Vacationers enjoying one last weekend of spring skiing flocked to the deck of the Bear River Bar & Grill on Tuesday afternoon. Sales tax collections in Steamboat Springs for February were nearly 20 percent lower than February 2008 numbers.

Photo by John F. Russell

Vacationers enjoying one last weekend of spring skiing flocked to the deck of the Bear River Bar & Grill on Tuesday afternoon. Sales tax collections in Steamboat Springs for February were nearly 20 percent lower than February 2008 numbers.

Sales tax collections dip 20 percent

February numbers represent sixth straight month of decreases for Steamboat Springs

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By the numbers

City sales tax collections for February 2009, compared with February 2008

Total: $1,752,444, 19.6 percent decrease

2009 through February: $3,642,362, 16.2 percent decrease

- By category

Miscellaneous retail: $604,246, 17.2 percent decrease

Lodging: $457,949, 28.4 percent decrease

Sporting goods: $143,553, 26 percent decrease

Utilities: $195,444, 0.9 percent decrease

Restaurants: $294,088, 17.6 percent decrease

Liquor stores: $57,164, 9.8 percent decrease

- By region

Town: $256,509, 19.2 percent decrease

Mountain - combined: $631,635, 28.7 percent decrease

U.S. Highway 40 corridor: $549,938, 8.1 percent decrease

Regional: $201,088, 8.8 percent decrease

West Steamboat: $113,274, 28.7 percent decrease

— February sales tax collections were nearly 20 percent lower than February 2008 numbers.

Steamboat Springs sales tax figures released Tuesday show a 19.6 percent decrease for the month, from about $2.2 million to about $1.8 million. February was Steamboat's sixth straight month of year-over-year revenue decreases, and sales tax income declined in every area and every industry.

With recent cuts, the Steamboat Springs City Council has budgeted for a 19 percent sales tax revenue decrease, Revenue Supervisor Kim Weber said.

"Right now, there's a 16 percent decrease year to date but an 11 percent decrease for the general fund," Weber said. "So we're still within our budget with the latest budget reductions that they made."

The cuts were in the general fund, she said, so Steamboat will be within its new budget as long as year-to-date general fund revenues don't slip by more than 19 percent.

February's decrease was the largest since the economy started faltering. January sales tax collections were off 13.5 percent compared with the previous year, December's were down 9.1 percent, November's were down 8.8 percent, October's were down 4.3 percent and September's were down 3.8 percent.

A global economic crisis and slipping visitor numbers have paved the way for the declining revenue.

"It's what we've been expecting all along is to see these large decreases," Weber said. "Of course, no one's happy about it. It's what we've been trying to plan for and budget for."

That planning and budgeting has included decreased hours for city employees and cuts across departments. Sales tax is the main source of revenue for Steamboat.

The city divides its sales tax revenue reports into categories and areas.

The categories are miscellaneous retail, lodging, sporting goods, utilities, restaurants and liquor stores. Collections decreased across the board, though they were only 0.9 percent lower for utilities. Lodging took the biggest hit, taking in 28.4 percent less than in February 2008.

Katy Martin is the sales and marketing director for ResortQuest, which runs properties including Trappeur's Crossing Resort. Visitors have been bargain-hunting this season, she said.

"We definitely have had to offer some very good deals that are bigger discounts than we traditionally offer to be able to close the sale," Martin said.

Her company and others have combined that with "value add" programs that include free upgrades, for example. If tourists are paying less, that means less sales tax revenue. The sales tax figures also suggest that visitors are spending less at restaurants and retail outlets.

"It's interesting that it's affected all of Steamboat, because once people get here, they tend to get in vacation mode and go out and buy those things. : Everyone is penny pinching right now," Martin said.

The sales tax collections also are split into town, mountain, U.S. Highway 40 corridor, regional and western Steamboat figures. February numbers were down for all categories. U.S. 40 and the region saw decreases of less than 10 percent, and the mountain and western Steamboat each saw decreases of 28.7 percent.

"We're still surprised to see west Steamboat down equally, percentage wise, as much as the mountain," Weber said.

That suggests that the decrease in sales tax collections isn't solely a result of less tourist money. Western Steamboat caters primarily to locals, Weber said. She did note, however, that many construction-related businesses are located in that part of town, and the construction industry has slowed.

Downtown Steamboat saw a sales tax collection decrease of 19.2 percent. Weber attributed that to two factors.

"You have a multitude of different types of stores, restaurants, liquor stores that are included in town, and so it is a combination of the visitors and locals," Weber said. "But I think with maybe some of the redevelopment on the mountain that it's pushing some of the visitors to the downtown area a little bit more."

