Clovis News

Valley sales-tax revenues improve

Sales-tax revenues are staging a turnaround in the Valley, signaling relief for the region's battered businesses -- as well as families and governments that depend on them.

About two-thirds of Valley counties and cities reported that sales-tax revenues for the first six months of 2010 were up over figures from the same period last year. That's a strong turnaround from early 2009, when few communities saw improved tax revenues.

The sales tax figures are reported by the state Board of Equalization.

Sales got even better in the second quarter, which ended June 30, with 21 of 32 communities reporting tax-revenue increases, compared with just two in 2009.

The latest results are occurring during a period when it is difficult to predict the financial future, said Michael Coleman, a fiscal policy adviser for the California League of Cities.

Auto sales are not picking up statewide and there continues to be "a lot of uncertainty in the housing market," he said.

But for Valley business leaders and officials in cities and counties hit hard by the recession, the recent uptick is encouraging.

Restaurants in Old Town Clovis appear to be busy in recent months and businesses are hiring a few more employees, said Fran Blackney, business advocate for the Clovis Chamber of Commerce. She agreed that Clovis businesses are showing signs of optimism, though they remain cautious.

Governments, which depend on sales-tax revenue to help fund services, also are finding reasons for optimism.

In the second quarter of this year the city of Fresno saw its first year-over-year increase in sales-tax revenue in the last few years, said Renena Smith, the city's budget director.

The city's sales-tax revenue peaked at $75 million in 2008, she said. This year, she said, "we are crossing our fingers for $60 million."

Sales-tax revenue represents about 30% of the general fund budget that pays for public safety, parks and recreation services in Fresno.

"The fact that we are actually on the positive side after consistently trending down makes me cautiously optimistic," Smith said. "I think that means we stabilized."

Like Fresno, Clovis also has a long way to go to reach tax revenues collected in earlier years.

In the second quarter of 2008, taxable-sales revenues were about $3.6 million. Revenues in this year's second quarter were about $3.1 million, according to state Board of Equalization figures -- but higher than the second quarter in 2009, when the revenues totaled about $3 million.

But, said Robert Woolley, interim city manager: "It's a very good sign. We have reached bottom and hopefully now we can turn around."

Woolley said new home construction is beginning to pick up and and retailers are showing new signs of life. For example, a new Kohl's store opened at Sierra Vista Mall at the end of September.

Woolley said he thinks consumer confidence is improving in Clovis.

"I think you are starting to see a positive turnaround in people's attitudes," he said. "They are more optimistic on their future and that the worst is behind us now."

Hanford has had some strong retail sales, especially at Target and Walmart, which fueled a rise in sales-tax revenue of nearly 4% in the second quarter, said Tom Dibble, Hanford's finance director.

He said the city also will have revenues from a new Kohl's store reflected in its sales-tax figures next year.

One concern, he said, is that auto sales have not come back.

"We don't expect gangbusters when the economy comes back, but we expect it to improve as we go along," Dibble said.

Visalia is making do with about $5 million less in sales-tax revenue than it had five years ago, said Eric Frost, the city's administrative services director.

"We are starting to see a little stability at the bottom, but until we see some continuous stability we are trying to tread water," he said.

Among smaller Valley cities, Firebaugh, Parlier and Dinuba had consecutive quarters with double-digit increases in sales-tax revenue.

Firebaugh City Manager Jose Antonio Ramirez said the Toma Tek tomato processing plant in his city hired 370 additional people this past year, bringing its work force to 1,100.

"They opened a new production line and that was a real shot in the arm," Ramirez said. "These employees shop here locally, so there is more money to go around, not just for Firebaugh but for surrounding communities."

Two other firms also have hired about 35 people: Queengil, an irrigation pipe firm, and Buttonwillow Warehouse, which sells fertilizer, he said.

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