Sales Tax Flat, Jobless Rate Rises

Building increase hints at recovery, despite still-high unemployment

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Payson’s revenue from building permits has rebounded from historic lows this year, stoking hopes of a revival of the region’s once-crucial building sector.

Unfortunately, sales tax revenues remain flat and state-shared revenue for gas taxes and income taxes remains depressed — pushing the long-hoped-for recovery off for at least one more month.

The region’s unemployment rate also remains stubbornly high, rising from 9.6 percent to 10 percent in December — the most recent month for which county rates are available.

That contrasts to a marked improvement in the unemployment rate statewide in December, with the rate dropping from 8.7 percent in November to 8.5 percent in December.

That compares to an Arizona unemployment rate of 9.2 percent in December of 2010.

Nationally, the rate in December stood at 8.7 percent in December of 2011 compared to 9.4 percent a year earlier. It dropped to 8.3 percent in January, due to more than one million people leaving the work force.

In Arizona during December, figures indicate the private sector continued to add jobs while the public sector continued to decline. Professional and business services led the way with 4,000

4,000 new jobs followed by 2,500 jobs in leisure and hospitality, a key sector for Rim Country. .

However, those gains were offset by a continued decline in government jobs — dropping by 7,000 in December.

In Rim Country, the monthly budget tracking report from the town offered a snapshot of a stalled economy showing tentative signs of life.

The town issued $100,000 in building permits in the first half of the fiscal year, up by a third from the previous year. The town also collected $31,000 in plan review fees, a 17 percent increase from the previous year.

That’s still a far cry from the boom times when Payson approved 200 to 300 homes annually.

Sales remained flat, bad news since sales taxes provide the bulk of the town’s revenue. Local sales tax receipts dropped slightly from last year while state-shared sales tax revenue grew slightly — another sign that Rim Country’s economy continues to lag behind Maricopa County’s nascent recovery.

Revenue from state-shared income tax totaled $753,000, down about $123,000 or roughly 20 percent.

That reflects the plunge in income tax collections two years ago at the onset of the recession.

Overall, the town has so far collected only $6 million in revenues, compared to the projected $7.8 million, but a lot of the shortfall represents grants the town hoped for but never received.

On paper, the independent fund for the water department looks deep in the hole. But that’s mostly because the town never received a hoped-for $1.8 million grant intended to build a water reclamation project on the Tonto Apache Reservation and about $3 million not yet received from the federal government for the C.C. Cragin pipeline project.

Virtually every town department has spent significantly less than the budget called for back in June, in keeping with the lower-than-expected revenues.

The town’s $14 million general fund pays for everything except the water department and various special districts.

The general fund has so far spent $576,000 more than it has taken in, reducing the projected year-end balance to a worrisome $286,000.

That shortfall comes mostly as a result of weak revenues, since the town’s departments have so far spent about 20 percent less than they budgeted back in June.

For instance, the police department has spent $2.3 million, about $500,000 less than it budgeted. The fire department has spent $1.9 million, about $400,000 less than it budgeted.

Those two departments account for 56 percent of general fund spending.

The next biggest budget item falls in central service, which pays most employee benefits. The central services budget for the first six months of the fiscal year totaled $865,000, about 8 percent less than called for in the original budget.

Only the town’s engineering department has so far spent more than it budgeted. In the first six months of the fiscal year, the engineering department spent $292,000, about 9 percent over budget.

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