Sales tax collections continue to decline

Phil Castle, The Business Times

Sales tax collections continue to decline, but local government administrators remain hopeful the trend soon will change.

According to the February report, sales tax collections dropped 3 percent for Mesa County compared to the report for the same month last year. Sales and use tax collections dropped 2.3 percent for the City of Grand Junction.

Counting the latest declines, tax collections for the county and city have dropped on a year-over-year basis in six out of the last seven months. The trend has been attributed to not only declining sales related to comparatively high unemployment, but also a slowdown in regional energy development and commercial construction.

Nonetheless, government administrators have yet to change county and city budgets for 2013, Moreover, they remain optimistic changes won’t be necessary.

For Mesa County, a total of nearly $1.96 million in sales taxes were collected for the capital improvement and general funds. Almost $742,000 in additional sales taxes were collected and distributed back to cities and towns in the county, more than $556,000 to Grand Junction alone.

All of those numbers constitute a 3 percent decline over what was reported in February 2012. Since tax reports lag a month behind, February reports reflect January sales.

For reports through the first two months of 2013, the county has collected more than $3 million in sales taxes for its capital improvement and general funds and distributed almost $1.7 million back to cities and towns. Those numbers constitute a 3.8 percent decline over the same span in 2012.

The City of Grand Junction reported collecting a total of nearly $3.7 million in sales and use taxes in February, 2.3 percent less than what was reported for the same month last year.

For reports for the first two months of 2013, the city collected a total of almost $8.5 million, a decline of 4.5 percent over the same span in 2012.

Eleanor Thomas, budget manager for Mesa County, said declining sales tax revenues reflect declining sales, albeit small, in nearly every category. “It’s pretty much across the board.”

Thomas said she suspects declining sales correlate with high unemployment rates in Mesa County, which spiked at 9.2 percent in January, the latest month for which estimates are available.

Still, Thomas said it’s too early to yet adjust a county budget based in part on a projected 4 percent increase in tax collections for 2013. “I hope it will come back up.”

Elizabeth Tice-Janda, revenue supervisor for the City of Grand Junction, said declines in use tax collections have been proportionally larger than those for sales tax collections because of slowing activity in energy development and commercial construction.

Given that city sales tax collections in the February report were down less than 1 percent, Tice-Janda said she’s hopeful the downward trend will reverse and collections will rebound in the second and third quarter. “I really do think we’re headed in the right direction.”

Like the county, the city has yet to substantially adjust its 2013 budget, Tice-Janda said. The city has projected a 3 percent increase in sales tax collections for the year while forecasting use tax collections to hold steady.