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Sales tax revenues above budget

Halfway through 2006, the city of Glenwood Springs’ sales tax revenues are up a whopping 38.8 percent over the first half of 2005.Yet City Manager Jeff Hecksel gets a lot more excited about a 6 percent figure.That’s how much sales tax revenues are ahead of budget for the year. And that’s what’s helping the city gain some breathing room as it continues to rebound from years of slumping sales tax proceeds.”That’s a good thing. I would hope for that 6 percent to be there through the end of the year,” Hecksel said.The city’s June sales tax proceeds were up 36 percent over the previous June. June’s increase was important for the city because the month is traditionally one of the city’s bigger ones for sales tax income. December tends to be the biggest, with September and November also being big producers.June brought in $1.42 million in revenues. Total sales tax revenues for the year so far are $6.7 million.Much of the credit for the year’s increase goes to the Glenwood Meadows commercial development, which began opening last fall. However, city officials have cautioned that the big gains don’t mean Glenwood is suddenly flush with cash. The city had been banking on a big gain from Glenwood Meadows simply to be able to make its budget for the year.The city’s sales tax revenue began a downward slide after 2001, thanks to that September’s terrorism attacks, the city’s Coal Seam Fire of 2002, the national recession and other factors. The city dipped into reserves to help make ends meet, and only last year did revenues exceed those of 2001. With this year’s revenues ahead of budget, the city may be able to begin building reserves back up to prepare for the inevitable next slowdown in the business cycle, Hecksel said. He also hopes that if the rebound continues, the city can look at boosting its spending on basic city services.”We definitely have some issues there that we need to address,” he said.Hecksel singled out the fire and police departments as being in need of more resources. But he added that all city departments have been in a holding pattern on spending over the last several years, despite the fact that the need for services has increased and the city has taken on the added cost of opening a community center and pool.Although the above-budget results so far this year are welcome news, they may not be entirely surprising. City Finance Director Mike Harman last year had projected that Glenwood Meadows would result in a net increase of $2 million in new sales tax revenues per year, compared to the developers’ estimate of $3 million. The difference was that the city was factoring in an anticipated drop-off in sales among competing businesses in Glenwood.Harman had hoped then that his projection would prove conservative, and that may be the case. Hecksel said it appears that while Glenwood Meadows is hurting some businesses in town, there has been less of a widespread impact than had been feared.”I think what we’re finding is the level of cannibalism, so to speak, isn’t as high as what we originally thought, which is great, I’m really happy to know that.”Now, the city will wait to see what kind of drop-off Glenwood Meadows might see when Costco opens this fall in Gypsum. But Hecksel takes heart in how Rifle sales tax revenues have remained strong after Glenwood Meadows opened, despite concerns about how much business the Wal-Mart SuperCenter there might lose to Glenwood Springs.Rifle sales tax revenues are up 20 percent for the first five months of the year over the same period in 2005.Contact Dennis Webb: 945-8515, ext. 516dwebb@postindependent.com

The city’s lodging tax revenues also continue to increase this year. Those revenues, a gauge of tourism activity, are up 20.6 percent for the first half of the year. June revenues were $75,318, up about 18 percent over June of the previous year. Total revenues so far this year are $289,422. The Glenwood Springs Chamber Resort Association contracts with the city to spend the money on tourism promotion.


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