Steamboat sales tax slide continues

January collections down 8 percent; West Steamboat hit hard

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Sales tax numbers

■ Total collections in January 2008: $2,166,093

■ Total collections in January 2009: $1,901,894

■ Total collections in January 2010: $1,749,279

■ Percent change, Jan. 09-10: -8

Category Jan. 2009 Jan. 2010 Percent change

Misc.retail: $681,526 $667,790 -2

Lodging: $459,147 $385,849 -16

Sporting goods: $148,187 $147,700 -0.3

Utilities: $233,842 $208,202 -11

Restaurants: $315,330 $281,758 -10.7

Liquor stores: $63,860 $57,981 -9.2

Area Jan. 2008 Jan. 2009 Percent change

Downtown: $273,028 $233,733 -14.4

Base area: $664,287 $598,860 -9.9

U.S. Highway 40 corridor: $578,724 $508,145 -12.2

Regional: $237,861 $297,598 25.1

West Steamboat: $147,994 $110,943 -25

Source: City of Steamboat Springs, in a preliminary report

that is subject to change after full collections are received.

— City sales tax collections continue to slide in front of a rapidly approaching shoulder season that could push some downtown businesses over the edge.

The city of Steamboat Springs collected about $150,000 less in total sales tax revenues in January 2010 than it did in January 2009, a decrease of about 8 percent, according to a preliminary report the city’s finance department released Monday.

Year-to-year January decreases particularly were steep for the lodging industry, which dipped 16 percent from a year ago, and the West Steamboat area, which dipped about 25 percent. The city collected only $6,304 in building use tax in January 2010, compared to $48,767 in January 2009 — an 87 percent decrease for an indicator of local construction activity.

January’s sales tax figures follow a year-to-year drop of more than 10 percent in December, which capped a bruising 2009 that saw the city collect about $16.7 million in total sales taxes compared to $19.9 million in 2008. On the upside, though, that drop-off of about 16.3 percent fell within city budget projections, meaning no reserve spending was needed. City Manager Jon Roberts said Monday that the city actually has about $750,000 in excess general fund revenue from 2009.

“Expenses came in under budget, and revenues came in over budget,” Roberts said about the final assessment of 2009 city finances.

The city budgeted for an 18 percent decrease in sales tax collections for 2009, compared to 2008. An additional 10 percent drop is budgeted for 2010.

Roberts said the Steamboat Springs City Council will discuss how to use the $750,000 at its meeting tonight. He said the amount is not enough to end the furlough program for city employees, which could cost about $1.2 million. Roberts said the money could restore safety and training materials for Steamboat’s police and fire departments, or it could roll into city reserves.

Tracy Barnett, of Mainstreet Steamboat Springs, gave mixed reviews of January’s 8 percent decrease in sales tax collections.

“Any down is

still down, and on top of the past downs, it’s a downer,” Barnett said. “But (the fact) that it’s not as far down as predicted, I think is a good sign. I don’t know if it’s going to be enough to help some of these businesses survive. It’s just a real tough go at this point, and people are getting fairly discouraged.”

Barnett said she has heard that “a couple” of downtown businesses could be forced to close in coming weeks, possibly after the end of ski season or, she said, “maybe even before.”

“Retail numbers are the worst in 10 years for downtown,” Barnett said.

Barnett said downtown business closings could be spurred by extensive Lincoln Avenue re-paving work slated to begin in April, and “the fear of how much worse it’s going to be during construction than it is anyway.” Some downtown business owners said their struggles were exacerbated in the fall during Colorado Department of Transportation work conducted by Scott Contracting, part of massive improvements to U.S. Highway 40’s downtown stretch.

City, business, CDOT and Scott Contracting officials have been meeting to prepare for the work and attempt to lessen the potential impacts to businesses. Construction officials say they plan for the work to be done before the height of the July and August summer tourism season.

