Gilbert's sales tax revenues rebound in June; annual budget projection met

Gilbert Water Tower
Gilbert enjoyed a rebound in sales tax revenue in June. The money came from strong May sales. (Courtesy town of Gilbert)

Gilbert enjoyed a rebound in sales tax revenue in June. The money came from strong May sales. (Courtesy town of Gilbert)

Gilbert has met the town’s budgeted sales tax revenue projections for the year after a stronger-than-anticipated financial report from May, town officials said.

The report also shows that the town can build contingency funds against a further economic downturn in fiscal year 2020-21, which began July 1. June revenues have yet to be collected.

Collections of sales tax—officially known as Transaction Privilege and Use Tax—from May were $9.57 million, a 6.93% increase from May 2019 and a 20.23% increase from April 2020, when the state was in its coronavirus pandemic shutdown period throughout the month. Businesses began to reopen around May 8.

That puts the town at $97.93 million collected for the year, with one month to go, while it budgeted for $97 million for the year.

“We feel really lucky to be in this situation,” Budget Director Kelly Pfost said. “We always under budget our sales tax or budget low so that we have wiggle room, and that's been really a benefit this year.”

Typically, Gilbert then uses the extra money collected in a year to be a contingency fund for one-time expenses in the following year, like an unexpected repair-and-replace project, Pfost said.

Two sales-tax areas that did particularly well were accommodations and restaurants and bars, Pfost said.

While revenue from accommodations for hotel stays was lower at nearly $58,000—compared to last year’s $67,000—it represented a strong recovery from April for that sector when few people traveled, Pfost said. Accommodations revenues are up 8.75% for the year to $750,368.

Meanwhile, restaurants and bars collected $779,141, a 2.8% increase year over year.

“That one really surprised me, that our restaurants and bars are seeing that much support and participation from the community in their business,” Pfost said.

Pfost said another good sign for the community is that revenue from residential rentals is about where the town expects it to be.

“It indicates that people locally are paying their rent or somebody is, whether it's them a family member or a support group,” she said. “The rent is getting paid. So that's hopefully a good indicator that people are able to stay in their home.”

Other general fund drivers include state shared sales tax, which also has revenues at 101% of what was budgeted; development serves at 105%; and the smaller parks and revenue fund, which is at 93%, sharply curtailed revenues but also expenses as a result of the shutdown.

Enterprise funds—which includes water meter sales—as well as wastewater funds and environmental services’ residential and commercial funds are at or near 100% for the year.

Street funds revenues from the Highway User Revenue Fund (110%) and Vehicle License Tax (102%) are above what was budgeted for the year.

“We're hopeful,” Pfost said about the town’s overall revenue picture. “We're glad to see some good news locally and just holding our breath to see, knock on wood, that it lasts through the fall.”
By Tom Blodgett
Raised in Arizona, Tom Blodgett has spent 30 years in journalism in Arizona and is the editor of the Gilbert edition of Community Impact Newspaper. He is a graduate of Arizona State University, where he now serves as an instructional professional in the Walter Cronkite School of Journalism and Mass Communication and editorial adviser to The State Press, the university's independent student media outlet.


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