face financial issues with next year’s budget. However, because the Petal Senior Center has been forced to close because of the coronavirus – and may remain closed for the rest of the year – two employees from that location will be furloughed until they can be brought back to the payroll.
“We’re hoping to bring them back as soon as possible, but I don’t look for us to probably do it within the next six or eight months,” Marx said. “I think we’re probably going to have to see what happens with the next wave of the virus, and make sure it’s safe for our senior citizens to be in any large groups.”
In addition, although the Mississippi Legislature was forced to temporarily adjourn because of the virus, members are still in possession of Petal’s request to hold a vote regarding a 2-cent sales tax increase at restaurants in the city. That proposal was sent to the Legislature in early March after that measure was unanimously approved by the Petal Board of Aldermen.
If a public election on the matter were to be approved by the Legislature, 60 percent of the voters who turn out must vote in favor of the increase before it could be implemented. The 2-cent increase would bring in approximately $480,000 annually, which would be used for the city’s Parks and Recreation Department.
“I don’t believe there’s any particular time limit on when we can hold that vote – I think we’d have it at least within the next year,” Marx said. “I believe it would be within our right to schedule that vote whenever we felt it was best. We need to ask the Legislature to give us that authority, but we’re not going to schedule an immediate vote on that – we’re probably going to wait until the next city election, which would be in May of next year.
“By that time, we should be through the worst of this impact at our restaurants because of the COVID virus, and it also would keep us from having to have a separate election (apart from the regular election). And that would give people time to digest whether or not they think the restaurants can support an extra 2 percent tax, and we’ll have a higher turnout of our voters because the voters will be turning out to vote for all the city offices. And it’ll save the city money from not having another election.”
