FLAGSTAFF – Blame it on the weather for lower than anticipated sales taxes collected by the city of Flagstaff.
Store owners and even city officials say unusually cold and wet weather in May drove away some tourists who normally visit Flagstaff.
The city estimates a 14 percent drop in taxable sales for May.
The May drop in sales taxes continues a steady year-over-year decline in taxable sales for the last 18 months, with the exception of one month, April 2008, which showed a slight increase.
Flagstaff City Manager Kevin Burke said he was disappointed with the sales figures. He believes he sees a pattern in decline in revenue over the last few months with each month seeing a year over year drop of roughly 15 percent – and that is a sign that the recession has hit rock bottom.
“I think we continue to bump along the bottom of the trough,” Burke said.
Burke expressed disappointment in the loss in revenue from the city’s bed, board and beverage tax, which is down 5.4 percent from last May’s figures.
Despite the continued drop in sales tax revenue, Burke said the city met its revised projections for the last fiscal year – but just barely.
“It was better than our worst-case scenario,” he said.
Like others in Flagstaff, Burke blames the weather for fewer dollars rolling in.
“Things were bustling around town,” Burke recalled. “We had good weather, although there were some pretty heavy rains.”
There are some positive signs including a smaller year-over-year decline in auto sales than in previous months.
In May, auto sales saw a 20 percent drop from the same month a year ago. Previous declines were much larger, ranging between 33 percent and 40 percent, depending on the month.
Burke said a recent program that waived the city sales tax on the sale of fuel-efficient vehicles might have something to do with the smaller decline.
Since starting up the program in May, Burke said the city has received 23 requests for waivers from dealers, 12 for new cars and for 11 used vehicles.