Hoover’s tax revenues declining
Hoover’s sales tax revenues for the first seven months of fiscal year 2009 show a decline of 5.6 percent when compared to the same time period last year, said Mayor Tony Petelos.
In the past seven months, the city has taken in $60 million in revenues. During the same time period last year, the city took in $64 million in revenues.
Petelos said the main reason for the decline is the drop-off in sales tax, which makes up 65 percent of the city’s revenues. He pointed to the bankruptcy of several major retailers, such as Goody’s, Bruno’s, Linens ’n Things, The Bombay Company and CompUSA, as well as the decline in the automobile industry.
For the past seven months, sales tax is down by $2.1 million when compared to the same time period last year.
“Our economy is based on sales tax revenues, and they’re down because of the economy,” he said. “In view of everything else going on in the economy, it could be a lot worse.”
Petelos said he expects the economy to turn around, but it might take a while.
“I hope it turns around soon, but every time I think we hit the bottom, we keep going down,” he said. “We haven’t done our 2009 budget yet. When we do the 2009 and 2010 budgets, I think those will be the two toughest budget years in the history of the city of Hoover. After 2010, things should start turning around.”
He said the revenue drop could seriously affect the city’s ability to give money to the Hoover City Schools system. Last year, the city gave the school system $7.5 million, a number that Petelos said he expects to drop sharply this year.
“We won’t be giving them that this year. It’s going to be substantially less, and there is a chance that we may not be able to balance the budget, and it may be zero (contributions),” he said.
However, the city is still financially healthy, with a reserve of $31 million and no expensive capital projects planned other than road projects, for which the money is already allocated. There are no plans to have layoffs or mandated furloughs for city employees.
“We’re just going to batten down the hatches and ride the storm out,” he said.