Financial Report Shows Rim Country Economy Mending

Building permit fees surge for first time since 2008

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Most of Rim Country’s economic indicators brightened in March, along with the state’s jobs picture.

Sales tax and vehicle license tax figures rose modestly and building permit fees jumped, the latest sign that the region’s economy is slowly recovering from the devastation of the housing collapse.

Meanwhile, the state’s jobless rate dropped to 8.6 percent as the economy added 19,000 non-farm jobs, the strongest gain in the March figures since 2006. That gain built on the addition of 28,000 jobs statewide in February.

The tourism sector led the recovery in March, but even the long-sickly housing sector participated — with the addition of 3,800 jobs statewide.

Gov. Jan Brewer hailed the decline in the state unemployment rate as evidence that the state’s economy is “finally on the right track.”

The brightening jobs picture could help break the budget impasse between the Republican governor and the solidly Republican Legislature. Gov. Brewer has proposed a budget with a roughly $500 million surplus, that minimizes additional cuts to schools. Legislative leaders have so far insisted on an additional $500 million in reserves in anticipation of the expiration of a one-cent sales tax boost approved by the voters in the depths of the downturn.

The Payson Unified School District recently released a budget that includes a roughly $650,000 deficit, which would likely result in a fresh round of layoffs.

Payson town officials are also wrestling with projections of state take-backs that could result in a big financial hit and layoffs on that front as well.

The persistent state budget cuts despite the mending economy may overshadow the slow recovery of the local economy evident in the March financial report from Payson.

With three-quarters of the fiscal year complete, Payson has so far collected $3.6 million in local sales taxes — up about $25,554 from the same period last year.

Payson is also running ahead of last year when it comes to sales tax money collected by the state and distributed on a per-capita basis. So far, Payson has received $781,000 in state-shared sales tax, about $15,000 more than last year. Those figures suggest that Payson is still recovering more slowly than Maricopa and Pima counties, which account for most of the sales tax activity in the state.

Payson also collected an extra $25,000 in vehicle license taxes from car sales, boosting the total so far in the fiscal year to $581,000.

That sizeable source of revenue accounts for why so many towns work so hard to lure auto dealerships.

Sales tax remains a vital source of revenue for Payson, providing much of the money the town uses to provide police and fire services — since Payson has only a minimal property tax.

Perhaps the most encouraging numbers in the monthly report remain the surge in building permit fees — almost non-existent since 2008. For the first three quarters of the fiscal year, building permit fees totaled $118,000 — up a whopping $38,000 from the same period a year earlier. Plan review fees rose to $42,000.

On the other hand, most of the money provided by the state on which the town usually relies continued to dwindle.

For instance, state-shared income tax payments dropped $158,000 to $968,000. That’s because it takes the state several years to collect, bundle and then share income tax revenues with cities and towns. The decline now reflects the plunge in state income tax receipts two years ago.

Almost every town department remains well under budget for the year, a reflection of the town’s ongoing struggle to bring in enough money.

The big reductions have come in police and fire, which together account for the bulk of the town’s general fund spending.

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