The latest sales tax numbers show Gilroy lagging about 20
percent compared to last year and performing at about 2003
levels.
The latest sales tax numbers show Gilroy lagging about 20 percent compared to last year and performing at about 2003 levels.
Between January and March, the city brought in about $2.13 million compared to $2.66 million during the same quarter in 2008, according to city figures. Auto dealers were hardest hit with a 48 percent decline in sales tax revenue compared to last year, but managers of local dealerships said the receipts from increased sales during the federal Cash for Clunkers program will likely reverse this trend.
Behind auto dealers were service stations followed by downtown merchants and then big box retailers such as Wal-Mart, Costco and Lowe’s, which produced sales receipts totaling 10 percent less than the same period last year, according to city figures. The Gilroy Premium Outlets experienced the lowest decline – about 4 percent.
The results from the third quarter of the 2008-09 fiscal year, which ended June 30, are in line with the deflated year-end projections city staff made earlier this summer. Finance officials will begin evaluating final quarter numbers from the 2008-09 year later this month, but current budget figures show sales tax revenue for 2008-09 fiscal year totaling $11.62 million. That’s a 21-percent decline over the year before, which saw $14.15 million in sales tax receipts. For the current fiscal year, FY09-10, staff expects sales receipts to total $11.09 million by June 30, 2010, according to budget figures.
“I am at least relieved to report that the sales tax information was substantially consistent with our projections for the period and that were incorporated in our budget projections for how we will finish” fiscal year 2008-09, City Administrator Tom Haglund wrote in an e-mail to City Council members late last month. “This reflects our expectations for the first three months of the calendar year and also reflects the state of the economy at that time – a difficult period following a very weak performing 4th Quarter of 2008 that included the worst holiday season on record.”
Haglund also pointed out Gilroy’s comparability to California as a whole, which saw a 16.4 percent decline in sales tax receipts during the same quarter. Nearly every city in Santa Clara County experienced declines ranging from 4.4 to 29.3 percent, Haglund said.
Sales tax accounts for about 30 percent of the city’s general fund revenues, the source of the city’s discretionary money, including salaries. This year’s general fund deficit is about $1.6 million, down from $4.7 million before the council passed contract concessions with the city’s five bargaining units this summer. The city’s expenditure budget is about $37 million.
