Payson Ready To Give Up On Public Works Boom

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Barely a month into the 2010-11 fiscal year, Payson officials have all but given up on a publicly funded building boom.

Although both building and sales tax trends have turned modestly encouraging, Town Manager Debra Galbraith in the first preliminary financial report issued in two months concluded that outside funding for a hoped-for $31 million in outside projects appears unlikely.

The main item on the endangered funding list is $21 million in hoped-for federal funding to put a cover on the Payson Event Center arena and money to rebuild two deteriorating streets.

Rep. Ann Kirkpatrick has promised to push for funding in any federal stimulus project for the three projects on the top of Payson’s wish list. However, in recent months alarm about the rising budget deficit has overshadowed support for a second, job-producing round of federal stimulus spending. President Barack Obama this week did announce plans for a $50 billion push to fund infrastructure projects, but prospects for the initiative remain bleak prior to the November election.

Payson Mayor Kenny Evans has speculated that Kirkpatrick’s push for the local projects may get a boost if House congressional leaders decide to do something concrete to boost the freshman representative’s chances against a strong challenge from Republican Paul Gosar, a Flagstaff dentist.

However, in the just-issued report on the town’s financial status, Galbraith has already concluded that the town won’t receive the possible $21 million in funding, which state law required the town to include in its budget just in case.

Galbraith said virtually every major capital improvement project in the budget also remains uncertain — with the exception of the already-under way construction of a new, $1.1 million third fire station.

Projects on the “status unknown” list include $800,000 in safety improvements at the Payson Airport; $900,000 to rebuild Bonita Street; $6.2 million to put in sewers and water lines in the Montezuma Castle Improvement District; and $1.8 million in improvements to the town’s water system.

On paper, including all the projects on the town’s wish list, more than doubled total town spending. However, if the town doesn’t get the assorted state and federal grants, it will simply not spend the money.

The figures provided only a murky glimpse of economic trends, since the state hasn’t reported sales tax figures for July or August. However, the figures showed a big increase in local sales tax collections for April, May and June — the last month for which reliable figures have been released.

In April, sales tax collections bottomed out for the year at less than $500,000, which may have partially reflected a quirk in state figures. In June, local sales tax collections had risen to about $700,000 — which perhaps also reflected extra state fiscal-year-end payments. State shared sales tax — collected statewide then doled out based on population — registered a roughly 2 percent decline from the previous year.

Despite the encouraging sales tax trend, most other revenue sources continue to struggle. For instance, the town in August collected $40,000 less income tax from the state based on population than the year before — a hefty, 16 percent drop. But typically it takes the state about two years to collect the income tax then redistributed it to cities and towns. As a result, income tax collections remained high early in the recession but will also lag two years behind the end of the recession.

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