Rising tax collections viewed as an indicator of improving economy

Sales tax collections rose nearly 7 percent in Mesa County in 2011 compared to 2010 — an increase that’s seen as an indication not only of growing retail sales, but also improving economic conditions.

“We hope this is a good sign that things are starting to look up for our local economy,” said Mesa County Commissioner Craig Meis.

Mesa County reported collecting a total of more than $2.2 million in sales taxes for its capital improvement and general funds in December, up almost 6.6 percent from December 2010.

That latest monthly gain brought total collections for the two funds for 2011 to nearly $26 million, an increase of just under 7 percent over 2010.

An additional $846,423 in sales tax collections reported in December were distributed to cities and towns in Mesa County, including Grand Junction. Those collections were up nearly 6.6 percent compared to December 2010.

For all of 2011, the county collected and distributed more than $9.8 million, an increase over almost 7 percent over the previous year.

Meanwhile, the City of Grand Junction reported collecting a total of just under $4 million in sales and use taxes in December 2011, down 2 percent from the same month a year ago.

However, city tax collections for 2011 still outpaced 2010. At $48.7 million, collections were up 6.6 percent.

Since tax reports lag a month behind, December reports reflect November sales. Year-end reports for 2011 reflect sales from December 2010 through November 2011.

The January 2012 reports scheduled for release in February will offer a more complete look back at sales during the latest holiday shopping season.

For Mesa County, sales tax collections have increased on a year-over-year basis in all but one of the last 16 months.

In November, the county reported collecting a total of almost $2 million for its capital improvement and general funds, a drop of nearly 7.2 percent from the November report for last year and the first decline since August 2010.

Marcia Arnhold, finance director for Mesa County, said the year-end tax collection numbers bode well for the county and the capital improvements and operations it funds with sales tax revenues.

“We ended the year well within our budget projections, which is important,” Arnhold said. “We certainly hope to see the numbers continue to be stronger throughout 2012.”

Arnold said a 4 percent increase in sales tax collections has been budgeted for 2012 with total projected revenues of nearly $26.4 million for the capital improvement and general funds.

The county assesses a 2 percent sales tax with 1 percent allocated to a capital fund used to pay for the construction of roads, bridges, buildings and other large projects. Of the remaining 1 percent, 0.45 percent goes into the general fund for operational expenses and 0.55 goes back to cities and towns in the county. Sales tax collections account for about 19 percent of county revenues.

For the City of Grand Junction, sales and use tax collections dropped on a year-over-year basis for both the November and December reports, although the declines were modest at 1.3 percent and 2 percent, respectively.

Jodi Romero, financial operations manager for the city, said she expects sales and use tax collections to increase slightly in 2012. Nonetheless, the city has budgeted more conservatively for no change from 2011, she added.

The city assesses a 2.75 percent sales tax, with 0.75 percent allocated to capital construction  projects.