Sales tax hike getting results

Published 12:00 am Saturday, March 20, 2004

Since imposing a one-cent sales tax in August, the City of Greenville has seen positive results, as a steady stream of money flows into the city’s coffers.

Though the tax met a great deal of opposition last year, it seems to be proving to be a positive addition for the city.

Greenville Mayor Dexter McLendon said that the tax was not something the city was excited about putting into place, but they knew that it was needed to help with growth.

&uot;It’s something we didn’t want to do,&uot; said McLendon. &uot;Because of Hyundai and the businesses coming to town we needed to.&uot;

When the tax was put into place it was estimated that it could generate $1 million dollars more a year.

Though the tax has not been put into place long enough to see what the end results will be, it looks as if this total will be met, if not exceeded.

At the previous 3-cent sales tax a net amount of $3.4 million was collected for fiscal year 2001-2002.

From Oct. 1, 2001 to Feb. 28, 2002, a total of $1.4 million was collected for the first five month.

This came at an administrative cost of $30,286.50.

The administrative cost is the cost levied by the state in the procedures of collecting and processing tax returns.

For fiscal year 2002-2003 a net amount of $3.5 million was taken in.

In the first five monts of the year, $1.4 million was collected. Administrative cost for collecting this amount was $28,723.90.

Since fiscal year 2003-2004 began on Oct. 1 through Feb. 28, the city has collected $1.9 million.

This is $500,000 over last year’s collection for the same time period.

At the current rate, the city expects to collect about $1.2 million for the year extra, a full $200,000 over the projected collections.

In October of 2003 the state went on an electronic filing system that allowed them to cut the cost to $2.25 per account for local taxing jurisdictions.

Between the lowered rate of collection and the success that the tax has seen so far, more of the same is expected for 2004.

However, those results remain to be seen.

&uot;We haven’t had it in place long enough to really see what is going to happen,&uot; said McLendon. &uot;But things are picking up. The economy is looking very good.&uot;

Because Greenville does not have many of the resources used by other cities to help fund growth a sales tax was a necessary evil.

Cities such as Troy that own their own electrical company often use it to generate revenue for growth.

These funds are placed in a general fund and used when needed.

However, since Greenville does not have this option a sales tax was necessary.

McLendon feels that with the industry coming into Greenville the tax is already paying dividends.

&uot;I think we are seeing a growth in our economy because of the sales tax,&uot; said McLendon. &uot;Because of the people working on buildings, staying in motels, and shopping here this is starting to effect the numbers we see for the city.&uot;

McLendon felt that if the numbers keep up the tax could no longer be necessary in the future.

&uot;We hope someday that we will not need it,&uot; said McLendon. &uot;That is what we always shoot for. This tax is not something that we really wanted to do and we hope we can get rid of it someday.&uot;

Until that day it is important that Greenville residents be patient.

If the numbers continue to add up as they have the funds generated will more than pay for themselves.

For Greenville the tax is a necessity to help fund a growth that will benefit the entire city.

How smoothly the growth goes will dictate whether the tax will remain in effect.