Williams sees 26 percent spike in sales tax revenues

WILLIAMS, Ariz. - With two major construction projects in the works, the city of Williams is already reaping the benefits of the new development through significant increases in tax revenue.

Sales tax revenue is up 26.31 percent year to date, Bed Board and Booze (BBB) tax revenue is up 12.83 percent year to date, and the revenue from the two taxes combined is up 23.82 percent year to date.

Williams Finance Director Keith Buonocore attributes the increased tax revenue to the Love's Travel Stop and Holiday Inn Express construction projects. The developers must pay sales tax on the construction materials they use.

"They're paying sales tax and we get a percentage of that so that's mostly what's reflected in there," he said about the tax figures.

Buonocore added that even though the construction only directly affects the sales tax figures, it has an indirect effect on the BBB tax revenue.

"Once you get construction activity then it trickles down," he said. "Those people, they're not running back to Phoenix every day. They're staying in hotels, they're eating in restaurants, those sort of things. That is a ripple effect. Without those construction activities, (the revenue) would probably drop substantially."

On the sales tax side of things, Buonocore said he had predicted revenues would be up about 8 percent this year, and so far the revenues are up about three times that amount. The city budgeted it would collect about $3.5 million in sales tax revenue this fiscal year. With only five months of data so far, sales tax revenue has already generated almost $2.3 million.

"But we've been in a low for the last how many years," he said. "So I'm hoping this is catch up to where the economy actually is recovering and we're seeing it on our side of the sales tax. People are saying you can attribute it to lower gas prices, more people are traveling, and the value of the dollar versus the foreign currencies."

Buonocore expects the sales tax revenues to continue to be up by around 20 percent, the BBB tax revenues to be up by around 7 percent and the combined revenues from the two taxes to be up by around 20 percent if nothing goes wrong as the year progresses.

"If the construction goes away, these numbers are going to start tapering down I'm sure unless something else spurs the economy," he said. "Hopefully we can sustain that but we've got to get the water problem squared away so we can start issuing permits and looking to what can we do on the development side. Can we sustain (those increases) the next budget? I don't know. It just depends on if we can get the water situation solved."

Although the increased revenues are encouraging, Buonocore said the city still has several obstacles on the expense side, such as paying for water related costs, updating the electric system, and making street improvements.

"We're optimistic the way we are, but we do have these hurdles we have to jump over and that's the utility side," he said. "We've got to get those things solved. We're working on the water and we're working on the electric side of these things. If we can have a little bit of managed growth that would be great because then we could bring these numbers in for the next year and the next year. If we can get some of these hurdles kind of cleared that would be nice so we're not always jumping over hurdles, we can actually maintain some growth."