With building ramping up, consumer spending increasing and industries expanding, Clayton appears firmly on the other side of the recession.
At its meeting last week, the Town Council reviewed financial figures for the fiscal year so far and liked what it saw. Six months into the fiscal year, Clayton is slightly more that halfway through its spending and has banked 96 percent of property taxes due to the town, the report showed.
“I’m cautiously optimistic we’re going to do a little bit better than we anticipated,” Councilman Michael Grannis said. “I don’t have any reason to believe we’ll encounter any huge hiccups.”
Growth in the tax base and a 2.5-cent increase in the town’s property tax rate have brought in an additional $700,000, bringing total receipts to $8.4 million so far this fiscal year. Grannis said he stands by the tax hike and thinks it puts Clayton in position to keep rates level for the better part of the next decade.
Town Manager Steve Biggs said this midway-point look at the books is the most important review the town does all year.
“The due date for property taxes is Jan. 5, so 70 to 80 percent of all property tax revenue comes in by late December, early January,” Biggs said. “It’s important to know at this point if we did a good job estimating for the year. If we’re coming up short, it’s a really big deal.”
Expenses increased in nearly every department, which Grannis attributed to salary hikes that followed a pay study. Biggs said the town also added back positions lost during the recession and created a few more.
With several new developments announced this year, construction is ramping back up after the housing collapse stalled or killed many projects around town. Biggs said the town expected some action in the housing market, and the numbers back that up. Revenue from building permits is up more than $40,000 from a year ago.
“It’s been primarily new residential,” Biggs said. “Sometimes you’ll see a spike in building permits when a new hospital is built or some other large project. But this year, seeing that spike primarily in the residential sector is what we expected. We thought the residential sector would be picking up, and that is what is bearing out.”
But sales-tax receipts depict a town of slowing, if not cautious, spending. Last year at this point, retail spending in town was up 13 percent over the year before. This year, that growth has more than halved.
“What we’re seeing with sales tax is that it’s increasing, but substantially less than the year before,” Biggs said. “Last year, three out of four quarters had double-digit growth. But the numbers are now increasing at a very modest rate.”
Biggs suggested that pent-up consumer demand, unleashed after the recession ended, has begun to flatten out. Grannis thinks it could have something to do with this year’s presidential election.
“I think part of it is it being an election year,” Grannis said. “People tend to pull their horns in a bit because they don’t know what’s coming with a new president.”
Biggs thinks the town has proven that county residents are willing to pay to use Clayton services. For several years, the parks and recreation department has sold memberships to out of town residents, and this year it’s seen a increase in memberships sales.
“The people who said a membership program wouldn’t work were wrong,” Biggs said. “There was a feeling among some that people would not pay for memberships, but we’re seeing them buy them at an increasing rate.”
Similarly, the town imposed a $5 library card fee on county residents for the first time, selling 1,600 memberships for around $8,000. The fee has reduced the number of county residents using Clayton’s library, but the library is better for it, Biggs said.
“It was a situation where people were loving it to death when it was a free product for everyone,” Biggs said. “This gives us better local control.”
Drew Jackson: 919-553-7234, Ext. 104; @jdjackson