Tax Revenues Due Cities, County Continue To Fall

By Tammy Gray-Searles
   As the governor calls on the state legislature to balance the budget, state tax revenues continue to slide, reducing, in turn, the funds available to local governments even before any additional budget cuts are made.
   According to the most recent report by the Arizona Department of Revenue, which includes all taxes collected in July, total collections were down by 13.2 percent for the “big three” tax types that go into the state’s general fund. The “big three” include individual income tax, corporate income tax and sales tax.
   Of the three taxes, corporate income tax collections are up significantly, by 44.4 percent, but since it is the smallest of the three types, representing just over $33 million collected for the general fund, the gains are not enough to offset dropping amounts in the other two types. Individual income tax collections, which totaled $182.4 million in general fund revenues, are down by 10.9 percent, and sales tax revenues, totaling $290.6 million for the general fund, are down by 18.4 percent.
   The general fund totals do not include additional revenues collected by the state that are distributed to other entities. The total amount of sales tax collected in July, which includes funds that were distributed to cities and counties, was $467,947,896, down 17.2 percent from July 2008.
   The reduction in total collections means a reduction for counties and cities. According to the Department of Revenue report, the amount of sales tax revenue returned to both counties and cities was down by 14.5 percent. Approximately $48.7 million was collected for Arizona counties, compared to just over $56.9 million last year. The situation is similar for cities, with $30 million distributed this year and $35.1 million last year.
   For July 2009, according to the report, Navajo County received $794,224 in sales tax returns from the state. That total is down 15.6 percent from last year. Of the 15 counties in Arizona, Navajo County had the fourth highest percentage of declining sales tax revenue. Greenlee County led the way with a drop of 29.3 percent, followed by Santa Cruz County with 21.2 percent, and Apache County with 16.9 percent. The percentage drop for many counties hovered just below 12 percent.
   Although the report does not indicate the percentage change for cities, it does note the amounts distributed to cities across the state. For July 2009, the City of Holbrook received $58,367 in shared revenue and $33,504 in returned sales tax, Winslow received $105,814 in shared revenue and $60,740 in returned sales tax. Snowflake received $53,095 in shared revenue and $30,478 in returned sales tax, while Taylor took in $44,111 in shared revenue and $25,321 in returned sales tax. Distributions to the cities were based on the following population totals: Holbrook, 5,425; Winslow, 9,835; Snowflake, 4,935; and Taylor, 4,100.
   Navajo County officials have indicated that they have received information that tax collections in August were up, but the increase was not enough to offset the drops in sales tax revenue that have already occurred.