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  • Crystal Justice

#ShopLocal-Tell Me Why?

You have heard me say #ShopLocal for years now, but why is it so important? Today I would like to consider how a city government funds its services for the community. Simply put there is a "bank account" where several tax revenue streams are "deposited." Sales tax is part of that revenue mix and consists of two portions: 7% that goes to the State of Tennessee and the rest is returned to the city where the purchase was made. Therefore, when you go grocery shopping at Mike's Value Plus, which is located within the city limits of Red Boiling Springs, TN, the state receives 7% and then RBS receives the rest to support the community services. However, if you go shopping in Gallatin, TN that tax revenue stays there to support their community.

Another part of the revenue mix is the local property tax rate, which is set through the budgeting process. First the council will host budgeting meetings to decide what the city will fund and then create an annual budget. Next the council will review all projected revenue for the coming year. If there is not enough revenue, the council will have to make the tough decision to raise property taxes or cut services. On the other hand, an increase in sales tax can help ensure there is plenty of funding for community services and offsets the likelihood of a large property tax increase.

When you buy locally you are making "deposits" in your community's "bank account!" Not only by supporting small business and creating local jobs--also by increasing the amount of sales tax revenue generated for your local community government. The tax revenue generated by shopping local is what builds your community!

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