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12-15-05 Mercer County collects 5% increase in sales tax

By Tim Cox

  Mercer County sales tax revenue has gone up for the fourth straight year with collections topping the $3.5 million mark for the first time.

  A year-end report shows the county generated $3,628,676 from its 1 percent sales tax, a 5.1 percent increase over 2004.

  The state collects sales taxes and then forwards the county's share on, so collections lag a couple of months behind. That means sales taxes generated locally during November and December will be reflected in January and February.

  The sales tax represents nearly 40 percent of county general fund revenue and is the largest single source of county income. Property taxes, local government funding from the state and fees collected by county offices make up the rest of the county's revenue.

  The growth in sales tax revenue for this year was solid, but not quite as robust as the 5.8 percent gain a year ago. Some had predicted that the new Wal-Mart Supercenter and surrounding retail development in Celina would spike tax collections significantly, but that appears not to be the case, at least so far.  County Auditor Mark Giesige said customer incentives offered by car dealers last summer, including "employee discounts" offered by a couple of manufacturers, likely played as large a role as anything else in raising tax collections. Those deals ended by late summer, about the same time collections tailed off from a year ago.

  The final month of collections was $3,000 lower than the same month in 2004, Giesige said.

  "Those incentive deals ending could be the reason sales taxes grew stagnant," he said.

  The $3.6 million in sales taxes eclipsed Giesige's budget estimate of $3.2 million for the year. But because there is no clear trend that tax collections will continue rising, Giesige said he will remain conservative in forecasting tax collections for the 2006 budget.

  He likely will peg the figure somewhere between his $3.2 million estimate for this year and the $3.6 million actually generated.


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