Glenwood sales tax revenues plummet
Mirroring the country’s economic changes, 2002 started off with Glenwood Springs sales tax revenues dropping. Following a 2.2 percent drop in revenue in December 2001, the new year began with a 3.6 drop in revenues for January 2002 compared with sales taxes collected in those months during the previous years.
The drop was the only time since the 1980s – other than an August 1997 decrease – that Glenwood’s sales tax revenues failed to increase.
City manager Mike Copp blamed the decrease on a bad snow season and the nationwide recession – a result of buyer apathy following the Sept. 11 terrorist attacks.
Although the drops were distressing, Marianne Virgili, Glenwood Springs Chamber Resort Association director, pointed out they weren’t nearly as bad as Aspen and Vail, which had January revenue drops of 6.3 percent and 7.9 percent, respectively.
In February, Glenwood Springs reported a 1.4 percent decrease in sales tax revenues, though lodging revenues increased by 7.9 percent over the same time the year before.
But March was dismal, reporting a 3.6 percent decrease in revenues, the worst one-month slide in sales tax revenues in more than a decade.
The next two months saw slight increases, with a 0.33 percent increase in April and a 0.62 percent increase in May. But when the Coal Seam Fire hit town in June, sales tax revenues plummeted 10.9 percent from the same time in 2001 – and city manager Mike Copp said Glenwood Springs would be budgeting at zero levels for 2003 to make up for the shortfall.
July 2002 sales taxes were down by 4.6 percent compared to July 2001, and accommodations taxes were down by 5.8 percent for the same period.
August’s collections were down 6.08 percent over the previous year, and September’s were down 9.03 percent. Sales tax collections for October were down 1.37 percent compared to October 2001.
By October, city leaders wondered aloud about how far sales tax revenues would have to drop before cuts would have to be made, after hearing the news that year-to-date revenues were down around 4 percent compared to 2001. They were told if that percentage held until the end of 2002, it would mean a drop of $140,000 compared to 2001 sales tax revenues.
Figures for the end are still being tabulated as the year comes to an end.
Glenwood’s sales tax rate is 3.45 percent. Through October, the city has collected $8.4 million, which compares to collections of $8.7 million for the same period last year. Sales taxes provide 46 percent of the city’s 2002 general fund budget.
The good news is that misery loves company: Colorado towns are seeing their sales tax revenues drop, but Glenwood Springs is doing better than many.
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