Tax collections drop, but year-end total still tops 2011

Phil Castle,  The Business Times

Sales tax collections for Mesa County and the City of Grand Junction lag well behind last year in the latest monthly reports. Still, overall collections reported for 2012 topped 2011.

It’s a situation that’s prompted local officials to project continued increases for 2013, but remain on the lookout for a downward trend. As a key indicator of local sales, tax collections have ramifications beyond filling government coffers.

“We’re going to watch this very, very closely and see what the year brings,” said Marcia Arnhold, finance director for Mesa County.

Elizabeth Tice, revenue supervisor for the City of Grand Junction, said nearly the same thing. “We’re cautiously attentive every month and looking at revenue every month as it comes in.”

Mesa County reported collecting a total of more than $2 million in sales tax revenues for its capital improvement and general funds for December. The county collected almost $779,000 in sales taxes it distributed to cities and towns in the county, including Grand Junction. Those figures constitute a nearly 8 percent drop from what was reported for December 2011.

Combined sales and use tax collections for the City of Grand Junction totalled $3.85 million in December, down 3.6 percent from the same month last year.

Since tax reports lag a month behind, December reports reflect November sales.

Total sales tax collections for the county capital improvement and general funds reported for 2012 came to slightly more than $26.8 million. Nearly $10.2 million in tax collections were distributed to cities and towns in the county. Those numbers represent an increase of almost 3.4 percent over 2011.

The city reported total sales and use tax collections of nearly $50 million for 2012, a 1.6 percent increase over 2011.

The year-end totals reflect sales between December 2011 and November 2012. Total collections for the 2012 calendar year will be available in February.

For Mesa County, tax collections have declined on a year-over-year basis in four out of the last five months. But the nearly 8 percent decline reported in December followed a 9.6 percent increase in November.

Arnhold said she’s at a loss to explain the fluctuations in the last two reports, but hopes for what she considers a more normal increase in tax collections of between 4 and 5 percent in 2013. Arnold has projected a 4 percent increase in 2013 collections over 2012 collections, although she could revise that number downward if collections decline.

Arnold said she’s hopeful the increased capital spending the county has budgeted for 2013 — $41 million worth — will help bolster economic and job growth and, in turn, tax collections. “The more we spend, the more we push back into the community in big capital projects.”

For Grand Junction, sales tax collections have dropped in three straight monthly reports. “That’s a little concerning,” Tice said.

Sales tax collections in the December report reflected a decrease in sales in nearly every category except restaurants and bars, she said. “There’s a lack of consumer confidence, and it’s really across the board.”

Use tax collections, a far smaller source of city revenues, have fluctuated in monthly reports, but dropped almost 45 percent in the December report and 15 percent for 2012. Use taxes are assessed on equipment and supplies purchased outside the city, but used inside the city.

Tice attributed the decline in use tax collections primarily to slowing in regional energy exploration and production related to low natural gas prices. But businesses in other sectors have been hesitant to buy new equipment, she added.

Tice said she expects a somewhat clearer statistical picture when the January report is completed and offers a look at sales in December, the single biggest month for sales tax collections for the city. While retail sales were up 4 percent nationally for December, that number includes sales of gasoline and groceries as well as online purchases the city doesn’t tax, she said.

The city has projected a 3 percent increase in sales tax collections for 2013, but expects use tax collections to hold steady.

 

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 Jan 17 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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