Crowding at the register

Customers shop at Fry's in Sahuarita while they wait to check out this April. 

The coronavirus didn't take as big a bit out of sales tax revenue for the Town of Sahuarita as was expected.

For April, the most current data available, general sales tax collections were $5,000 higher than a year ago and $82,000 higher than the five-year average for the month.

Despite April falling within the state’s stay-at-home order, the month brought in more general sales tax revenue than in April 2019.

Actual collections were $2,757 under what was predicted for the month.

Finance Director A.C. Marriotti said he was “pleasantly surprised” by the overall numbers considering the circumstances brought on by COVID-19.

All major categories of sales tax revenues have shown growth from July 1, 2019, the start of the fiscal year, to April 2020. This includes retail and restaurants and bars, which faced major disruptions to business during statewide closures.

Retail is up nearly 9 percent, from $3,366,233 to $3,663,871 from July 1, 2019 to April 2020. It’s up an even higher 10 percent compared to April 2019. Retail makes up the largest portion, just over 40 percent, of general sales tax collections.

Marriotti said a large part of this is because there are more people and businesses in town now then there were last year.

As far as the shopping habits of residents, Communications Coordinator Mark Febbo said April had “runs” on essential household items and supplies that may have contributed.

“Some factors affecting retail through COVID-19 might include that although people have been presented with financial challenges, they’ve also needed to keep their households in supply,” he said.

Restaurants and bars increased year to date by 16 percent, from $565,418 to $657,936 from July 1, 2019 to April 2020.

While the restaurants/bars collections are up from last year, they are 13 percent under the revenue for the month of April 2019.

Febbo said the Town has put a focus on supporting restaurants during this period through initiatives like Takeout Thursdays, spotlighting local restaurants. They are currently promoting a Restaurant Week and encouraging residents to support local eateries.

“Our businesses have worked hard and been creative when in the face of these challenges, and so I think some of what you’re seeing in sales tax figures is their ingenuity,” he said. “We don’t like seeing sales down for any of our businesses and we’re trying to be proactive in helping them however we can.”

One of the categories with the least growth year to date was “other,” which includes transportation, hotels and amusement. “Other” is down over 50 percent compared to the month of April 2019. 

In Arizona, hotels and motels took one of the largest hits in sales tax revenue. According to the Joint Legislative Budget Committee's most recent revenue report, motels and hotels are down 82 percent from May 2019 statewide.

Marriotti said “other” makes up under 2 percent of their general sales tax collections, and so the revenues are not as significant for Sahuarita.

“It’s very hard to develop an expectation over so many taxing categories that cover a myriad of different business types,” he said. “Given that challenge and the fact that the revenues are not significant, it’s better to focus our efforts elsewhere.”

Rental and leasing, while almost 3 percent higher than the year to date, dipped about 28 percent compared to last April.

Febbo said, traditionally, this is a time of year seasonal residents tend to return to their home states.

Construction

Construction tax revenues make up about 36 percent of the 2020 year to date collections from July 1, 2019 to April 2020, the second largest portion after retail trade.

Marriotti said they expected to see a decrease in construction but it is essentially the same as last year.

Current collections were $39,000 more than this month last year and $135,000 more than the five year average for this month.

Febbo said where many industries were halted during the COVID-19 pandemic, construction was never required to stop and the need to build did not go away.

In the past five months, the Town has averaged 49 single-family home building permits per month.

In April, they issued 46 and in May they issued 50.

Planning and Building Director Sarah More said “these numbers are significantly higher than projected, and in fact, the highest they’ve been since 2010.”

So far, the total of single family home permits is 414 for the fiscal year, which ends June 30. This fiscal year is already ahead of 324 permits issued last year.

“We see this as an indicator that builders still view Sahuarita as a great market,” Febbo said. “They see people interested in living here, moving here, raising a family or retiring, and we hope that has a little bit to do with what we do as a town government to maintain the well-being of our community through keeping our infrastructure maintained and also with creating a welcome space for business.”

Marriotti expects to see sales tax revenue increase for May with things reopening.

Jamie Verwys | 520-547-9732