Postcards promoting Steamboat Springs are on display in a downtown retail store. Steamboat continues to lag behind some other mountain communities with its sales tax growth.

Photo by Scott Franz

Postcards promoting Steamboat Springs are on display in a downtown retail store. Steamboat continues to lag behind some other mountain communities with its sales tax growth.

Steamboat Springs' sales tax growth lagging behind other mountain communities

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— Many mountain resort communities around Colorado are seeing their sales tax revenue grow this year at a higher rate than Steamboat Springs is.

But this city isn't worrying yet about its below-average tax gains.

Finance director Kim Weber told the City Council earlier this month that Steamboat tends to lag behind other mountain resort communities both in terms of feeling the effects of an economic downturn and seeing a recovery.

"In 2008, when Vail and Aspen were seeing the big 10, 12 and 14 percent decreases, we were seeing the 1 to 2 percent decreases," Weber said.

She said Steamboat didn't see its sales tax drop double digits until 2009.

"We generally lag about a year behind," she said.

Weber said Monday the reasons for the lag aren't all completely known, but she said she thinks a lot of it has to do with how people book their vacations in Steamboat.

"People are booking their vacations here ahead of time versus being on the 1-70 corridor where it can be a little bit more spur of the moment and weekend travel," she said. "Planning trips to Steamboat tends to be future plans versus last-minute getaways."

Weber told the council a good snow year likely benefitted resorts along the Interstate 70 corridor more this season, but the big gains they have seen could mean good news ahead for Steamboat.

"We could benefit from it next year with some additional reservations," she said.

She told the council Christmas bookings for Steamboat already were trending up this year.

A group of 10 Colorado mountain resort communities that includes Steamboat has seen its 2014 sales tax revenue grow by an average of 8.2 percent through May compared to the same time last year.

Steamboat's growth of 6.6 percent is slightly below that average.

The town of Telluride has seen the highest sales tax growth with a 13.7 percent gain over last year.

Weber cautioned the council that the list of 10 other communities, which also includes such cities and towns as Frisco, Aspen, Snowmass, Breckenridge and Winter Park, is not a list of communities most like Steamboat.

Council member Scott Ford pointed out that he thinks Steamboat is more socially and economically comparable to Glenwood Springs, a city that has seen a 2.8 percent sales tax gain over last year.

The snapshot of where Steamboat lies in sales tax growth regionally came during a longer presentation about how tax collections have trended here in recent years.

Here are more highlights from the presentation:

Visitor vs. local spending

Using two different methods, the city of Steamboat Springs estimates that locals generate 60 to 65 percent of the city's total sales tax revenue, while visitors generate 35 to 40 percent.

"I have to say this is probably the most shocking number to a lot of people," Weber told the council.

The city bases that number on the last 10 years of average sales tax collections in May and October, two off-season months when visitor spending is believed to be minimal.

Sporting goods boost

The tax report contained good news for stores that rent and sell skis, bikes and other gear for outdoor enthusiasts.

Sales tax revenue from sporting goods stores has increased about 29 percent since 2009.

It was the highest percentage gain for any industry group in Steamboat.

Restaurants are generating 17 percent more sales tax revenue than they did in 2009, while liquor stores are generating 11 percent more.

Summer growth

Steamboat is seeing its highest growth in sales tax revenue in the summer months.

Collections have grown by about 20 percent in the warmer months from 2009 to 2014.

Collections in the winter months grew 17 percent while collections in the shoulder months grew 11 percent.

Still, Steamboat's winter season delivers the highest economic impact.

The city collects 46 percent of its annual sales tax from December through March.

It collects 32 percent from June through September and 22 percent in the remaining shoulder months.

To reach Scott Franz, call 970-871-4210, email scottfranz@SteamboatToday.com or follow him on Twitter @ScottFranz10

Comments

Paul Hughes 2 months, 1 week ago

The City's 2008 study showed that locals generated more sales tax revenue than tourists (and way more than second-home owners), but these numbers are truly shocking. So much for the tired old belief that tourists will always pay the bills for us. This report has serious implications that we cannot continue to ignore.

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Scott Wedel 2 months, 1 week ago

This is pretty much what I expected. SB has seen significant growth in the number of location neutral workers/residents so the portion of sales tax paid by locals has increased.

I'd also argue that using May and Oct to indicate sales tax by locals would under estimate sales tax paid by locals because those are low income months for locals that work in the tourism service sector and thus they minimize their spending. For instance, service workers are far more likely to eat out when working many hours than when furloughed.

I don't see why it matters much if tourists pay less than 50% of local sales tax revenues. The important news is that sales tax still generates large sums of money and no signs of that stopping.

For me, the important number for government is tax revenues per resident and while SB has less than Aspen, it still have far more than most other cities. I know since the sun came up this morning and the world didn't end that there are some in city government seeking additional taxes so that SB residents can be the highest taxed in the state, but there is nothing in the sales tax numbers that helps their argument that more taxes are required.

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