Black Friday – with any luck – will turn into black ink for the City of Manteca.
If Christmas sales trigger a strong fourth quarter increase in taxable sales, Manteca may be able to avoid further reductions in municipal service levels in the 2010-11 fiscal year.
Manteca also will need to have a relatively upbeat property value situation on Jan. 1. That’s the day that the assessor has to use when he readjusts property values by July of each year.
Of course, even if both sales tax and property values do fairly well there is always the wild card – state pilfering of local revenue to balance the state deficit expected to hit $21 billion.
City Manager Steve Pinkerton on Monday said the city is closely monitoring sales tax receipts for the crucial fourth quarter that includes October, November, and December. Most of the city’s one cent general sales tax share on every dollar of taxable sales will make its way to city coffers about mid-2010.
The city was able to prevent the loss of one of its Top 10 sales tax generators – B.R. Funsten & Co., by working with them to stay in Manteca and to expand on a tight time frame.
Even if retailers do well, Pinkerton noted car sales – that account for more than a tenth of the city’s revenue from sales tax – are taking a big hit especially with the closure of Sexton Chevrolet and Manteca Dodge during the past 13 months.
Property taxes dropped 14.7 percent this year in Manteca based on assessed value that plunged $500.3 million.
Pinkerton said the city is cautiously optimistic that the drop will be either slight or virtually unnoticeable this year.
Resale housing values plummeted $10,000 a month on average during 2007 and the first four months of 2008. They then slowed to an average loss of $4,000 a month for the rest of 2008 and the first three months of this year. Since April, closed escrows have been bouncing between $175,000 and $179,000 as the market has stabilized to essentially eliminate the drop in values.
Pinkerton is hopeful the 300 new homes projected to have been sold this year for an average of over $300,000 will help offset any drop in property values on resales. Manteca also has new commercial construction that can help offset losses.
The recent adjustments to employee contracts for the next two years – with most groups forgoing raises and the police opting for 12 layoffs - is expected to eliminate most of the need for reducing expenditures in 2010 and 2011.