Serving Clovis, Portales and the Surrounding Communities
Spurred by residential and commercial construction and heavy holiday retail sales, Clovis’ gross receipts taxes for February skied to an all-time high.
The city received $1.45 million in receipt taxes from the state in February, eclipsing the previous high of $1.34 million returned in July of 2004, according to city records. Gross receipts tax returns lag two months behind, which means the record economic activity occurred in December.
In addition, the city received $17.5 million in gross receipts taxes for 2004, up $1.7 million from 2003.
The city raised its gross receipts tax by one-quarter of 1 percent in July, which translates to 25 cents per $100 goods and services sold. Approved by voters March 2, the increase is slated to fund infrastructure improvements and capital outlay purchases such as fire and police equipment.
The tax increase accounted for a $146,178 of February’s total. But even if that sum was taken out, the month would still be the highest in the city’s history.
Gross receipts taxes are collected on services and goods sold in a number of industries, such as transportation and warehousing, finance and insurance, educational services, health care services and arts and entertainment.
Local shoe retailer Randy Dayhoff said his business saw nice sales numbers over the holidays. He added that his February sales were also up from last year.
“It really picked up right after the election and carried all the way through,” Dayhoff said. “The town just seems a lot busier these days.”
He said many of the other business owners in town saw strong sales over the holidays as well. Dayhoff said the economy may be seeing the first impact of the cheese plant construction south of town.
City Manager Joe Thomas said strong numbers in the construction sector played a big part in the strong month.
“We certainly are undergoing ... a kind of boom in construction,” he said. “We don’t know how long that is going to last, (but) we are optimistic that it’s going in the right direction.”
Thomas said this particular building boom is stronger than any other he has seen. He credited the hospital and railroad expansions, the Southwest Cheese plant construction and the continued presence of Cannon Air Force Base as the main reasons for the continued growth.
He conceded that the ultimate fate of Cannon Air Force Base will play heavily on the economy in the coming years. He said Clovis could survive the loss of Cannon, but in the short term a hit like that would stop economic progress in its tracks.
“We are optimistic that it will stay as is or increase (in scope), rather than ultimately closing,” Thomas said.
The Base Realignment and Closure commission meets later this year to decide exactly what will happen to the base. The commission will make its recommendations to President Bush about base closures in September.
The extra tax revenue will go into the city’s general fund, Thomas said. Because the city budget is already set based on projections, any money left over at the end of the fiscal year will carry over to the next budget.
He said the city won’t be able to spend the extra money until the new fiscal year begins July 1.
Thomas said it is hard to know exactly where the city stands in relation to its budget right now, with unexpected increased costs in employee health insurance, increases in the total insurance package for the city and the police raise granted in November clouding the picture.