CHARLESTON, W.Va. - Charleston city leaders say a recent surge in business and occupation tax collections is evidence the city's economy is bouncing back.
Mayor Danny Jones said the $400,000 in additional tax collections over the past three months also would help cut the city's burgeoning pension liabilities.
Charleston closed the books on the first quarter of its 2013 fiscal year at the end of September. City finance director Joe Estep said business and occupation tax collections beat expectations by about 4.7 percent during the July to September quarter.
"The amounts collected in the first three months are about $470,000 above what we budgeted for the first three months," Estep said.
Estep said the collections were about $900,000 more than what the city brought in during the same time frame last year - a revenue jump of about 10 percent year-over-year.
Last year, the city collected $39.9 million in B&O revenue, and this year's budget had projected that to grow to $42.2 million.
Estep has been closely monitoring quarterly business tax collections for several years. He said while any fiscal year could register a $1 million to $1.2 million increase in those collections, the $900,000 spike in one quarter was significant.
"It's just a clear upward trend," he said. "What it says to me is that, within the city of Charleston, we are rebounding."
Charleston has collected around $40 million a year in business and occupation taxes in recent years.
The city's business tax collections began to suffer following the national financial crisis in 2008 and 2009, although the effects were delayed.
While its 2009 fiscal year was OK, the 2010 fiscal year - which ran from July 1, 2009, through June 30, 2010 - reflected a steep decline.
"Fiscal year 2010 for us was a horrible year," Estep said. "I mean the bottom fell out."
Charleston saw its B&O tax collections drop $1.8 million from the prior year.
"Two years ago, we were basically in a panic and people were afraid of everything financially," Jones said. "They were afraid to spend, afraid they were going to lose their home and afraid of a lot of things."
Revenue rebounded by about $800,000 in fiscal year 2011 and by about $1.2 million last fiscal year. But Estep said the growth in those two years basically got the city back to where it was in 2009.