Sales tax revenue paid to Augusta-Richmond County dropped for a third straight month in September compared with the previous year, making some officials worry that consumers are abandoning the city for retailers in neighboring counties.
According to data from the city finance office, special purpose local option sales tax collections were down $182,759, or 5.84 percent, and local option sales tax revenue was down $204,320, or 6.68 percent, from September 2011. In July and August, sales tax collections dropped 7.9 and 1 percent, respectively, compared to a year ago.
The news left city officials looking for answers, particularly in light of increases in sales tax revenue distributed by the state Department of Revenue to Columbia and Burke counties for the month.
“Everybody else went up, and ours went down,” City Administrator Fred Russell said. He speculated that retail growth in Evans, North Augusta and Waynesboro might be luring consumers outside Richmond County.
“If you look at the growth in Columbia County, the growth across the river, it’s easily explained,” Russell said. “In the past, the only place people have had to shop is Augusta.”
The drop leaves Augusta only 0.23 percent below budgeted sales tax receipts for the year. The revenue goes toward capital projects approved by voters and some city services, the bulk of which is $20 million in local option sales taxes budgeted for law enforcement this year.
The decrease means the Richmond County Board of Education, which collects a 1 percent sales tax for capital projects, saw a similar dip.
The state’s method of disbursing sales taxes prevents local officials from knowing where the decreases occurred, officials said. The issue, one that Mayor Deke Copenhaver frequently raises, left city officials at a similar loss in determining the impact of House Bill 386, which eliminated a sales tax on energy used in manufacturing. When the bill takes effect in January, officials can only estimate its impact because they don’t know how much each Augusta factory was paying in sales taxes.
Russell took the drop as further evidence that Augusta needs a dedicated retail development specialist, a new position he has included in the 2013 budget now before the Augusta Commission.
Though the city has a Downtown Development Authority and a Development Authority of Richmond County, which focuses mostly on large industrial development, it has no one to focus on retail, particularly in areas such as south Augusta, where residents complain they have few shops and restaurants.
“It’s somebody that will go fill up empty storefronts downtown and look toward bringing in retail and restaurants in the south parts of Augusta that need them,” Russell said.
The budget prepared by Russell and finance officials includes the new retail position and nine other new jobs, in addition to a $5 million shortfall that the commission must either eliminate or determine how to fill.
The commission has work sessions on the budget Thursday and Monday.