Glenwood Springs tax collections see big drops in March, April

Post Independent Economy numbers tax news graphic

Glenwood Springs tax collections are showing the impact of the COVID-19 pandemic, with seven out of 15 sales tax categories down more than 50% in April.

Accommodations tax collections were down 91.1% in April.

Sales tax

January and February sales helped keep the first-quarter tax collections from looking too bad, finishing February about flat — up 0.6% year to date as compared to 2019. But collections dropped 17% in March alone, a decrease of $275,184 as compared to 2019. Collections through March were down 6.3% year to date.

“Our first quarter wasn’t too bad; the COVID-19 pandemic only impacted the March numbers,” Steve Boyd, Chief Operating Officer for the city of Glenwood Springs, said in an email.

But in April, sales tax collections were down 34.5% compared to April 2019, leaving collections down 13.6%, or $749,215, through the first four months of the year. 

“April was down about as much as we had forecast, though we were ready for the drop in that month to be even worse,” Boyd said.

Accommodations tax

Accommodations tax collections tell a similar yet bleaker story, finishing February about flat, or down 0.7% for the year.

Collections dropped 61.2% in March and plummeted 91.1% in April. The city prohibited lodging facilities from accommodating non-critical guests from April 6 into early May. A possible saving grace is that April has been the second smallest month for collections over the last five years. 

Accommodations tax collections through the first four months of the year are down 40%, or $125,746, as compared to 2019.

April sales tax by category

April sales tax collections were down in every category except building materials and supplies, which was up 11.4%, adding $21,414 to the coffers. 

Two categories slightly exceeded the percent declines in accommodations tax: apparel/accessories was down 91.8% and motel/hotel was down 91.6%.

The next worst categories were health and recreation, down 76%, and personal services, down 74.9%.

The categories with the biggest dollar declines were eating/drinking places, down $130,050; motel/hotel, down $95,936; automotive/service stations, down $77,380; and apparel/accessories, down $68,694.

Year to date sales tax by category

Through the first four months of 2020 three categories posted increases: “all other,” up 13%; marijuana, up 7%; and building materials and supplies, up 4%.  

The biggest percent declines were in apparel/accessories, down 36.8%; motel/hotel, down 36%; furniture/home furnishings, down 35.1%; and health and recreation, down 33.5%.

The biggest dollar declines were in eating/drinking places, down $225,487; motel/hotel, down $185,896; apparel/accessories, down $92,750; automotive/service stations, down $78,269; and food stores, down $72,541.

Steamboat Springs in a similar boat

April sales tax numbers were similar in Steamboat Springs, according to a Steamboat Pilot & Today story on June 16. April sales tax collections were down 26.1%, and collections were down 7% through the first four months of the year.

April collections were down in seven of nine categories, though only three were down more than 50%, including lodging down 89.6%.

Another difference is the liquor store category — which Glenwood does not track — was up 29.8%, though that accounted for $14,000 out of $1,028,680 collected. To put that gain in perspective, Steamboat lost roughly $150,000 from restaurants, $95,000 from lodging and $68,000 from miscellaneous retail.

City to survive 2020 

In April, the city of Glenwood Springs announced the layoff of 66 part-time employees and pay cuts for all full-time employees. Those steps should help the city make it through the year, Boyd said.

“These revenue shortages are devastating to the city’s ability to perform basic services and fund infrastructure projects. If we see revenue reduction continuing on an ongoing basis we will have to take more dramatic action, but we can survive the rest of 2020 with the spending cuts and utilization of reserves we’ve modeled,” Boyd said.

May and June projections

Boyd expects the drop in collections for May and June to be closer to those in March rather than April.

“I’m estimating that May is going to be down about 20%, which is obviously not good news, but it could have been worse. We expect June will likely come in at about the same level,” Boyd said.

Accommodations tax is also likely to see an improvement over a dismal April, Lisa Langer, director of tourism promotion for Visit Glenwood Springs, said.

“What I’m hearing from most of the hoteliers is that their occupancy is up even on the weekdays, they’re seeing really good occupancy that’s higher than last year at this time, and their rates are even higher than they were at this time last year. They’re doing very very well. … They’re really busy on the weekend, and they seem like they’re consistently busy on the weekdays,” she said.

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