Spending cuts and smaller drops in tax collections have gotten budget-battered Payson one month closer to breaking even for the year, according to February budget figures released this week.
Although sales tax collections have declined 8 percent from last year, Payson is beating the statewide average in the midst of a sharp economic downturn.
Payson sales tax collections have come in about $334,000 behind the same time last year. However, state shared sales tax doled out on a per capita basis dropped 11 percent from last year.
The sales tax figures suggest that Payson has suffered only about two-thirds as steep a sales tax drop as the rest of the state.
However, only money coming in from income taxes has risen so far in the current fiscal year, with significant declines in sales taxes, vehicle license fees and building permits.
Fortunately, spending cuts have sharply reduced the projected deficit. The town council in December imposed layoffs and other budget restrictions to avert the projected shortfall.
Those budget cuts saved the town $222,300 in February alone.
Projections that once anticipated a $700,000 deficit in June now project a wafer thin $300,000 surplus by the time the fiscal year ends.
Still, the picture remains “bleak” for the budget year starting in June, wrote Payson Town Manager Debra Galbraith in the executive summary of the 24-page report she now issues each month to the council.
Galbraith said State Treasurer Dean Martin, in a budget briefing held in Payson, predicted that state shared revenue and gas tax money will drop an additional 10 to 15 percent next year, on top of this year’s steep declines in both categories.
Galbraith said sales tax de-clines have flattened out, relieving concerns caused by steep declines in November and December.
“Despite the economic downturn,” she wrote of the sale tax numbers, “we have received only $50,000 less this February compared to last February.
While that is still very significant, hopefully it will continue bringing our major revenue source into a more positive trend as the rest of the year progresses. As we begin to have more events in the upcoming months, this revenue source may begin to hold its own.”
About half the money the town spends doesn’t show up in the general fund budget, but comes from various separate funds. For instance, the water department spends about $3 million annually, but covers all those costs by charges to water users.
The town also started the fiscal year with $4.7 million saved up from water impact fees imposed on new development to help pay for the estimated $30-million cost of building a pipeline to deliver water from the Blue Ridge Reservoir.
The town this year spent $2.2 million from that fund to finalize its agreement with the Salt River Project and begin repairs on the pumps and pipes for the existing section of pipe up on the Rim.
Fiscal year total as of Feb. 29 compared to same period in last year
Local sales tax: $3.9 million — down $334,192
State revenue sharing: $1.6 million — up $91,000
State shared sales tax: $747,000 — down $89,000
Vehicle license tax: $556,626 — down $36,000
Building permits: $122,370 — down $52,200
Plan review fees: $53,600 — down $40,700
HURF (gas tax): $830,790 — down $148,000
Payson sales taxes
Cumulative fiscal year sales tax collections in January 2008 vs. January 2009
Com./utilities: $430,000 - 1%
Construction: $635,000 - 2%
Manufacture: $098,000 - 22%
Retail: $2,144,000 - 5%
Real Estate/Rent: $0215,000 - 12%
Restaurant: $0363,000 - 7%
Accommodations: $0175,000 - 17%
Entertainment: $0033,000 - 45%
Revised budgets by department
Planning: $ 808,000
Services: $ 798,000
IT: $ 553,000
Attorney; $ 501,000
Finance: $ 425,000
Clerk: $ 274,200
Manager: $ 229,500
Streets: $ 215,000
Court: $ 212,000
Council: $ 117,500
Tourism: $ 109,000
HR: $ 92,000