Tax collections reflect slow and steady growth

Slow, but steady, economic growth is the buzz phrase on the national level. Tax reports from the City of Grand Junction and Mesa County indicate slow and steady could be the trend locally as well.

The city reported a seventh straight month of year-to-year increases in its sales and use tax collections in December. The county report reflects a fourth consecutive month of increases in tax collections.

The city reported $4.06 million in sales and use tax collections in the December report. That compares to
$3.38 million in collections in the report from the same month in 2009. Mesa County reported $2.09 million in sales tax collections in December, a 6.73 percent increase over December 2009.

Since reports lag a month behind the spending that produced the tax dollars, the December  reports represent consumer spending in November.

January reports will reflect the bulk of spending for the holiday shopping season in 2010. Those reports will be issued in February.
Despite the rise in tax collections during the latter part of the year, city and county totals for 2010 reports were smaller than collections in 2009.

For the year, the city reported a total of $46.11 million in collections, 8.9 percent lower than the 2009 figure. The county collected $32.68 million in sales taxes last year. That’s 6.4 percent lower than in 2009.

According to county reports, sales tax collections were lower than the same month the year before from December 2008 through August 2010.

“We did end the year well within our projections, which is important,” Mesa County Finance Director Marcia Arnhold stated in a news release. “We certainly hope to see the numbers continue to be stronger throughout 2011.”

About 60 percent of general operating revenue for the city comes from sales and use tax collections.

“I don’t think we’re out of the woods yet, and we remain conservative in our projections. But things are certainly beginning to look better than they were earlier in 2010,” said Jodi Romero, financial operations manager for the city.  “This appears to be a positive sign that people are feeling a little more confident about spending.”

The city and county reduced spending from the totals originally budgeted for 2009 and 2010. City employees received a 3 percent pay cut in 2010, and county pay scales were frozen for the year. Both the city and county reduced staffing and transferred employees from departments that were less busy during the economic downturn to departments where they could be more useful.
The city also delayed re-surfacing some city streets to save money as it anticipates a possible further reduction in spending through 2012.

Declining property values in Mesa County won’t be reflected in lower property tax collections until next year. The county also is waiting to see whether or not the Colorado Legislature will dip into severance tax dollars that energy companies paid to offset effects on local communities.

The city budget for 2011 is set at $147.2 million, while the county budget is $129.21 million.