Rim Country Economy Finally Gaining Ground

Sales rise 7% as Payson’s plan review fees jump 44%

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Rim Country’s economy continues to gain ground with a 7 percent improvement in sales reported on Payson’s January financial tracking report.

Payson sales tax collections jumped $191,000 to $3.1 million for the first seven months of the fiscal year compared to the same period a year ago.

The rise in tax revenues has mitigated an otherwise worrisome budget picture, given the wafer-thin reserves with which the town started the year.

Only continued under-spending in most departments has kept the budget precariously balanced, according to the January report.

The gain in local sales headlined increases in tax collections almost across the board, including state sales and income tax, vehicle license taxes and planning fees.

The one exception to the brightening fiscal picture came in the form of a small decline in building permit fees.

Highlights of the report in addition to the 7 percent gain in sales taxes include:

• Vehicle license tax collections rose a heartening 12 percent to $455,000 for the first seven months of the fiscal year. The money mostly reflects new car sales, one of the leading indicators of economic growth.

• The report reflected a 6 percent rise to $632,000 for the period in state-shared sales tax, collected statewide and distributed based on population. That figure indicates that Rim Country’s economy is keeping pace with the statewide recovery, after having lagged behind in the past two years.

• State-shared income tax payments rose 9 percent, which reflects the increase in statewide income tax collections more than a year ago as the recovery took hold. The state collects the money statewide and distributes a portion of it to cities based on population.

• Plan review fees rose a surprising 44 percent to $65,000, the best indicator of new building projects entering the development pipeline.

The report included two cautionary figures, however.

Money paid for building permits to actually start construction of new projects actually dropped 4 percent to about $95,000. The figure indicates despite a rise in interest in future projects, the number of projects actually under construction has declined slightly from last year.

In addition, the report documents a worrisome decline in gas tax money passed along to the town by the state. Collections from the so-called HURF funds dropped by about 2 percent to $645,000 for the first seven months of the fiscal year. The town has long relied on the state-collected gas taxes for road maintenance and construction. The state Legislature diverted a big chunk of the gas tax money at the start of the recession even as gas tax collections fell due to the downturn. The state has been slow to restore the gas tax funding, after using it to shore up the budget for the Department of Public Safety and other legislative priorities.

Local governments are lobbying for full restoration of HURF funding in the upcoming budget year and Rep. Brenda Barton (R-Payson) has declared its restoration is one of her top legislative priorities this year.

Payson has eliminated everything except the most basic maintenance of its streets as a result of the HURF funding drop and abandoned its once-ambitious street improvement and overhaul planning, despite the deteriorating condition of crucial local streets like Bonita and Manzanita.

The report included a sales tax tally by sector, although the detailed breakdown of those numbers takes an extra month — so the breakdown reflects sales as of December.

Nonetheless, the specific figures for December show a rise in overall retail trade, real estate rental and leasing, construction, manufacturing and services.

However, the breakdown by sector also shows declines in hotels, restaurants, bars and arts and entertainment — an indication that the tourism sector that has long buoyed the local economy continues to struggle.

Despite the rise in tax collections, Payson has only managed to stay in the black by spending less than originally budgeted in almost every department, according to the January financial tracking report.

The report shows that in the town’s $13 million general fund the slender initial fund balance has dropped by $58,000 to just $417,000.

But the town would be facing a deficit of some $600,000 if all the departments had been actually spending everything budgeted back in June.

Fortunately, the general fund — which doesn’t include the water department — spent nearly $900,000 less than the council approved back in June. That’s about 7 percent under budget overall.

The $5.4 million police department budget accounts of about one-third of general fund spending. So far this year, the department remains about 11 percent under budget — a savings of about $300,000.

The $4.5 million fire department budget constitutes about a quarter of the general fund budget. The fire department remains about 14 percent below budget, a savings of about $200,000. A big chunk of that savings stems from the council’s decision earlier this year to eliminate the position of the fire marshal.

The other big-ticket departments didn’t do so well at getting under budget.

Central Services has a budget of $1.2 million annually to pay employee benefits, which accounts for about 9 percent of the general fund.

The Community Development planning department accounts for about 6 percent of town spending and the Engineering and Streets department for about 4 percent.

Comments

Pat Randall 2 months, 1 week ago

Could the gain in sales tax in the article be because people were buying Christmas presents the month before?

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Meria Heller 2 months, 1 week ago

no surprise on entertainment, tourism as there is basically nothing to draw tourism left. Even the Casino hasn't put out a show/entertainment all year.

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