Sales tax collections dip 20 percent | SteamboatToday.com

Sales tax collections dip 20 percent

February numbers represent sixth straight month of decreases for Steamboat Springs

Blythe Terrell

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.

— 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.

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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.

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