Brandon Leuallen, The Business Times

Grand Junction’s sales tax revenues are running slightly ahead of last year’s pace, but the city remains below its budgeted projections through the first seven months of 2025.

According to the city’s latest revenue report, total sales tax collections through July are 1.5 percent higher than 2024, yet remain 2.6 percent below the 2025 budget forecast. The city has collected just over $36.6 million for the general fund, about $1 million under projections.

City Chief Financial Officer Jay Valentine said that puts Grand Junction in a better position than many other metropolitan areas in Colorado, where sales tax revenues are declining.

“July 31st, the sales tax is 1.5 percent over last year, but it still is down from our budget projections,” Valentine said. “We’re keeping a close eye on revenue and holding back on some of the more major expenditures.”

He then clarified he was referring in particular to major hiring expenditures.

Valentine said Grand Junction is not considering furloughs and reductions like Denver. He said staff are scrutinizing open positions and weighing whether to delay hiring.

Consultant and former finance director Jodi Welch said discretionary expenditures such as equipment purchases are also being deferred where possible to help align spending with revenues.

Valentine said Grand Junction and Colorado Springs are among the few metro areas in Colorado with sales tax revenues slightly up. Denver is flat, while Pueblo, Fort Collins and Greeley are down.

While early 2025 began “a little rocky,” Welch said collections in recent months have run ahead of last year.

“On a monthly basis, we appear to be trending higher than 2024. That’s a good trend and one that we hope will continue,” she said.

Welch noted Grand Junction’s tax structure makes it more vulnerable to changes in consumer confidence than some neighboring cities. Unlike Montrose and others, Grand Junction does not collect sales tax on groceries or residential utilities.

“When people pull back on discretionary spending, that directly impacts our sales tax revenue,” she said. “You’re still going to buy groceries and pay your utility bill, but you may cut back on dining out, clothing or big-ticket items like vehicles.”

Valentine said financial markets expect the Federal Reserve to cut interest rates in September, with traders giving it about an 85 percent chance. He said the cut is already priced into the bond market and could help loosen economic conditions, boosting local spending. 

The report shows sharp contrasts across different sectors. Online and delivery-based sales, utilities and sporting goods are up, while business-to-business transactions, liquor stores, and accommodations have declined compared to 2024. Lodging tax collections fell between 12 and 15 percent compared to last year, while cannabis taxes surged 31 percent and are running 22 percent above budget.

Valentine and Welch said the city does not have five- or 10-year charts showing sales tax trends by category, explaining their primary focus is on how revenues impact the current year’s budget and planning.

At the district level, the city’s report shows mixed results compared to last year. Economic Nexus collections, driven largely by online sales and commercial utilities, rose 5 percent, while the Interstate 70 Business Loop corridor climbed 14 percent. The Mesa Mall and 24 Road area edged up 1 percent.

Despite overall gains in citywide revenues and rising costs of goods, which result in higher sales tax revenue per unit sold, several key districts remain in negative territory. The Highway 6&50 corridor, which accounts for 21 percent of total collections, slipped 1 percent. Downtown fell 1 percent, and Horizon Drive dropped 3 percent. 

A more detailed breakdown of district-level trends, including business owner perspectives, will appear in next week’s edition of The Business Times.