COVID Caused Dip in State Tax Revenue, Rebound Beginning
As the world marks one year since the declaration of the COVID-19 pandemic, local Oxford and Lafayette County officials are already seeing promising signs of a rebounding economy that could come back stronger than ever.
“Absolutely, I’m optimistic,” said Jon Maynard, CEO and President of the Oxford-Lafayette County Chamber of Commerce and Economic Development Foundation.
In total, Mississippi sales tax collections for the year of 2020 were down $148 million from 2019. Mississippi collects sales taxes and then returns each community’s share as a diversion, explained Maynard.
Oxford saw its share of tax diversions dip $1.46 million from the previous year. However, November and December 2020 showed the highest diversions on record, with the exception of November 2018 and December 2019. Sales tax numbers for January were expected to be released Monday.
The $1.46 million decrease is divided out among the food and beverage diversion, the lodging tax and general sales tax. Each decreased in 2020 as compared to 2019. Sales tax diversions were down $717,000, lodging diversions were down $149,000 and food and beverage tax diversions were down $550,000.
“We didn’t know what to expect. We have never seen this before. It is looking at this through an experimental research eye and trying to cope with issues as they came along,” said Maynard, adding “Although the overall average for the year is down $1.5 million, the trend line is going up.”
“We fared better than some and worse than others. In conversations we’ve had with other SEC communities, other college towns nationwide, we really are doing exceptionally well. The businesses that were willing to innovate, that adapted to the new environment were the ones who were able to rebound more quickly,” he said.
Maynard said the EDF tracks seven sets of numbers to assess the local economy, most of which are U.S. Census-driven, and are expected to be significantly delayed this year until later this summer. Those measurements are: population, total employment, personal per capita income, average annual wage, civilian labor force, assessed value and retail sales.
However, he thinks the economy is primed for take-off over the next year as COVID numbers continue to improve and vaccinations roll out.
“We are still going to be a little behind on the trajectory where we are going, but the rebound we have seen in businesses, the traffic level, the numbers of people who are out and about – the indications are that Oxford is a desirous place to spend money, to be to shop and to live. We anticipate our growth will continue unabated after this major setback,” Maynard said.
The cost of borrowing money is cheaper than it has ever been and “it has motivated people to really move forward with things they might not have done in the past,” Maynard said. “We’ve seen a significant uptick in residential real estate market. We have commercial spaces that are empty now because of retailers that shut down but we are getting a phone call about once a week from a retailer who wants to locate a business in Oxford, move their business to Oxford or start a business in Oxford.”
The pandemic has shown that workers can work productively work remotely, and that will further drive businesses and individuals to locate in Oxford, said Maynard. He also believes the recent approval of medical marijuana could spur additional growth. “It has the opportunity to kickstart the state economy. No one knows the rules yet or where that is heading. It’s a huge opportunity, we have to wait to see how it pans out.”
“There are a lot of opportunities that are staking up,” he said.