For second month, Rifle’s tax gain is Glenwood’s loss |

For second month, Rifle’s tax gain is Glenwood’s loss

by Heather McGregor
GSPI Managing Editor

Glenwood Springs took another big hit on sales tax revenues in December 2003, while Rifle collected almost as much as Glenwood Springs lost.

Glenwood Springs December sales tax revenues fell by $130,783, or 11 percent, compared to December 2002, and Rifle’s December 2003 revenues climbed by $110,750, or 47 percent, compared to the same month a year earlier.

December marked the second straight month for big gains in Rifle and painful losses in Glenwood Springs, largely explained by the opening of a Super Wal-Mart in Rifle on Oct. 29.

“I wasn’t surprised at all, especially with a Super Wal-Mart opening that time of the year,” said Glenwood Springs finance director Mike Harman. “The first month, everyone wants to go check it out. The next month was the holiday season, so you go down there and do some of your Christmas shopping.”

In November 2003, Glenwood Springs lost $92,000 in sales tax revenues compared to a year earlier, while Rifle posted a $120,000 gain.

“We knew that sooner or later there would be this leakage, and it would be to the west,” said Bob Zanella, a former Glenwood Springs mayor who is now acting director of the Downtown Development Authority. “We knew there would be a time when we would max out our area and resources. That has started with the Wal-Mart going to Rifle.”

As a result, Glenwood Springs ended 2003 with a 2.5 percent total drop in sales tax revenues, collecting $10.2 million in 2003 compared to nearly $10.5 million in 2002. The difference was $261,620.

The city collected a record $10.7 million in 2001, on a sales tax rate of 3.45 percent.

Glenwood’s biggest dollar loss in 2003 came in general merchandise stores, where year-end sales tax revenue totals fell from $2.8 million to $2.6 million, a drop of 5 percent.

The city’s biggest percentage loss came in sales of furniture and home furnishings, which dropped by 25 percent in 2003. In dollars, however, that sector’s loss was more modest, shifting from $282,000 in 2002 to $212,000 in 2003.

Rifle ends year with 17.8 percent increase

Rifle ended the year with a 17.8 percent increase in sales tax revenues, up by nearly $400,000, for a total of $2.6 million in revenues. The city’s sales tax rate is 2 percent.

The biggest jump was in the general retail sector, which climbed a whopping 122 percent by year’s end. The sector yielded $403,200 in sales tax revenues by the end of 2003, compared with $181,200 in 2002.

In December alone, Rifle’s retail sector jumped from $26,500 in sales tax revenues in 2002 to $120,100 in 2003 ” an increase of 352 percent.

Sales taxes collected by Garfield County government reinforce the view that Glenwood Springs tax dollars have migrated westward to Rifle.

Collections of the county-wide 1 percent sales tax climbed by a modest 3.45 percent in 2003, rising from $5.9 million collected in 2002 to $6.1 million collected in 2003.

In other words, total sales in the county did not climb much in 2003 compared to 2002, meaning that much of Rifle’s gains were offset by losses in Glenwood Springs.

Glenwood waits for new big box stores

Rifle’s Super Wal-Mart may continue to erode the Glenwood Springs sales tax base for the next year and a half, until the Target and Lowe’s big box stores open at Glenwood Meadows. They are projected to open in fall 2005, with construction to start this spring.

“Target and Lowe’s will bring that back,” Zanella predicted.

But he hopes that Glenwood Springs shoppers will return sooner.

“Hopefully some of that will come back as people settle down. I think a lot of people wanted to try them out,” he said of the Super Wal-Mart.

In the meantime, city officials are preparing to make budget cuts if necessary.

Harman said the city’s 2004 budget was based on sales tax revenue figures from 2002.

“We haven’t had an official word to cut anything, but we have done some exercises. We are preparing ourselves for where to start doing that,” Harman said.

“We’ll have to wait and see, month after month, what it’s going to do.”

Contact Heather McGregor: 945-8515, ext. 517

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