Sales tax collections on the rise

Phil Castle, The Business Times

Sales tax collections for Mesa County have increased on a year-over-year basis for three straight months to not only keep pace with 2012, but also offer some encouragement of increased business to local retailers in 2014.

Sales and use tax collections also increased for the City of Grand Junction, although year-end totals reported for 2013  lagged behind those for 2012.

While they project revenues to remain flat for 2014, government officials hold out hope for increased collections that reflect a more robust economic recovery.

“This may be when the tide turns for our local economy,” said Jodi Romero, financial operations director for the city.

Mesa County reported collecting a total of $2.17 million in sales taxes for its capital improvement and general funds in December. That’s an increase of nearly 5.8 percent over what was reported for the same month last year.

With year-over-year gains of 5 percent or more in each of the last three months, the county reported total sales tax collections for the two funds of more than $26.8 million in 2013. That’s three-tenths of a percent higher than 2012.

Marcia Arnhold, finance director for Mesa County, said she was pleased with gain, albeit slight. “It’s still an increase. We’re not going in the opposite direction.”

The City of Grand Junction reported collecting a total of almost $3.9 million in sales and use taxes in December, 1 percent more than the same month last year.

For all of 2013, the city reported collecting a total of just over $48 million in sales and use taxes, a decline of 2.7 percent from 2012.

Sales tax collections slipped eight-tenths of a percent. While use taxes constitute a far smaller source of revenue for the city, collections dropped 32 percent from the prior year in part because of declining activity in energy exploration and production in the region.

Because tax reports lag a month behind collections, the December reports reflect November sales. Year-end reports for 2013 reflect sales from December 2012 through November 2013.

Reports scheduled for release in February will indicate just how busy the latest holiday shopping season was for local retailers as well as if the trend of increasing tax collections continued.

While Arnhold had to revise downward what originally was projected as a 4 percent increase in sales tax collections for 2013, she said she was pleased actual collections still matched those for 2012. “It’s good it was not a decline.”

Romero said there was enough flexibility in the city budget to accommodate decreased tax revenues during 2013, but she was surprised nonetheless collections didn’t increase the way she anticipated. “From a local economy standpoint, we’re definitely still struggling. We’re waiting for the tide to turn.”

The 2014 budgets for both Mesa County and the City of Grand Junction project no gains in sales tax revenues.

Romero said it’s a conservative and smart approach. She’s holding out hope though, actual collections will once again defy projections — by exceeding them. “Hopefully, it’ll be on the other side.”