Business owners have asked for considerations including more advance notice and detail with construction schedules, variances to city sign codes to allow open businesses to promote themselves, more pedestrian access to downtown streets and an increased effort to provide downtown parking where possible.

Barnett said reports of slow economic recovery might not bear fruit fast enough for downtown business owners.

“The predictions are optimistic, but that doesn’t help them pay the electric bill,” Barnett said.

Comments

Scott Wedel 4 years, 5 months ago

I note that the new lodging barometer as reported in this paper predicted comparable numbers to 2009. But the actual numbers came in 16% less. This continues the pattern I noted a month ago that the new lodging barometer, which may be more accurate, counts at least 10% more people than the old lodging barometer.

Considering that they have said that March lodging numbers were weak, I think it is likely that March lodging will be down at least 20% from a year ago and March's overall retail sales will be down over 10%.

I do not what predictions for when are optimistic, but I see nothing to be optimistic about sales tax in the short term.

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cindy constantine 4 years, 5 months ago

Hopefully the City Council agenda will include time for what additional cuts can be made from the 2010 budget as the revenues will be lower than the 10% they projected to be down from 2009. Never heard such "doom and gloom" from Tracy and she is the one with the closest pulse to the downtown businesses.

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Matthew Stoddard 4 years, 5 months ago

Scott- the lodging barometer only measures number of units occupied in the rental market. It doesn't predict how much they will spend while here.

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Scott Wedel 4 years, 5 months ago

Kielbassa, Actually, the new lodging barometer also counts more than number of rental units occupied. It also count visitors that stay in resident's homes and second home owners that are here that night. Based upon the predicted numbers of the new lodging barometer and how it compares to lodging sales tax, the new lodging predictor is apparently including somewhat more than 10% more visitors than the old predictor. Thus, since the new lodging barometer is predicting weakness for March then it strongly suggests that March is going to be really weak.

I know that the lodging barometer does not predict what they will spend. But the Chamber and so on has been making the case for years that when people come here then they also spend money. So fewer tourists results in less spending.

Sales tax is the result of locals and tourists spending so the effect of increases/decreases in tourists is reduced by the relatively stable number of locals. Thus, I predicted that retail sales will be down due to fewer tourists, but not down as much as the decrease in tourism.

This is just my analysis based upon this year's vs last year's numbers for the lodging barometer and actual lodging and sales tax.

It also makes me curious regarding the source of Barnett's optimistic predictions, because the predictive short term data suggests further declines.

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Matthew Stoddard 4 years, 5 months ago

Scott- I was generalizing. The Barometer as you described, is not really new. I used to do the numbers to give to the Chamber for the barometer last year. It basically is generated for any occupied unit that is Rental or Owner-Serviced, whether it be a condo, townhome or private home, depending on the company generating that report. It doesn't look at No-Service units usually (again- depending on the company generating the report), who may or may not have someone coming in at any given time.

And yes, the Chamber will "predict" that a certain amount of tourists will spend X amount of dollars and they always try the hopeful numbers to put forth. Unfortunately, a lack of early snow & a poor economy can take it's toll. Even in the off-season, tax revenues were down. That can be mostly attributed to local dollars not being spent. We all are tightening our belts.

Still, business hasn't been tanking, so we need to give the best service to those who do come here, no matter what. March numbers don't look awful, but there is always room for improvement. I'm betting the snow will be better next year & the economy will hopefully pick up slightly. That means we want whomever is here this winter to spread the word to come back next winter with more people, so we can get thru the winter with less worries.

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David Hill 4 years, 5 months ago

One of the biggest factors impacting the amount of tax revenue is the average rate people are paying to stay. As a rental property owner the number of rental nights I had in 2009 was one more than 2008 but the rental income was down nearly 25%. So while a similar number of tourists may be coming to town, the amount they are spending on lodging is significantly reduced. I have no idea what percent of the tax revenue is lodging based but I assume this is a major factor in the reduced sales tax revenue.

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