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Sales tax takes a hit in local area retail

Cash registers around the county took in much less sales tax in the final quarter of 2009 than they typically do.

By JOHN SERFUSTINI
Sun Advocate Reporter

Have all the spendthrifts pulled out of Carbon County?

Early reports from the Utah State Tax Commission show that fourth quarter 2009 taxable sales in the county plunged about 27 percent compared to the same period in 2008.

That's a scary statistic taken all by itself, considering how much local governments depend on sales tax revenue. It also hints that buying and selling have slowed down by that much. Don't panic. There's more to an economy than lists of dry numbers.

According to DeLynn Fielding, the county's economic development director, this year-to-year dip may not be as catastrophic as it looks, and may not even qualify as a near-death experience for most businesses. What you have to do, he explained, is to look at what's driving the numbers down.

"It's a reflection of the recession," Fielding noted. "Because of that, the public mentality is more conservative, even if people are working. On the other hand, some businesses are reporting record years for sales."

It is important to consider that taxable sales don't tell the whole story.

For example, sales to the mining industry dipped 53 percent. A good part of that could be that some mining equipment sales are no longer taxable.

Motor vehicle sales, down 20 percent, could be at least partly attributed to people shying away from the $40,000 models and settling for cars and trucks going for half that. That "conservative mentality" may apply to retail food stores as well. Those taxable sales went down about three percent, but that could simply mean that people are shopping for bargains more now than a year ago.

By and large, the state's figures indicate that the biggest declines come from the suppliers of goods and services to large companies. In addition to mining, manufacturing taxable sales were down 68 percent, transportation off 64 percent, wholesale durable goods down 34 percent and wholesale nondurables fell 54 percent.

The sales figures also don't reflect total employment in the region. During 2009, employment in Carbon and Emery counties showed a net loss of only 200 jobs out of roughly 14,000 people in the workplace. So, according to Fielding, the dip in taxable sales is more likely the result of an attitude of uncertainty rather than an actual collapse of the job market.

Price City Manager Nick Tatton agreed with that observation, and noted that with employment holding relatively constant, things could begin to turn around. He said that last fall, activity had stagnated in the Planning and Zoning department, but is now showing signs of recovering.

"We're in the deep end of the pool, but we're still treading water," he commented on the city's financial situation. Tatton said that Mayor Joe Piccolo has ordered city departments to postpone purchases that are not critical until the revenue picture brightens. Price draws about $3 out of every $4 in general fund revenue from sales tax receipts.

However, water and electrical departments have their own funds and are somewhat insulated from the ups and downs of general retail.

On the bright side, some aspects of the local economy have surged. Communications sales were up 27 percent, electric and gas up 14 percent, and amusement and recreation rose 26 percent.

General retail sales, the biggest sector, posted a gain of 5 percent.




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