verything’s looking up, businesswise. Well, except for construction. Alas, poor construction.
Payson’s September financial tracking report shows heartening gains in taxes and sales compared to the same point last year at this time.
The town’s most important revenue source — sales tax — jumped about 15 percent compared to the same period in the previous fiscal year. The town’s fiscal year starts in June.
As of September, the town had collected $1.2 million to that point in the fiscal year, up $158,000 from the previous year at the same point.
The breakdown of the figures by category, which actually apply to the August sales, show overall retail trade showed the biggest gain. However, hotel bookings also showed a strong gain — up a let’s-throw-a-party 77 percent over the same period last year. Most other categories showed modest gains. However, construction, wholesale trade and “other” all fell.
But the encouraging economic figures came almost across the board, with gains in most sources of town revenue.
That included an 8-percent increase in state-shared income tax revenue, up to $427,000 in the first four months of the fiscal year.
Sales taxes collected statewide and shared based on population rose 6 percent to $209,000 for the fiscal year. Interestingly, that’s the first report in the past year where local sales tax gains outperformed the statewide figure.
Vehicle license taxes from the sale of new cars rose a hefty 20 percent to $187,000.
But not all the news was good.
Alas, after a strong performance early in the year — new construction has slackened, as measured by building permits and plan fees — evidence of the stubborn weakness in a sector that once drove the local economy.
Building permit fees for the first quarter of the fiscal year were down by almost a third to $37,057. Plan review fees reflecting projects just heading into the development pipeline dropped by nearly 20 percent to $22,218.
The government shutdown stalled the release of September unemployment figures, another indication of the state of the tenuous recovery. The August figures showed the national rate dropped to below 7.4 percent, but the Arizona figure turned upward — rising from 8.3 to 8.6 percent. The Gila County unemployment rate in August stood at a daunting 9.4 percent. However, the Gila County rate is skewed by unemployment rates hovering around 50 percent on the San Carlos Apache Reservation in southern Gila County. Typically, the northern Gila County unemployment rate tracks just below the statewide average.
Despite the improving tax revenue picture, Payson continues to spend more than it takes in — by nearly $1 million. About a third of that comes from spending on upgrades to the town’s water system taken from the dwindling, but still ample, reserves of the water department. Most of the extra costs in the water department stem from the expensive effort to get the town’s complex water system ready to receive water from the Blue Ridge pipeline in another year or two.
The town still has $5.3 million in its water fund, which includes both operating funds for the water department and grants and remaining impact fee money to build the Blue Ridge pipeline. The pipeline will likely cost more than $40 million. The town will take out long-term, low-cost federal loans to cover construction costs, repaid over the next 50 years from water bills and grants.
The town’s general fund covers the cost of most town departments, but not the water department. The town’s general fund this year totals $13 million. About $10 million of that pays salaries — mostly for the police and fire departments. That means the town’s general fund spends about $900 per resident, with most of that money coming from sales taxes.
Last year, tax revenues lagged well behind projections. Fortunately, almost every town department spent well under its budget, so the books remained balanced despite the sluggish economy.
This year, most departments remain under budget — but by much smaller margins than in the previous fiscal year. That largely reflects a hiring spree in the police department, which went most of last year with five vacancies on the patrol staff. The department has now filled most of those vacancies, bringing manpower up to levels not seen since the onset of the downturn. The department has been running with a shortage of dispatchers for the past couple of months, but is now looking to hire as many as five more dispatchers.
The fire department has also built up its manpower, thanks to a federal grant that allowed Payson to fully staff the third fire station. Nonetheless, the department this year cut its fire marshal position and is waiting until after retired Fire Chief Marti deMasi uses up his months of accumulated vacation and sick leave before hiring a new chief.
For the first four months of the fiscal year, the departments in the general fund have spent 18 percent less than their budgets would have allowed — $2.7 million instead of $3.3 million.
The police department’s $854,000 expenditure to date is about 14 percent under budget and the fire department’s $584,000 about 28 percent under budget.
Other, smaller departments also remain well under budget — including Parks and Recreation, the town attorney, human resources and finance.
Only the town’s computer department has substantially overshot its budget. The $253,000 spent in the first quarter is 77 percent over budget, but finance manager Hope Cribb in the report noted that the overspending stems from paying for things up front and that the department should end up on target by the end of the year.
The Parks and Recreation Department continues to dwindle from the now, long-distant budget glory days. Parks has a $327,000 annual budget — less than half of what it once boasted — although some functions got transferred to other departments rather than eliminated. Even so, the $65,000 spent in the first quarter of the fiscal year puts it 21 percent below that allowed budget.