While ongoing COVID-19 pandemic and the resulting shutdowns led to serious problems for many businesses and municipalities throughout the country, with many businesses facing difficulties staying open, leading to drops in sales tax revenue, Camp Verde has seemingly bucked this trend.
Instead, the town’s past few months show among the highest sales tax receipts that it has pulled in — ever.
“The revenues are just unbelievable,” Town Manager Russ Martin told the Camp Verde Town Council at their Nov. 4 meeting. “We are at a new record last month now for revenues received, so four out of the top five historic records are for the last few months. Revenues are approximately $400,000 over-budgeted … if we kept it over that for the rest of the year.”
“The largest block we’re seeing is coming in construction sales tax,” Camp Verde Economic Development Director Steve Ayers said. “The construction coming in Camp Verde has bolstered the economy in ways nothing else has. People I know in construction are all busier than they’ve ever been.”
According to Ayers, many of these construction projects were set up before the pandemic hit in the spring, and with many of these jobs relatively unaffected by pandemic restrictions, the construction work has continued on apace without significant hiccups. Ayers pointed to the Opportunity Zone designation of the State Route 260 corridor, which provides federal tax breaks for investing in a low-income area, as a major locus for construction.
In addition, the town has not seen the kinds of reductions in retail sales that some other areas have, with less of the town’s economic base coming from retail in normal times. With the COVID-19 pandemic leading to fewer consumer purchases in brick-and- mortar locations, and more from online retailers like Amazon, the town was able to increase its retail sales tax revenues by taxing online retailers.
Hospitality, a major part of Camp Verde’s economy, saw a combination of changes, with a drop in hotel accommodations but the addition of a new RV park on State Route 260. The RV park is ideal for pandemic precautions — keeping people outdoors and separated from other people — allowing visitors to continue exploring the area and spending.
“What we’ve seen here is a reduction in sales tax revenue from hotel rooms but an increase in sales tax revenues in overnight RV stays,” Ayers said.
Ayers also pointed to an increase in local dining from Camp Verde residents, even as restaurants have faced serious difficulties due to restrictions and reductions in out-of-state tourism.
“I truly believe more people are trying to spend their money locally,” Ayers said. “Our restaurants are succeeding at keeping their head above water. That says something about the people of Camp Verde and their commitment to keeping their local businesses viable.”
For the town’s government, the increase in revenues so far does not mean anything drastically different for this year’s budget, which was approved in July. The town anticipated having to dip into its reserves to pay for this year with expected lower revenues, but the increases mean that if things continue steadily, it will no longer have to do that.
According to Town Manager Russ Martin, there are numerous small spending projects that have been postponed in recent budgeting discussions that might be worth using some of the extra revenues on.
“There are employees and services we held back, like in the [Camp Verde] Marshal’s Office. We haven’t filled some of those spots,” Martin said. “Now with the revenue coming in better than we hoped, we can put some of those things back in the budget.”
Martin hopes that this will allow for a pay increase for town employees that had been delayed in recent years, and that the town will be able to pay for small capital improvement projects such as renovating town council chambers and other rooms at town hall.
The major project that Martin does want to see considered would be refurbishing the streets of the town, in small steps.
“The streets are what we know we need to get done,” Martin said. “Before we chip seal the whole street, we crack seal the cracks under it — to do some crack seal this year, in order to prepare for the half-million dollar project of doing some chip seal.”
While the council has not yet made any official deci- sions about what to do with the additional revenues, it does allow for additional flexibility in the coming years, with the likelihood of increasing the town’s reserves as well.
“If it continues this way, we’ll be able to save for another rainy day,” Martin said. “If this isn’t the rainy day we expected, there will be another rainy day.”
