News updates are sent daily. You can unsubscribe at any time.
Tempe's sales tax revenue slumps 9.2% in last 4 months
Digg|
Save|
License|
Print|
E-mail|
Sales tax collections in Tempe dropped last month, and city officials warn the news is only going to get worse.
Tempes sales tax revenue falls
Revenue in the fiscal year's first four months (July-October) was down 9.2 percent from the same span in 2007, according to recently released city financial documents. In terms of actual money received, Tempe was $2.5 million short of last year's total of $27 million for the same period.
When looking at month-to-month receipts, it becomes clear October was the fiscal year's worst yet. Through the first quarter, revenue was off 8.1 percent. In October alone, it was down 12.3 percent.
Collections in October came from sales made in September, and it was midway through that month when trouble on Wall Street began to spook American consumers. Worse news came during the first 10 days of October, a stretch that saw the Dow Jones Industrial Average lose more than a fifth of its value.
Day after day of alarming economic reports had the effect of scaring consumers into hanging on to every cent they had, as evidenced in the U.S. Census Bureau's report, released last Friday, that national retail sales for October fell 3.1 percent from the previous month and 5 percent below October 2007.
Economists at the blog Calculated Risk said when inflation is taken into account, the drop in retail sales from October 2007 was 8.8 percent - "the largest (year-over-year) decline since the Census Bureau started keeping data."
Tempe won't release its revenue report from October sales until the middle of next month. But city financial services manager Jerry L. Hart predicted, "the impact of these (national economic) events will be negative."
"In light of this, we recommend great caution with regard to any decisions having an ongoing economic impact," Hart said in his Nov. 7 memo to the mayor and City Council.
Tempe's sales tax revenue collected through October was off 13.3 percent compared to the prior year. Especially weak were the automotive and building supply sectors - down, respectively, 36.7 percent and 24.7 percent.
"It appears that a recovery is several months out," Hart said.
Related
Please add your comments, but follow these guidelines to keep this a safe, credible place for discussing the news: