Sales tax collections drop, but at a slower pace

Phil Castle, The Business Times

Sales tax collections continue to decline in the Grand Valley, albeit at a slower pace that offers some encouragement the trend could change.

“We’re hoping we’re moving in the right direction,” said Elizabeth Tice-Janda, revenue supervisor for the City of Grand Junction.

For now, though, lower tax collections constitute a key measure of what’s been lower sales. Moreover, officials with the city and Mesa County have had to adjust for shortfalls in what they’d initially budgeted. “We’re still definitely not where we want to be,” Tice-Janda said.

According to the April report from the city, sales and use tax collections totalled almost $4.19 million, a decline of 1 percent from the same month last year, Mesa County collected a total of almost $2.22 million in sales tax revenues for its capital improvement and general funds, 4.5 percent less than the same month last year.

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

City sales and use tax collections have dropped on a year-over-year basis in eight out of the last nine months. But the latest decline was the smallest proportionally since September.

For April, city sales tax collections decreased 1 percent. Use tax collections increased 9.6 percent, but at just $18,342 constituted a far smaller source of overall revenues.

For reports for the first four months of 2013, the city collected a total of  $16 million, down 4.1 percent from the same span in 2012.

Tice-Janda said lower sales could reflect in part a declining workforce and perhaps a declining population as people leave the Grand Valley in search of jobs elsewhere.

Energy exploration and production activity in the area also has slowed, Tice-Janda said, as companies shift their attention from natural gas development in Western Colorado to oil development elsewhere in the state and nation.

While the city has been able to adjust to declining revenues so far, budget cuts could be needed if the trend continues, she said. The city had initially budgeted for a 3 percent increase in sales tax collections in 2013.

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

For reports for the first four months of 2013, the county collected a total of nearly $3.27 million for its capital improvement and general funds, down 4.6 percent from the same span in 2012.

Marcia Arnhold, finance director for Mesa County, said first quarter sales tax collections from the automotive, home improvement, hospitality and retail sectors held steady. But collections from the construction, manufacturing and wholesale sectors dropped to their lowest levels in seven years.

While Arnhold initially projected a 4 percent increase in sales tax collections for 2013, she said she now hopes tax collections at least hold steady for the remainder of the year. Meanwhile, though, collections for the capital improvement fund have already dropped $1.2 million below what was budgeted, she said.

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 May 13 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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