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Glenwood sales tax results a downer

Just released sales tax figures for 2002 show Glenwood Springs and Carbondale lost ground compared to 2001, while Silt, New Castle and Garfield County posted solid gains.”This is the biggest drop we’ve seen since I’ve been here,” said Glenwood Springs city manager Michael Copp, who is in his 19th year at the helm.Sales tax collections for all of 2002, and the percentage increase or decline compared to 2001, are as follows:-Carbondale – $2.4 million, down 5.6 percent.-Glenwood Springs – $10.4 million, down 2.4 percent.-New Castle – $693,000, up 4.6 percent.-Silt – $221,000, up 9 percent.-Rifle – $2.24 million, up 1.8 percent.-Garfield County – $5.9 million, up 3.5 percent.Figures were not available for the town of Parachute.”If Garfield County was up 3.5 percent, that shows there was economic growth county-wide,” said Rifle city manager Selby Myers.Carbondale town manager John Hier estimates Colorado’s inflation rate for 2002 was 1.8 to 2.2 percent, so Silt, New Castle and Garfield County more than held their own. Rifle collections were flat compared to 2001.Copp blamed Glenwood Springs’ sales tax decline on summer wildfires that kept tourists away, the drought that hurt the rafting industry, and a shaky national economy where consumers defer major purchases.Overall, 47 percent of Glenwood’s general fund budget comes from sales taxes.”We were down across the board,” Copp said. “Furniture sales were down 11 percent, general merchandise was down 3 percent, eating and drinking establishments were down 4 percent, motels were down 5 percent.”Glenwood Springs’ only gain was in grocery sales, which were up 2 percent.Copp said Glenwood Springs has seen many years of double-digit sales tax increases, and the only flat year since he has been city manager was 1989. Even with the sales decline in 2002, Glenwood Springs remains in good financial shape due to belt-tightening in the 2003 budget and revenue gains from the city electric system and landfill.”We’re still pretty solid,” Copp said.In Carbondale, observers are mulling the 5.6 percent decline in sales tax revenues, the largest percentage drop in Garfield County. Mayor Michael Hassig said the tax loss could have resulted from a construction slowdown locally and the slow national economy.Hassig said studies show that traffic on Highway 133 dropped in 2002 from 2001. That could mean fewer construction workers stopped at City Market and other Highway 133 stores. Hassig said approximately 60 percent of Carbondale’s general fund budget comes from sales tax.Carbondale is taking steps to increase its sales tax base. The town hired an economic development director last year, and is contributing funds to the Carbondale Chamber of Commerce to boost the economy.”There’s active work being done to try to encourage economic prosperity,” Hassig said.For the next three to five years, Hassig said, the town has enough reserves to keep services at current levels.New Castle town manager Steve Rippy attributes the town’s sales tax gain to increased population and strong sales at City Market grocery and other stores in the Interstate 70 interchange area.”The interchange serves a fairly large demographic area,” Rippy said.Rippy said New Castle’s retail base isn’t very diversified with furniture stores and such, which can be more affected by the economy than other stores. “Most of what we have here are necessities,” Rippy said.In Rifle, which treaded sales tax water last year, the word is still “leakage.””People are still going somewhere else to shop, and that would be Grand Junction first and Glenwood Springs second,” said Rifle city manager Myers.Other than La Roca restaurant, few new retail operations opened last year.Rifle’s existing bars and restaurants had a pretty good year, however, as reflected by an 8 percent sales tax gain in that category. Sales tax collections in liquor stores were up 10 percent, and motels were up 6 percent. General retail was down 1 percent; tax collections on food were unchanged in 2002 compared to 2001.Contact Lynn Burton: 945-8515, ext. 534lburton@postindependent.com


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