Clovis News

Valley lags state in sales-tax revenues

The San Joaquin Valley fared worse than the rest of the state in fourth-quarter 2009 sales-tax collections and was the only region in which revenues declined in double digits compared to 2008's fourth quarter.

Statewide, sales-tax revenues fell 6% in the fourth quarter, but in the Valley -- which stretches from Stockton to Bakersfield -- revenues were down by 10.5%, according to statistics compiled by MuniServices, a municipal consulting firm.

Even though the Valley continues to lag the state, officials in some central San Joaquin Valley cities were encouraged by the fourth-quarter sales-taxes report.

Of 33 communities surveyed in the region, eight had higher receipts in 2009's fourth quarter than the same quarter the year before. In each of the first three quarters of 2009, no more than two cities had improved returns.

Sales and property taxes pay for the lion's share of city services, such as public safety, parks and recreation services and some road projects. When those dollars drop, communities must cut services.

Fresno's fourth-quarter taxable sales receipts were down 11.2%, equal to about $2 million.

Renena Smith, the city's budget director, said revenue is about where it had been forecasted.

And, if there is a silver lining for Fresno, revenue drops are not as bad as the drops of 21.3% and 12.7% in the second and third quarters last year.

"The good news is that it didn't get any worse," she said. "I am hopeful things are stabilizing ... instead of having to constantly respond to the downturn."

In some cities, business was better than expected.

Clovis sales tax revenues were down about 0.6% in 2009's fourth quarter compared with the same period in 2008.

"I expected that we would be 5% down, so we came in much better than expected," said Robert Woolley, Clovis finance director. "It's a very pleasant surprise."

Hanford posted similar fourth-quarter results, with sales tax revenues down 0.5% from 2008.

But Hanford officials expected a stronger economic turnaround when they made their budget projections, said Tom Dibble, the city's finance director.

"We thought we would be flat or increase, but we are down about 8% [for the year]," he said.

Hanford has some new retail on the way: A new Kohls store will be coming in October, and a Forever 21 store has replaced Gottschalks.

But, Dibble said, the booming sales-tax revenues of a few years ago are not returning anytime soon.

"I have seen some reports that say it will be 10 years before we get to where we were," Dibble said.

Even cities with the most reason for optimism are tempering it, such as Kerman, where fourth-quarter sales-tax revenues jumped 18.1%.

City Manager Ron Manfredi said the state and county still are battling financial problems and cities typically are targets for money grabs.

Parlier had a 56% jump in fourth-quarter sales, but finance director Patricia Barboza said she does not expect the city to reach last year's annual taxable sales revenue.

The improved fourth quarter was due to a new Auto Zone store and new drugstore, she said.

"Parlier never had a drugstore before, so people were going out of town," Barboza said.

They still take cash out of Parlier to shop in other cities with larger department stores, she said.

Barboza said she remains pessimistic about sales-tax revenues improving in 2010.

Mendota's fourth-quarter sales-tax revenue more than doubled compared with the same period in 2008 -- much to the relief of City Manager Gabriel Gonzalez.

"It's kind of a bonus," he said. "We really weren't counting on it."

A state audit found that the city had been shortchanged by about $139,000, and the money was added to Mendota's fourth-quarter sales-tax revenues.

An opposite scenario occurred for Firebaugh after city officials discovered the state had erroneously sent an extra $254,000.

City Manager Jose Antonio Ramirez said the state mistakenly believed some companies outside of Firebaugh were in the city limits because of their mailing addresses.

The city has enough money in its budget reserves to refund the overpayment but will be allowed to pay it back over six quarters instead of all at once. It's a big chunk of money for the city, which collects less than $1 million yearly in sales-tax revenues.

The city wanted the slower payback because "we caught the error before they did and reported it," Ramirez said.