Declines end upward trend in sales tax collections

Phil Castle

Phil Castle

Phil Castle, The Business Times

What local government officials hoped might be a trend of increasing sales tax collections has ended.

If there’s a consolation, declines reported in February come during what’s usually one the lowest months for collections anyway.

The City of Grand Junction reported a 2.3 percent decrease in February sales tax collections compared to the same month last year. Mesa County reported a nearly 3.2 percent decline. Since tax reports lag a month behind, the February numbers reflect January sales.

Sales tax collections constitute not only an important source of revenue for the city and county, but also a key measure of local retail activity.

The February reports marked the end of a string of year-over-year increases in sales tax collections that had extended four months for the city and county.

“Hopefully, this was just a temporary setback,” said Elizabeth Tice-Janda, revenue supervisor for the City of Grand Junction.

Marcia Arnold, finance director for Mesa County, said it’s difficult to speculate exactly how the year will turn out given uncertainty in the local economy.

The city reported collecting nearly $2.8 million in sales taxes and receiving another $567,000 in sales taxes collected by the county that’s distributed back to cities and towns. That total of $3.34 million was 2.3 percent less than what reported for February 2013.

The city also collected almost $112,000 in use taxes, a nearly 57 percent drop from the same month a year ago.

Total tax revenues of $3.45 million were 6.2 percent less than this time last year.

Tice-Janda said a number of factors could have affected sales during January, including winter weather, an increase in the number of people paying health insurance premiums under the new federal health care law and an end to extended unemployment benefits for those who’ve been out of work. Tice-Janda attributed the decline in use tax collections to slowing in energy development and construction activity in the area.

February and March reports typically reflect the lowest monthly tax collections of the year for the city and county. Tax collections usually pick up during the spring and summer and again during the holiday shopping season.

For reports for the first two months of 2014, the city collected a total of almost $8.5 million in sales and use taxes, three-tenths of a percent more than the same period last year. The city has budgeted for no increase in 2014 from the roughly $48 million in sales and use taxes it collected in 2013.

Mesa County reported collecting a total of $1.89 million in sales taxes for its capital improvement and general funds in February. The county collected another $718,000 it distributed back to cities and towns.

Arnold said no clear cause for the decline was evident from an analysis of collections by sector. Compared to county collections reported in February over the past five years, the latest numbers fell roughly in the middle, she said.

For reports for the first two months of 2014, Mesa County collected a total of $4.46 million in sales taxes for its capital improvement and general funds, nearly three-tenths of a percent less than the same span in 2013.

Like the city, the county has budgeted for no gains in sales tax collections in 2014. The county collected $26.8 million in 2013.

Phil Castle is editor of the Grand Valley Business Times, a twice-monthly business journal published in Grand Junction. Castle brings to his duties nearly 30 years of experience in editorial management positions with Western Colorado newspapers. In addition, his free-lance work has appeared in a variety of publications, including the Washington Post. He holds a bachelor's degree in technical journalism from Colorado State University.
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Posted by on Mar 11 2014. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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