Glenwood sales tax floats off to Rifle |

Glenwood sales tax floats off to Rifle

Glenwood Springs lost $100,000 in sales tax revenues in November 2003 compared to a year earlier, while Rifle gained $120,000 in the same month.

The shift can be explained by looking to the new Super Wal-Mart store that opened in Rifle Oct. 29.

Economists call it “sales tax leakage,” but for Glenwood Springs, the problem is more akin to a flood.

The Rifle Wal-Mart diverted so many shoppers away from Glenwood, Glenwood’s November 2003 sales tax receipts dropped 12 percent, said Glenwood Springs finance director Mike Harman.

“Wal-Mart was definitely a factor,” Harman said. “This is the highest drop I’ve seen in the 13 years I’ve been here.”

Rifle finance director Nancy Black giggled when asked about her city’s latest sales tax report, which covers November.

“We’re up 70 percent,” she said. “I didn’t expect it to be this good. It was beyond my expectations.”

Like Glenwood Springs and other Colorado towns, Rifle relies on retail sales tax to help fund its operations.

Harman’s monthly sales tax report shows November’s receipts were $714,000. That’s $100,000 less than in November 2002, and the lowest November total since 1999, when the city brought in $677,000.

Rifle collected collected $291,000 in sales taxes in November 2003 compared to $171,000 in in November 2002 ” a $120,000 gain.

The biggest drops in Glenwood Springs occurred in the following sales tax report categories: building materials and supplies, general merchandise, and furniture/home furnishings.

For all of 2003 through November, Glenwood Springs took in $9.15 million in sales taxes, which is down 1.6 percent compared to the same period in 2002. December 2003 figures are not yet available.

Glenwood Springs Mayor Larry Emery doesn’t see the Rifle Wal-Mart’s sales tax impact as a one-time thing.

“It’s a trend,” he said.

Emery said the new Home Depot and Wal-Mart in Avon also diverted sales tax receipts away from Glenwood Springs. “Those have made an impact, too,” he said.

The Glenwood Springs City Council and staff are discussing how to dam the sales tax flow and keep those dollars in town.

“We’ll talk about it at our Thursday meeting,” Emery said.

One idea is to offer economic incentives to Glenwood Springs businesses to remodel their facilities to make them more attractive to shoppers.

The city is also working on a contingency plan to address what could become a $1.25 million budget shortfall by the end of 2004.

“We should have that in place in March,” Emery said.

Longer term, the city government is counting on sales taxes generated from the Glenwood Meadows retail development at the base of Red Mountain, which is expected to bring in close to $3 million in sales taxes per year.

“It’s imperative the Meadows gets on line and running,” Emery said.

Construction on the Meadows is planned to start this spring, and the Target and Lowe’s stores are slated to open in late summer 2005.

But the developers and city officials are still working out funding and designs for the 114 interchange on Interstate 70 and intersection upgrades at 8th Street and Midland Avenue, improvements that must be done for the project to open

Contact Lynn Burton: 945-8515, ext. 534

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