Roanoke anticipates sales tax slump

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ROANOKE, Va. (WDBJ7) Starting Monday, millions will be hopping online hoping to score a great deal.

Amazon.com is kicking off its third annual "Prime Day" beginning at 9 PM. They're planning discounts on thousands of items, but you have to be a Prime member first, which costs about a hundred bucks a year. Prime Days have given the online seller massive sales bumps in the past.

But those bumps can mean some slumps for others.

Walk in to Walkabout Outfitter, and you'll find Diane Hailey.

Diane Hailey with Walkabout Outfitter, said, “Some of these products can be intimidating.”

She knows that because she's a serious hiker herself.

“I've used a lot of this stuff,” she said.

Hailey says sometimes people come to look at the gear, and leave to buy it online.

“Online sales have always been a competitor of ours,” she said.

Which can affect their bottom line -- and the city's too.

Wayne Bowers, Roanoke City Director of Economic Development, said, “Well it's really a reflection of what's going on nationally.”

Numbers from the city show sales tax revenue is down for the first three quarters of fiscal year 2017 by about 570-thousand dollars.

“It's pretty significant amount because this is a major revenue source,” said Bowers. “We're talking about millions of dollars that are essential for city services.”

Wayne Bowers says more people used to travel from out of town to shop at places like Valley View Mall. Now, more and more is being done online, which means the city doesn't get that sales tax anymore.

“I don't think it's very well known,” he said. “I think most people don't really think of that.”

In response to the anticipated revenue slumps, the interim city manager says he asked departments to cut back budgets. The director of management and budget says this fiscal year, they eliminated one position and didn't fill 22 others to try and counteract the slump.

“In government, there's not usually very many easy solutions and this one will be a challenge for awhile,” said Bowers.

Sales tax numbers are just one piece of the much larger puzzle.
Interim city manager Brian Townsend says they are still collecting final revenue and expense numbers for fiscal year 2017 and they'll present final numbers to city council in late August or early September.