Officials: Tax collections more encouraging

Phil Castle
Phil Castle

Phil Castle, The Business Times

After watching sales and use tax collections decline for months, local officials say they’re a bit more heartened by the latest numbers.

“There are some encouraging signs here,” said Eleanor Thomas, budget manager for Mesa County.

Jodi Romero, financial operations director for the City of Grand Junction, said an increase in city sales tax collections reflected the kind of activity that comes with warmer weather — tourism and home improvement.

The overall pace of tax collections continues to lag, however, and Thomas and Romero said they’re closely monitoring the situation for the potential effects on county and city budgets.

Mesa County reported collecting a total of more than $2.56 million in sales and use taxes in May. That’s an increase of $15,401 and six-tenths of a percent over collections for the same month last year.
A 7.5 percent increase in use tax collections more than offset a tenth of a percent decrease in sales tax collections.

The city reported collecting a total of nearly $3.88 million in sales and use tax collections. That’s a decrease of $56,052 and 1.4 percent over the same month last year, but sales tax collections rose 2.1 percent. The overall decline was the result of a 58.6 percent decrease in use taxes, a smaller and more volatile portion of revenue.

May tax collections reflect April sales.

Thomas said county sales tax collections from retail sales increased on a year-over-year basis 3.6 percent in May, while collections from hotels and restaurants rose 15.5 percent. Collections from other industries were down, though, including a 66 percent drop in the oil and natural gas sector. Use tax collections from automotive sales advanced 8.6 percent, she said.

Romero said the increase in sales tax collections reflected increasing sales related to tourism and home improvement. The decrease in use tax collections reflected a slowdown in the energy sector related to low commodity prices.

Year-to-date sales and use tax collections for Mesa County totaled nearly $12.45 million for Mesa County through May, 3.8 percent below the same span last year. Sales tax collections dropped 2.6 percent, while use tax collections fell 15 percent.

Year-to-date collections for the city totaled more than $20.4 million, 1 percent below the same span last year. Sales tax collections rose seven-tenths of  percent, while use tax collections decreased 33.2 percent.

Thomas said the forecast for county sales tax collections has been revised downward to a 2 percent decrease. Since half of county sales tax collections funds capital and infrastructure projects, the change could delay some projects, she said.

Depending on what happens in coming months, Romero said city revisions also could be required. Sales tax collections could increase enough to offset decreases earlier this year. That’s less likely to happen for use tax collections, however, she said.