Nelson Harvey
Citizen Telegram Contributor
Rifle, CO Colorado

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December 19, 2012
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October sales tax numbers flat compared to 2011

If sales tax receipts are any indication, the economic picture in Rifle remained virtually unchanged from September to October of this year.

Sales tax revenue stood at about $5.3 million in October, according to a report to Rifle City Council from Finance Director Charles Kelty for the Dec. 19 meeting. That was up 0.4 percent compared to this point in 2011, when revenue was at about $5.25 million.

Revenue in about half of the categories the city tracks are down so far this year compared to 2011, including food, retail, liquor stores and motels, the report showed.

Categories up so far this year include bars and restaurants (4 percent), car parts and sales (2 percent), hardware (10 percent), and oil and gas (5 percent).

Compared to 2011, October was also "less bad" than September: Overall sales tax revenues in October were down 9

percent compared to the same month in 2011, while revenues in September were down 15 percent compared to that month the previous year, the numbers showed.

"I was hoping for a boost in revenues in November, and that people were starting to settle down in their spending habits after the election, but I'm still not seeing that," said Kelty.

If current trends continue, Kelty projects a decline of about 2 percent in total sales, use and lodging tax revenue for the city this year, compared to last year.

October figures show total tax revenues at approximately $5.9 million, down 0.2 percent from the 2011 figure of about $5.88 million.

"The general fund is holding its own, and we have enough in reserves to weather the decline," Kelty said.

More than half of the revenue from the city's 3.5 percent sales tax goes into the general fund.

Bright spots in the October spending and revenue numbers included a continued rally in motor vehicle use tax receipts. Those were up 34 percent compared to October 2011, and they have increased by 26 percent this year overall, from $330,500 to about $415,500. The trend suggests that, even in a weak economy, sales of new and used cars remain strong, Kelty said.

In other good news, expenses in the wastewater and sanitation departments declined slightly from September to October, figures show. Wastewater expenses in October were just over $2.5 million, down six percent from the previous year, and sanitation expenses were just over $412,000, down eight percent from 2011.

Kelty said the declines were due to engineers wrapping up the plans for a new water treatment plant in Rifle.

Asked whether Rifle could be affected by a failure by politicians in Washington, D.C. to reach a compromise on the "fiscal cliff," Kelty said there are two possibilities that worry him.

First, if automatic tax increases take effect, employees may be forced to pitch in more of their paycheck to social security taxes, which could hurt consumer spending.

Second, the tax-exempt status of interest on municipal bonds could be in danger, Kelty said, which would make those bonds less attractive to investors. That, in turn, would make it more difficult for Rifle to finance capital improvement projects, he added.

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The Post Independent Updated Dec 19, 2012 04:51PM Published Dec 19, 2012 04:50PM Copyright 2012 The Post Independent. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.