Rising tax collections reflect increased holiday spending

Spending during a portion of the important holiday shopping season in Grand Junction was up nearly 10 percent over last year, according to the latest sales and use tax collection report from the city.

The tax report for January, which reflects spending in December, shows the city collected $5.02 million. That total is up 9.8 percent from the $4.57 million in collections reported in January 2010.

The city also collected more tax revenue than what initially was budgeted. Collections reported in January were 2.9 percent higher than what was anticipated when the city finance department made projections last fall.

About 60 percent of general operating revenue for the city comes from sales and use taxes. Declining revenue the past two years forced the city to reduce spending from the total originally budgeted for 2009 and 2010. City employees saw a 3 percent pay cut in 2010 and staffing was reduced. The city also delayed several street overlay projects. The city budget for this year is $147.2 million, 1.2 percent lower than the 2010 budget.

Mesa County similarly reported higher sales tax collections in January, reflecting an increase in spending during December. The county reported $3.41 million in collections, up 0.51 percent from the January 2010 report.

Like the city, the county is realizing slow but steady growth in tax collections compared to the same months in the prior year. January marked the fifth consecutive month in which the county has realized year-over-year increases. The city has seen eight consecutive months of year-over-year increases in sales tax collections.

Over the past two years, Mesa County budgets have been adjusted to accommodate shrinking revenues. The salaries of county employees were frozen in 2010 and staffing also has been reduced. The county budget for this year totals

$129.2 million, 9 percent lower than the budget originally adopted for 2010.

Both the city and county are bracing for the effects of declining property values on property tax revenues, starting with collections in 2012.