Increasing tax collections offer promising sign of improving economy

Phil Castle
Phil Castle

Phil Castle,  The Business Times

Year-over-year gains in sales tax collections in the Grand Valley continue to reflect increased retail activity as well as offer the promise of improving economic conditions.

“I think we’re turning in the right direction,” said Elizabeth Tice-Janda, revenue supervisor for the City of Grand Junction.

Frank Whidden, deputy administrator for resource management at Mesa County, said the latest numbers extend the trend in increased tax collections with no indications of softness in the local economy. “I believe we’re headed in the right direction.”

While 2014 collections have moved ahead of 2013, they’re still behind 2012, however.

The city and county both reported year-over-year increases in sales and use tax collections in May. The sales tax gains were the seventh over the last eight months.

The city reported collecting a total of $3.91 million in sales and use taxes, an increase of nearly $199,000 and 5.4 percent over reported collections for the same month last year.

For reports covering the first five months of 2014, the city collected a combined $20 million in sales and use taxes. That’s $361,000 and 1.8 percent more than the same span in 2013. An increase in sales tax collections more than offset a decrease in use taxes, a measure of activity in energy development and construction.

Since tax reports lag a month behind, the May report reflects April sales. Reports for January through May reflect sales from December through April.

“We’re really optimistic for the sales tax increase and hope it’s sustainable,” Tice-Janda said.

The gains reflect improving consumer confidence as well as increasing tourism activity at the start of the busy season, she said. “We hope that we’re starting a good summer.”

The prospect of rising natural gas prices also could help in promoting more energy development in the area, she said.

While the latest monthly and year-to-date tax collections topped those for 2014 as well as 2011 and 2010, they remain slightly below 2012.

Tice-Janda said there are no plans at the moment to adjust upward what was projected conservatively to be flat tax revenues for 2014. But downward revisions won’t be necessary either, she said. “We are very confident we won’t be making cuts.”

Mesa County reported collecting a total of $2.51 million in sales and use taxes in May, an increase of almost $80,000 and 3.3 percent over the same month last year.

For reports covering the first five months of 2014, the county collected a total of more than $12.2 million. That’s an increase of nearly $173,000 and 1.4 percent over the same span in 2013.

“We think they’re looking a little better,” Whidden said of the latest numbers in reflecting recovery from what was something of a double dip in the slow recovery from the recession.

Like the city, Mesa County hasn’t yet adjusted it’s budget projections to reflect increased tax collections. If projections are revised upward, the change likely will be a small one of 1 percent, Whidden said.