Tax collection reports reflect increased holiday sales

Phil Castle, The Business Times: 

Two months after the fact, sales tax reports confirm what many Mesa County retailers already knew: Holiday sales increased compared to the year before.

The latest gains extend an upward trend in year-over-year increases in tax collections government officials say reflect slowly improving economic conditions. “Hopefully, we’re stabilizing here,” said Marcia Arnhold, finance director for Mesa County.

Mesa County and the City of Grand Junction both reported increased sales tax collections in their January reports, which reflect spending in December and a good portion of the holiday shopping season.

Mesa County reported collecting a total of more than $2.6 million in sales taxes for its capital improvement and general funds, an increase of more than 6.5 percent over the report for January 2011. An additional $1 million in sales tax revenues were distributed to cities and towns in the county, including Grand Junction.

The City of Grand Junction reported collecting a total of more than $5 million in sales and use taxes in its January report, up 3.7 percent over the report for January 2011. That figure includes $492,000 in sales tax revenues the city received from the county.

Arnold said December sales in Mesa County as measured by sales tax collections were the highest since 2008, when more than $2.1 million in sales tax revenues were collected. The city reported the same trend. Counting only city sales tax revenues, the collection of $4.32 million in the January report was the highest in three years.

Jodi Romero, financial operations director for the city, said gross sales in the city increased 18 percent in December compared to the same month last year. That proportion includes the sale of food, gasoline and other merchandise the city doesn’t tax.

With the exception of building materials, tax collections increased for all categories of businesses, Romero said. The downtown and northwest areas of the city reported the largest gains compared to last year. “Across the board, our retailers experienced a better season than last year,” she said.

Because city tax collections don’t track sales of such basic necessities as food and gasoline, increased collections offer an indicator of more discretionary spending and, in turn, what Romero sees as improving consumer confidence in the Grand Valley.

Year-end tax reports for 2011 — which reflect spending from December 2010 through November 2011 — totalled nearly $26 million for Mesa County, an increase of almost 7 percent over the year-end report for 2010.

The City of Grand Junction reported collecting nearly $49 million, an increase of 6.6 percent over the previous year. For Mesa County, sales tax collections have increased on a year-over-year basis in all but one of the last 17 months.

While the gains compare to a period in which tax collections decreased because of a recession, the trend is encouraging nonetheless because it reflects a slow recovery, Arnhold said. “I see this as a real positive.”

Arnhold expects the trend to continue with a 4 percent increase in sales tax collections budgeted for 2012 and total projected revenues of $26.4 million for the county’s capital improvement and general funds.

The City of Grand Junction similarly has experienced year-over-year growth in sales and use tax revenues since mid-2010. That followed what was in 2009 and the first half of 2010 the worst drop in tax revenues in 25 years, Romero said.

Despite the more recent gains, the city continues to budget conservatively in forecasting a total of $48.8 million in sales and use tax revenues for 2012 — about the same as 2011. “We projected it flat,” Romero said.

Meanwhile, the latest monthly measure of hotel and motel stays in Grand Junction has increased. According to a Grand Junction Visitor & Convention Bureau report for January, lodging tax revenues totalled $62,124, a 3.3 percent gain over the report for January 2011. January reports reflect hotel and motel stays in December.

In its year-end report for 2011, the VCB reported lodging tax collections of more than $1.1 million, a dip of 1.5 percent from the year before.

The VCB also reported in January an almost 23 percent increase in the number of brochures it mailed out and a 6.5 percent increase in unique visits to its Web site. Visits to the Grand Junction Visitor Center were nearly unchanged for the month at 504.