Payson continues to stash money in its long-depleted reserve fund, thanks to a boost in its sales tax rate, according to its March financial tracking report.
The town has collected $7.6 million in sales taxes since the start of the fiscal year last July. That’s about $900,000 more than the same period last year — a 13 percent increase.
Chief Financial Officer Deborah Barber said much of the increase comes from the previous council’s decision to boost the local share of the sales tax from about 2.3 cents to 3 cents on every dollar.
Overall, local sales are running way ahead of 2016-17, but have bounced around from one month in the last two years. Local sales taxes spiked last year in April, then plunged in May. Sales spiked again in November and plunged in December. This year, collections have remained much more steady from one month to the next.
Generally, sales tax collections remain right about where budget planners predicted back in July, said Barber.
The town has shifted a big chunk of the increased revenue into its reserve fund. The town’s financial policies call for reserves totaling at least 5 percent of the $18 million general fund — but for years the reserves have remained below about 1 percent.
“Although there is still a shortfall between actual reserves, the gap is considerably less than it has been for the prior 10 years or more,” Barber wrote in the March financial tracking report.
Additional money will go to broad employee pay raises and an attempt to catch up with the worst the town’s long deferred capital and maintenance budget, she said.
“Some of the larger capital items that routinely must be replaced include fire engines and command vehicles, police cars, technology upgrades, artificial turf for our recreation fields, water and street department equipment and service vehicles, park improvements and many other items,” wrote Barber. “Delaying those purchases does not eliminate the necessity and does not significantly reduce overall costs. Instead, delayed attention causes demands to pile up to an unmanageable level.”
Still, town revenues have risen along with spending in the general fund and water department.
The town relies mostly on sales taxes — a large share paid by visitors. Most other revenue sources have risen much less than the 13 percent rate of local sales tax gains.
State-shared sales tax collected statewide and distributed based on population rose only slightly — up 5 percent to $1 million.
State-shared income tax based on collections two years ago distributed each month on a population basis actually declined slightly for the months from July to March. State-shared sales tax dropped 2 percent to $1.4 million.
Vehicle license taxes distributed by the state rose about 4 percent to $742,000.
State-shared gas tax money rose 7 percent, a boon for the town’s deferred road building and maintenance plans.
The report offered one potentially worrisome sign that growth has slowed — especially in the once-vital construction sector.
Payson’s building permit revenue dropped 6 percent to $240,000.
The plan review fees for future projects dropped a whopping 14 percent to $139,000.
Overall, the town collects about $18 million in taxes, with the sales tax accounting for about $12 million. Roughly 70 percent of the town’s general fund goes to pay salaries.
Payson also collects $470,000 in bed taxes on hotel rooms. The town originally assured hotels it would spend most of that money to promote tourism. However, the general fund tourism budget is only $81,000.
This year the town also is getting $870,000 from Gila County’s sales tax for roads projects after the county agreed to share its voter-approved take with cities.
Thanks to the increased revenue the town has made an extra $600,000 payment for police and fire retirement plans, added $100,000 to its capital plan, shifted $200,000 to repay a loan from the water department, increased the general fund reserve to $1.1 million, bought new computers and software and added three positions to the fire department.
The water department has the town’s biggest budget — about $7.4 million — which comes payments on water bills, impact fees and grants.
Most of the town’s departments remain safely under budget, with 75 percent of the fiscal year already passed. The town’s general fund — which doesn’t include the water department — spends about $1.8 million monthly. So far for the year, the town departments have spent about $2 million less than originally budgeted.
Much of that savings comes from the police department, which has a budget of $6.7 million — but is so far nearly $1 million under budget for the year.
The fire department’s the next most costly function, with a budget of $4.5 million. So far, the fire department’s about $400,000 under budget.
The Magistrate Court is over budget at the moment. The town-operated court has a $213,000 budget for the year and so far is running about $12,000 over budget.