Sales tax collections continue to rise

Phil Castle, The Business Times

Sales tax collections have increased for a second consecutive month in the Grand Valley — gains that might not yet constitute a trend, but could signal increasing consumer confidence and the discretionary spending that goes with it.

“I think good things are happening in the community, and people are starting to feel better,” said Jodi Romero, financial operations director for the City of Grand Junction.

Eleanor Thomas, budget manager for Mesa County, said the latest tax collection numbers reflect increased sales in the retail sector as well as other industry categories. “Everything is looking pretty good.”

The city reported an 11.1 percent gain in combined sales and use tax collections in May compared to the same month last year. The county reported a 6.6 percent increase. May collections reflect April sales.

The city also reported a 3.3 percent increase in year-over-year lodging tax collections, a measure of hotel and motel stays.

The city reported collecting a total of more than $4.3 million in sales and use taxes. That’s an increase of $432,000 over what was collected during the same month last year. Sales tax collections increased 10.5 percent. Use tax collections, a smaller and more volatile portion of revenue, jumped 50.4 percent on increased sales in the energy and utility sectors.

Romero said a substantial increase in sales tax collections from a communications company bolstered the latest numbers. But even taking that gain out of the calculation, tax collections still would have grown nearly 4.3 percent on increased sales of building materials, restaurant meals and general merchandise. More taxes also were collected from online sales, she said.

The May numbers bring year-to-date city sales and use tax collections to nearly $21 million. That’s an increase of more than $500,000 and 2.5 percent over the same span last year. Sales tax collections were up 2.8 percent, while use tax collections rose 3.6 percent.

Romero attributed the gains in part to more construction and tourism activity, but also more confident consumers who’ve increased their discretionary spending. “I think people are feeling more confident about the economy overall.”

The city isn’t likely to change what Romero described as a conservative forecast with no increase in sales tax revenue this year. But she also said she wouldn’t be surprised if collections continue to increase if what’s expected to be a busy summer tourism season materializes. “Maybe we’ve turned the corner. We’ll see.”

The county reported collecting a total of more than $2.7 million in sales and use taxes. That’s an increase of nearly $170,000 over what was collected during the same month last year. An 8.8 percent gain in sales tax collections more than offset a 13.2 percent drop in use tax collections.

The county also reported an increase in sales tax collections from a communications company — almost $109,000 that accounted for the bulk of the overall gain. But collections in the retail, home improvement and oil and natural gas sectors increased as well, Romero said.

The May numbers bring year-to-date county sales and use tax collections to more than $12.7 million. That’s an increase of almost $305,000 and 2.4 percent over the same span last year. A 2.9 percent gain in sales tax collections more than offset a 2.4 percent drop in use tax collections.

Thomas said there could be a correlation between increasing sales tax collections and decreasing unemployment rates in Mesa County.

For April, the last month for which estimates are available, the seasonally unadjusted unemployment rate in Mesa County fell six-tenths of a point to 3.2 percent. That’s the lowest level since April 2008.

Thomas also pointed to an increase in construction activity. Through May, 289 new construction permits have been issued in Mesa County this year. The estimated dollar volume of that construction totals more than $118 million. Compared to the same span last year, permits have increased 49 percent, while building permit valuation is up 13.4 percent.

The county has projected a half-percent increase in sales tax collections for 2017 over 2016, but Thomas said she hopes larger increases occur. “I’m hoping its a trend. But then, two months don’t make a trend.”

Grand Junction lodging tax collections totaled $111,796 in May. That’s an increase of $3,597 and 3.3 percent over the same month last year. May collections reflect hotel and motel stays in April.

The latest gain brings year-to-date lodging tax collections to nearly $411,000. That’s an increase of $4,000 and 1 percent over the same span last year.

Romero said she expects lodging tax collections to increase as the busy summer tourism season gets under way. Moreover, a number of events attracted visitors in May, including the Junior College Baseball World Series and Grand Junction Off Road bicycle race.