Tax Revenue Declines, But Shows Signs Of Rebound

Retail sales slide, but real estate shows signs of life in sales tax report


Payson got a half a glass of economic news with the release of March sales tax figures — down about 8 percent from last year as the economy began its slide into recession.

The region’s economic glass is hall full — or half empty — depending on your viewpoint.

Pessimists will note the recession continues, with sales consistently below last year. Retail sales figures dropped by 17 percent between the February report and the March report — which actually reflect sales made between one and two months earlier.

But glass-half-full types will note the sales figures have remained 8-10 percent below last year’s tallies in most categories consistently since November — which means the downturn hasn’t deepened.

Moreover, the battered real estate sector, which led the decline at the start of the recession, now shows signs of life in the March report, with tax receipts rising from $24,000 in the February report to $46,000 in the March report.

Town Manager Debra Galbraith, who no sooner got the job last year than she had to lay off employees, cancel projects and cut town spending by 26 percent, hopes the figures mean the Rim Country has nearly gotten through its own Donner Party winter.

“I think we’re doing better than we could be,” she said cautiously of town revenue sources — almost all down from last year’s totals overall, but less than December projections had suggested.

“Overall, we’re down 13 percent from where we should have been at the end of March — with three months still to go.”

Fortunately, we’ve made it through to the busy spring and summer months — with major events planned for most upcoming weekends.

Normally, local sales tax receipts average $400,000 to $500,000 in the winter months, but rise to an average of $600,000 to $700,000 in the summer months. Moreover, the town typically gets a double tax payment from the state in June, which bodes well for ending the year in the black.

Tourism Director Cameron Davis said that a Civil War re-enactment and a national bass championship drew big crowds for the last two weekends — with a car show, the revived Sawdust Festival and the Rodeo still ahead.

He said that, in the past few weeks, hotels have reported renting an average of 65 to 75 percent of their rooms.

Unfortunately, the sales tax figures still look bad for hotels — based mostly on figures dating back to January and February. Sales taxes for “accommodations” have remained stuck at about $15,000 for the past four monthly reports compared to $25,000 to $33,000 for the four months before that.

Still, Galbraith found some glints of hope in the lumps of economic coal in the town’s budget stocking.

“I think things are starting to pick up — although it’s very, very slow. But I hope that we’ve had the worst and we may have to maintain at this level for a couple of months — but then we’ll pick up again.”

She said department cutbacks and some shuffling of existing and newly discovered funds should produce a small, year-end surplus, despite the drop in most revenue sources.


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