Sales Still Bumping Along The Bottom

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Rim Country’s recovery continues to shimmer down the road just out of reach, like the illusion of a puddle on a Valley highway.

May sales in Payson declined slightly from last year, according to the town’s financial tracking report.

By contrast, statewide sales tax collections actually increased — indicating Rim Country continues to lag behind the big, urban counties when it comes to recovering from the recession.

Sales tax provides nearly 60 percent of the town’s operating budget. Unfortunately, almost every other revenue source has also declined modestly from last year. The declines include the town’s share of the state income tax and vehicle license taxes.

People waiting for any sign of recovery that would generate local jobs or arrest the slide in property values could find little good cheer in the May report, the first clue to the prospects for the crucial summer travel season.

Town officials say the economy has sputtered along as the tourist season takes hold, although confusion about forest closures and high country fires may have scared off some visitors in recent weeks.

Most officials predicted a busy July 4 weekend and guessed that the fireworks show might lure 20,000 people to Green Valley Park, since most other high country communities have canceled their planned shows.

Payson Tourism Director Cameron Davis said that traffic on the town’s tourism Web site has risen about one-third from last year to an average of about 1,200 per day.

“I really don’t think the fires have hurt us too much,” said Davis. “In fact, I think they’ve helped us. As it gets hotter and hotter in the Valley, people are coming this way, since we’re one of the few mountain communities even open.” Still, Davis conceded that the lackluster sales tax reports show that the economy hasn’t managed to climb out of the hole into which it fell two years ago.

“We’re still kind of stuck in this ‘recovering economy’ mode. I know we’re all ready to get out of it, but I think it’s going to go on a while longer.”

Many hope that some breakthrough in the long-suffering effort to win a firm commitment from Arizona State University to build a campus here will finally spark a convincing recovery locally. Backers say they expect to break ground on the first phase of the 6,000-student campus in December, but ASU and Payson have yet to sign a binding agreement.

However on a hopeful note, the dismal building sector showed a flicker of life. Money from building permits rose $2,700 from last year, but remained at just $108,000 for the year — a pathetic fraction of the money that flowed in when the building department was processing permits for nearly 250 homes annually.

The town’s plan review fee revenues also rose slightly — up $1,400 from last year to a still-modest total of $48,000 for the year.

Money from the gas-tax-based Highway Users Revenue Fund (HURF) also rose slightly — up $16,000 to $1.1 million. Even that category remains anemic compared to years past, since the Legislature gobbled up a lot of gas tax money that used to go to cities and towns to fund the Department of Public Safety (DPS).

Put all that together and Payson has collected $8.2 million in taxes in the current fiscal year, which is about $500,000 less than the council expected when it adopted the budget for 2010-11 a year ago.

The budget tracking report included a breakdown of the sales taxes by category, but those figures stem from sales in April, not May.

The breakdown of sales by category in April shows a heartening improvement for hotels — a striking 43 percent jump from last year to a total of $23,000. Arts and entertainment rose an impressive 63 percent, but remained a relative footnote to the overall sales picture at $5,700. Spending in restaurants and bars declined slightly, with the taxes collected declining about 7 percent to $38,000.

Construction also jumped, registering an 11 percent jump to $20,000.

However, despite the glimmers of light, the overall April sales tax collections declined a discouraging 9 percent.

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