In the next week or so, many local residents will begin receiving stimulus checks from the government. They won’t be the $1,200 checks that we received in the Spring, but they will be half that much. Even $600 will help a little, but it will be too little too late.
Even though many retail businesses in Monroe were hit hard by the Coronavirus, mostly restaurants and bars, others were sustained, and some even grew.
If sales tax collections are a cue, then for the most, the city has collected enough sales taxes this year to stay on an equal footing with years past.
According to city financials, the city’s sales taxes took a big dip in the first five months of the year. The city’s municipal tax (2.5%) took a small drop of $53,593 in but was as high as $634,355 by April.
The Stimulus checks began in April, and immediately the city’s sales tax snapshot changed. By the end of May, that $634,355 loss was reduced to $102,046.
As more people received those stimulus checks, the months that followed showed significant increases over previous years.
The municipal tax receipts for June were 15.8 percent higher than in 2019 but higher than in 2018 as well. That same pattern is reflected in the city’s 1.0% street improvement tax, its .49% tax for police and fire services. Its vehicle sales taxes reached a 19% increase in June, and the next month it hit an all-time high of 24% increase on previous years.
The increases began to slide downward as most of the stimulus money seemed to dry up, but as late as September, the entire parish was 19% above previous years.
As the year comes to a close, the last of the stimulus money is drying up. The infusion of new cash hopefully will help the entire parish through the early months of winter.
Because the checks won’t come until after Christmas, retailers probably won’t get the big hit they hoped for as some folks behind on rent and utilities may choose to catch up on debts free from the temptation to spend without restraints prompted by Christmas.
So, with only $600 extra per person to count on, many will probably exercise some belt-tightening.
Experts are suggesting that consumers should:
–Try to slash unnecessary spending, especially for subscription services that are not used. Some households have subscriptions to Netflix, Hulu, Vudu, and Amazon Prime, mostly duplicating each other. Some will drop at least one subscription service next year.
–Reduce Credit card debt. Many have been living on credit cards during the virus crises and have been pushing the limit and piling on interest. Some will use their stimulus checks to pay down or pay off credit card debt.
–Reduce frills and entertainment. Some will resist the temptation to spend their entire stimulus check on frills and entertainment. Partygoing is fun, but there are costs involved: clothing, entrance fees, food, and drinks. Some will question whether they need a new pair of Jordans to add to the doze pairs already in the closet. Others will question whether hair extensions and fingernails are essential when money gets tight.
Others will consider spreading that $600 check as far as possible and reducing other costs, including car insurance rates, consolidating loans, and refinancing existing loans.
If the Democrats are successful in Georgia and take control of both government branches, more stimulus checks may be coming under the Biden Administration.
What is known, however, is that $600 is coming.
The city and parish have survived and even thrived because of the April stimulus and many in government are breathing easy.
However, because of the reduced amount of Congress’s combined December stimulus effort, it wouldn’t be wise for either government or individuals to splurge or undertake unnecessary costs until the Coronavirus crisis has ended.
