PICAYUNE — With American workers trying to climb out of the worst recession in the nation’s history, some local merchants are not expecting as good a Christmas shopping season this year as compared to last year when Americans first began feeling the business slowdown.

However, individual comments vary. Some retailers say they are holding their own.

Justin Matthews, manager of Wal-Mart, which does more than $100 million in sales annually here, said that “it seems” that retail sales are slower right now although he is hoping sales will still pick up between now and Christmas.

Wal-Mart’s parking lot, however, was packed on the traditional Black Friday as some Christmas shoppers here began their shopping in hopes of finding some great bargains which retailers highlight the day after Thanksgiving to attract customers.

The first Friday after Thanksgiving is considered the heaviest shopping day of the year.

“We had a good crowd early this morning (Friday), but it has thinned out some,” said Matthews. Wal-Mart is open 24 hours a day, seven days a week.

“We really won’t know how Christmas sales are until it is over, but for the whole year sales are definitely down some,” he said.

Jesse James, manager of Sears, 3300 U.S. Highway 11 North, said on Friday that “we have had a pretty strong start, about what we expected, but it is not as strong as last year.”

Sears is open 9 to 7 Monday through Friday, 9 to 6 on Saturday and 11 to 4 on Sunday.

On Main Street in downtown, Debbie Galiano, owner of Galiano’s, an antique and gift shop at 101 Main Street, says that business was good on Friday but she said she is not sure how it will go for the rest of the holidays.

“Definitely, for the year business is down, but we are hoping for a good Christmas holiday response. It is scary the way the economy is right now. Everybody is hoping for a good holiday response to make up for the year.”

Galiano’s sells antiques, gifts and recently installed a baby boutique selection, which is doing very well, said Galiano. Galiano’s is open from 10 a.m. to 5:30 p.m. Monday through Saturday.

Melinda Shaw and her husband Brad own and run Melinda’s, a gift shop at 109 West Canal Street, and she said on Friday that business was good.

“We have a line at the register right now, so that is good. People are in a good mood,” she said, also pointing out that on Dec. 13 the store will celebrate its 12th year in business in Picayune.

“We have a wonderful group of customers who have supported us, and we appreciate that. We are truly blessed,” she added.

Asked to describe her overall trade for the year, she replied, “Steady.”

Melinda’s has special holiday hours, 8 a.m. to 5 p.m. on Saturday, noon to 4 p.m. on Sunday, and 8 a.m. to 6 p.m. Monday through Friday.

Although some businesses might be holding their own, city sales tax collections show that overall business is down here when compared with previous years since Katrina. However, business is way up when compared with pre-Katrina retail sales.

The downward trend shows when you track state sales tax collections here, which reflects the volume of retail sales.

However, individual businesses’ sales will vary.

The State Tax Commission collects retail sales taxes in each of the state’s municipalities and then reimburses a portion of that back to the cities.

By tracking those tax collections, he rise and fall of retail sales can be tracked in the municipality in which they are collected.

In Picayune’s case, half the city budget is based on sales tax reimbursements from the state. If retail sales here fall, that not only reflects a downturn and impact on merchants’ revenues, but also has a direct impact on Picayune and Poplarville’s city budgets and the services they offer.

That’s why “number crunchers” in Picayune and Poplarville follow closely the ups and downs of city retail sales, and also why officials are always encouraging people to shop locally, because when a resident shops somewhere else, that location receives the taxes there rather than one of the two local municipalities.

Sales taxes are not rebated in those portions of the county outside the municipalities.

Sales taxes reimbursed to the Picayune peaked here shortly after Katrina because of the influx of new residents, storm refugees and the infusion of Katrina recovery funds and spending on cleanup, pumping money into the local economy.

In February 2006, $592,614.92, reflecting December 2005 sales tax collections, was rebated to Picayune. That is the highest one month rebate in the city’s history.

That reflected the impact of Katrina reconstruction and cleanup spending and the increase in population from Katrina refugees who flocked to Pearl River County after the storm.

The tax settlement runs two months behind, so that February reimbursement represents the December 2005 Christmas sales, when the taxes were actually collected on retail sales.

Retail sales here peaked in the Christmas holidays after Katrina, but have gradually declined in the three-to-four years since the storm.

Although the storm was bad news for residents and refugees, it was a boom economically for the city. City sales tax reimbursements and retail sales have remained considerably higher since the storm compared to pre-Katrina collections, reflecting that a lot of the refugees remained here and bought homes.

In recent months, the rebates have hovered around $329,000 a month. Expecting the downturn, Picayune city officials during budget discussions in August and September budgeted for 2010 an expected $345,000 monthly to be received from sales tax rebates.

City officials say they are worried that sales tax rebates are running below what they budgeted, but they are hoping that a really good Christmas sales season will pull up the average. They won’t know until February, however, what happened in December.

The monthly average by year for sales tax rebates from a report compiled by City Clerk Priscilla Daniel and given to the council show:

2003-04, monthly average $261,208; 2004-05, $286,009; 2005-06, $467,431; 2006-07, $416,189; 2007-08, $394,672; and 2008-09, $368,243.

From the 20004-’05 to 2005-’06, sales tax rebates to Picayune jumped close to 40 percent in one fiscal year, the direct result of Katrina. That means that retail sales also jumped about that percentage, too.

The latest figures for October and November show a monthly average of $329,853, showing that retail sales here are slowly falling.

The November check from the state shows the collections for two months earlier. In other words, the $314,874.80 check this November was for taxes collected in September.

The sales tax rebates from the state make up half the City of Picayune’s budget, which runs between $9 million and $10 million annually.

However, the figures show that sales tax rebates to Picayune, which reflect retail sales in Picayune, peaked several months after Katrina during Christmas and have gradually fallen from a high of almost $600,000 in one month shortly after the storm.