Online sales taxes boost city revenues
More local shopping also a factor as yuma’s finances are doing better than the same time last year
Yuma revenues have been doing surprisingly well considering the pandemic, better than the same time last year. City Administrator Phil Rodriguez attributed it to two major factors: the city now receives tax revenues from online sales and residents have been shopping more locally.
Rodriguez on Wednesday presented the council with a “3/9” financial report for the first quarter of fiscal year 2021. It’s called a “3/9” report because 3 months are behind with 9 more months to go. The report covered the months of July through September.
Rodriguez highlighted the tax revenue sources because “that’s the question we get the most: How are our tax revenues doing?”
The city’s revenues are $2.4 million ahead of where they were at this point last year. All of the tax revenue funds are performing better this year than the same period last year, except for the gasoline tax, also known as the Highway User Revenue Fund, or HURF.
Rodriguez credited “some pretty significant court cases across the country” that now allows the city to collect sales taxes from online retailers. In addition, community members are spending more of their dollars locally.
“It’s having a more vivid, positive impact on the local economy,” Rodriguez said. He “applauded” the community for “taking care of their friends and neighbors by spending their money here.” That revenues are doing better now than in 2019, when there was no COVID-19 pandemic, points to the fact that “the community is rallying around itself,” he added.
The only underperforming revenue source is the gasoline tax because people aren’t driving as much, possibly due to working from home or trying to stay more at home because of the pandemic, so they’re not spending as much on gasoline.
However, the city administrator cautioned that it’s still pretty early in the fiscal year and he doesn’t want to assume what’s still to come. “But we have every reason to be optimistic at this point,” he said.
As for expenditures, the city has so far spent $460,190 less than last year. “I wouldn’t put a lot of weight on the expenditures side at this point of the year,” Rodriguez said, noting that some expenditures and projects hit earlier and later every year.
Nonetheless, he noted, the expenditure line is still a “good temperature check” of the city’s finances. He also credited staff for keeping the expenditures low and being good stewards of the city’s resources.
The 2% hospitality tax is down by $166,405 from a year ago, but the expenditures are also down by $396,505. It’s not a surprise because the city had programmed less revenue for this year because it expected less tax revenues due to the pandemic. However, the revenues are exceeding expectations at this point.
The Desert Hills Golf Course revenues are also down as well as its expenditures, but the city also knew this would be the case. Nonetheless, the golf course revenues are still doing $145,000 better at this point than a year ago.
The water, solid waste and wastewater enterprise funds, which operate like a private business and should never see expenditures exceed revenues, are all again performing better than a year ago.
Going forward, Rodriguez is cautiously optimistic. “I don’t want to paint too perfect of a picture at this point in the fiscal year because we don’t have enough months,” he said.
He hopes the city will continue on the same path through the rest of the fiscal year. Compared with other parts of the state and other nations, Yuma “is doing very well. We have much to be optimistic about, much to be hopeful for,” Rodriguez noted.
“Hopefully, these numbers will help our community understand and see when you spend locally how much impact that really does have on our local budgets, which allows us to do some things for the community’s good.”
As previously reported in the Yuma Sun, the additional revenues this year have allowed the city to allocate more funds to assist residents with their city utilities bills, fix roads and employee pay raises.