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Sales tax drops third month in a row

GLENWOOD SPRINGS ” January was the third month in a row that city sales tax revenues plummeted substantially compared to a year earlier.

According to recently released city sales tax figures, the city earned $55,000 ” or 7.6 percent ” less in January 2004 than in the same month in 2003.

“It’s down 7, but we’re not sure why or how,” city manager Mike Copp said. “Aspen was up double digits.”



While the drop was dramatic, City Councilman Dave Merritt pointed out that the revenues from January 2003 were exceptionally good.

“January was off from a relatively strong January 2003,” he said.



Still, if the trend from the past four months holds steady, the city could be looking at a drop of $1 million ” or 10 percent of the sales tax revenue stream ” from the previous 12 months, Merritt said.

The city usually earns about $10 million a year from sales tax revenues, he said.

“We’re monitoring it,” Copp said.

“I want to give council a game plan before I leave. We’re doing things internally, and hopefully the citizens won’t see a major change in how we do business.”

Most local economists attribute the revenue drops to the opening of a Super Wal-Mart in Rifle. The store opened on Oct. 29, 2003, and Glenwood Springs’ sales tax receipts have been slumping ever since.

The city’s November 2003 sales tax revenues were off by $92,000 and December’s fell by $130,800 ” both 11 percent ” compared to the same months in 2002.

At the same time, Rifle’s December 2003 revenues climbed by $110,750, or 47 percent, compared to the same month a year earlier.

The decline in sales tax revenues is the main factor motivating City Council to take a hard look at the city budget.

Council has asked each of its department heads to find ways to save money. A meeting is set for 6 p.m. tonight at City Hall to discuss the cost-saving ideas and possibly to implement some of them.

Contact Greg Masse: 945-8515, ext. 511

gmasse@postindependent.com


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