Returns were due March 20, and Tuesday's numbers represent returns that came in through Friday, she said. Weber's department has been pushing to get figures out earlier to help the city plan its budget.

Comments

ybul 5 years ago

Bubbles are created by monetary/credit expansions, not computer models. Computer models did not create the bubble in 1929, the Dutch Tulip Bubble, etc.. Bubbles have come and gone over time, they are largely the result of monetary/credit policies both of which created excess money that needed to be invested.

The problem is that those that make their profits soonest after the money/credit was created fared the best (ie homebuilders, and others who sold on credit) and those who were furthest from this creation of money typically did not fare as well (ie agricultural interests).

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Stan Zuber 5 years ago

In theory isn't the money in circulation like a closed loop, and when you start making profits from interest and didvidends, the money has to be created somtime to make up for profits. So now all we are doing is putting money into circulation to make up for all the profits that were made over the past years. The money has to come from somewhere.

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seeuski 5 years ago

What a doofus!! Blaming sellers and buyers (supply and demand)and the free market for what the ACORN type redistribution of wealth Obama lovers did with our economy is dishonest. We would not be in this mess if it weren't for the loans made to people who never could repay them. Calling sellers who made a profit on their real estate greedy and using the f word to describe them is way left wing. Here is my money I don't need it you take it my home is worth x but you can have it for less because I smoke rope. No one holds a gun to the head of people who decide to buy a home in an up market and no one holds a gun to the head of sellers in a down market. Truth will prevale and how this market crashed will be continually exposed by the honest historians.

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Scott Wedel 5 years ago

It doesn't take brilliant historians to figure out how the bubble happened.

Fundamental fact: Lenders lent to people unable to pay.

How did that happen?

Lenders were selling the loans they made into secondary markets so it became more important to produce loans than to be sure the borrowers could repay.

They could sell the loans because Wall St had come up with computer models showing that bundling enough loans created the equivalent of a high yield bond. And they were also able to buy insurance promising the loans would be made good.

The insurance companies sold the insurance without setting aside reserves because the regulators and auditors somehow agreed that the loans would not default.

And so a bubble was created. Buyers were told that they needed to buy now before prices went even higher and it was okay that they couldn't afford the mortgages because they would refinance before defaulting.

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JLM 5 years ago

SBS's sales tax collection declines are created by the recession which has cast a pall of concern over all personal discretionary spending.

Fewer tourists and lower levels of spending per tourist are at the core of the sales tax declines. This is mirrored by a similar behavior among local residents.

Vacation spending and tourism are among the hardest hit segments of the economy as they are purely discretionary and can further be purchased in different increments of quality --- you can still take a vacation but it may not entail hopping on a plane and coming to SBS.

SBS, because of the travel requirement, is very high on the continuum of discretionary spending and therefore is likely to see a proportionately greater impact. When travel can be stripped or dramatically reduced from vacation spending, it is the first casualty.

Will it recover? Absolutely beyond a shadow of a doubt. The only variable is how long it will take.

There has never been a recession --- including the Great Depression --- in which the following expansion has failed to recover all GDP lost to the recession. This one will be the same.

The big difference this time around is that the government has not placed its faith in the free market and capitalism and has instead put all of its "hope" and all of "our money" on government intervention.

This seems a very risky strategy and one which failed miserably during the Great Depression and the Japanese Lost Decade of Prosperity.

But rest assured, SBS will recover and recover fully. When?

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Fred Duckels 5 years ago

Seeuski, Honest historians covers a lot of territory. It seems that history today is determined by the agenda of the historian. Text books are rewrighting history as we speak, and our students are taught the left wing version.

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ybul 5 years ago

Stan,

 Money does not need to be created to cover more goods and services being produced.  Who profits from the creation of that money?  If one follows M1, M2 and M3 circulation they increase and now rapidly to stop perceived deflationary pressures.  Where did that come from and who benefits from its creation?

  In addition, the inflating of a currency tends to create profits for those closest to its creation.  Those making loans, those selling their goods on credit.  While credit was expanding homebuilders and the car manufacturers did extremely well.  However, those in agriculture tended to fair much worse as they were typically one of the last to see that created credit/money.

  I think that when you look at the federal reserves mandate to manage inflation in addition to economic prosperity, then check out the definition of inflation, you would see that having the federal reserve manage inflation is akin to the fox watching the hen house.

  As of today the federal reserve has not been audited.  It is a quasi government entity in which excess profits are returned to the government, however, as no audit has been preformed who knows wether they are doing so.

  Brent Pharo stated yesterday that when you rob Peter to pay Paul, you can always depend upon the support of Paul.  We are robbing from our children and grandchildren today racking up these deficits and yet we can still count on Paul to come forward with his hand out for money for this program or that.
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