Kingsport sales up strongly in December

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KINGSPORT – Sales inside the City of Kingsport are on the rise, with December sales tax collections posting the second largest increase in a decade.

Sales tax collections jumped 11.10 percent for December, while collections through eight months of the fiscal year are up 5.8 percent. November sales were also up by 6.22 percent.

Theres been a good bit of conversation about retail sales in the region lately, and the results so far are closely following strong sales growth state wide, City Manager Jeff Fleming said Friday. Clearly, retail sales in the current fiscal year are on a strong upward trend in Kingsport.

In all, the City has collected $17.3 million in sales taxes so far this fiscal year beginning July 1, 2014. Under state law, half of that sum goes to support K-12 school systems in Kingsport, Bristol and Sullivan County on a per student basis.

The remainder goes to the City General Fund, although the City supplements state funding for Kingsport schools with $10.35 million annually from the General Fund. Another $3.25 million in General Fund dollars goes to cover Kingsport schools capital construction debt.

In all, about 65 percent of all sales taxes generated inside Sullivan County are generated inside the corporate limits of Kingsport, according to the latest report.

With strong industrial growth, and long term efforts to develop commercial retail and housing, we do believe this a trend that will continue, Fleming said. The impact of the national recession lingered longer than we would have liked, but the past few years have been on a gradual upward climb, with sales tax growth of .84 percent in fiscal year 2013 and 1.77 percent in FY 2014.

With the difficult weather of recent days, Fleming said its critical to remember Kingsport small businesses when making purchasing decisions, and to shop local whenever possible.

Sales are the key to funding a world-class school system, Fleming said. If sales tax dollars dont grow, its very difficult for the Board of Mayor and Aldermen to make that up on the property tax side.

On a budgetary basis, Kingsport sales tax collections are running about $126,700 ahead of budget, and $486,588 above last years collections at this point. While this is a good indicator of local economic activity, Fleming noted that many needs remain as the City heads toward its annual budget development sessions.

This will provide a little bit of breathing room, along with a continuing emphasis on increasing operational efficiency and holding headcount as low as possible, Fleming said. In the current budget, the BMA concentrated on increasing road maintenance funding, greater support for K-12 education, and covering increased solid waste costs.

In the end, there are a limited number of dollars to go around, and we look to the Board to set the agenda in terms of focus areas. At the same time, management continues to believe that the key to Kingsports success is in building the strongest possible workforce, so we will be looking to strengthen our workforce as capacity permits.