Sales tax sees slight decline in Steamboat

City Manager: February revenues give city budget “breathing room”

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February sales tax numbers

■ Total collections in February 2008: $2,180,532

■ Total collections in February 2009: $1,768,280

■ Total collections in February 2010: $1,714,462

■ Percent change, Feb. 2009-10: -3

Category Feb. 2009 Feb. 2010 Percent change

*Misc. retail $609,321 $665,929 9.3

Lodging $458,016 $405,292 -11.5

Sporting goods $143,775 $147,595 2.7

Utilities $195,534 $177,729 -9

Restaurants $302,395 $262,992 -13

Liquor stores $59,239 $54,930 -7.3

Area Feb. 2009 Feb. 2010 Percent change

*Downtown $267,104 $317,054 18.7

Base area $632,163 $592,196 -6.3

U.S. 40 corridor $550,130 $492,612 -10.5

Regional $201,734 $212,842 5.51

West Steamboat $117,148 $99,757 -14.9

*The miscellaneous retail and downtown categories each include about $75,000 from one-time, sales-taxable revenue sources found during use tax reconciliations.

Source: City of Steamboat Springs, in a preliminary report that is subject to change after full collections are received.

— February sales tax revenues dipped just 3 percent compared to February 2009, giving city officials confidence that the winter months could buoy Steamboat’s budget through a potentially slow mud season.

The city of Steamboat Springs collected a total of $1,714,462 in February sales tax revenue, compared to $1,768,280 in February 2009, according to a preliminary report released late last week. The collections put Steamboat’s year-to-date total at $3,476,217, about 5 percent below the first two months of 2009 and well within budget projections so far.

“That certainly gives us some breathing room in terms of our budget,” City Manager Jon Roberts said about the sales tax report Monday.

The city has budgeted a 10 percent decrease in sales tax revenues for 2010. That decrease is on top of the 18 percent decrease budgeted in 2009. City sales tax collections actually dropped about 15 percent last year, thus generating a difference worth about $800,000 in excess funds that the city used to shore up other faltering revenue streams and unexpected costs.

Roberts said February’s sales tax numbers are especially encouraging because ski season months generate much more sales tax revenue than other months, meaning those months account for a larger percentage of the city’s annual revenues than, say, April or May.

“Every percentage point … during these big months has a bigger beneficial impact,” Roberts said.

Sales tax revenues from sporting goods showed a modest gain in February compared to February 2009, rising nearly 3 percent.

But the local lodging industry continued to struggle, showing an 11.5 percent drop in sales tax revenue and a nearly 14 percent drop in accommodation tax revenue compared to a year ago.

Although the downtown area and miscellaneous retail category showed strong gains in February, according to the report, city revenue supervisor Kim Weber said those numbers can be misleading.

The preliminary sales tax figures include about $75,000, Weber said, that resulted in sales-taxable items discovered during a building-use tax reconciliation process with a large development.

The city charges a building-use tax on all building materials used for construction in Steamboat’s city limits. Builders pay a deposit before construction — based on an estimate of costs — and then reconcile the actual tax payment with the city after construction is completed.

Weber said during one such reconciliation, sales tax was assessed on discovered items such as furniture and appliances. The resulting $75,000 in revenue to the city resulted in a one-time boost to February’s downtown and miscellaneous retail sales tax figures. Weber said because the “downtown” designation of the funds likely will be changed to “regional” in the finalized February sales tax report.

Comments

Scott Wedel 4 years ago

Without the one time building use tax reconciliation, sales tax would have fallen 8%. So the budgeted 10% sales tax decline is still a pretty reasonable projection. I note that with last year falling 18% and this year falling 8% then I think economists would classify our area as officially in an economic depression which is normally considered a 20% economic decline.

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