Ebb and flow of sales taxes affect Oak Grove budget
by Mark Ledbetter
OAK GROVE — The small town has an advantage other towns its size don’t have, but that advantage could be gone if it looses just one business.

“In eight years of being in municipal government I’ve not found any town that is even close to being similar to Oak Grove, where our finances are compared more like a small city of 2,000 in sales tax,” Mayor Charles Merkel said.

Merkel said the chief advantage is the U.S. 280 corridor that runs through Oak Grove.

“Most of our income is from sales tax,” he said, “The loss of one of five major businesses would result in major adjustments for us.”

While the town depends on sales tax as a major source of revenue, Oak Grove is unique in that residents do not pay property tax.

“Because there is no municipal property tax here,” Merkel said, “we have to be more careful. There’s nobody like Oak Grove.”

Merkel said the past three months have indicated an improvement in sales revenues. He described last spring’s sales revenues as “flat” and any increases haven’t approached sales revenues before the economic downturn in 2008.

With the addition of two new businesses that have proved to be successful, Merkel said sales revenues have improved. He said August receipts were higher than they have been in some time and although September and October receipts were not as high as in August, they did indicate increases over last year.

What Councilmen David Harris and Tony White perceive as an uncertain financial future motivated them to table a measure granting a cost-of-living increase for the eight full-time and seven part-time town employees.

At Tuesday night’s meeting, Merkel proposed the council grant town employees a 1.7 percent cost-of-living allowance. He said he based his figure on the recent announcement of the federal government’s granting a 1.7 percent COLA for Social Security recipients.

White said he was concerned that if the council granted the COLA and after the first of the year there was a severe financial setback, he did not want to cut employees.

Harris echoed White’s sentiments and said once approved the town couldn’t take away the increases and would have to cut jobs, “and I don’t want to do that,” Harris said.

According to figures provided by town clerk Wendy Kelly, the gross payroll for the fiscal year was $241,799, which does not include payroll taxes, SUI, retirement, health insurance and workman’s comp. She estimates a 2013 cost-of-living allowance of 1.7 percent would be $4,854.

New Councilwoman Mary Carter said she hopes that after Congress remedies the “fiscal cliff” the government is facing, the council will have a better direction in what it can do.

© 2012