Payson’S Economy Stirring

Sales rise 1 percent; building permits jump by 31 percent

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Payson’s economy is still holdings its own with a small rise in sales and a big jump in building permits.

Unfortunately, cuts in state-shared revenues for things like income and gas taxes have continued to squeeze the town’s budget despite an improvement in local sales and permits.

The 1 percent year-to-date rise in local sales tax collections demonstrates that Rim Country is still just holding its own.

Sales taxes remain the single biggest source of revenue in the general fund. As of the end of May, sales taxes have risen $54,000 to about $4.7 million.

That means Payson hasn’t recovered quite as well as the rest of the state, since state-shared sales tax revenue rose 2 percent to $992,000.

A sharp rise in building permits also offered encouragement, although activity remains far below the 2008 peak. The town’s building permits for the fiscal year rose 31 percent to $141,000.

Fees collected to review future building plans rose more modestly — up 6 percent to $51,000.

The just-released sales tax numbers by category from April reveal more hopeful trends, including a doubling of construction activity over April of last year. In addition, hotel tax revenue rose 10 percent and sales in bars and restaurants rose 4 percent.

Unfortunately, deep cuts in state-shared revenue overwhelmed those hopeful increases. Income tax money the state shares with towns based on population dropped 18 percent to $1.2 million. The state’s distributions of the income tax money typically runs about two years behind — which means the decline in revenue now reflects the impact of the collapse into recession two years ago.

In addition, the state’s shared gas tax payments also took a nose dive — down 19 percent to $1 million. The town mostly uses that money on streets and transportation projects. The state diverted a big chunk of the money that used to go to towns and counties to bolster the budget for the Department of Public Safety and other state departments.

As a result of the loss of that state-shared revenue and the failure to get various hoped for state and federal grants, the town has gotten more than $1 million less than it expected when the council adopted its budget last July.

Fortunately, the town departments included in the general fund are running about 20 percent under budget, according to the May figures.

All told, the town spent $23.5 million between June 2011 and May 2012, including $10.2 million from the general fund and $3.6 million to run the water department.

Other big-ticket items included $2.1 million put into the town’s self-insurance fund, $2 million spent on the Blue Ridge pipeline and $1.3 million in gas tax money on street and road improvements.

Virtually every department included in the general fund has remained well below budget.

The most expensive department in the general fund remains the police department, with an adopted budget of $4.7 million — about $300 per resident. However, so far this year the department stands at about 20 percent under budget. The department has lost several officers to firings or resignations and hasn’t been able to find replacements.

The second most expensive department is the fire department, with an adopted budget of $3.3 million. The fire department is about 21 percent under budget, which reflects in part the town’s failure to get a federal grant it hoped would provide money to hire enough firefighters to fully staff the third fire station.

The pace of spending in every other department also remains well below the targets set in the adopted budget, with the biggest shortfalls in financial services, elections, human resources, community development and parks and recreation.

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