Despite ongoing pandemic restrictions in the state, Gilbert’s pocketbook appears so far unscathed.
The town’s sales tax revenues, which include retail trade and construction, totaled $9.6 million in May – a 7 percent increase compared with May 2019, Gilbert officials said.
Gov. Doug Ducey began shutting down parts of the economy in late March and in mid-May allowed non-essential retailers, salons, gyms, theaters and in-door dining to reopen again.
But a surge in COVID-19 cases prompted Ducey to order bars, gyms, tubing, water parks and movie theaters to shut down for a second time June 29 for 30 days. That order was to expire Monday, July 27, and Ducey last week adjusted it.
Gilbert’s total sales and use tax haul for the first 11 months of the 2019-20 fiscal year, which ended June 30, so far is $98 million – 9 percent higher than the same time period in the 2018-19 fiscal year.
“Our citizens have been doing a tremendous job of supporting our local businesses and making a special effort to eat from local restaurants,” Budget Director Kelly Pfost said.
“Part of the explanation may also be that because more people are working from home, they are now spending money close to their home rather than close to their work.”
Pfost said Gilbert has a large residential population, compared with other communities that have a large daytime population.
“I think this is part of the explanation,” she said. “Another part is that Gilbert is still growing and adding new families to our local area.”
Councilman Bill Spence hailed the news and said that Gilbert residents should take a victory lap for supporting town businesses.
“It puts us in a very solid position to try and help businesses that are struggling,” Spence said, noting that Town Council is discussing various strategies, including the use of its $30 million in federal pandemic relief it received two months ago from the state.
According to a town document, May’s sales tax figures mean the budget projection for the fiscal year that just ended “has now been met and that any additional monies received for June will be used to offset revenue losses that may be seen in” the current fiscal year.
But Pfost noted that because June’s sales tax numbers are still out and the 2019-20 fiscal year is not fully closed, the numbers will change slightly as final revenues and expenditures are recorded.
“This is a snapshot in time to help Council see the trends related to our local economy,” Pfost said.
The town is keeping a watchful eye on the sales tax numbers because it makes up the lion share of revenue for its General Fund, which pays for day-to-day operations such as police, fire and parks.
Back in May, Pfost reported to the Council the town budgeted $97 million for sales tax and had then received 83 percent of that, which she called “very strong.”
At the time, she said the town would need $5.6 million a month for April, May and June collections in order to meet the budget.
The town’s share of the state sales tax for May – which is different from the local sales tax – was 13 percent lower than May 2019. But a strong showing in June put Gilbert ahead of its budget projection. The town expected $25.5 million and received $25.7 million, according to documents.
Development Services revenues from business licenses, building permits and other fees also came in higher than projected.
The town budgeted $6.6 million for this pot of money and instead yielded $6.9 million.
Revenue from the town’s Highway User Revenue Fund and Vehicle License Tax also exceeded budget projections. And its enterprise fund and residential trash collection revenue both met their budget projections while the wastewater revenue from residential and commercial customers met 99 percent of its budget.
Parks and Recreation saw the biggest impact from the pandemic.
It only met 93 percent of revenue expectations. The budget projected $3.9 million in revenues but the town only realized $3.7 million.
As a result of closures in April, Gilbert parks and recreation programs and permits generated $101,843 – far less than the $426,251 projected for that month.
Although the total revenue for parks and recreation came up shy, expenditures fell below budget expectations, helping make up the difference, according to the town.
“Most areas are coming in at or above the original budget,” Pfost said. “We did revise projections down for a few areas when we built the Fiscal Year 2021 budget – for example, the Highway User Revenue Fund, Vehicle License Tax and parks and recreation.
“Gilbert budgets on the low side to begin with so that we always have wiggle room built in for unexpected things to come up during the year,” she explained, adding:
“When revenues coming in higher, then we are able to use the money for one-time projects in the following year, for example for repair and replacement of infrastructure.”
Overall, the town’s total general operating fund revenue was $211 million, $25 million more than the $186 million projected in the 2019-20 budget.
Pfost pointed out that the $211 million included $23.6 million the town received in CARES Act money for the pandemic.