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Sat, Aug. 08

Bed, board and booze and sales tax up 13 percent

WILLIAMS, Ariz. - The numbers are in, and last year's sales tax and Bed, Board, and Booze (BBB) tax revenues in Williams came in at the highest level in at least six years.

Combined, the two taxes generated $4,429,431.29 for fiscal year 2013/2014. That's up 13 percent from the previous year, when the taxes generated $3,933,281.54. In fiscal year 2007/2008, the two taxes generated $4,249,659.66.

City Manager Brandon Buchanan said the increase is a natural progression following the recession.

"I think it's the return of tourism really," he said. "In 2007-2008 when all that dove off a cliff, everybody stopped spending money on first and foremost tourism activity. Now that the economy's been improving over the last five years people are now starting to loosen up with those tourism dollars again and start traveling more and spending more when they travel."

While the double-digit percentage increase sounds impressive, Buchanan said the revenues are just catching up to their pre-recession levels. In fiscal year 08/09, tax revenues decreased 4 percent from the previous year. The following year revenue dropped 11 percent from the year before. The next three years saw modest 2 percent, 3 percent, and 2 percent increases before last year's 13 percent increase.

"I think it is as much we're getting back to where we were five to six years ago as it is we're just doing so much better in tourism," Buchanan said. "We're making up those lost percentages when the recession hit."

He added that the efforts of the Williams-Grand Canyon Chamber of Commerce and other local groups have also helped raise the tax revenues.

The combined BBB and sales tax revenues increased almost every month during fiscal year 2013/2014 compared to the same month the previous year.

The only blip in the upward trend came in November, after the Grand Canyon closed because of the federal government shutdown in October and tourism stalled. In November, the tax revenues were down 6.33 percent from the previous November.

Overall, Buchanan said he expects the tax revenues to continue climbing as they have since fiscal year 2009/2010.

"I'm not expecting probably double-digit increases like we've been seeing," he said. "I think more realistic numbers and numbers that other communities across the state are seeing are single digit 6-7-percentage increases, which is more realistic I think in the long term."

BBB revenue

The BBB tax generated $764,405.80 for fiscal year 2013/2014. That's a 12 percent increase from the previous year, when the tax generated $683,866.92.

Last year's BBB tax generated about $80,000 more than the city budgeted.

"In general when we go into budgeting, on revenues we're conservative and on expenditures we budget high and then hope that it comes in opposite on both of them," Buchanan said. "But an $80,000 increase is fantastic news."

The city's tax rate for restaurants and hotels is 4.5 percent. BBB revenue goes to the Williams-Grand Canyon Chamber of Commerce for tourism promotion, the Williams and Forest Service Visitors Center, and recreation facilities.

Sales tax revenue

Sales tax brought in $3,665,025.49 in fiscal year 2013/2014, which is a 13 percent increase from the prior year when it generated $3,249,414.62.

Part of the reason for that increase is that the city increased the retail sales tax rate from 3 percent to 3.5 percent starting March 1, 2013.

That half-cent increase was originally intended to generate about $300,000 for street projects. However, in light of the city's water crisis, that money has been diverted to water-related expenses.

However, the rate change isn't the only reason for the increase.

"Part of it again though I think is the same as the BBB, that as the economy's improved slightly, people are loosening up their spending as well," Buchanan said.

Besides the portion allocated for streets, the sales tax revenue goes to the city's general fund.

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