Sales tax revenues are climbing out of a multi-year slump and are forecast this year to hit record highs in some Valley cities.
Officials say they expect the upward trend to continue but aren't celebrating yet.
"It's certainly optimistic, and it's nice to see it go back up, but you have to be careful," said Visalia Mayor Amy Shuklian. "We're not going to go out and spend like drunken sailors."
Visalia forecasts a record-setting $24.1 million in sales tax revenues in the year ending June 30, surpassing its $23.2 million peak in 2006-07 before the recession.
The revenue boost comes from increased car sales, more business transactions in the city's industrial park, an improved economy and the opening of new stores on Mooney Boulevard, including Macy's, Walmart, BevMo and Dick's Sporting Goods, City Manager Steve Salomon said.
And sales tax collections are on the upswing for other Valley cities.
Clovis is forecasting record-setting sales tax revenues of $15 million for the year ending June 30, aided by the city's new shopping center near Clovis and Herndon avenues, topping the pre-recession peak of $14.9 million in 2007.
New car sales have been strong, combined with high gasoline prices, consumer goods sales and building and construction materials sales, said Jamie Hughson, city finance director.
Hughson said the increase would bridge an expected shortfall in property tax revenues.
Fresno, which is still climbing out its slump, is close to returning to pre-recession sales tax numbers.
Sales tax revenues peaked at $78.2 million in 2007 before falling to a dismal $58.4 million in 2010.
But the city's budget office is forecasting $71.4 million in sales tax revenues for the year ending June 30.
New car sales are boosting sales tax revenues.
"There was pent-up demand," city budget manager Jane Sumpter said.
Higher gasoline prices also have put more cash in the city's treasury, she said.
Although the rate of growth may be slowing, the upward trend is expected to continue, she said.
In Visalia, sales tax revenues reached recession lows in mid-2010. The trend line since then showed that a new high would be reached at some point, but "not at this speed," said Eric Frost, Visalia's administrative services director. "It's the first time in five years we're expecting to have revenues in excess of budgeted expenses."
He said the increase in revenues will continue, although not as significantly.
Visalia officials said they expect to use the extra sales tax money to repair the city's battered balance sheet.
The city's emergency fund fell from $12.5 million at the start of the recession to $1.4 million today.
Frost said he is recommending that $800,000 in surplus revenues go into reserves, and that half of future surplus revenues be placed there.
One Visalia City Council member said he supports rebuilding the reserve fund first, but the city also will need to address road repairs and other needs that were put on hold during the recession.
Said Vice Mayor Steve Nelsen, "We're moving in the right direction."
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