“I think we are,” said Sweetwater resident JoAnn
Scharschu. “We are heading for it deeper.”
Like many consumers locally and nationally, she pointed
to high gas and grocery prices.
“It’s hard,” Scharschu said, while shopping at a local
grocery store.

As consumers worry and try to curb their spending to only
buying the necessities, that shrinks the sales tax revenue
state and local governments rely on.
According to the Tennessee Department of Revenue, local
option sales tax revenue growth for the latest month
figured was virtually flat.

The county’s March $638,371 figure in net local option
sales tax collections was up only $690 over the same
month last year and the sales tax figures were colleced
before the most recent escalation in the price of gasoline,
which is now around $3.56 locally for a gallon of regular
unleaded.

The county budget is usually figured on 3 percent growth
on sales tax collections, county Finance Director Brian
Tallent said.
He said the last several months overall have seen little if
any sales tax revenue growth.

“I know there are a lot of businesses that are struggling
with gas prices,” Tallent said.
Gov. Phil Bredesen last week announced plans to cut more
than 2,000 state jobs in the face of a revenue shortfall
approaching $500 million.

While economists and others watch prices rise, they will
begin to look more closely at unemployment rates to see
if the sluggish economy is costing jobs not only at the
government level but private industry as well.

Tennessee’s seasonally adjusted unemployment rate for
March 2008 was at 5.6 percent, 0.3 percent higher than
the February rate of 5.3 percent. The United States
unemployment rate for the month of March was 5.1
percent.

Monroe County came in with a 7.7 percent jobless rate for
the latest month figured, compared to at 5.8 percent
unemployment rate this time a year ago.
A recent report from the University of Tennessee Center
for Business and Economic Research did not paint a rosy
picture for the economy.

“Economic conditions continue to deteriorate, raising
concerns about a potentially deeper and more prolonged
downturn,” the report said. “Rather than improving, prices
have continued to climb. The setbacks in residential
housing continue with little or no improvement in sight.
The ripple effects of the weak housing market have now
spilled across the entire economy, and prices— especially
food prices—are up sharply.”

The report, the Tennessee Business and Economic
Outlook (Spring 2008), said the economy will “teeter on
the brink of recession” and any improvement will be slow.
To view the full report, visit the Center for Business and
Economic Web site at http://cber.bus.utk.edu/ then click
on the report link under “current publications.”

tommy.millsaps@advocateanddemocrat |337-7101