Phil Castle, The Business Times
While two months don’t yet constitute a trend, lagging sales tax collections so far in 2016 have local officials closely monitoring the numbers.
Mesa County reported a 3.1 percent decline in combined sales and use tax collections for February compared to the same month last year. Collections also decreased in January. The last time county collections decreased for two months in a row was 2013.
Sales and use tax collections for the City of Grand Junction were essentially flat for February with a two-tenths of a percent increase over the same month last year.
February collections reflect January sales.
Eleanor Thomas, county budget manager, attributed the decline in county collections to slowing in the energy sector related to low commodity prices.
Thomas said she feels a bit more assured by what was a 3.8 percent year-over-year increase in tax collections from retail sales.
For the city, however, collections from general retail sales were down, as were collections from automotive sales and restaurants and bars, said Jodi Romero, financial operations director. “There were decreases in certain categories we’ll need to watch.”
=Mesa County reported collecting a total of $2.28 million in sales and use taxes in February. That’s a decrease of $74,013 and 3.1 percent from the same month last year.
Overall sales tax collections slipped four-tenths of a percent. Retail sales tax collections were up 3.6 percent. But tax collections were down 68.4 percent in the oil and gas industry sector, 52.7 percent in the wholesale sector and 29.1 percent in the manufacturing sector.
Thomas said those figures reflect continued slowing in the energy sector related to low commodity prices.
Overall county use tax collections dropped 24.2 percent on a 24.8 percent decrease in automobile sales and 11 percent decrease in building materials sales.
Through the first two months of 2016, Mesa County collected a total of almost $5.2 million in sales and use taxes. That’s a decrease of $268,835 and 4.9 percent over the same span in 2015. Sales tax collections declined 3 percent, while use tax collections fell 21.4 percent.
The county has budgeted for a 2.5 percent increase in sales tax collections in 2016. Thomas said “two months don’t make a trend,” but she plans to closely monitor collections as the year progresses.
Thomas also said she’s encouraged by a slight increase in the number of building permits issued by the county — a total of 43 in February and January, three more than the same two months last year.
The City of Grand Junction reported collecting a total of $3.6 million in sales and use taxes in February. That’s a decrease of $60,596 and 1.6 percent from the same month last year. Sales tax collections edged up three-tenths of a percent. Use tax collections — a more volatile, but far smaller portion of revenues — dropped 24.7 percent.
Romero said sales tax collections were down on a year-over-year basis in a number of categories. Several factors could have been involved, she said, including higher than usual sales last year or more inclement winter weather this year. Declining collections also could reflect slowing in the energy sector, particularly when it comes to use taxes, she added.
Through the first two months of 2016, the city collected a total of more than $8.8 million in sales and use taxes. That’s an increase of $17,820 and two-tenths of a percent over the same span in 2015. Sales tax collections were up 1.4 percent, while use tax collections were down 25 percent.
While Romero said she’s also closely watching the numbers, she isn’t yet overly concerned. “I don’t think it’s cause for alarm right now.”