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Joplin, Mo., Analyzing Impacts of COVID-19 with Optimism

While overall sales are down, grocery sales might have increased, which would be good for the city’s revenue. While officials expect some declines, overall they are optimistic about the strength of the financial reserves.

(TNS) — Joplin, Missouri's finance director is analyzing city sales tax revenue, trying to draw a bead on the impact of the loss of in-store shopping and travel as a result of the COVID-19 pandemic.

"Obviously for the city of Joplin, our main revenue source is sales tax," Leslie Haase said. "I don't think anyone can drive through the community and not see that sales are down.

"Right now we are doing a lot of analysis. We are looking at sales tax payments from last year," particularly the months that correspond to the current period of reduced business.

But it appears that some sales, such as those at grocery and discount stores, could be higher than a year ago, "so we'll be looking at that and talking about that. We also will have other revenue that is affected, such as the hotel and motel tax, parks programs and the airport," she said.

A ticket surcharge on airline tickets brings in revenue for the Joplin Regional Airport. Fees for team sports and recreation programs pay the costs or offset the expense to the city for recreational programs.

The city has received its April sales tax payments, which represent purchases made in February. It was down by about $120,000 from the April payment in 2019, when the proceeds from the city's 1-cent general sales tax amounted to about $1.193 million.

It is the halfway point in the city's fiscal year, which began Nov. 1, and tax collections so far have held pace. The total for the 1-cent tax so far is at more than $7.5 million. It produced $14.9 million for the entire last fiscal year.

A half-cent sales tax the city started assessing April 1 under the voter-approved Proposition B could be affected by any drop in local in-store sales and restaurant proceeds.

By the time the tax is collected at local businesses and submitted to the state to process and disburse to Joplin, the city won't see the initial results until June. "I think everyone expects those collections to be less than they would have been" without the pandemic, Haase said.

"But as far as the use of the sales tax itself, the plan is the same. The tax will come in and it will go to the designated items, first and foremost the (Police and Firemen's) Pension Fund," Haase said. Some of it will be placed in reserve to pay for transitioning some of the public safety workers to another retirement fund, a statewide plan that was discussed at the time of the election on the sales tax.

Revenue from that tax going to the pension fund was expected to free up about $3 million in the general fund for other city needs.

Because of that and other financial sustainability actions taken by the city in the last two years, "the city of Joplin is probably in better financial standing than some other communities," Haase said. "We have paid off all our debt on City Hall and on Joe Becker Stadium. We will be closing out the Disaster Recovery Tax Increment Financing District," which will return some tax proceeds to the city that had been going to pay off debt for recovery projects.

Also, the city has reconciled its disaster recovery costs with the Federal Emergency Management Agency, which returned money to fund reserves the city used for those costs. That gives the city reserve funding equal to about six months' worth of costs, providing a cushion.

"So I think in the short term, our reserves are in probably better shape than probably some other cities' (reserves) might be," Haase said.

When the analysis is finished, Haase said, she and the city manager will look at the results and provide that information to the City Council.

©2020 The Joplin Globe (Joplin, Mo.). Distributed by Tribune Content Agency, LLC.

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