Sales tax collections remain ahead of 2010 pace

Sales and use tax collections continue to rise in Mesa County and the latest reports from county and municipal governments indicate collections remain ahead of last year’s pace.

Mesa County reported $2.96 million in sales tax collections in April, a nearly 6 percent increase over the same month in 2010. So far for 2011, the county reported $11.36 million in collections, a 5 percent increase over the first four months of last year.

The City of Grand Junction reported $4.05 million in collections in April, almost 9 percent higher than April 2010. Year to date, city collections totaled $16.12 million for the period between January and April, 11 percent higher than the first four months of last year.

Mesa County and Grand Junction reports lag a month behind consumer spending. So reports from the first four months of 2011 actually represent consumer spending from December 2010 through March 2011.

Sales tax collection reports from Fruita and Palisade reflect more modest gains, but also indicate consumer spending is up over the first part of 2010.

Fruita reported first quarter sales and use tax collections of $284,390, 0.25 percent higher than the January-March period for 2010. In Palisade, sales tax collections for the first three months of 2011 totaled $40,238, about 1 percent higher than during the first quarter of 2010.

Fruita and Palisade reports correspond to the consumer spending that generated the taxes, so first quarter reports reflect spending that occurred from January through March.

Grand Junction’s report is tempered with a prediction gains realized in the first part of the year probably won’t continue through the second half of the year. The finance department predicts collections for 2011 will finish about 1 percent higher than 2010.

“We thought we’d start ahead of last year, then we’ll begin to decline,” said Grand Junction City Manager Laurie Kadrich. As large construction projects are finished, the purchase of building materials — and the sales tax revenues that go along with them — will subside, she said.

Four such projects are funded at least partly by local government. They are a police station and public safety facility at Fifth Street and Ute Avenue, with a cost of

$11 million to $14 million; the 29 Road viaduct over the Union Pacific Railroad tracks, a $32 million project split between the city and county; stadium renovations at Lincoln Park totaling $8 million; and a roundabout at 23 and G roads carrying a price tag of $1 million.

In the private sector, an American Furniture Warehouse outlet is under construction along U.S. Highway 6 & 50 near Grand Avenue. That’s also scheduled for completion this year. Elsewhere, though, commercial space remains vacant and available. That includes the former Border’s store in Grand Mesa Plaza, the former Office Depot location on U.S. Highway 6 & 50 near Mesa Mall and the former Eastgate City Market on North Avenue.

Declining tax collections have led the city to tighten spending over the past two years. The 2011 budget of $147.2 million is 1.2 percent lower than the 2010 budget. City employees received a 3 percent pay cut last year and staffing was reduced. Street repaving was suspended for most city streets during that time, but that effort will resume next year, Kadrich said. That’s because the city won’t have to spend $8 million it’s spending this year on the 29 Road viaduct.

The funding situation could have been worse this year had the state not come through with about $3.5 million in funds that partly came from highway users and energy severance tax revenues, Kadrich said. The state took some of the local share of severance taxes to help balance the state budget during the economic downturn and lawmakers had threatened to take more this year.

In Fruita, sales tax collections for March totaled $99,780, down 1 percent from March 2010. However, first quarter collections of $284,390 were up over the same period last year. An anomaly occurred in the category of use tax collected on vehicles, which was up 17 percent for the first quarter.

Overall, Fruita seems to be faring well during the soft economy, said City Manager Clint Kinney. “While we budget conservatively on purpose, we’re very pleasantly surprised.”

Palisade also saw a modest gain in sales tax collections for the first quarter. But the town will take any gain during challenging economic times.

“It’s a tiny change, but still positive,” said Town Administrator Tim Sarmo. Palisade has seen repeated gains in yearly sales tax collections, even during the local economic downturn that began in late 2008. Collections for 2009 were 8 percent higher than 2008. Collections in 2010 were 5 percent higher than 2009.

It’s still too early to predict whether 2011 will bring another yearly increase. Big swings in percentage gains and losses can occur partly because Palisade has a small tax base. For example, collections were up

3 percent in January of this year, down

4 percent in February and up 2 percent in March in year-to-year monthly comparisons.

Despite publicity about business closures in Palisade and a decision by Family Dollar Stores to cancel plans to open in Palisade, Sarmo remains upbeat. “We’re seeing new businesses open right along with businesses that close. People are bullish on Palisade. Businesses are bullish on Palisade.”

Meanwhile, the town board continues to refine methods to recruit new businesses.

“The board is desirous to see a broader base of businesses that appeal to local people and to tourists,” Sarmo said. Palisade works closely with the Grand Junction Economic Partnership to find out about business prospects that would consider moving to the Grand Valley. But the small town often doesn’t meet the minimum requirements to recruit a business, Sarmo said.

Palisade actively promotes agritourism, luring tourists who might be interested in visiting vineyards, wineries and orchards. The town is working on an official fruit and wine trail, complete with signs directing people driving on Interstate Highway 70 to a route through Palisade and surrounding farmland. The U.S. Department of Agriculture has approved a $9,000 block grant to start the project. The Colorado Association of Vintners and Enologists donated another $5,000.

Palisade is adding another festival, hosted by the Lavender Association, in mid-July, Sarmo said. The town also offers the Peach Festival in August and Colorado Mountain Winefest in September.

If hotel bookings are any indication, the tourism business seems to be improving in Grand Junction.

Lodging tax collections in April totaled $80,099, 12.7 percent higher than April of last year. For reports covering the first four months of this year, collections totaled $255,001, 1.5 percent more than during the same period in 2010. The reports lag one month behind the hotel bookings that generate the tax.

Early this year, officials at the Visitor and Convention Bureau hoped a soft economy might cause many Colorado residents to vacation in the Grand Junction area instead of traveling farther distances. The log book at the visitor center shows a modest 0.3 percent increase in Colorado visitors for the first four months of the year. Out-of-state visitors have declined 12.1 percent. Visitors from other countries are up 17.9 percent, although the sample for both years is small.

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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