Tax collections bolster upbeat expectations

Phil Castle
Phil Castle

Phil Castle, The Business Times

The increasing pace of sales tax collections in the Grand Valley has bolstered increasingly optimistic assessments for improving economic conditions as well as more upbeat projections for next year.

“It looks like things may be looking up a little bit,” said Jodi Romero, financial operations director for the City of Grand Junction.

Frank Whidden, deputy Mesa County administrator for resource management, agreed. “It’s looking good right now. I like the way the trend is going.”

The city reported a 6.1 percent increase in year-over-year sales and use tax collections in its October report. The county reported an even larger proportional increase at 7.3 percent.

With year-over-year gains in 12 out of the last 13 months, the upward trend in sales tax collections reflects increased retail sales, Romero and Whidden said.

The city reported collecting a total of more than $4.4 million in sales and use taxes in October. That’s an increase of nearly $255,000 and 6.1 percent over the same month last year. Sales tax collections alone increased 4.8 percent. Use tax collections constitute a far smaller revenue source for the city, but jumped 50 percent on a year-over-year basis.

The county reported collecting a total of more than $2.7 million in sales and use taxes in October. That’s an increase of more than $185,000 and 7.3 percent over the same month last year. Sales tax collections were up 6.4 percent, while use tax collections increased 16.1 percent.

Because tax reports lag a month behind, October reports are based on September sales.

Romero said city tax collections during the third quarter reflected year-over-year gains in sales of automobiles and construction materials as well as meals and beverages served in restaurants and bars. Higher use tax collections reflect more activity in area energy exploration and production activity and, to a lesser extent, increased construction and utility work, she said.

The latest numbers bring year-to-date sales and use tax collections for the city to more than $41.2 million. That’s an increase of nearly $990,000 and 2.5 percent over the span span in 2013. Year-to-date sales and use tax collections were almost $288,000 higher at this point in 2012, however, a difference of about 7 percent.

Romero said the upward trend in sales tax collections is expected to continue into 2015 with a 3 percent increase projected.

The county has collected a total of more than $25.6 million in sales and uses taxes so far in 2014. That’s an increase of almost $705,000 and 2.8 percent over 2013. Year-to-date sales and use tax collections for the county are at their highest level for this point in the last five years.

Whidden said a 2 percent increase in sales tax collections for the county capital improvement fund is forecast for 2015, although that prediction could be “conservative.” The projection could be revised upward early next year if strong year-over-year increases continue, he said.