After a significant drop in city general fund gross receipts revenue in August, this month’s gross receipts income not only came in above estimates but also made up for two-thirds of last month’s shortage.
The City of Rio Rancho’s September gross receipts tax (GRT) revenue after adjustments was more than $2.2 million, according to a report from city Financial Services Director Olivia Padilla-Jackson. That number is 7.4 percent higher than September 2012 and $205,000, or 10.2 percent, above estimates.
September gross receipts revenue is based on July economic activity.
“I’m hoping we keep this up,” said City Councilor Chuck Wilkins.
Wilkins, who owns an insurance agency, said he had been nervous about the GRT distribution because he had talked to business people who said their July activity was worse than in June.
Gross receipts taxes are imposed on income from the sale of goods and services, according to the state Taxation and Revenue Department website. While they’re levied on businesses, those businesses often pass the expense on to customers.
August GRT revenue, based on June activity, was just more than $2 million after adjustments, almost $352,000 below estimates and 9.2 percent below August 2012. Retail, construction, utilities and manufacturing sectors’ GRT declined last month.
However, compared to last September, 13 of 22 sectors rose in GRT income to the general fund this month. The manufacturing and construction sectors bounced back on a year-over-year basis and a month-over-month basis, Padilla-Jackson wrote.
Still, GRT payments to date this fiscal year are 2.5 percent below the annual estimate.
This month’s construction distribution was more than $494,000, 38 percent higher than in September 2012 and well above last year’s monthly average of $390,000. According to Padilla-Jackson, construction GRT income is up 5.8 percent compared to last fiscal year.
Wilkins said he’d spoken to developers who told him single-family home construction would increase for the rest of the year. For the past couple of months, he said, they were cleaning out inventory.
The expected increase in single-family homes, coupled with better business activity and property re-assessments by the Sandoval County Assessor’s Office, are making projections of property tax income look higher as well, Wilkins said.
Manufacturing GRT revenue rose sharply this month to $205,000, compared to an average of $90,000 over the last six months and not quite $37,000 last month.
“Manufacturing companies are now remitting GRT on various utility expenditures, including electricity, instead of the utility companies,” Padilla-Jackson wrote. “Timing of these tax payments likely led to the large swings seen over the last two months.”
With the utilities distribution, it’s 35 percent less this month than last September and 35 percent below the income at this point last fiscal year.
“… One of the primary reasons for the decline is the change in reporting for electricity used in the manufacturing process; however, other factors, such as demand related to weather, may be coming into play,” Padilla-Jackson said.
According to the report, the retail and services sectors changed little compared to last September, but they’re moving in different directions. This fiscal year to date, retail distributions are 2 percent less than last year and services revenues are 6 percent more.
However, within the retail sector, food-related sales are a little higher compared to the same period last year, according to Padilla-Jackson.
For the services sector, administration and support is 71 percent above its revenue at this time last year. Health care-related and educational services performed better as well.
On the other hand, professional scientific and technical GRT is down 30 percent this fiscal year to date.