When it comes to the fiscal health of the City of Visalia the major issue is the local economy mayor Amy Shuklian reported in the State of The City presentation this fall. ”The major issue facing Visalia is the general economic contraction. To put into context the severity of the recession, consider that in the past 30 years, sales tax has not had a major decline until 2008.” But in the past several years ” this decline is dramatic and severe. Economic activity dropped, unemployment went to double digits and businesses retrenched.” Shuklian summed up.
Now comes the latest sale tax revenue number that for the first time in four years – offers what looks very much like a rebound.
City finance chief Eric Frost says based on the most recent quarter cash receipts for the April/May/June quarter, the city received $4.9 million. That compares to $4.2 million for the same quarter in 2012, $3.8m for the same time period in 2011, $3.75m in 2010 and $4.46m for the quarter in 2009, just as the recession was kicking in.
If the latest quarter is a sign of an upward trend, the city will average $5 million a quarter that would add up to $20 million a year. The interesting part is that our frugal and conservative city has budgeted about $16.4 million for this fiscal year that runs July to June says Frost.
“This latest $4.9 million quarter is the largest on record” adds Frost.
Is Frost celebrating? Not yet, but he is dusting off the party favors.
“I will be able to tell you a lot more after our next report comes at the end of December” says Frost, for the period July through September. ”As you can see we have had some nice increases lately which hit or may exceed our budgeted sales tax. All good news compared to what we have had for the last 4 years.”
Council member Warren Gubler who opposed a plan to raise the sales tax percentage in Visalia this summer, a decision put on hold, says the latest numbers ” sound like at least we are heading in a promising trend.” Gubler, who when we talked, says he just returned from an upbeat Downtown realtor’s conference and saw a record crowd a few days ago at the Christmas parade. ”I think people seem more positive and ready to open their wallets for the Holidays” suggests Gubler.
“Mooney’s on the Move” adds the State of The City report pointing to the big shopping strips new players. And car sales are up as well.
Visalia’s general fund gets money from sales tax and property tax that is also finally heading higher.The median price of a home in town is up about $25,000 since April says real estate website Trulia. However, ”there is long lag-time on property tax revenues” says Frost. In 2010- the city budgeted $18 million from property taxes and for 2012-13 the budget is anticipating $18.4 million.
One more related issue – the big pharmaceutical distributor VWR, now open in Visalia ,was the Bay Area City of Brisbane’s largest sales tax generator but has indicated to the City of Visalia it would not report sales from here even though this is now their West Coast headquarters. Using our town as their point of sale would give Visalia a big boost. How about it guys – since we were dragged into your union dispute and had to defend in court!
Statewide, sales tax collections are also improving. The State Board of Equalization collected $1.86 billion in general fund sales and use tax revenue in October, surpassing the state’s $1.74 billion budget estimate.