G.C. records strong sales tax receipts for July

8/30/2013

By SCOTT AUST

By SCOTT AUST

saust@gctelegram.com

July sales taxes collected in Garden City were strong compared to the same period last year.

Overall, sales tax revenue is more than 5 percent ahead for the first seven months of this year, compared to the same period in 2012. In July, city sales tax receipts hit $554,262, and the portion of county sales taxes collected by the city reached $238,623. In July 2012, city sales tax receipts were $453,965, and the county receipts were $199,698.

City officials said the strong numbers are positive signs for Garden City's future, and additional new development on the horizon bodes well for the community.

"It's certainly going to help our coffers and maybe lets us do things that we couldn't do without raising the mill levy. Any time you can do that, it's good for our property owners," City Commissioner Melvin Dale said.

Commissioner Chris Law said he is pleased with the strong numbers and hopes to see them continue.

"When you invest in something, you're looking for a return. So far, so good. It doesn't surprise me," he said.

Both commissioners believe the city's economy will continue to benefit from retail growth due to two projects currently in the works at Schulman Avenue east of the bypass: the Schulman Crossing Phase II development, which anticipates more than 200,000 square feet of new retail shopping opportunities north of Menards; and the hotel, water park and Old Chicago restaurant being built south of Menards.

Both projects, worth about $25 million each, are expected to start construction sometime this fall.

Dale said he is excited about the potential each project has to bring more people to Garden City.

"I think the number of people drawn to the community for shopping or spending the night is going to be surprising," he said. "It's just going to be a tremendous boost for our economic development. I can't wait until Old Chicago and the pool gets here. This old man may slide down the slide one time."

Law said there are a lot of people looking forward to the growth.

"As I go around to some of our shopping areas, whether it's downtown or out east or the movie theater, the number of out-of-county and even out-of-state tags is good. There's lots of them, and we're glad to have them here," he said.

When more sales taxes are collected than anticipated, it directly helps the city's budget by limiting the amount of property taxes needed.

"The more of that we generate, the better use we can make of the property taxes we are collecting, and/or continue to lessen that burden," Law said.

While property taxes needed will never be zero, lowering the property tax burden helps make investing in things like building more housing more attractive to builders and developers.

"When those variables become more attractive, that's when they start to invest more. It may spur some economic growth," Law said. "Once people see others willing to invest, they take a closer look. It is a good time. All the variables seem to be pretty decent right now."

But City Manager Matt Allen, while definitely excited about the numbers, remains "cautiously optimistic."

Allen cautioned that monthly disbursements of sales tax revenue from the state Department of Revenue swing so much that it is difficult to discern month to month trends.

Allen said that in the past, sales tax disbursements used to be more smooth and consistent each month. Now, there are more peaks and valleys in state disbursements and he isn't sure why.

As a result, he said, many cities now look at quarterly reports to find more accurate trends.

"We do look month to month, but I don't know that we jump to conclusions, positive or negative, after any particular month anymore," he said. "We look at quarterly, half-years, full years, and those trends are also very good and positive."

Given that Menards opened at the beginning of June, some may think that store's sales were a big part of July's sales tax spike. Allen said because of the delay in sales tax reports from the state, Menards' impact was likely small on July's numbers.

"July's number is astonishing," Allen said. "I don't know that I've seen a month like that, or we have had a month on record like that. But again, it's tough to say whether that was due to something that happened over a few days, or was sort of a slow roll out of the Department of Revenue the month before, making the disbursement look abnormally large."

Allen believes a combination of factors, including healthy large sales trends like automobile sales, and healthy overall commerce in the city, played roles in the good sales tax numbers.

"(Sales tax) helps fund a lot of general government services, but more importantly is an indicator of the economic health of the community and the state of the community as a regional hub," Allen said.

And being 5 percent ahead of the game compared to a year ago isn't anything to sneeze at.

"That's some steady growth. That's nice. We like that," Allen said.

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