2005 Taxable Sales: Polk County Judith I. Stallmann University of Missouri Extension Professor of Agricultural Economics, Rural Sociology and Truman School of Public Affairs Bolivar Leadership January 23, 2007

Retail Sales □ Provide employment in the county □ Is not high wage, generally □ Provide sales tax revenues to the cities and to the county □ Sales tax revenues come from other sectors also □ Quality of life

Retail Sales Are a function of: □ Population—consumer base □ Local per capita income □ Local retail availability so that county residents can shop locally □ Attraction of consumers from outside the county

Retail sales analysis □ Compare actual retail sales to potential retail sales □ Shows how much of the potential sales are actually being captured locally

Potential Retail Sales (State per capita retail sales X county % of state per capita income X county population) State per capita retail sales is adjusted by County per capita income as a % of state per capita income And multiplied by the county population

Retail Pull Factor _ Actual retail sales_ Potential retail sales Multiplying by 100 gives the percentage of the potential that is spent locally

Retail sales tax revenues Actual retail sales - potential retail sales = - -$48,013,920 □ With a 1% local option tax this is $480,139 in lower sales tax revenues

Know the Data □ Based on taxable sales □ Food stores □ State taxes □ Local option taxes □ Other sales not taxable □ Data disclosure problems with 6 firms or fewer □ New way of classifying data

Retail sales: Polk vs. Missouri □ Polk population growth more rapid □ Per capita income growth is slower □ Economies of scale in retail--some types of stores will locate only in cities above a certain size □ Commuting outside the county can lower retail sales □ average journey to work is 25 minutes

Changing Retail Environment □ Destination shopping □ Internet and catalog sales □ Increasing percentage of income spent on untaxed services as compared with retail sales □ Retail earnings are falling □ Perhaps more part-time workers □ Is a sector that is not growing as fast as the economy in general

U.S. Retail and E-retail (Millions of dollars)2004 % change Total Retail Trade 3,477, Mail order (not e-commerce) 94, E-commerce 70, Electronic shopping and mail order houses 52, E-commerce other businesses 18, Source: U.S. Census Bureau, Annual Retail Trade 2004

Total E-commerce ($ millions) Total e-commerce 1,577,860 % of total Manufacturing shipments 996, Wholesale451,57429 Retail70, Selected Services59,2063.8

Numbers don’t tell all □ Local information is important □ Is there shifting of purchases between retail sectors? □ Food stores to department stores or general merchandise stores. □ Drugs to food stores and general merchandise □ Are local spending patterns different from the state in some important way?

Data disclosure

The $64,000 Question □ Why do people in the county shop outside of the county? □ Why do firms not locate in the county □ May be that the economics are such that it is not profitable to locate in the county

Even better questions □ Why are people shopping in the county? Build on what works. □ Those who live in the county □ Those who do not live in the county □ Can sectors with low-sales be indicators of potential new businesses?

Thank-you for the invitation

The following slides provide additional information about surrounding counties. This likely will not be directly covered but is provided as additional information for those who are interested.