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Forecast: Retail sales off by $100M

Manteca budget reflects weak economy

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POSTED October 20, 2009 5:15 a.m.

Manteca retail sales are expected to fall by almost $100 million when the current municipal fiscal year ends June 30, 2010.

That will mean $1 million less for the Manteca general fund.

Property tax receipts at the same time are expected to retreat by almost $1.7 million thanks to reassessments made Jan. 1 reflecting a decline of market value of roughly 40 percent for homes.

Those two projections – based on a conservative approach of under estimating projected city revenue – not only are the basis of this fiscal year’s proposed $32.8 million general fund but they also serve as barometers for the overall economic health of the Manteca community.

The general fund, which represents a 19.2 percent drop in revenue and expenditures over last fiscal year ending June 30, 2009 for the biggest drop since the Great Depression, is part of the budget package being considered for adoption tonight by the Manteca City Council. The council meets at 7 p.m. at the Civic Center, 1001 W. Center St.

Manteca’s conservative approach of under estimating income when cobbling together a budget avoided an even bigger disaster than the $14 million deficit the city is in the process of bridging. The budget forecast in June 2008 anticipated sales tax revenue of $5,561,400. The final numbers were higher - $6,250,000. That extra gain in sales tax of just under $700,000 was more than wiped out by drops in other revenues.
The 2009-10 general fund projection for sales tax assumes retail sales of $561,500,000 for the fiscal year. The one cent local sales tax reflects municipal general fund revenue of $5,615,000.

The half cent Measure M sales tax is not included in the general fund sales tax receipts as it is restricted exclusively for the hiring of additional police and fire personnel.

Bass Pro Shops and Costco receipts helped general retail sales tax but a major decline in auto sales slammed Manteca as it did other cities. Sales tax is assessed based on where a buyer lives and not where the vehicle is purchased.

The state is now holding on to a larger chunk of the local sales tax receipts for months at a time so it can ease its cash flow problem before paying local government what is due them.

Even if the majority of the outlet mall stores are open by midyear, the sales tax receipts would not flow into Manteca’s municipal coffers until the 2010-11 fiscal year.

The same is true of property tax on the outlet mall and other new construction.

While there is a good chance sales may start rebounding and property tax hold its own drop off in other revenue is hurting the city. On top of that, the state is threatening to suspend local payments on a variety of grants it disperses plus start charging for things such as for the use of the state crime lab essentially to prosecuting cases.

To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com


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