GONZALES — City officials believe a combination of new retail available in Ascension Parish and growing use of online shopping are behind the sluggish sales tax revenues that Gonzales is seeing for the first time in years.
With few exceptions — a downturn in the 2008 recession and post-hurricane leaps after Katrina and Gustav — sales tax revenues have grown by about half a million dollars a year for more than a decade.
But a leveling off, which began in fiscal year 2014-2015, is continuing through the present fiscal year that ends on May 31. Flat sales tax revenues also are forecast for the new fiscal year that begins in June.
“It concerns us enough that we want to keep an eye on it, just watch it and see if there’s a pattern,” said Mayor Barney Arceneaux.
Sales tax revenues make up 70 percent of the city’s general fund, which pays for personnel, operations of the Fire Department and Police Department, sanitation, streets, drainage and recreation facilities.
The revenue from sales taxes also pays for virtually all of the city’s capital outlay fund, which goes for wastewater, road and water and gas and other projects, said City Clerk Clay Stafford.
“We’ve been so fortunate that we’ve seen our sales tax collections grow by about a half million dollars or more” for most years since 2001, Stafford said.
However, he said, “Here we are about to finish (fiscal year) 2015-2016 and we didn’t see growth.”
Stafford said he has two theories on the slowdown.
“We’re seeing growth in retail outside Gonzales and the other thing is Amazon.com. I think online shopping is hitting us,” Stafford said.
A look at sales tax collections in the recent fiscal years of 2012-2013 and 2013-2014 shows the more typical pattern Gonzales has enjoyed for more than a decade.
From June 2012 through May 2013, the city collected approximately $12.9 million in sales tax revenues.
For the same time period in the next fiscal year, 2013-2014, the city collected sales tax revenues of about $13.7 million, an increase of $800,000.
But in fiscal year 2014-2015, the momentum seemed to slow.
Sales tax money came in at about $14 million, for only about a $300,000 growth over the previous year.
For the fiscal year that’s drawing to a close, revenue from sales tax growth has slowed further, with Stafford anticipating sales tax monies for the city of approximately $14.18 million by May 31.
In passing its new budget in recent weeks, the city took a conservative approach and set projected tax revenues for 2016-2017 at $14.2 million.
The big sales tax generators in Gonzales are the Tanger Outlet shopping center off La. 30 and the Wal-Mart store on Airline Highway.
Revenue from Wal-Mart sales, however, is split between the city of Gonzales and Ascension Parish, through a decades-old intergovernmental agreement, Stafford said.
The agreement was made when the Wal-Mart store was built in the 1990s on property annexed into the city, with Gonzales getting 1.5 cents on the dollar of its local 2-cent sales tax, and the parish getting the remainder, Stafford said.
Gonzales city officials said, however, that there are encouraging economic outlooks ahead.
“The good news is, with Conway coming in, we know they’re going to be bringing in stores and restaurants,” Arceneaux said of the Conway development coming to La. 44, south of Interstate 10 with a mix of residential and commercial property.
Businesses continue to open, too, on La. 30, in the area of Cabela’s and the Tanger shopping center, Arceneaux said.
A Smoothie King opened recently on La. 30, and a Chick-fil-A and Buffalo Wild Wings will be coming shortly.
Another plus is a new zoning code, adopted recently by the Gonzales City Council that “makes it easier for us to remain flexible for new zoning,” Stafford said.
“We strive to be a pro-business city,” he said. “That’s our lifeblood.”