Sales Tax Dollars On The Upswing

Retail sales rise 25 percent, brightening summer prospects after a year in the doldrums

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Retail sales picked up sharply in Payson in March and April, a welcome respite from a year in which the region’s economy bumped along the muddy bottom like a hungry catfish.

The breakdown of the March figures showed a startling 25 percent jump in retail sales, the leading category. Overall for the month, sales rose 17 percent.

Hotels and motels accounted for one of the largest percentage gains in March figures, with a 54 percent jump to $20,000.

The big gains in March and April countered declines in previous months, leaving the town just barely ahead for the whole June-April period. The June-April $22,000 uptick in state-shared sales tax and the $29,000 rise in local sales tax represented only a tiny improvement over the same period last year.

Mind you, the tiny increases in year-to-date sales tax didn’t compensate for the $408,000 drop in state-shared income tax, the $43,000 drop in vehicle license fees and the $14,000 drop in state-shared gas taxes.

However, the much sharper rise in the last two months gave budget officials hope heading into the summer season.

Still, the town’s finances remain only precariously balanced overall, with big anticipated cuts in state-shared revenue projected for the upcoming fiscal year that starts in July.

Various town departments have spent about 14 percent less than the council budgeted last June to this point in the year. The town’s general fund has so far spent $8.9 million out of the $10.4 million budgeted.

Every single department remains under budget.

That includes the police department where the $4.3 million budget accounts for 35 percent of the general fund. So far this year, the police department is about $300,000 under budget.

However, the parks and recreation department remains the champion general fund budget cutter — down by $61,000 from the adopted budget, which works out to about 29 percent. Bear in mind, even the adopted budget was about half the pre-recession total.

The water department, which operates out of its own fund instead of the general fund, has a $3.6 million operating budget, but remains 52 percent below the year-to-date figure mostly as a result of various projects not yet started.

On the other hand, the water department has spent most of the impact fee money it accumulated during the boom times to build the Blue Ridge pipeline. The reserve fund for the pipeline has dropped from more than $10 million to about $2 million. That money went mostly to helping the Salt River Project repair and upgrade the existing pipeline on top of the Rim, buying pipe and completing environmental and engineering studies of the pipeline route.

Mostly, the March and April figures provided a glimpse of the health of the Rim Country economy, after nearly two years of stalled growth.

On the encouraging side, retail sales rose to $223,000 in March, communications and utilities jumped 15 percent to $82,000, services jumped by a third to $15,000, arts and entertainment rose 160 percent to $8,500 and even construction rose 18 percent to $25,258. That’s only a fraction of the pre-recession activity for construction, but still a huge improvement on the trend this time last year.

Only a few sectors declined in the March tally, including real estate, which dropped 8 percent to $34,000 and finance, which also dropped 8 percent to $23,000.

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