Ridgeland’s sales tax returns are yielding the high marks they once did before the early 2000s recession. According to Ridgeland city officials, the month-to-month increase from sales tax returns is high.
Low inflation and unemployment rates caused the early 2000s recession, which ended at the end of 2001. Ridgeland’s returns were negatively affected.
In 2004, Ridgeland’s sales tax yielded them over $8,000,000. Ten years later, Ridgeland generated $12,903,590 in sales tax diversions. In 2020, they received $13,356,870 in diversions, an increase just shy of half a million.
Then the great recession hit, lasting from 2007 to 2009. Sales tax revenue still saw some modest growth due to new businesses like the Renaissance.
In 2005, the yearly return was $9,277,019 and in 2006 it was $10,185,431.79. In 2007 the return was $10,554,823 and in 2008 the yearly return was $10,749,978. In 2009, sales tax yielded $11,059,483.
The growth was slower throughout the recession but it was positive regardless.
According to Alderman Chuck Gautier, month to month diversions have returned gains reminiscent of the strong ones before the recession. The trend in rising sales tax returns month after month indicates that businesses are growing. And the city has been slowly climbing back to those numbers since the end of the recession.
Steadily increasing sales tax diversions help the city keep low taxes. Ad Valorem taxes can remain low because the city profits from sales tax diversions.
Though the city hasn’t raised the millage rate for property taxes in almost 30 years, when the early 2000s recession occurred Ridgeland had to tighten their budget. Luckily, because they had been doing so well before the recession, they didn’t have to raise taxes.
Sales tax reports have a two-month lag. Spending from two months ago takes one month to be processed, and another month to create a report. So, the May sales tax report represents spending in March
The 2018 May sales tax report indicated sales tax revenue was over $1,100,000. In 2019 it rose above $1,203,315. But it dropped for May of 2020 to $1,086,204. The drop was attributed to Covid-19. This March, when Covid-19 restrictions began relaxing, the number rose to $1,411,594.
According to the May 2021 tax report, which represents spending in March, there was a 29 percent increase when compared to the report for May of 2020.
According to Mayor McGee, several factors contributed to this growth in sales. One is the bounce back from the pandemic, as people have been vaccinated and mask mandates have been lifted by the State.
Another is the business community who adapted quickly to the pandemic, by relaxing some zoning laws and signage laws for curbside pickup.
“Economic development is just one of the many factors that contribute to us being a successful community, and there’s no question that we have been and will continue to make Ridgeland a place where people want to be.”