Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 16, 1991                   TAG: 9102160267
SECTION: BUSINESS                    PAGE: A8   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium

SALES TAX TAKE DOWN IN ROANOKE AREA

Salem was the only area locality reporting a monthly increase, up $1 million or 2.7 percent to a total of $36.9 million.

Roanoke's sales for the month came to $136.1 million, down 12 percent or $18.6 million from a year ago. Roanoke County's taxable sales were $59.5 million, a decrease of 10.2 percent or $6.8 million.

What this shows, said Roanoke municipal finance director Joel Schlanger, is that "people are holding on to their money . . . Revenues are headed south."

January receipts for December sales tax collections were down 8.8 percent from a year ago, and he expects that trend to continue for the next four to eight months.

Sales tax collections in Roanoke for the first seven months of the year were a scant 1.04 percent ahead of the corresponding period a year earlier. After inflation, that is a minus figures, he said. Collections were running far ahead until the end of the year, he said.

Roanoke's admissions taxes are down 5 percent for the fiscal year and the prepared-food tax is up 1.3 percent. "But that is negative in light of the inflation" in food and transportation costs, Schlanger said.

As interest rates fall, Schlanger said, Roanoke is beginning to see negative figures in interest income on investments, a major tax source for the city. "Lower interest rates are good for consumers but not for the city," he said.

"We're not facing a deficit, just hard times," Schlanger said.

But he had one piece of good news. Roanoke's slim 1.04 percent rise in collections for seven months of sales is far better than a decline of 12 percent to 12 1/2 percent in Northern Virginia, showing the importance of Roanoke Valley diversification.

"We're not suffering as bad as areas with one industry," Schlanger said. Roanoke is very diversified in manufacturing, sales and industry, compared with the concentrations in Northern Virginia and Tidewater, he said.

Roanoke County's share of December sales tax receipts was $595,000, down from $662,000 in December 1989. County treasurer Fred Anderson called the year-earlier December "an exceptionally high" month.

Since the start of the fiscal year on July 1, the county's sales tax receipts were $145,000 ahead of the same period a year earlier, Anderson said.

Does that mean the national recession has missed Roanoke County? "Let's just say that, as of December, it hadn't hit us," he said. "The unemployment figures bear that out, too."

The only obvious explanation for the increase in Salem's December sales was the addition of Wal-Mart, Kmart and Heironimus stores, said Angela Sellers, assistant finance director in Salem.

The lower volume of December sales was equally significant throughout the state. The Taxation Department reported an 11.1 percent drop of more than $650 million in state sales to $4.8 billion.

Staff writer Mark Layman contributed to this story.