Both Starkville and Columbus missed their projected sales tax budgets for this fiscal year by less than $50,000.
Starkville finished FY 2026 with about $10.31 million in general sales tax collections, falling about $35,000 short of its $10.35 million projected budget. The city saw less than 1% growth in general sales tax collections for this fiscal year.
Meanwhile, Columbus’ collection grew by 3.07% over that same time frame, but the city still fell just short of its $12 million projection by about $24,000.
Sales tax diversions run on a three-month cycle. Taxes are collected by retailers in the first month, sent to the Mississippi Department of Revenue the next and then disbursed to cities and counties the third. Therefore, September reported collections reflect sales from July.
Columbus collected $11,976,012.94 in sales tax diversion this fiscal year, up 3.07% from last year’s collections of $11,619,514.38. This still left the city $23,987.06 short of its $12 million projected sales tax budget.
Despite falling just shy of this year’s sales tax goal, the city is projecting about $12.5 million in sales tax collections for FY 2027, an expected increase of about 4.37%.
Ward 6 Councilman Jason Spears, who chairs the city’s finance committee, defended the higher projection to city council on Tuesday. He said that jump accounts for continued consumption in the city with increased prices.
The city collected $988,288.13 in sales tax diversions this month, down 6.95% from August ($1,062,110.09). This also marks a 5.86% increase from last September’s collections of $933,556.
Collections of the city’s restaurant and lounge tax outpaced FY 2025 collections by just more than 10%, while the city’s hotel/motel tax fell by 1.19%.
The city collected $2,882,886.63 in restaurant and lounge tax diversions this year, up 10.16% compared to FY 2025 collections of $2,617,022.92.
This month, the restaurant and lounge tax brought in $250,520.84, an 8.79% increase compared to last month’s collections of $230,271.67. This marks a 12.03% increase from September 2025 collections of $223,625.
The city’s hotel/motel tax brought in $464,380.95 this fiscal year, a 1.19% decrease from FY 2025 collections of $469,975.51.
This month, the hotel/motel tax brought in $32,672.80, a 14.88% increase from last month ($28,442.03). This marks a 0.65% increase from September 2025 collections of $32,461.
Starkville brought in $10,314,447 from general sales tax diversions this fiscal year, up by only 0.98% from last year ($10,214,504). The city missed its projected sales tax budget of $10.35 million by about $35,523.
Budget Chair and Ward 2 Alderwoman Sandra Sistrunk said the city had a hard time projecting this year’s budget due to audit adjustments made by the state Department of Revenue last year that skewed collections. The adjustment was reflected in June 2025 collections, when the city reported more than $1.1 million in sales tax diversions.
Sistrunk told The Dispatch the city is still not sure how much additional revenue was generated in that month’s collection due to the audit adjustment, but estimated it was between $200,000 and $300,000.
An audit adjustment happens when MDOR corrects a taxpayer’s return after reviewing its records.
Going into FY 2027, the city does not need to account for that adjustment and is projecting $10,608,750 from revenue from general sales tax diversions, a 2.85% increase. Sistrunk believes the projected growth estimate is fair because it is close to what growth would have been this year without the adjustment last year.
“We look at our overall trajectory (and) we made a best guess of what we thought the anomaly was, and we just settled on that number based on trends we’re seeing,” Sistrunk told The Dispatch. “Are we right? I can maybe tell you this time next year.”
In previous years, Starkville has reliably predicted at least 3% in growth from general sales tax collections, but Sistrunk said sales tax growth is slowing in the city.
“I don’t have an explanation for you there, in terms of whether that is a change in consumer behavior, and they’re just buying more stuff off the internet,” Sistrunk said. “… Or if it is a broader reflection of the economy and people don’t have more money to spend, they’ve still just got the same amount of money to spend, so the growth is not there.”
The city collected $794,007 in sales tax diversions this month, down 4.09% from August collections of $827,902. This also marks a 15.92% increase from September 2025 collections of $684,935.
End-of-fiscal-year collections of the city’s restaurant sales tax diversions and its tourism sales tax outpaced FY 2025 collections by just more than 4%.
Starkville generated $3,307,675 in restaurant sales tax diversions this fiscal year, up 4.36% from FY 2025 collections of $3,169,369.
The city brought in $236,042 from restaurant sales tax diversion this month, a 1.89% decrease from last month’s collections ($240,587). This marks a 2.99% increase from last September’s collections of $229,179.
Starkville’s tourism tax generated $1,901,313 this fiscal year, up 4.15% from FY 2025 collections (1,825,550).
This month, the city collected $136,076, down 3.46% from August ($140,947). Collections are up by 2.92% from this time last year ($132,209).
West Point began its fiscal year July 1.
Three months in, the city has collected $791,457.67 from sales tax diversions, up 7.98% from this time last year ($732,972.55). The city is on pace to meet its $3.1 million projected budget.
West Point generated $233,027.11 from sales tax diversions this month, falling by 18.68% from last month’s collections of $286,572.32. This represents a 1.06% increase from September 2025 collections ($230,592.32).
Year-to-date, the city’s tourism tax has brought in $101,223, down 4.9% from collections this time last year ($106,437.44).
The city brought in $32,745 from its tourism tax this month, a 3.98% increase from August collections of $31,491. This marks a 7.19% drop in collections from last September ($35,282.10)