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Tax collections increase in local communities

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Posted: Thursday, December 8, 2011 4:00 pm

When Intel announced plans in February for a billion-dollar plus construction project on its Chandler campus, there were promises of financial gain for the community.

Recent tax revenue reports show that’s what happened.

Every month for the last 19 months, Chandler has seen a year-over-year increase in tax collections. Big jumps are in hotel/motel tax collections and contracting, which includes construction, said Dennis Strachota, management services director for city of Chandler.

In fact, several area communities are seeing increases in tax collections over last fiscal year.

In Chandler, hotel/motel tax revenues are up nearly 60 percent over first quarter last year. Contracting tax collections, which include construction, are up nearly 70 percent over year.

Construction management groups overseeing the Intel project often use the local hotels and motels for meetings when they come into town, Strachota said, prompting much of the jump. Then there are all the materials needed for the project and the individual spending by those building the plant.

“You’ve got 400-plus construction workers out there,” he said. “Even with the construction workers you’re going to have a spike as a result of food and restaurant increases. That’s inevitable.

“You have contracting sales going up, retail going up (each of the last four months).”

During the last 20 months of tax collections, most increases have been in the 6 percent to 7 percent range. But recently, some areas are doubling that and more.

“We did expect an increase. We didn’t expect it to be this much,” Strachota said. “We’re definitely running well ahead of budget for sales tax revenue.”

But Strachota cautions having too much optimism because the economy was down so much and many of the purchases going on surrounding the Intel project won’t stick around forever.

“When you have a huge construction project like Intel, that’s going to last just two years. Unless there’s something else to come along to replace it, we’re going to see the growth in that go down,” he said.

• Contact writer: (480) 898-6549 or mreese@evtrib.com

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