Tax collections, climb but pace slows in city

Phil Castle
Phil Castle

Phil Castle, The Business Times

Sales and use tax collections continue to increase in the Grand Valley, although the pace has slowed in Grand Junction.

While Mesa County reported a 1.5 percent  increase in year-over-year sales and use tax collections in its latest report, the City of Grand Junction reported a gain of only three-tenths of a percent.

Sales tax collections serve not only as a source of revenue for local governments, but also an indicator of retail sales and economic conditions.

“We are right on track for our budget,” said Eleanor Thomas, budget manager for Mesa County.

Jodi Romero, financial operations director for the city, said overall tax collections continue to reflect improving conditions, but she plans to keep a “watchful eye” on collections from some categories.

Mesa County reported collecting a total of nearly $2.55 million in sales and use taxes in May, an increase of more than $38,000 and 1.5 percent over the same month last year. A 3.4 percent increase in sales tax collections more than offset a 14 percent drop in the more volatile use tax collections.

The City of Grand Junction reported collecting a total of  more than $3.9 million in sales and use tax collections in May, an increase of about $12,500 and three-tenths of a percent over the same month last year.

City sales tax collections actually declined nine-tenths of a percent, but a 6.8 percent increase in use tax collections and 6.1 percent increase in the sales tax collections the county shares with the city more than offset the difference.

May collections reflect April sales.

Thomas said sales tax collections from the retail sector, most of which is located within the Grand Junction city limits, were down. But collections from the manufacturing and wholesale categories were up.

The drop in use tax collections reflects a decline in construction activity, Thomas said.

Romero said sales tax collections from department, furniture and home improvement stores remain strong, but collections from vehicle sales were down on a year-over-year basis. Sales from local dealerships varied, while collections from dealers outside the city limits processed through the state were down, she said.

There’s a possibility slowing in regional energy exploration and production related to low oil and natural gas prices could effect sales and, in turn, tax collections, Romero said. Energy companies might buy fewer vehicles, for example.

For reports for the first five months of 2015, Mesa County reported total sales and use tax collections of more than $12.9 million. That’s an increase of more than $725,000 and 6 percent over the same span in 2014. Year-to-date sales tax collections were up 6.4 percent, while use tax collections were up 1.9 percent.

The City of Grand Junction reported total sales and use tax collections of nearly $20.5 million. That’s an increase of more than $390,000 and 1.9 percent over the same span in 2014. Year-to-date sales tax collections were up 1.6 percent, more than offsetting a 3.5 percent decline in use tax collections.

Mesa County budgeted for a 2 percent increase in sales tax collections, and Thomas said she hopes the trend of higher collections will continue.

The city has budgeted for a 3 percent gain in sales tax collections, and Romero said she’ll continue to monitor the numbers to determine if changes are needed.

Romero said she’s hopeful a series of events planned for the Grand Valley and robust summer tourism season will help to bolster sales tax collections. A few months of year-over-year gains could bring the numbers back on track, she said.