Mesa sales taxes show steady growth

Six years ago this summer, Mesa tumbled into the fiscal equivalent of the Grand Canyon — a $60 million-plus hole dug largely by plunging local sales taxes.

According to the latest sales-tax report, getting back to the rim will still take a long hike. But at least Mesa is on the trail.

With the fiscal year more than half gone, collections are a solid 5.4 percent ahead of last year’s pace. Even better, they’re 5.9 percent ahead of what Mesa had expected to receive, easing pressure on a still-challenged city budget.

Total local sales-tax revenue between March 2013 and February was $139.3 million. The same period the previous year brought in $130.2 million.

Both figures represent a rebound from the $121 million that Mesa collected in recession-wracked 2009-10, but fall far short of the high-water mark, $155 million in 2006-07.

Mesa’s latest report covers collections received in February for January business.

Retail sales, historically the biggest single fuel source for Mesa’s budget, showed the strongest growth among several sectors in February compared with the same month in 2013. The $5.5 million collected from retail was 8.3 percent higher than February 2013.

Contracting, which suffered badly during the recession, also showed strong growth, as did utilities, restaurants and bars. The only sectors to decline in February represent relatively small pieces of Mesa’s tax portfolio.

The recovering revenues are likely to help Mesa avoid dramatic shortfalls.

But City Manager Chris Brady and Budget Director Candace Cannistraro told the council last month that revenues are barely keeping up with galloping expenses. Cannistraro said fuel, employee compensation and costlier contract renewals are chewing up whatever new money might be coming in.

Mesa also releases sales-tax figures for several key areas. Among the February highlights:

• Collections from new-car dealers dropped 6.1 percent compared with a year ago and are basically flat for the fiscal year compared with the same year-ago period.

• Taxes from Riverview shopping center soared 30.8 percent in February compared with the same month in 2013.

When next-door Riverview Park was closed last year for renovations, the shopping center saw a big dip in collections. But the park reopened in late January, the Chicago Cubs opened their new stadium in February, and the Riverview area is typically packed with visitors even on non-game days.

• Collections from the Fiesta area were up 20 percent compared with February 2013 despite heavy construction along Southern Avenue. Fiesta Mall itself, however, saw an 8.8 percent drop in collections; Macy’s announced in February it is closing its Fiesta store.

• Superstition Springs Center saw a 15.8 percent drop from the same month in 2013, but for the fiscal year as a whole, the mall reports a 3 percent increase.

• Dana Park, the upscale center at Val Vista Drive and U.S. 60, posted a 9.1 percent increase in February sales and for the fiscal year is running 12.9 percent ahead of last year.

Mesa’s overall city sales tax rate is 1.75 percent, funneled into three pots:

• A 0.3 percent levy goes to street maintenance.

• A .25 percent levy sustains infrastructure and employees acquired after voters approved a temporary half-cent “quality of life” sales tax in 1998.

• The other 1.2 percent goes to general government operations.

Mesa voters last approved a sales-tax increase in 2006, the same election in which they rejected a primary property tax to support the general fund.

Mesa’s February sales-tax report showed a 2.4 percent decrease in the number of businesses with sales-tax licenses compared with the same month in 2013. There were 24,019 such licenses in February.

by Gary Nelson, The Republic | azcentral.com

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