Prescott shows growth in taxable sales
PRESCOTT - A third consecutive month of taxable-sales growth in Prescott has helped to propel the city's year-to-date sales tax revenues into the black.
The city announced Friday that sales tax revenues grew by 3.8 percent in the second quarter of the fiscal year (October through December, reflecting sales from September through November), as compared with the same months last year.
For the fiscal year, which began July 1, the taxable sales grew by 0.64 percent.
And although city officials are hesitant to call the recent increase a trend, they say it is good news for the city, which has experienced several years of shrinking sales tax revenues.
The increases "are off of three straight years of decline," Budget and Finance Director Mark Woodfill said. "I consider that good news."
But he pointed out that the increases do not come close to making up for the losses that occurred in recent years.
For instance, last December's taxable sales number was down by 8.8 percent, while this year's December report was up by 2.15 percent.
Deputy City Manager Laurie Hadley also expressed cautious optimism.
"These are positive signs that illustrate consumer confidence is growing in some sectors and that our tourism marketing efforts are showing marked results," Hadley said, although she added that it may be premature to call the increases a trend.
Woodfill said the growth in recent months makes planning for the coming budget year somewhat easier. City staffers already are looking ahead to the budget for the 2011/2012 fiscal year, and the Prescott City Council likely will hear its mid-year budget report at a workshop on Jan. 18.
For the current fiscal year, Woodfill said the city projected about zero growth in sales tax revenues.
"We're in good shape to achieve the budgeted amount," he said of the 2010/2011 fiscal year.
The standout categories in the most recent quarter were: use tax (up 24.2 percent); hotels/motels (up 18 percent); publishing (up 16.7 percent); and utilities (up 15.3 percent).
In addition, auto sales, which have been down dramatically in recent years, were up by about 12.5 percent for the second quarter. But Woodfill emphasized that the auto category is rebounding from a decline of about 43 percent during the same quarter just two years ago, and a decline of about 6 percent one year ago.
And even the first quarter of the current fiscal year was down dramatically for auto sales - at a minus 18.5 percent. Overall, the fiscal-year-to-date numbers in the auto category are still down by 5.7 percent.
Both the hotels/motels category and the restaurant/bar category have shown consistently increasing growth throughout the first half of the fiscal year.
The fiscal-year-to-date numbers show that sales tax for restaurants and bars is up 5.9 percent, while hotels/motels is up 10.4 percent.
The second-quarter numbers are more dramatic - up 8.7 percent, and 18 percent, respectively. And Matt Dunbar, assistant finance director, noted that the lodging numbers showed a 20-percent increase in December, the most recent reporting month.
"These numbers indicate a four month trend of improved revenues," Dunbar said of the lodging numbers. "As is typical when you have increases in transient lodging revenues, restaurant and bar income has also increased over the last four months."
The city's largest category, retail sales, has also shown a recent jump in growth. Although the first quarter of the fiscal year showed a 6 percent drop in retail sales, the second quarter showed a 3.1 increase, bringing the fiscal-year-to-date number for retail sales to a minus 1.5 percent.
Overall, taxable sales in Prescott for the first half of the fiscal year have grown from $569 million in the past fiscal year to $573 million in the current fiscal year.