Burien “Seeing A Little Bit Of Improvement” In Sales Tax Revenue

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by Ralph Nichols

Burien is “seeing a little bit of improvement” in sales tax revenue collected by the city, according to Accounting Manager Gary Coleman.

Collections for March, which were received by the city in May, were about 15 percent below sales tax receipts in March 2009.

While this is not what city officials anticipated when they adjusted Burien’s first biennial budget last fall to account for declining general fund revenues, it’s better than the way the year started.

Sales tax collections for January were down 21 percent, compared to January 2009.

“There was a slight uptick” in sales tax revenue for March, the most recent month for which this information is available,” Coleman told The B-Town Blog. “Things are not so dire as they were.”

The retail trade represented the largest decline as the year began – 55 percent – from January 2009.

Sales tax receipts generated by new car dealers, which accounted for over 40 percent of all sales tax revenue in Burien, were down by 43 percent at the beginning of this year.

Burien began 2010 with four new car dealerships, compared to six three years ago. And this spring Millennium Ford changed owners and became a used-car-only dealer.

All motor vehicle and parts dealers combined accounted for a 31 percent decrease.

Total sales tax receipts were down by almost $373,000 from January 2009.

“We are noticing the strain of the poor economy” in the poor tax revenues, Coleman said. “But the city also planned for this eventuality, so we also have some small [general fund budget] reserves for this.”

Car sales, a “big driver” for sales tax receipts in Burien, were down and construction was slow, he noted. “Everything was down, even gasoline taxes received.”

Although car sales “have always been one of our bigger sales tax generators, this won’t get all the way back. We’re now down by two-and-a-half car dealers.”

But since January, “we have been seeing some signs of life,” Coleman said. This includes “some increased real estate activity.”

Another “good trend” for Burien is that, while local sales tax receipts remain down, county wide sales tax revenue “is slightly up.” And the city receives a small portion of sales taxes collected by the county.

Still, 2010 sales tax revenue projections look “overly optimistic” at this time. City staff, already working with reductions made in the 2009-10 budget last year, is closely tracking sales tax trends as they craft the 2011-12 budget.

Coleman said that, in the meantime, the council could “start cutting things we can” if sales tax collections continue to remain below what was anticipated, or if the economy starts to decline again.

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