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Less construction means less 2009 tax revenue for Mercer Island, report says

The Mercer Island City Council discussed the city’s 2009 “dashboard report” Monday evening, which includes 35 indicators that show how the city is fairing.

The report showed that sales tax revenue continued to decline last year. Overall, there was a 20.5 percent decline in city sales tax revenue from 2008 to 2009, most of which was credited to a downward-sliding construction sector, which was down 35.2 percent during the same period.

First quarter sales tax revenue numbers won’t be available until July, but preliminary numbers from January through May 2010 show a continued year-to-year change, although not as severe as the previous year.

The state, however, seems to think it won’t be as big a drop as before. “I’d be really surprised if there was a big decline in 2010,” said Mike Gowrylow, a spokesman for the Washington State Department of Revenue.

The city received $1.8 million in sales tax distributions from January through May 2008; $1.13 million during the same period in 2009; and $1.05 million in 2010.

The State Economic and Revenue Forecast Council projects the stabilization of 2010 retail sales tax on a statewide level. Lower construction spending is expected to continue to weigh down retail sales tax receipts.

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