Phil Castle, The Business Times:
Sales tax collections for Mesa County continue to trend downward, declining on a year-over-year basis for three consecutive months.
Total collections so far in 2012 continue to outpace 2011, though, and are projected to come close to matching yearly gains posted before the county went through an economic boom and bust.
“To me, this is a normal growth rate. I’m not too alarmed,” said Marcia Arnhold, finance director for the county.
Combined sales and use tax collections for the City of Grand Junction have decreased on a year-over-year basis for the last two months, although the latest decline was small and sales tax collections within the city limits actually increased According to its September report, Mesa County collected a total of almost $2.36 million in sales taxes for its capital improvement and general funds. Another $895,000 in taxes were distributed to cities and towns in the county, including Grand Junction.
Those numbers constitute an nearly 2.3 percent decrease from collections reported for September 2011. Since tax reports lag a month behind, September reports reflect August sales.
After average gains of almost 8.9 percent through the first six months of 2012, county sales tax collections have dropped to an average of nearly 2.2 percent over the past three months. Arnold said she’s at a loss to pinpoint the reason for declining tax collections — or the retail sales that generate those collections.
Election-year uncertainty and the looming “fiscal cliff” of federal tax hikes and budget cuts could affect consumer sentiment and spending, she said. At the same time, though, Arnold said she expects total sales tax collections for 2012 to still exceed those in 2011.
According to reports for the first nine months of 2012, the county collected a total of more than $20.4 million in sales taxes for its capital improvement and general funds. Another $7.7 million was distributed to cities and towns in the county. Those figures represent a 4.7 percent increase over reports for the same span last year.
Before the economic boom in Mesa County from 2005 through much of 2008 and the bust that followed in 2009 and 2010, annual sales tax collections increased from 4 percent to 6 percent, Arnhold said.
Arnold forecasts a slightly larger increase of 7.6 percent for 2013, although she said she could have to adjust that forecast based on collections for the remainder of 2012.
According to its September report, the City of Grand Junction collected a total of $4.4 million in sales and use taxes, a decline of two-tenths of a percent from collections reported for September 2011.
City sales and use tax collections fell on a year-over-year basis by 2 percent in August. The declines in the last two months are the first for the city since November.
For the September report, sales tax collections within the city limits actually increased 4.6 percent over the same month last year. But a 3.3 percent decline in the share of sales tax collections the city received from the county and a nearly 30 percent drop in use tax collections offset the gain.
Jodi Romero, financial operations manager for the city, said collections within the city constitute by far the largest source of sales tax revenues and the number she monitors most closely. The September gain actually exceeds the average 4 percent increase for the previous eight months, Romero said.
Moreover, total city sales and use tax collections for 2012 continue to outpace 2011. For reports for the first nine months of 2012, the city collected a total of more than $37.3 million in sales and use taxes, a 2.3 percent increase over the same span in 2011.
Given the popularity of events that bring visitors to the Grand Valley during the fall — along with increased sales in some retail sectors — Romero said she remains optimistic about the fourth quarter. Moreover, she said she expects sales tax collections for 2012 to exceed those of 2011 and, more importantly, budget projections. “We’re going to finish the year out where we need to be.”