• Second in a series
“Shop local” is more than just a slogan, especially in a down economy.
“I don’t think a lot of people are aware of the impact they have every time they make a purchase as a consumer,” said Amy Hollywood, director of public information for the city of Waxahachie. “It’s not just the businesses that benefit from those purchases, it also impacts the workers they employ as well as the city budget and the services funded in large part through sales tax revenue generated through those purchases.”
In an effort to raise public awareness, city officials and chamber of commerce officials met this week to discuss opportunities to educate the community on the role local citizens play in helping our overall economy.
“I think it is extremely important for us to encourage people to buy things locally because that money is reinvested back into the community — in many cases, several times over,” Hollywood said. “I think most people aren’t aware how important that is, thinking it really doesn’t matter where they shop. It does matter.”
Sales tax impact
In the January report from the Texas State Comptroller’s Office, sales tax returns to the city of Waxahachie were down 12.9 percent for the month of December, traditionally the highest grossing month for municipal sales tax returns.
Waxaha-chie Finance Director Charlie Harris said what makes that figure significant to city residents is the fact that 40 percent of the Waxahachie general operating budget is funded from sales tax receipts — taxes paid on nearly every purchase made within the city of Waxahachie.
The remaining 60 percent of the general budget is funded from property taxes as well as permit fees and fines. Harris added that 100 percent of the 4B budget (which is used to fund the Waxaha-chie Civic Center and Waxaha-chie Sports Complex) is generated through sales tax revenue.
“There are a lot of reasons why ‘shop local’ is more than just a slogan,” said Paul Stevens, Waxahachie city manager. “It is important to our local businesses who employ local residents. It’s important to their suppliers and contractors, who also employ local residents. But it is extremely important as far as the city budget is concerned as it has a direct impact on our ability to provide city services and fund capital projects.”
A ‘lean’ budget
Forecasting a downturn in the economy for the 2008-2009 fiscal year, Stevens said the city council approved a “lean” budget that called for hiring freezes, no travel for training except for when it is legally required, no pay raises for city employees, no increases in department or program funding and no capital expenditures other than for emergency vehicles that had to be replaced.
“We’ve also asked each department head to reduce their budgets where possible,” Stevens said, stressing the city is taking a very proactive stance during a difficult economy.
Stevens said his staff has already been in discussions about additional cuts, should the economy worsen.
“The trigger mechanism for those cuts is the monthly sales tax report from the comptroller,” Stevens said, noting if the March report shows another double digit decline in returns, municipal budget cutting measures will need to be put in place.
Should economic conditions fail to improve (or at least remain stable), Stevens said some of the options currently being discussed include:
• Reduction in city services, including the closing of municipal swimming pools for the summer;
• cutting back on summer mowing and park maintenance;
• cutting back on street repair projects;
• reduction on all contract services for the city; and possibly,
• reduction in force (layoffs).
Stevens said these are items the city is working hard to avoid, but feels it is important to let residents know could happen should the economy worsen.
“Waxahachie is faring far better than a lot of cities,” he said. “We still have activity going on. We’re issuing permits for new construction. It’s down a lot from where it was in 2007, but we’re still active and growing.
“That’s good news. Times are difficult, but it’s not all doom and gloom and for that we are all very thankful,” he said. “But what we hope to do is be proactive in making every citizen aware of how they can play a part in helping turn around our local economy simply through the purchase decisions they make every day.”
As an illustration, Hollywood used the example of a family traveling to Dallas or Cedar Hill for an outing. While there, they decide to have lunch and go ahead and knock out their weekly shopping duties.
“We all have done it,” she said. “At the time, we don’t think the $100 we spend somewhere else makes that big of a deal. But if every family in Waxahachie (the city’s population has now topped 30,000) is doing that, it’s a lot of dollars that aren’t helping our local economy.”
Additionally, Stevens said when the economy was going strong, sales tax receipts enabled the city to fund projects such as the new Waxahachie Senior Citizens Center, widening of Broadhead and Parks Schoolhouse roads, the train depot restoration and the new municipal parking garage in downtown Waxahachie.
“That’s why it is so important that everyone in the community understands how every aspect of the local economy is tied together,” added Michael Scott, assistant city manager for the city of Waxahachie. “Now more than ever, I think it is critical that we get out the message that shopping locally makes a difference. I believe the more people understand that, the more likely they are to help make a positive influence on our local economy.”
Impact on jobs
Doug Barnes, economic development director for the city of Waxahachie, pointed out the axiom that for every manufacturing job created, seven additional jobs are created in the community to support that one position.
“A similar formula can be used on dollars spent in the community,” Barnes said, noting that a $50 million company payroll equates to $350 million being spent in that community.
“You can extrapolate that out for our small businesses, which are the heart and soul of the local economy. Even though their payroll may be smaller, when you put them all together it turns out to be a giant engine for our local economy.
“Shopping locally is extremely important because a lot of jobs are literally on the line,” he said. “Whether it is a retail establishment or a service company, each business hires employees. They use their paychecks to pay for their homes and shop at the grocery store and department stores, which in turn creates and keeps those folks employed. It’s all connected.”
With the national unemployment rate rising above 8.5 percent, North Texas is faring better than most areas of the country with a jobless rate of 5.9 percent, Barnes said, stressing that Waxahachie isn’t immune to the global economic crisis.
“While not as bad, our unemployment rate is rising. Our businesses are reporting they are receiving 30 applicants for every one job opening, and that’s an indicator of how much things have changed in the past two years when we actually had a labor shortage just a few years ago,” he said.
Spreading the word
Waxahachie Chamber President Debra Wakeland noted there are businesses in the community that are having a difficult time, mainly due to the economic downturn.
“At the chamber, we push ‘shop locally’ all year long because it does make a difference — not only during the good times, but especially when the economy is down like it is now. It is important to shop locally. We have such a diverse selection of retailers and services businesses now, you really don’t have to leave town to shop because you can find everything you need here,” she said. “Every purchase you make locally counts. When you shop local, you’re not just helping our local businesses, you’re helping your friends and neighbors who count on those businesses for jobs and you’re helping to fund city services we all count on.”
Hollywood said the more awareness that can be raised, the faster residents can help turn their local economy around.
To recommend a local small business or story idea for this series, contact Daily Light Editor Neal White at firstname.lastname@example.org or call 469-517-1457.