Tax collection slump at an end? Trend could be changing

Phil Castle

Phil Castle

Phil Castle, The Business Times

A change in sales tax collections in Mesa County has one official more hopeful what’s been a downward trend for the key economic indicator has reversed course.

“I do believe we’re moving in the right direction,” said Jodi Romero, financial operations director for the City of Grand Junction.

The city reported just a tenth of a percent decrease in sales tax collections in November — a slight difference Romero considered essentially equal to collections for the same month last year. Meanwhile, Mesa County reported a 3.2 percent increase in year-over-year sales tax collections.

November collections reflect October sales. Collections in December and January will indicate how well local retailers fared during the holiday shopping season.

The city reported collecting a total of $3.9 million in sales and use tax collections in November. Use tax collections, a smaller and more volatile portion of city revenue based on sales in the energy and construction sectors, fell 23.9 percent.

Romero said November sales tax collections reflected increased sales in home improvement stores and restaurants, but decreased sales for motor vehicles.

The year-over-year decrease in sales tax collections for November was the smallest for the city since July, when collections edged up four-tenths of a percent.

Romero said it’s possible the downward trend in collections hit bottom in August with a 7.5 percent drop compared to the same month last year. The proportional decreases have been smaller since then, and Romero hopes that trend continues with a move into positive territory. “I’m hoping it’s a sign of things to come.”

Through November, the city has collected a total of more than $45.4 million in sales and use tax collections in 2016. That’s about $1.1 million or 2.5 percent less than the same span in 2015 Sales tax collections have lagged more than $350,000 or nine-tenths of a percent. Use tax collections have declined almost $660,000 or 34.6 percent.

The Grand Junction City Council approved a 2017 budget with $140.5 million in spending — about $6.9 million less overall than in 2016, but with increased allocations for economic development, public safety and street maintenance. Sales tax revenues are projected to remain flat.

Mesa County reported collecting a total of more than $2.5 million in sales and use taxes in November. That’s an increase of more than $31,000 and 1.3 percent over the same month last year.

Use tax collections on motor vehicles and building materials purchased outside Mesa County but used inside the county, fell 14.6 percent compared to November 2015.

Sales tax collections on retail sales increased 1.7 percent. Collections also reflected increased sales at home improvement stores, hotels and restaurants.

Collections in other sectors declined on a year-over-year basis, however, including a 34.4 percent drop in the oil and natural gas sector and a 34.2 percent decline in the constructor sector.

Through November, Mesa County has collected a total of about $28.2 million in sales and use taxes during 2016. That’s nearly $1.3 million and 4.3 percent less than the same span in 2015. Sales tax collections have lagged 2.9 percent, while use tax collections have dropped 16.2 percent.

Mesa County commissioners approved  a 2017 budget of $159.6 million, which is about 2.2 percent more than the adopted budget for 2016.

Public safety accounts for nearly half the 2017 budget. The commissioners also allocated nearly $36 million for capital projects, including $18.1 million for road and bridge improvements, $5.5 million for facilities and $1.1 million for regional transportation.

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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