Phil Castle, The Business Times
Tax collections continue to trend downward in the Grand Valley, both a reflection of decreasing sales and an increasingly worrisome development for local government officials.
Meanwhile, though, lodging tax collections continue to rise along with business at hotels and motels.
The City of Grand Junction reported a 2 percent decrease in combined sales and use tax collections for April compared to the same month last year. Mesa County reported a 7.4 percent drop.
While year-to-date city collections so far in 2016 have dipped only 1 percent from 2015 and so far present no cause for alarm, the trend is troubling nonetheless, said Jodi Romero, financial operations director. “It is a little concerning.”
Eleanor Thomas, county budget manager, said she’s monitoring the numbers in case she has to change budget projections that could have implications for county spending, particularly for capital improvement projects.
The city reported collecting a total of more than $4.2 million in sales and use taxes in April, a decrease of more than $84,000 and 2 percent from the same month last year. Sales tax collections edged down 1.1 percent. Use tax collections, a far smaller and more volatile source of revenue for the city, dropped 21.6 percent. April collections reflect March sales.
The latest numbers bring year-to-date sales and use tax collections for the city to more than $16.5 million. That’s down nearly $160,000 and 1 percent from the same span last year. Sales tax collections edged up three-tenths of a percent, while use tax collections were down 28 percent.
Romeo said a report for city sales tax collections for the first quarter of 2016 reflected decreases in the general merchandise and miscellaneous retail categories as well as motor vehicles, construction and restaurants and bars. Considered by geographic area, tax collections were down for the Mesa Mall, North Avenue and downtown, but up for the U.S. Highway 6 & 50 and Patterson Road corridors.
Romero said declining sales could reflect less consumer spending or perhaps a shrinking population.
It’s still too early to tell whether or not the downward trend in tax collections will continue or force changes in the city budget, Romero said.
Sales taxes account for 65 percent of revenues for the general fund, Romero said. The city had projected a 2 percent increase in sales tax collections this year.
Increased tourism activity as indicated by gains in lodging tax collections could buoy sales tax collections, too, she said.
Mesa County reported collecting a total of nearly $2.5 million in sales and use taxes in April. That’s a decrease of almost $197,000 and 7.4 percent from the same month last year. Sales tax collections were down 6.3 percent, while use tax collections declined 17.4 percent.
Combined sales and use tax collections have dropped on a year-over-year basis for four consecutive months.
The latest decline in county sales tax collections reflected a decrease in overall retail activity as well as decreases in the construction, home improvement and manufacturing sectors. The drop in use tax collections reflected decreases in the sales of automobiles and building materials.
Thomas attributed the downward trend in tax collections to slowing in the energy sector and, in turn, fewer sales for support services.
Through the first four months of 2016, county sales and use tax collections totaled almost $9.9 million. That’s a decrease of nearly $505,000 and 4.9 percent. Sales tax collections fell 3.2 percent, while use tax collections declined 20.1 percent.
Thomas said there’s a possibility what was projected as a 2.5 percent increase in sales tax collections could be revised. Since half of county sales tax collections go into a capital improvement fund, changes could delay some projects, she said.
The Grand Junction Visitor & Convention Bureau reported collecting $96,294 in lodging taxes in April. That’s an increase of almost $8,298 and 9.4 percent over the same month last year and the highest amount for an April since 2008. April collections reflect hotel and motel stays in March.
The latest number brings year-to-date lodging tax collections to almost $2988,568, an increase of about $18,562 and 6.6 percent over last year heading into the busy summer season.
Other tourism-related metrics the VCB tracks constituted something of a mixed bag for April with a year-over-year increase in unique visits to the VCB Web site, but a decrease in visits to the Grand Junction Visitor Center.