Originally posted Nov 15, 2011
A solid boost in sales-tax revenue, driven by more consumer spending, is providing Valley municipalities with much-needed relief for budgets that took a hard hit during the recession.
Nearly every major city in the Valley enjoyed a significant jump in sales-tax collections during the first eight months of 2011, a welcome message after three consecutive years of stagnation and decline.
Phoenix, which added a food tax in April 2010, has seen its overall sales-tax figures climb 16.4 percent year-over-year, through September. Retail activity was up 8.6 percent and restaurant collections increased 11.6 percent.
“It could be pent-up demand,” said Tracy Reber, a deputy budget director for Phoenix. “It could be that people can’t delay purchasing things any more. Maybe you’ve put off buying a washing machine, but you can only wait so long.”
The positive trend in Phoenix is mirrored by similar growth in Scottsdale, Glendale, Peoria, Chandler and Gilbert.
Among major cities, Mesa was alone in bucking the trend; overall collections increased by just 2.2 percent and retail revenue fell 2.7 percent.
Sales tax plays a large role in municipal budgets, generally accounting for 35 to 55 percent of the general fund.
“The percentage has actually increased in recent years as other sources, such as shared revenue, have declined,” said Ken Strobeck, executive director for the League of Arizona Cities and Towns.
That is good news for residents, who are less likely to experience cuts in services, and for city employees, who are less likely to be laid off.
2011 – $40,111,631.
2010 – $37,718,610.
Percentage change – 6.3 percent.