Sales tax collections keep increasing, but for how long?

Sales and use tax collections for the City of Grand Junction continue to follow a pattern the city manager forecast last fall for the first half of 2011.

Whether or not a dire prediction for the second half of 2011 comes to fruition remains up for speculation.

According to the city report for May, sales and use tax collections totaled $3.78 million, a 9.4 percent increase over the $3.46 million reported in May 2010.

May reports reflects consumer spending in April, since reports lag a month behind the consumer spending that produced the taxes.

For reports covering the first five months of 2011, sales and use tax collections totaled $19.89 million, a 10.8 percent increase over the same span last year.

While the 2011 reports reflect an increase in sales compared to the first part of 2010, City Manager Laurie Kadrich expects tax collections to level off during the second half of this year. Kadrich bases her prediction in part on the fact few major construction projects are on the books late this year and no new projects are planned for 2012.

“I’m pessimistic,” Kadrich said during a public presentation on budget projections in early June. “Other people aren’t as pessimistic.”

City Finance Director Jodi Romero is among those who are more optimistic, Romero believes pent up consumer demand will prompt people to continue to spend more at retail stores and restaurants.