Payson Sales Tax Figures Still Bleak

Town lags behind state as revenues dwindle in face of threat of big state cuts


Payson’s economic purgatory just keeps dragging on and on.

February sales tax figures showed a small but telling decline from last year, which set records for awful.

Payson’s numbers in February lagged behind the rest of the state, which is showing a least some signs of recovery.

The weak sales figures in Rim Country reflect Gila County’s also dismal unemployment figures. The county’s unemployment rate in January stood at 11.5 percent, compared to a 9.5 percent both statewide and nationwide. Maricopa County’s rate stood at 8.7 percent.

Payson’s local sales tax figures for the period from June to February dropped by $34,000 from the year before. That’s especially discouraging since the 2009 figures for that same period dropped more than $500,000 from the previous year.

By contrast, the statewide sales tax distributed to the town based on population rose $8,600 in that period — compared to an $83,000 drop the year before.

Almost every source of revenue for Payson has dropped slightly this year when compared to last year’s fiscal disaster.

That’s especially bleak news in the shadow of the state budget adopted recently by the Senate. That budget would gobble up money that normally goes to cities and towns and would cost Payson an estimated $2 million, forcing a budget reduction of more than 10 percent.

Even without the state raid on town funds, the past few months have seen a gradual deterioration in Payson’s finances.

For instance, the town’s share of the state-collected income taxes has dwindled by $326,000 from last year to about $1 million.

The town’s revenue from vehicle license fees has dropped by $6,892 to $491,000.

Already shriveled revenues from building permit fees have continued to drop — down $6,000 to $75,000.

All told, the town’s general fund took in $6.7 million for the first two-thirds of the fiscal year, about $1.1 million less than the projections. That shortfall has largely swallowed up the reserve fund, with three months left to get through.

Those figures don’t include the $2.6 million in revenue for the town’s water department — but even there the collections are running about $300,000 behind projections. The town has also spent about $1.6 million out of its $10 million fund for building the Blue Ridge pipeline, mostly from the accumulation of $7,500-per-unit water impact fees back when developers were building about 300 houses a year.

Fortunately, the town’s departments have maintained a tight rein on spending. So far, the various departments have spent about $900,000 less than the budget adopted back in June authorized — although about half of that comes from fund transfers not yet made.

The police department has so far spent $2.8 million, about $200,000 under budget.

The fire department has spent $1.7 million, about $100,000 under budget.

The parks and recreation department has spent $178,000, about $61,000 under budget.

Central service, which mostly accounts for employee benefits, has spent $2.9 million, about $200,000 under budget.

Most of the other departments remain just barely under budget, although the town attorney’s office, the town manager’s office, the magistrate court and streets remain slightly over budget.

The report also offered a breakdown of sales tax figures by category — although that detailed breakdown applies to the January sales — not to the February sales.

Those figures offered a few glimmers of hope.

For instance, the crippled construction sector showed a flicker of life with an increase for the month from $18,000 to $25,000. However, that’s still far below the $90,000 for January of 2008.

Hotels also showed a sharp rise for the month from $14,000 to $21,000, a huge, 50 percent increase. That puts the January tally well ahead of even 2008’s $18,000.

Moreover, arts and entertainment rose significantly, from $2,300 to $3,200.

Most other categories slumped, although the retail trade very nearly broke even —dropping from $298,000 last year to about $290,000 this year.

The once bellwether real estate sector languished, with January sales tax revenues of $25,000, down from $27,000 and year ago and from $35,000 in 2008.

Sales in restaurants and bars followed suit with revenues of $39,000, down about $2,000 from the year before and down from $35,000 in 2008.


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