Declines anticipated in sales tax

A ripple effect from the jobless rates in this recession may be documented in a drop in sales tax receipts.

The Minnesota Department of Revenue reports a downward trend in sales tax receipts from 2008 to 2009.

"Statewide we are anticipating a drop," said Lynn Andrews, revenue department spokeswoman. "We can assume in the Brainerd-Baxter area it is going to drop. That's the first time it will have dropped since the '60s when the sales tax was started."

Andrews said the sales tax numbers show a small, steady growth - until Fiscal Year 2008 and 2009.

The state reported a 2007 sales tax total of $9,983,878 in Brainerd, $23,568,752 in Baxter and $57,443,614 in Crow Wing County.

Jeremy Vacinek, finance director and economic development authority director for the city of Baxter, said the city's local option sales tax and motor vehicle excise tax collections have been declining - with a January exception - since October when comparing numbers to the previous year.

A January increase with $161,181 for 2009 compared to $133,364 in 2008 may have stemmed from a holiday surge.

Vacinek reported the city collected about $163,000 in the first full year, $168,000 in the second full year and with seven months into the third year is currently collecting about $143,000 per month on average.

"The overall year-to-date monthly average is down about 15 percent, hit particularly hard by a 35 percent reduction in October 2008 as compared to October 2007," Vacinek reported. "Other months are down about 10 percent. The one anomaly is the month of January 2009 which was up 21 percent over the same period in 2008.

"The true indicator will be the summer months of May through August, historically the largest collection months for the city."

Vacinek said beyond retail sales, the construction industry slump (also seen in the drop in housing permits) affected the numbers and carried over to construction industry suppliers and related businesses.

RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.