A balloon travels through the sky during the 27th annual Balloon Rodeo in 2007. The rodeo is one of many popular attractions for summer tourists in Routt County, which could see a drop in summer sales tax revenue this year because of reduced spending that local government officials say could result from the downturn in the overall national economy.

Photo by John F. Russell

A balloon travels through the sky during the 27th annual Balloon Rodeo in 2007. The rodeo is one of many popular attractions for summer tourists in Routt County, which could see a drop in summer sales tax revenue this year because of reduced spending that local government officials say could result from the downturn in the overall national economy.

Summer sales tax up in the air

National economy threatens local government's coffers

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Derek Ruiz, a member of a Triple Crown team from Dakota Ridge, warms up in the on-deck circle during a game in the 11-year-old division in Steamboat Springs in 2007. The Triple Crown tournament is one of many popular attractions for summer tourists in Routt County, which could see a drop in summer sales tax revenue this year because of reduced spending that local government officials say could result from the downturn in the overall national economy.

— Steamboat Springs and Routt County have been somewhat immune to the downturn in the overall national economy, but some government officials fear that could change when affluent ski season tourists are replaced by the Yampa Valley's working-class summer guests.

January sales tax figures for the city of Steamboat Springs were 5.67 percent higher than the year before, exceeding the 4 percent increase that the city's budget is built on. Routt County's sales tax revenues also were strong, but some believe those revenues could take a hit in coming months.

"That's a different tourist than we have in the summertime," County Manager Tom Sullivan said of winter visitors.

Deputy City Manager Wendy DuBord said the city saw a slight decline in tourism and recreation spending in the post-Sept. 11 economic downturn. County Commissioner Doug Monger described Routt County's summer tourists as "bubble people," those who might be debating whether to pull the trigger on a vacation due to the state of the national economy. Monger said gas prices and other factors are effectively doubling the cost of some people's vacations.

"We will be watching things closely," Monger said. "We will see it quickly in Triple Crown activity."

Monger was referring to Triple Crown Sports, the sports tournament company that hosts baseball and softball tournaments in Routt County for several weeks during the summer and is a primary driver of the local summer economy.

Triple Crown officials, however, are forecasting a record turnout for their tournaments this year.

"The way things are looking so far, we're significantly ahead of pace over last year," said Matt Van Alsburg, World Series director for Triple Crown. "Our numbers across the country are up."

Van Alsburg said his assessment is based on factors including the registration of teams. At this time last year, he said only 10 teams had paid to participate in Steamboat's summer tournaments. On Friday, he said 75 teams have paid. He predicted a total of 390 teams would travel to Steamboat this summer, 40 more than ever before.

But even if people make the trip to Steamboat this summer, that doesn't necessarily mean they'll spend a lot of money once they get here.

Eric Escudero, spokesman for AAA Colorado, said factors such as gas prices usually don't reduce travel but do lead to travelers compensating for increased costs in other ways, such as staying at less expensive hotels and eating in.

"They'll still travel," Escudero said. "They'll just make up for these extra costs. We have not seen, so far at least, any decrease in travel. But that could change."

Escudero's assessment is supported by recently released data. According to Merrill Lynch, 36 percent of consumers' disposable income went toward energy, food and medical care by the end of 2007, a greater amount than at any time since records were first kept in 1960. Eating at home increased for the first time since 2001, according to the government, and 54 percent of restaurants reported declining traffic in January, the National Restaurant Association says.

Other factors

Routt County Finance Director Dan Strnad said the county would see the biggest financial hit from a declining economy in its interest income from investments. Strnad said the county anticipated a 4.75 percent rate on its portfolio but now is looking at 3.6 percent, a 24 percent decrease that could mean a potential loss of $450,000.

"My biggest known commodity is interest revenue," Strnad said. "We're going to feel that."

Bob Litzau, assistant finance director for the city of Steamboat Springs, agreed. He said the city's portfolio has an average life of three years. As its investments mature, the city will be forced to re-invest in lower yielding investments due to repeated interest rate cuts by the Federal Reserve.

COLOTRUST, an investment vehicle for Colorado governments, has seen the daily interest rate on its COLOTRUST PRIME fund fall from 3.12 percent on March 1 to 2.26 percent on Thursday.

Strnad said any losses in sales tax and interest income may be mitigated by persistent growth and real estate activity. He said Routt County has seen double-digit percentage growth in both building and housing permits.

"We're still having a lot of sales," Strnad said.

DuBord and Litzau said the city's conservative budget policies better prepare it for unfavorable economic conditions.

"We do budget pretty conservatively," Litzau said. "We work hard to live within our means."

All officials noted that there is a certain amount of a crystal-ball factor when it comes to evaluating current economic conditions and preparing for the future.

