Pleasant surprise: May sales tax numbers better than expected

Du Quoin's sales tax receipts continued to hold steady in May, despite it being the second full month of business shutdown due to the COVID-19 pandemic, and the first month where sales weren't artificially supported by stimulus payments from the federal government.

Du Quoin got its May 2020 sales tax numbers this week, which showed that among the big three - municipal sales taxes, home rule sales taxes and the Business District taxes - receipts were up by more than 10% over May 2019. The city collected $269,624 in May compared with 244,362 a year ago.

"It's surprising to me that we're in the middle of a pandemic and our numbers in May are higher than what they were last year," said Mayor Guy Alongi.

There is a three-month lag before a municipality gets its sales tax numbers. Last month, April's numbers also showed a surprising upswing from 2019, despite April being the first full month of pandemic shutdown.

Last month, Alongi explained the unexpected boost in sales taxes as being a direct benefit of the stimulus checks.

Now, he says, Du Quoin's continued good fortune is directly tied to one of the city's two biggest sales tax producers - the Prysmian Group, formerly General Cable.

"General Cable is driving the economic engine in Du Quoin," the mayor said, adding neither Carbondale, Marion or Herrin are as fortunate. As General Cable the Du Quoin plant made power distribution cable for more than 50 years, until in 2018, it was acquired by the #1 of power cable, the Prysmian Group, based in Italy.

Alongi said business for Du Quoin's Prysmian plant has continued to be strong - including winning a contract to provide cable for the Mexican border wall in Arizona. He said Prysmian provides more than 35% of Du Quoin's sales tax collected each year, and has an employee base of more than 200 jobs.

"They are shipping wire all over the world. People should be very grateful we have General Cable," the mayor added.

Still, the mayor said he won't let two months of surprisingly good tax receipts change his general conservative fiscal outlook.

"I think we can have a sigh of relief, but am I going to go on a spending spree? Hell, no," Alongi said. "You never know what is going to happen."

Earlier in the summer, Alongi had predicted Du Quoin could lose more than $500,000 in sales taxes this year alone from the business shutdown. He worried that the city, already lean on personnel, might even have to furlough or lay off employees, and he asked his department heads to draw up various budget scenarios that would cut their departments by 15, 20 and 25%.

With two months of better than expected numbers, nobody is talking about laying people off anymore. But the contract for lobbying that got canceled a few months ago is staying canceled for the time being, Alongi said.

"I'm not going to let two months change my course of action," he added. "We'll keep plugging along through the end of the year."