Increasing sales tax collections encouraging indicator

Phil Castle
Phil Castle

Phil Castle, The Business Times

Another month brings another increase in sales tax collections in Grand Junction and Mesa County, along with further encouragement local economic conditions are slowly improving.

“We hope to see continued growth, although it is very gradual at this point,” said Jodi Romero, financial operations director for the City of Grand Junction.

Frank Whidden, deputy Mesa County administrator for resource management, put it this way: “We have cause for cautious optimism.”

Sales tax collections constitute not only an indicator of retail sales, but also a significant source of revenue for local governments.

The city and county both reported slight year-over-year gains in sales tax collections during July as total collections so far in 2014 continue to outpace 2013. The city and county have reported year-over-year increases in sales tax collections for nine out of the past 10 months.

The city reported collecting a total of $4.34 million in sales and use taxes in July, a gain of almost $51,000 and 1.2 percent over the same month last year. A 1.6 percent increase in sales tax collections more than offset a 9.8 percent decrease in the more volatile use tax collections.

While the July 2014 numbers topped those for 2013, they were slightly below those for the same month in 2012 and 2011.

The county reported collecting a total of $2.66 million in sales and use taxes, a gain of slightly more than $8,000 and 0.3 percent over July 2013. A 1.2 percent increase in sales tax collections offset a 6.9 percent decrease in use tax collections.

The latest county numbers were higher than the July figures for each of the previous four years.

The latest numbers bring combined sales and use tax collections for the city for reports covering the first seven months of 2014 to more than $28.4 million. That’s an increase of almost $365,000 and 1.3 percent over the same span in 2013.

The county collected $17.5 million, an increase of nearly $220,000 and 1.3 percent over the same span in 2013.

Since tax reports lag a month behind, July numbers reflect June sales. Year-to-date reports reflect sales from December through June.

Romeo said the city tax numbers so far for 2014 not only outpace 2013, but have come in 0.4 percent above what was budgeted. “We will be meeting with our city council next month to talk about revenue projections going into the budgeting process and will, of course, know more with one more month in the books,” she added.

Whidden said a slight increase of 0.75 percent in sales and use tax revenues tentatively has been budgeted for the county for 2015, but it’s hoped actual collections next year exceed that conservative outlook.

It’s far easier, he said, to handle more revenues than expected than it is to cut the budget to make up for decreased spending — especially in halting road projects that require lengthy lead times before initiating.

In the meantime, Whidden said the long-term trend of increasing tax collections is an encouraging one. “We are happy with the way the numbers are going.”