Sales tax collections continue to decline

Phil Castle, The Business Times

Sales tax collections continue to decline in the Grand Valley, a lengthening trend attributed in part to a decrease in regional energy exploration and production.

According to the May report from the City of Grand Junction, sales and use tax collections totalled $3.7 million, a decrease of 5.1 percent compared to the same month last year.

Mesa County reported collecting a total of $2.2 million in sales taxes for its capital improvement and general funds, a year-over-year decrease of 5.7 percent.

Because reports lag a month behind collections, May reports reflect April sales.

With declining sales tax collections now stretching back nearly a year, city and county governments have been forced to adjust budgets in looking for cuts and delaying some projects.

Elizabeth Tice-Janda, revenue supervisor for the City of Grand Junction, said key questions remain: How long will the trend continue and to what extent?

City sales and use taxes collections have dropped on a year-over-year basis for nine out of the last 10 months.

For reports through the first five months of 2013, the city collected a total of  $19.7 million in sales and use taxes. That’s a 4.3 percent decline over the same span in 2012.

Energy development, the largest single industry sector in generating city sales and use taxes, has declined, Tice-Janda said. Despite some large public projects that are under way or soon will be, commercial construction activity has remained slow as well, she said.

At the same time, the opening of chain stores in outlying cities has reduced the contributions of regional shoppers to the Grand Junction tax base, Tice-Janda said.

But even as residents play a more prominent role in paying sales taxes, there are indications the population could be shrinking as people leave in search of jobs elsewhere, she added.

Declining sales and use tax collections have forced city administrators to look for ways to make up a shortfall in budgeted revenue. Cuts could be needed if the trend continues, Tice-Janda said.

For Mesa County, sales tax collections have dropped on a year-over-year basis in 10 out of the last 11 months.

For reports for the first five months of 2013, the county collected a combined $10.8 million for its capital improvement and general funds, a 5 percent decrease from the same period in 2012.

Eleanor Thomas, budget manager for Mesa County, attributed the decline more to a slowdown in the energy industry and the companies that support regional activity than a more widespread drop in retail sales.

“Our retail is pretty much steady,” she said.

Still, lower sales tax collections have forced county administrators to adjust the budget, particularly for capital improvement projects.

Thomas said some projects have been delayed.


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Posted by on Jun 18 2013. 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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