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City tax revenue climbs as more cuts are considered

The City of Grand Junction continues to report upswings in sales and use taxcollections even as it prepares to trim spending for a third consecutive year. For reportsfiled in October, representing consumer spending for the month of September, the citycollected $4.17 million in sales and use taxes. That’s a 12.08 percent increase over thereports for October of 2009. It was the fourth consecutive monthly report which displayeda year-to-year increase over the same month last year.

“It’s exactly what we projected,” said City Manager Laurie Kadrich, who addedthe city projected an increase in tax collections for the second half of this year. Somecommercial construction projects moved forward during the past few months, includinga new City Market on 24 Road, a Main Street hotel and continued construction of the 29Road viaduct over the railroad tracks. Additionally, the tourism business is more lucrativeduring the summer and early fall months.

“We projected we’d finish stronger than we started,” said Kadrich.However, the city is on track to collect less in 2010 than it did last year, when thecity realized a big drop from the 2008 totals. The city collected $38.08 million in salesand use taxes for reports covering this year’s January-October period. That’s 5.06 percentless than during the first 10 months of 2009.

The city has trimmed money from its budgets the past two years, and plans aneven leaner budget for 2011. At press time, the city was considering a budget of $147.2million for next year. Spending cuts announced during the current year will cause thisyear’s final tally to be less than the amount in the original budget. Reductions includeda three percent pay cut for city employees, a trimming of the number of city employees,and suspension of the street overlay program for many city streets. The proposed budgetfor next year would not restore any of the services or jobs that were cut over the past twoyears, said Kadrich.

Kadrich and city staff have a secondary budget plan, which would slice another$4.8 million from next year’s budget, in case revenue falls short of projections. Shouldthat happen, it could require more staff reductions—as many as 10-12 positions, saidKadrich. Some of the reductions could occur through attrition as some employees retire.

Meantime, the city moves ahead with paying half the cost of a 29 Roadviaduct over the railroad tracks, and city council has approved the use of DowntownDevelopment Authority funds to help pay for expansion and improvements for theAvalon Theater. DDA funds come partly from a tax levied on downtown properties, andpartly from a voter-approved tax increment fund, which is a portion of the local sales tax dedicated to DDA projects. The city also plans to refurbish Main Street from 4th to 7thStreets, beginning in January.

The city is mulling over possible increases in some fees to help pay for servicessuch as public golf courses, downtown parking and meals at Two Rivers ConventionCenter. Another proposal calls for increasing traffic fines so they’re more in line withcounty and state fines. Under current rates, a four point speeding ticket in the city draws a$75 fine, compared to $135 on a county or state highway. While fee increases often drawpublic complaints, City Finance Manager Jodi Romero said the city might realize an extra$200,000 annually from all the proposed fee hikes.

In a breakdown of taxes collected by category, the city noted there was a 32percent increase in sales taxes from auto and camper sales in October, compared tothe October report from last year. Clothing and department store sales tax collectionsincreased 15 percent in year-to-year comparisons, while furniture and appliancecollections were up 4 percent. There was a 12 percent increase in collections fromthe “other” category, which the city said mostly includes taxes from utilities and largeretail stores. Collections at restaurants were up 3 percent over the October, 2009 report.

Tax collections from medical marijuana sales totaled $142,000 over a 14 monthperiod ending in October, said Romero. City Council voted earlier this year to banmarijuana dispensaries as of January 1, but voters signed petitions in an effort to force aspecial election on the issue. Council’s next step is to either repeal the ban or to place themeasure on the ballot in April. The issue, along with the 2011 budget, were on the agendafor council’s mid-December meetings as of press time.

About
Mike Moran has worked as a news and sports reporter, and news manager for the past 30 years, in markets that include Rochester, New York; Colorado Springs; Panama City, Florida and Monroe, Louisiana. He also teaches Speechmaking at Mesa State College and assists his wife, Toni Heiden, in managing her real estate company in downtown Grand Junction. Mike is active in Kiwanis Club of Grand Junction, the Mesa State MBA Alumni Committee, Habitat for Humanity, the United Way and the Botanical Gardens of Western Colorado.
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