Payson retail sales bounced back in January, offering beleaguered town officials hope that the economic downturn may have finally bottomed out in the Rim Country.
After steep drops in November and December that prompted furloughs and budget cuts, sales in Payson clawed back nearly to last year’s level.
The town’s $14 million general fund still has a $579,000 shortfall that could eat up most of a projected $1 million loan from the water department, but the budget hole at least stopped getting deeper in January.
“I would say I’m guardedly optimistic,” said Town Manager Debra Galbraith. “I really want to be, but it’s one of those things where if you say it, you’re afraid it won’t happen.”
In December, a surprising plunge in tax receipts prompted the town council to approve two-day-a-month furloughs for all town staff — which amounted to a 12.5 percent pay cut.
The furloughs hit police and fire especially hard, since those departments still often used overtime pay. The curtailment of overtime and the furloughs amounted to more like a 15 percent cut for most officers and firefighters. During many shifts in the past month, the town has operated with one less officer on the street and one less firefighter on each of the two trucks.
In previous cuts, the town had canceled almost all capital improvements, routine street maintenance, new hires, raises and most overtime.
The January numbers offer hope the town can limp through the second half of the fiscal year without additional, significant cuts — but remain bleak enough to ensure the town will leave the furloughs in place until June, said Galbraith.
At the present rate, sales taxes will end up about 9 percent below last year, which was 9 percent below the year before.
December, January and February are traditionally bad months for retail sales in a town that depends heavily on an influx of summer visitors. Normally, revenues don’t start to rise significantly until April.
In November, local sales taxes lagged about $130,000 behind the year before. In December, the gap remained wide — about $110,000. However, the January numbers showed the $414,000 in local sales tax nearly matched the same month last year — $441,000.
“To me, that’s very hopeful —that we’re so close to last year. Granted, last year wasn’t a banner year, but if we can get to the point where we’re at least maintaining, that’s better than continually going down,” said Galbraith.
Most revenue sources came in just slightly below last year, including vehicle license taxes coming mostly from new car sales, gas-tax HURF funding for roads, state sales taxes distributed based on population, building permits and plan fees.
Still, building permit revenue remained at awful levels — as they were most of last year. Town officials say they’ve processed only about 30 permits for new houses all year.
During the boom years, before 2006, the town approved an average of 250 new homes annually.
Town spending has dropped even faster than the revenues, due to the furloughs, overtime freeze and a smaller spending cuts.
Those cuts should keep department-by-department spending well below adopted budget levels, helping the town eke through until the end of the fiscal year in June.
“We’ve had three paychecks with the furloughs and so far have saved $119,000,” Galbraith said.
The general fund budget includes $10 million for personnel and $3.2 million for operating costs.
So far, although 58 percent of the fiscal year has passed, the town has spent only 46 percent of the general fund budget.
Police and fire alone account for nearly $10 million of the general fund.
The $6 million water department has its own fund, financed entirely by payments on water bills.