LONG BEACH, MS (WLOX) - With the entire country getting stung by the recession, sales taxes are on the decline. South Mississippi is no exception.
Over the past year, several cities throughout the coast experienced a drop in sales taxes. The city of Long Beach is facing an even greater challenge.
"We've made all the cuts and tightening areas that we can do to sustain the city and provide fire and police protection," Mayor Billy Skellie said.
Mayor Skellie said the city is making cuts in response to its slumping sales tax revenue.
"We don't have an I-10 running through or an interchange running through here in Long Beach, but we've got beautiful beaches and water. But we don't have these super roads that bring on retail," Skellie said.
Long Beach will soon have a new six story Holiday Inn Express and new restaurants. However, the city's sales tax revenue is down. Initial reports suggested a 40 percent decline, but the mayor said an accounting error skewed those numbers.
"We were contacted by the State Tax Commission that they had overpaid us in July of '08," said Skellie. "It was an erroneous payment of 200 and some odd thousand dollars, you don't usually run that high, but we were getting collections from 10 businesses that were really not in the city. The tax commission made an entry incorrect, but paid us that way. So we've spent a year having a $14,000 a month reduction paying this back."
Mayor Skellie said the city actually went from about $170,000 in sales tax revenue to about $120,000.
Soon, it will have to deal with another threat to its economy: The super center known as Wal-Mart.
"We're certain it will affect us," Skellie said. "There's no doubt about it."
A mini strip mall at the corner of Pineville and Beatline Roads has been open since May and to date there's only one business. But owners say they're not worried about the super center opening in neighboring Pass Christian.
"We are pretty confident because of the service that we give and we are offering," Laurel Malley said.
Laurel Malley owns the Long Beach Pharmacy, a business that offers more than just medicine.
"We offer everything that they have, as well as some other things, such as our compounded pharmacy that they don't have," Malley said.
The store includes a pharmacy, a deli and a number of specialty items make up the small business. It's how Long Beach does the one-stop-shop. And they hope it will encourage residents to spend their money a little closer to home.