Tempe sales tax collections better than projected

Tempe, Arizona – Despite the troubled national economy, early holiday shoppers may have given the City of Tempe a boost, newly released sales tax collection figures show.

According to Tempe’s December Tax Revenue Statistical Report, available Monday at www.tempe.gov/salestax, tax revenue collected so far in the

2008-2009 fiscal year is down 7.8 percent compared to the prior fiscal year. At the end of November, that gap had been 9 percent. In previous months, Tempe had predicted double-digit declines by late 2008.

Translated into dollars, Tempe has collected $36.4 million year-to-date through December, compared to $39.5 million collected by the same time in fiscal year 2007-2008. The city’s fiscal year runs July 1 through June 30.

City Manager Charlie Meyer and Financial Services Manager Jerry Hart are cautiously optimistic about the latest numbers, but said the time has not come to relax prior projections. The city is continuing its reorganization and budget reduction plans, which will be reviewed by the City Council in February.

“We like the direction it appears it’s going right now,” Hart said. “But it’s too soon at this point to assume that we’ve hit the bottom.”

Month-over-month general fund sales tax revenue, from November 2008 to November 2007, was down 8.1 percent. December 2008 general fund sales tax collections were much better – just nine-tenths of one percent lower than December 2007. That improvement accounts for the better year-to-date numbers, Hart said.

By mid-February, the city will release figures that reflect retail sales activity during December 2008, which typically is a busier month for holiday shopping.

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