Sales tax revenue falls in region

By: Bryan McKenzie | Daily Progress
Published: August 11, 2009

Sales tax revenues for both Charlottesville and Albemarle County shoppers dropped in the first half of 2009 as compared with 2008, according to state sales tax figures.

City revenues dropped 8.41 percent compared with 2008 and county income dipped 11.68 percent, figures show.

The numbers come as no surprise to city officials.

“We’ve been prepared for it,” said Lee Richards, Charlottesville’s commissioner of revenue. “We have regular meetings to keep track of the figures and we expected this when we budgeted.”

Richards said the city’s income is close to what it expected.

“We’re doing OK with it,” he said. “We knew it would be off, but we’re glad things have evened out a little bit. The sales tax revenue isn’t in free-fall, even though it’s still decreasing.”

In the first six months of 2009, Charlottesville earned $4.45 million in sales tax revenues, compared with $4.98 million in the first six months of 2008, the figures show. Albemarle County earned $5.59 million in the first half of 2009 compared with $6.33 million in the first half of 2008.

Tim Hulbert, president and chief executive of the Charlottesville Regional Chamber of Commerce, said Monday that the figures for Charlottesville and Albemarle don’t tell the whole economic story.

“If you look at the figures from 2008 compared to 2007, we really had 10 or 11 months in the city and county that had negative income compared to the same months between 2008 and 2009,” he said. “You don’t need to be an economic genius to figure out that it’s tough out there, but when your sales are down 16 percent in the first three months of the year and then down only 8 percent for the second three months, that’s showing some improvement.”

Figures show Albemarle County’s sales tax revenue was down by double digits each month from January through May but down only about 8 percent in June, year over year.

In the city, income was down by double-digit numbers for every month but April and June. April posted a 1.1 percent increase and June posted less than a half-percent decrease from June 2008.

State figures show that the city and county each earned more than 2 percent more in sales tax revenue for 2007 than in 2006. In 2008 the fortunes turned and the county earned 4.38 percent less than 2007 and the city pulled in 3.22 percent fewer sales tax dollars.

“We’re happy to see some change for the positive in the June 2009 figures,” Hulbert said. “Recessions have an average life of about 11 months, but this one began in December 2007 and has lasted almost 20 months. It’s been called the ‘great recession’ because it’s been the longest in a hundred years.”

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SALES TAX REVENUE

2008 2009 % change
Albemarle
Jan. $911,104 $814,165 -10.64
Feb. $952,527 $854,044 -10.34
March $1,128,739 $941,298 -16.61
April $1,080,886 $952,239 -11.9
May $1,130,148 $990,754 -12.33
June $1,132,070 $1,042,859 - 7.88