GAUTIER, MS (WLOX) - The city of Gautier is bracing for a large sales tax loss due to the closing of the Singing River Mall. Officials have now begun making some financial cuts in several city departments to help cover the possible shortfall.
When stores in Gautier's Singing River Mall began closing last year, a lot of the sales tax dollars left along with the tenants.
"We knew coming into this budget year we had a little bit of an unknown with our big anchors JCPenney and Sears closing," City Manager Samantha Abell said.
So far, there has been about 5.5 percent sales tax reduction in the city.
"We have forecasted that by the end of the year we could be looking at a 15 percent sales tax reduction."
City Manager Samantha Abell said the mall is in the process of being redeveloped into a multimillion dollar open air facility with a Walmart. Until that happens, money that was budgeted for other departments such as fire, police, and recreation are now being moved to the general fund. The extra money is expected to help with day-to-day operations.
"It represents about a $400,000 adjustment to our budget and that number is through attrition," said Abell. "It is either personnel who had departed from the city that have either departed from the city or positions that were budgeted that are not yet filled. In the case of our fire department, those will be positions that are going to be filled July 1st that we originally anticipated filling in January."
City leaders are confident the quality level of service residents rely on every day will stay the same.
"Our level of service will not be affected. This is not a layoff, and this is not reducing services. We are just preparing in case we see an increase in or reduction of sales tax," said the city manager.
As the city tightens its purse strings, the goal is to finish the mall makeover soon and get more sales tax revenue dollars flowing into the city again.
"We know when the new mall opens we are going to be looking at increase of $150 million in retail sales that first year," Abell said about the new construction. "We know just what the opening of the Walmart in the first three months we will earn the same revenue as the entire mall in a year. So, we are preparing for that so we can live within our means."
Abell said the city's new Walmart is expected to open by late spring of 2015 and the mall will then follow. Belk is the only store currently open at the Singing River Mall site.