Our View: Tax figures show modest good news
February 13, 2011
Steamboat Springs — December's sales tax revenue report released last week reveals some positive signs for the local economy while also affirming the prudence of city officials who conservatively budgeted a 10 percent decline in revenues for 2010.
The city of Steamboat Springs' preliminary sales tax report for the last month of 2010 showed total revenues of nearly $2.2 million, up about 2.75 percent from December 2009. The year-over-year increase maintained a positive trend in which monthly revenues have exceeded those of the corresponding month from 2009. September, November and December 2010 each were stronger revenue months than their 2009 counterparts.
Also significant is that the city is poised to finish 2010 within 1 percent of 2009's year-end revenues. Because the city budgeted a 10 percent decrease in sales tax revenues from 2009, there's likely to be a "surplus" of about $1.7 million.
From a big-picture perspective, the monthly revenue reports from the second half of 2010 are perhaps the best indication to date that our economy is stabilizing. That does not mean the economy is growing, nor does it mean the struggles endured by many residents and businesses are behind us. Unemployment remains high, and foreclosures still are at record levels. But the first step toward getting better is no longer getting worse, and that's what recent city revenue reports seem to indicate.
Kudos are warranted for City Hall officials and the elected representatives of the Steamboat Springs City Council, who for three consecutive years have set conservative revenue forecasts and made proactive cuts to expenditures to help offset the loss of sales tax collections and reserve spending. We know some of those cuts were painful to employees who endured lost pay, or worse, lost jobs. And those cuts weren't enough to offset reserve expenditures used to subsidize the general fund. The city planned to spend about $3.3 million of its reserves this year. The $1.7 million in unexpected revenues in 2010 means that reserve spending will be cut in half. But it doesn't help, for example, the serious shortfall in the city's capital improvement fund used to pay for future projects.
So although budgetary issues remain for the city of Steamboat Springs, we can at least take some solace in a strong finish to 2010 and better-than-expected revenues for a city and local economy eager to emerge from a difficult recession.