Local tax collections continue to trend downward

Phil Castle
Phil Castle

Phil Castle, The Business Times

Local sales and use tax collections continue to trend downward, although actual sales levels still vary from category to category.

The City of Grand Junction reported a 4.2 percent decrease in combined sales and use tax collections for September compared to the same month last year. Mesa County reported a smaller decrease at eight-tenths of a percent. September collections reflect August sales.

The latest numbers extend a string of year-over-year declines for the city to seven months. The county has reported declines in seven out of nine months this year.

The city collected a total of more than $4.1 million in sales and use taxes in September. That’s down about $180,000 from the same month last year. Sales tax collections dropped 3.4 percent. Use tax collections edged up 1.2 percent, but constitute a far smaller portion of revenues for the city.

Jodi Romero, financial operations director for the city, said tax collections decreased on vehicle sales as well as on miscellaneous retail sales that include clothing, electronics and sporting goods. Tax collections were up, though, for general merchandise and groceries, a reflection of sales at large department and warehouse stores.

The county collected a total of nearly $2.8 million in sales and use taxes in September, a decrease of about $22,500 from the same month last year. Sales tax collections rose  2.5 percent, but use tax collections dropped 24.4 percent.

Eleanor Thomas, county budget manager, attributed the  increase in sales tax collections in part to a large payment from a home improvement business that was due in August, but deferred until September. Otherwise, sales tax collections remained flat, Thomas said.

Tax collections increased 7.7 percent on retail sales and 5.7 percent on hotel and restaurant sales, but fell 31 percent in the transportation, 48.2 percent in the manufacturing and 59.9 percent in the oil and natural industries.

The drop in use taxes reflected a 25.5 percent decline in collections on automobiles and other equipment purchased outside the county.

City sales and use tax collections for 2016 through September totaled more than $37.1 million. That’s about $1 million and 2.6 percent less than the same span in 2015. Sales tax collections slipped nine-tenths of a percent, while use tax collections dropped 36.7 percent, a reflection of declines in the energy and construction sectors, Romero said.

County sales and use tax collections for 2016 through September totaled more than $23.1 million. That’s about $1.1 million and 4.5 percent less than the same span in 2015. Sales tax collections declined 3.2 percent, while use tax collections fell 16.2 percent.

As part of budget cutting efforts to compensate for declining tax revenues, the city has launched a voluntary labor reduction program. The program offers employees who want to participate temporary unpaid leave, early retirement incentives, voluntary separation incentives and a voluntary reduction in hours.

Mesa County commissioners implemented a hiring freeze as part of their efforts to deal with declining tax revenues.