"This whole subprime mortgage thing - it's huge," said Strnad, referring to the subprime mortgage fallout many believe to have triggered the downturn. "Something's happening here. We'll see. It's hard to tell."

Comments

another_local 6 years ago

Downturn in Triple Crown Activity? Thank goodness for Triple Crown. They are the visitors that come regardless. The real downturn will come in another area alltogether that the story all but misses; construction. Yes we have several projects underway, but I doubt you will see another hole put in the ground for a major project in 2008 and possibly not for 2009.

What happened here the year of the forest fires? What happened after 9/11 and the stock market tanked? Triple Crown still came to town that's what.

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longtimelocal 6 years ago

"40 more teams than ever before" You have got to be kidding me. That much more traffic, congestion, and rude people. For many years I have enjoyed the summers here in Steamboat, They are much less fun with the town suffed full so the merchants can make a buck. This is getting ridiculous.

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addlip2U 6 years ago

I'd rather have less revenue than the Tripple crown invasion!

Where is the Chamber on this issue? Get off your duff and start promoting to other worth while (as the article refers to) "affluent" tourists.
The Chamber has been put on notice several years ago that Tripple Crowners need to GO, yet does nothing. When it comes to the midnight witching hour when Tripple Crown threaten to pull out of Steamboat - and we wish the would - The Chamber and the City gives in another "inch away".
This year it is the Pamela Lane resident area ball field! When will this end?

They (the affluent tourists) came before we were invaded by the "working class" Tripple Crowners that come with coolers loaded, pack the condos with extra kids and adults, bring the sleeping bags and camp out in the living rooms, run loads of laundry and dishwasher every day ( using our valuable natural resources) generate lots of trash they leave around and bring more noise and pollution.

Chamber- bring in the "affluent" tourists and leave the Tripple crowners behind.

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bcpow 6 years ago

Let's get the poor people to go to Craig and lure the rich people from Aspen and Vail. I am sure they need a whoop ass tshirt too.

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Books 6 years ago

addlip2U - Totally agree!

We need to put Triple Crown to a vote. Let the people decide.

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Matthew Stoddard 6 years ago

Soooo...when did affluent people keep summer tourism alive in Steamboat??? Not back in the 80's, that's for sure. The races were 2 weekends in September...that's it. We also had Rainbow Weekend in July. How many people used that revenue to keep open all summer?

Funny- I remember no jobs pretty much available in the summer until Triple Crown came in. How many businesses stayed open on the mountain back then all summer long? Let's also remember that all of Ski Time Sqr will be gone this summer for at least 2 years (I'm betting more, considering how long it's taking the downtown buildings to finish up), with no place for affluent people to spend money there. That's a good 1/3 of mountain businesses.

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OnTheBusGus 6 years ago

How can we lure "the rich people from Aspen and Vail" when they have Food and Wine (as in the magazine) festivals , classical and jazz music events, Vail has the Teva games and an international dance festival. Aspen has theatre and ballet. What have we got... rodeo, a hot air balloon festival that has almost no place to have the event, some random local car shows, the Mustang rally, a strings tent with limited seating (maybe it's better now?), ummm, ummm, anybody, Bueller, what else have we got?

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bloggyblog 6 years ago

gus, what about our friendly, caring, giving, sharing locals.

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OnTheBusGus 6 years ago

Those locals are out there but they are becoming scarce. I have so many longtime local friends who are moving away at the end of the season because they either can't afford it or cashed out on their real estate and are moving on to make a better life for their families with the proceeds from their investment. They are being taken over by unfriendly, selfish, stingy newcomers who wish to make Steamboat the new Aspen/Vail. Well, it's not all that bad yet but I was responding to bcpow's idea to lure rich people from Aspen and Vail.

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Matthew Stoddard 6 years ago

bloggy- Would that the same locals on this thread saying "Triple Crown Go Home?"

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contrarian 6 years ago

Wow! snore is now an editor at the paper. The world must be coming to an end.

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outsiderlookingin 6 years ago

When are the brain surgeons in charge of this town going to have their heads surgically removed from their rectums? The caption under the picture says Officals blame the national ecomomy for the downturn... WRONG Look no further then Ski Time Sq or any other local construction project. Just 'cause you build it doesn't mean they will come.

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another_local 6 years ago

"the downturn" ?? At the moment there is no "downturn". There is a risk of a downturn, but the last 12 months have produced more sales tax revenue than any 12 month period in the history of our community.

Is there a potential downturn? Yes, there is, and our city would be well advised to be ready. In the mean time though, let's not blow this out of proportion. Historically, our recent "downturns" are in single digits. Very managable as long as they are taken into account in planning.

By the way, if there is a local downturn will have more to do a slowdown in construction than with either over-built projects of the national economy. We have become addicted to the construction business again and it plays a much bigger role in the local economy than a few points downturn from the national economy.

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