Mesa sales tax receipts stabilize after plunge - East Valley Tribune: East Valley Local News

Mesa sales tax receipts stabilize after plunge

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Posted: Wednesday, September 30, 2009 6:06 pm | Updated: 1:06 am, Sat Oct 8, 2011.

Mesa officials are sweating a lot less this week — but not just because temperatures have plummeted.

The city’s sales tax revenue has stabilized after a dramatic downturn this summer that caught Mesa off guard. The drop was so big that the city feared a nasty trend was in the making. 

Mesa officials are sweating a lot less this week - but not just because temperatures have plummeted.

The city's sales tax revenue has stabilized after a dramatic downturn this summer that caught Mesa off guard. The drop was so big that the city feared a nasty trend was in the making.

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But sales tax fell 3.3 percent in July, after dropping 12.6 percent in June and 10.1 percent in May. The city's budget has a contingency for small declines and even months of big drops, Mayor Scott Smith said. Because sustained drops force the city to make cutbacks, Smith said the city had anxiously been waiting to see July figures come out in recent days.

"We weren't real happy about it, but we were relieved," Smith said.

Double-digit revenue drops came month after month a year ago, which led to painful cuts and layoffs. Smith said that shouldn't have to happen again if the sales tax revenues remain flat or even decline 2 or 3 percent.

Mesa took in about $10.7 million in July, roughly $368,000 less than a year ago. The biggest single source of the tax is retail sales, which fell 9.4 percent from a year ago.

The city expects sales taxes will generate about $129 million this fiscal year.

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