There’s a bit more to it than that, though. I’ve been told in the past that there’s a two-month lag in the sales-tax numbers, because it takes a while for businesses to do their paperwork and remit taxes to the state, and for the state to do its paperwork and send cities their share of the money.
So when we’re discussing first half sales-tax reports for 2009, we’re actually talking about sales that happened from November to April.
If you think of the numbers strictly as first-half numbers, they don’t make a lot of sense. Why did it take so long for the recession to finally hit Mitchell’s tax revenues, and what finally triggered it to happen? But if you think about the numbers in the context of when the sales actually happened, from November to April, it makes more sense.
On March 16, Trail King laid off 75 workers. That was the biggest single round of local layoffs that we’ve heard about since the national recession began. It now seems logical to believe that the "first half" sales-tax numbers were dragged down by those layoffs. Of course, there have been other layoffs that are probably contributing to the decline in sales tax revenues, but 75 all at once is a pretty big chunk to take out of a small city.
It’ll be interesting to see what fiscal policies city officials adopt to deal with the revenue shortfall.