City blames slowing retail for sales tax drop

Last edited 3:45 p.m., June 8, 2017

City of Springfield officials cited a weakening retail industry for a slump in annual sales tax collections.

Through June, the last month of the city’s fiscal year, the 1 percent sales tax check from the Missouri Department of Revenue totaled $43.4 million, 4 percent lower than the $45.4 million projection, according to a news release.

"Sales tax is a volatile revenue source and retail is experiencing a paradigm shift like we have never seen," City Manager Greg Burris said in the release, citing U.S. Bureau of Labor Statistics data. “The retail sector lost approximately 30,000 jobs nationally in March alone, with thousands of store closings projected through 2017.

“At this pace, store closings in 2017 are likely to surpass the Great Recession year of 2008."

The check for the month of June — representing sales processed by the state in May from transactions made in April — came to $3.9 million. That’s 10 percent less than what city officials forecasted for the month.

The latest numbers are 2 percent less than what the city collected during the same year-to-date period in fiscal 2016 and 15 percent less than the same month a year ago, according to the release.

During last week’s City Council meeting, Finance Director David Holtmann said revenue growth between fiscal 2017 and 2018 is just under 1 percent, due largely to less in sales tax collections.

Sales taxes fund vital Springfield services, including Police and Fire Department operations. Roughly 56 percent of revenue in the general fund comes from sales taxes.

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