Most tax collections on the rise

Mike Moran, The Business Times

The City of Grand Junction and Mesa County continue to report increased sales tax collections over last year, although lodging tax collections still lag behind.

The city reported $4.42 million in sales and use tax collections in July, while the county reported $3.26 million in sales tax collections. Lodging tax collections totalled $131,157. The July reports reflect spending in June.

City collections rose 10 percent higher than what was reported in July 2010. County collections were an eye-popping 36.55 percent higher than last year.

The county figure can be misleading, though. “You’ll notice a really large jump when you compare July 2011 to July 2010. That’s an anomaly,” Mesa County Public Relations Director Jessica Peterson wrote in an e-mail to the Business Times. Peterson said the county refunded more than $659,000 to an energy company in July 2010 following a statewide court ruling involving drilling materials. “If you factor that out, our increased sales tax would have been a 7 percent increase over July of last year,” Peterson stated.

Lodging tax collections were 2.2 percent lower in July 2011 than the same month in 2010.

For reports covering the first seven months of 2011, the city collected a total of $28.13 million in sales and use taxes,

a 9.4 percent increase over the same span in 2010. Sales tax collections alone accounted for $22.87 million of the total, a more modest 4.7 percent increase over the first seven months of 2010.

The county reported $20.54 million in sales tax collections for the first seven months of 2011, a 9.21 percent increase over the same period last year.

 While rising sales tax collections offer a measure of optimism about the local economy, city and council officials expect gains to slow later this year.

City Manager Laurie Kadrich cautions that local construction activity could slow even further in 2012, affecting sales tax collections for the purchase of construction materials. Construction layoffs would affect consumer spending as well.

Marcia Arnhold, finance director for the county, predicts total sales tax revenue for 2011 will come in at about 3 percent higher than the 2010 total.

Tax reports over the final five months of 2011 will affect decisions as county commissioners prepare to adopt a budget for next year.

Peterson said county administrators are asking department leaders to look for additional savings in their budgets where possible, but don’t anticipate drastic cuts for 2012.

Lodging tax collections for the reports covering the first seven months total $601,124, a tenth of a percent lower than during the same period last year.

The lower collections could reflect lower room rates rather than a decline in the number of customers, said Jennifer Grossheim-Harris, marketing and public relations coordinator for the Grand Junction Visitor & Convention Bureau.

The VCB reports a 20 percent increase in unique visits to its Web site and an 8 percent increase in international visitors over the first seven months of 2011. Grossheim-Harris expects lodging taxes for all of 2011 to equal last year’s total and that next year could produce a

2 percent increase.

“We’ll see more activity in-state,” she said. Denver continues to be a prime market for VCB advertising that brings residents there to the Grand Valley. More international visitors are coming to the region in part because of a comparatively weak U.S. dollar that gives them more buying power.