Payson’s sales tax showed signs of life in January, especially in the tourism sector.
For the June to January period, local sales tax collections rose by $31,000 to about $2.9 million. Granted, that amounts to an increase of just 1 percent — but it’s way better than the same period the year before when sales fell a stunning $419,000.
The sales tax collected by the state and distributed based on population showed a similar trend. In the past seven months, that category rose by $1,500 — compared to a $78,000 decline in the same period the year before as the recession hit bottom.
The rise in sales taxes offered fresh hope that Rim Country’s economy is on the mend heading into the spring and summer travel season. Many Rim Country businesses have been clinging to the frayed ends of their ropes for the past year, waiting for the turn.
Unfortunately, other sources of town revenue showed no such hopeful trend — including the once-dominant construction sector.
Money from building permits for the June-January period were down $4,100 from the same period in the previous year — which had declined $45,000 from the year before that.
Similarly, revenue from the town’s plan review fees also dropped $4,600, on top of the $12,600 drop in 2009.
A breakdown of sales tax by category underscored the evidence of the building department figures. Sales taxes for construction stood at just $27,000, down 7 percent from the year before and down 63 percent from 2007-08. Taken together, the figures from the building department show that the recovery has yet to affect the construction sector.
Moreover, the town took a big hit in its share of shared state income tax, passed along after a two-year lag. Payson has collected $286,000 less shared income tax from the state so far this fiscal year than in the same period last year. Because of the lag between when the state collects that money and when it passes it along to cities, the income tax revenue stayed high for the first two years entering the recession — but will likely lag the recovery of the rest of the town’s revenue by a similar margin.
Still, the most recent figures helped revive hopes for a stronger spring and summer tourist season — even if construction remains weak. The most recent figures give the best sign for encouragement of any month since last October, when figures rose sharply only to be followed by a seeming, renewed slump.
The breakdown of sales tax figures by category showed strong signs of life in the tourism sector.
Sales tax revenue from hotels and accommodations jumped a 71 percent from last year. In fact, the figures for the month actually stood 31 percent higher than in 2007/08 — the only category with higher sales than three years ago.
Restaurants and bars reported a more modest 6 percent gain from last year.
However, real estate also scored a rare increase — up 9 percent from the same month a year ago — although that’s still 21 percent below three years ago.
On the other hand, overall retail sales remained 5 percent below last year and 16 percent below three years ago.
The figures suggest the Rim Country may finally be crawling out of the pit just in time for the traditional boom months of the year. Typically, Payson’s sales tax collections rise from about $400,000 monthly in March and April to about $700,000 monthly through the peak summer months.
Despite the signs of retail sales growth on the horizon, the town’s current financial picture remains tough.
On paper, the town’s general fund has shelled out $470,000 more than it has taken in so far in the current fiscal year.
However, the financial report said that the paper deficit mostly has to do with some big up-front payments the town has made, including the lease of its maintenance yard, lease of the municipal courtrooms, last fall’s chip sealing of several miles of roads in town, the town’s share of the highway roundabout and some slower-than-expected transfers from the state.
Most town departments continue to run a little behind their adopted budgets.
The police department has an annual budget of $4.3 million — 35 percent of all general fund spending. So far, the department’s actual spending puts it about 7 percent under budget. The town spends about $268 per resident on police services.
The fire department has a budget of $2.6 million annually — about 21 percent of all general fund spending. So far, the fire department is running about 2 percent over budget. The town spends roughly $1,625 per resident on the fire department.
The town still hasn’t received any word from the federal government on its application for a SAFER grant to pay the salaries of the firefighters it will need to staff its new, third fire station. The town would have to hire roughly nine firefighters to put a three-man crew on a new engine in that station on an around-the-clock basis, which could increase the cost of the department by one-third — or about $521 per resident.
Overall, the various town departments are spending 24 percent less money at this point than they budgeted. Despite those cost controls, various cash flow complications mean that on paper, the town has actually committed its whole reserve fund — and then some.
The town last year borrowed $1 million from its own water department to get through the year. This year, the bottom line includes scraping up enough money to repay that loan.
Fortunately, the town’s cash-cow water department has been holding its own this year. The water department has its own budget, separate from the general fund — with a $4.4 million budget, not counting money for the Blue Ridge pipeline.
So for the year, the water department’s revenue is running about 12 percent ahead of budget.