Payson’s economy continues to grow, with healthy increases in sales tax, building permits, gas taxes and vehicle license taxes.
Payson’s January financial report reported an 18 percent increase in sales tax collections, which remains the town’s main source of income. However, perhaps two-thirds of that increase comes from the increase in the tax rate starting in October.
If you remove the tax rate increase, Payson’s doing just a little bit better than the 5 percent rise in sales tax revenue statewide.
So far this fiscal year, the town’s sales tax revenues have jumped $900,000 compared to the same period last year — about 58 percent of the total fiscal year.
The sales tax bounty has allowed the town to set aside $600,000 to bolster pensions for police and fire, necessary because the value of the trust fund plunged during the recession and hasn’t yet fully recovered.
The town has also resumed normal street maintenance — after skipping the roughly $600,000 investment in annual street maintenance for about seven years, a full maintenance cycle.
Moreover, the town has started making up deferred capital spending. That includes $165,000 for new police cars. The jump in sales tax collections will also cover a $200,000 transfer to the water department to repay a loan to the general fund made years ago.
Payson also plans to add three positions to the fire department, both to deal with the need to manage dangerously overgrown yards throughout the area and to reduce reliance on firefighter overtime to cover shifts.
Payson’s general fund spending totals about $19 million annually, with about two-thirds going to police and fire.
The town also budgets about $6.7 million for the water department, with money coming from water bills and impact fees.
The water department budget is higher than normal because the town is still covering the extra costs of completing the $54 million C.C. Cragin pipeline.
The revenue sources for the town’s general fund budget includes $12 million in sales taxes, $2 million in state-shared income taxes, $685,000 from property taxes, $1 million in vehicle license taxes, $1.6 million in state-shared gas taxes and $330,000 from the bed tax.
The town also collects about $100,000 annually in fines, $773,000 for licenses and permits and charges $837,000 for various services.
If you include all of the town’s budget categories, they total $42 million, but that includes a couple million in grants the town might not actually receive, improvement districts and other categories.
The strong sales figures put the town in a good position heading into the budgeting process, said the town’s Chief Fiscal Officer Deborah Barber.
“As the finance department begins the budget process for fiscal year 2019/2020, we continue to be optimistic. We will be working to re-establish financial policies that have been unattainable during the recession and the years of slow recovery that followed,” she wrote. “A big piece of the budget puzzle will be the capital budget and exploring capital needs that have been long-delayed.”
The town council will meet on March 5 to discuss priorities for capital items and provide town departments with direction for budget preparation.
She noted that the steady rise in sales tax revenue could slump in the next several months.
“Local sales tax revenue for the first half of the 2018/2019 fiscal year continues to outpace 2017/2018. However, we typically see a sales tax slump in February, March, and April — some years deeper than others,” she wrote. “With 58.3 percent of the year elapsed, sales tax revenue is currently at 59.62 percent of the total annual budget for sales tax receipts,” she concluded.
Most of the town’s departments remain comfortably under budget.
The police department leads the way, having spent about $900,000 less than the budget calls for so far in the fiscal year. The fire department is about $500,000 under budget.
Add it all up and the various town general fund departments have so far spent about $9 million of the of the $11 million budget to this point in the fiscal year.
The town spends about $1.5 million every month, with personnel costs accounting for about two-thirds of the total.