Sales taxes fell overall in 2010

Sales tax collections in Terrebonne Parish were down more than $14 million in 2010 when compared to total figures from the previous year. However, detailed elements suggest that overall averages and extenuating circumstances, such as Hurricane Gustav in 2008 and the BP Deepwater Horizon explosion and oil spill in 2010, actually indicate some stabilization during the final years of the decade, either because of or in spite of a tight economy.

According to revenue totals released by the Terrebonne Parish Sales and Use Tax Department, sales tax collections from area businesses in 2010 totaled in excess of $90 million, which was down almost 7 percent from the $104 million collected during 2009.

The two years saw different spending patterns as 2009 figures started out at $12 million in January but the same month in 2010 posted just under $9 million. December sales tax figures demonstrated a stronger holiday shopping season in 2010 with more than $8 million collected compared to the $7 million listing for 2009.

During the first decade of the century, Terrebonne Parish business activity generated sales taxes levels from a total $64 million in 2000 to a 10-year-high point in 2008 at $111 million.

Jumps in sales tax revenue were seen January, April and December 2008, each month with more than $10 million collected.

January 2009 was the highpoint for sales tax revenue collection during the decade. Since then monthly sales tax figures averaged $9 million with a median level closer to $8 million per month.

February and March of 2010 each offered returns short of $7 million and were the slowest months for retail activity during the previous five years.

Following the Deepwater Horizon incident in April 2010, sales tax numbers remained consistent with monthly returns, each of which was more than $8 million.

Total motel / hotel and occupational license revenues for the parish were 6 percent lower in 2010, with more than $99 million, than in 2009 when $105 million was collected. Yet, figures for December saw a 12 percent increase in 2010 from the same month one year earlier.

Hotel / motel taxes alone saw a sharp spike from $151,763 in 2009 to more than $1 million in 2010 due to an influx of people and work related to the Deepwater Horizon oil spill.

“Toward the beginning of the year we were up against [Hurricane] Gustav figures. We had a lot of insurance money in the parish in the beginning of 2009 [being spent on cleanup, repairs and rebuilding]. I think that was part of it as well as the economy that were both affecting us. We had that extra money,” Terrebonne Parish Sales and Use Tax Department Director Christa Lagarde said.

Lagarde noted that during the summer of 2009 figures began to level off and continued at a relatively steady rate into 2010. “By that point most of the Gustav money was gone and things were returning to a normal status. Our hotel / motel taxes were through the roof because BP was renting everything in the parish,” she said. “But I think things just got back to normal. The economy wasn’t too good at the time but I think both [Gustav and BP] that affected us with those decreases,” she said.

Terrebonne Parish President Michel Claudet confirmed that overall 2010 saw sales tax revenue remain basically steady during the year after a $2 million decline from January’s level during both February and March.

“We had an increase during the BP period taxes [generated] and activity in Terrebonne Parish,” Claudet said. “When the BP claims money quits pouring into Terrebonne Parish, if the drilling activity has not increased we are expecting a precipitous drop in sales taxes at that time. We’re hopeful that the drilling will commence prior to BP dropping and if that happens there should be an easy time for us in the future. However, we should not spend our money before we actually get it in and right now is an uncertain time.”

Claudet noted that the hotel / motel tax, even though it increased during the past year, does not contribute to the operating of Terrebonne Parish. “The only hotel / motel tax we get, some of that goes to the civic center, some of that goes to the downtown, but parish government is run by sales and ad valorem taxes,” he said.

Since 1970 gross tax collections for Terrebonne Parish, which at that time were just over $2 million for the year, saw steady annual increases until 1983 when returns were listed at more than $17 million, which was a drop from the $22 million collected each of the two previous years.

It was not until 1991 that tax collections returned to the level that surpassed $22 million. A spike to $27 million in 1993 offered another starting point for steady gross collections until it hit a peak of $111 million in 2008, then dropped to more than $104 million in 2009 and excess of $98 million in 2010.

Michel Claudet n BP claims could impact future tax collections.